254 PROGRESSING HUMAN RESOURCE MANAGEMENT
cease to justify themselves financially, they are considered as expendable as any
other asset that has ran its course. If this makes economic sense on one level,
it ignores the possibility that financial measures themselves may be faulty or
inappropriate, particularly when it comes to the provision of services through
tacit knowledge. How do we compute the financial value of an administrative
clerk, a police officer on the beat, or an accountant for that matter? We explore
the problematic nature of these interpretations in the sections that follow.
The human resource, human capital,
and knowledge management
There is no denying that the strategic perspective played a remarkable role in
highlighting the importance of people for the organization. In fact the very
idea of strategy, a notion that is more readily applied to military manoeuvres
as in the dictionary meaning—the art of planning operations in war—implies
the skilful utilization of resources in the most efficient and effective way.
This importance attaches primarily to the skills, competences, and knowledge
people bring to the organization. The challenge for managers is thus cast in
terms of how best to utilize these skills and competencies in order to achieve
organizational ends. While this perspective might be seen as offering a new
interpretation of the nature of human skills, it also reaffirms the view of labour
as a factor of production. What is new about this ‘people are an important
asset’ argument is that it does not restrict itself to shop-floor workers and those
in the lower echelons of the organizational hierarchy. Instead, it encompasses
adifferent section of the workforce, primarily the white collar and profes-
sional cadres. In fact until recently, many observers have been restricting their
discussion on knowledge management to so-called knowledge-workers, that
is technocrats and IT people, and in the process limiting themselves to the
purely technical aspects of knowledge management which in fact merely boils
down to information management.
The recognition that people constitute ‘human capital’ has fostered a resur-
gence of interest in how to ‘manage’ this resource in order to maximize benefits
to the organization, while at the same time responding to the often complex
needs of these individuals. The concept of human capital acknowledges that
the skills and knowledge people bring to the organization have value in and
of themselves (see also Nahapiet and Ghoshal 1998). The task for managers
is to tap into this value and utilize it in the quest for attaining organizational
objectives, and to help build a competitive advantage. This is achieved through
the process of appropriation, which we consider in more detail below. The
justification for tapping into this unique value is provided by the treatment
of the resource as strategic, which also implies it is at the disposal of the
organization.