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Management of Organizational Change Through the Capitalization of Knowledge.

INTRODUCTION

Knowledge is currently the basis of changes in the world. In it lies the root of innovation, quality and competitiveness of organizations, however, it is generated by man. Santillan (2010) believes that knowledge is "a human capacity, based on experience, which aims to transform information into concrete decisions and actions" (p. 21). Knowledge is a human characteristic which, through a teaching process, is generated, transferred and finally conserved. Through the human capacity of reasoning, knowledge is generated. It is intangible, since it is not something that can be seen optically or physically; it is volatile; the knowledge that is not used is blurred over the time; knowledge has the characteristic of disappearing through the epochs in which it is happening.

Knowledge needs to be elaborated, organized, structured. Since the data by themselves do not provide knowledge, it is necessary to have a structure so that they can provide it (Dalmau, 2005). The types of knowledge are varied. Nonaka and Takeuchi cited in Santillan (2010), explained that knowledge has two forms, explicit knowledge and tacit knowledge.

Many family businesses in Mexico lack some planning, however, people have confidence and dedication to the businesses to which they are committed. The company in the case study began activities in 1998 with the idea of providing maintenance, transformation, and automation services to the industries in the state and the Mexican lowlands. It has been observed in the company, that the things are done in a way that people are familiar with, which has defined the creation of the organization. In this way, it has been thought that if you capture and manage that knowledge of people, this will be the basis for a new strategic planning process that defines their objectives and meets the organizational goals that are based on this knowledge.

The problem with the target of this research is, on the one hand, the discouragement of human capital in this organization, because they neither develop nor strengthen all their potential. And, on the other hand, due to the challenges of the environment and competition, the company has identified the need to generate a significant organizational change in its structure. They also have become aware of the need to grow internally in number of personnel and infrastructure and to respond to market demands. As well, they need to build high performance teams and integrate qualified people who are trained and match the profile of the position which they will occupy in the company, because there is a lack of planning. And thus there are organizational shortcomings, such as a blank in training follow-up, objectives by staff, lack of interest in the working environment, development of processes, among others, which have generated a stagnation in the company. The central question asked was, "What strategies can be implemented in order to use the knowledge and skills of people in the organization aiming to generate an organizational change in the company?"

KNOWLEDGE MANAGEMENT

Santillan (2010) considers that knowledge is "a human capacity, based on experience, which aims at transforming information into concrete decisions and actions" (p. 21). Knowledge is a human characteristic which, through a teaching process is generated, transferred and finally conserved, through the human capacity to reason. It generates itself; it is intangible, since it is not something that can be perceived optically or physically; it is volatile; the knowledge that is not used is blurred over time. Knowledge has the characteristic of disappearing through the ages in which it is happening. Another important characteristic is that knowledge needs to be built, that is, it needs an arrangement of placement and of order. It needs to be structured, since the data by themselves do not provide knowledge. Therefore, it is necessary to have structure so that knowledge can be conveyed (Dalmau, 2005). Types of knowledge are varied. Nonaka and Takeuchi (Mentioned in Santillan, 2010) explains that knowledge has two forms, explicit knowledge and tacit knowledge.

According to Santillan (2010), explicit knowledge is "that has been or can be articulated, codified, and stored in some kind of medium and is easily transmitted" (Santillan, 2010, p.24). On the other hand, he affirms that tacit knowledge "refers to the knowledge that the person has internally and that presents enough difficulty to be transmitted to other people" (p.24).

Knowledge is the greatest source of power for any company and managing it is possible in any organization, according to its size and particular features.

The competitive position of a country will be largely based on the production of the knowledge it generates. Developed countries have become wise nations, and this has had an impact on their worldwide competitive position, Kondratieff (mentioned in North & Rivas, 2008, p.25) states that "capital and labor will no longer be considered as scarce resources, but information and knowledge derived from it will be considered as scarce resources and, therefore, valuable for society or companies" (p. 25). When talking about developed countries, which are conceptualized as knowledge-based societies, it is worth mentioning that they manage information, analysis and knowledge as factors that have a preference over the production.

The basis of global competition is determined by the ability to generate and transfer knowledge in global knowledge networks. The industrial nations increasingly become wiser nations, thanks to their knowledge regarding the information of international markets that allows the development of new products, organizing production processes at a global level and managing international logistics.

What are smart companies like? What characteristics do these organizations bear? Which ones manage to transform information into knowledge and turn it into efficiency? When companies comply with the demands of their consumers, they become intelligent organizations. These companies balance their prices, provide the right products to the customer and provide solutions for them. These solutions are increasingly less related to work and capital, but they are related to knowledge, the importance of its structure and its transference of knowledge (Dalmau, 2005).

For Fontalvo, Quejada and Puello (2011), knowledge management is "the process of generating value from the intangible assets of the organization" and, therefore, it can be said that knowledge management is a process that, together with organizational communication, can lead to generating innovation in products and processes in order to guide them to improvement.

HUMAN CAPITAL

Human capital, according to Ramirez (2003), is the capital that the company has related to the personnel that work in it and their skills and knowledge. It is formed by different skills and abilities that take organizations to a higher level and maintain efficiency, as well as innovation and employability, which means "the possibility of people to find a job that compensates their work skills" (Ramirez, 2003).

Human capital can be increased or reduced. It is shaped through different influences and also through different origins which can include tasks that lead to learning through formal or informal education or also through the training that takes place in companies, as well as being formed through the knowledge, skills and competencies of each person.

There are five factors that help to better develop human capacity. The first refers to health services. Second, there is on-the-job training. The third reason explains the importance of formal education. Fourth, there are programs of educational extension by companies. Finally, the role of migration of people and families in search for better job opportunities.

The fact of gathering all the elements of education that allow learning, coupled with an optimal quality of life and health, is the beginning of the process of human capital accumulation. These elements are immersed in an evolutionary process that goes parallel to the advancement in technology (Ramirez, 2003).

The company is an open social system composed of different factors, such as politics, economics, religious, etc. Not only do they provide the company with a certain situation, but also they are immersed in a changing and challenging environment. The inputs or resources the organization receives are three: financial, technological and human inputs. This environment is not static; it is constantly changing. In this way, there is only one constant for the organizations: change. So, they must adapt continuously to the environment through analyzing it and adopting strategies appropriate to their processes and consistent with their plans (Puchol, 2007).

Over time, organizations have adopted different ways to ensure their competitiveness by adapting to change. An example of this is all programs that aim at total quality, which change the way companies operate to be more successful (Bohlander, 2007).

ORGANIZATIONAL CHANGE

There are two types of changes to ensure to remain competitive, according to Bohlander (2007) there are reactive changes which occur at the moment when external forces have influenced the performance in the organizations.

Other types of changes are proactive ones, which are directed through the managerial levels with the objective of obtaining a specific advantage of the most important opportunities; this occurs within companies that are in the process of changing things quickly.

Bohlander (2007) shows the results of a survey conducted by the American Management Association in which it is observed that 84 percent of the employees who were surveyed want to propose at least one change in the organization. But, unfortunately, these proposals are not easily materialized and this diminishes the intention of employees.

There are many reasons why attempts to propose changes in organizations fail, and these reasons affect human resources issues.

Bohlander (2007) shows us some of the reasons he considers the most important for which organizations are slowed down in their efforts to change:

a) They do not establish a sense of urgency

b) They do not create a common front to lead the efforts.

c) They lack visionary leaders.

d) They lack leaders capable of communicating the vision.

e) They need to include the risky issues into the new vision.

f) They should consider themselves successful even before they become.

g) They should leave the corporative culture changes aside.

Buckner (mentioned in Bohlander, 2007) mentions that "Non-technical and unattended human factors are, in fact, the most frequent problems in projects of change that have failed" (p. 14).

The change in an organization has defined steps and these must be established by the managerial and executive levels; they must visualize the future and communicate this vision at all levels within the company; they have to state and establish what is expected to be obtained in a clear and real way, i.e., how it should be obtained, what is the expected result in each process; develop the plans that will eventually lead the company to execute a master plan through the organization of all the people involved and through the organization and reorganization of the items the company has, such as facilities and machinery, among others.

Companies that have been successful in these processes of change have done it through the planning they execute and the possession of certain key elements needed to carry it out:

* They carry out a link between the business strategy and the change to be made.

* They show the benefits to be obtained in a quantifiable way.

* They make all the personnel committed people, including the organization, customers and suppliers.

* They integrate into this plan the desired behaviors as part of it.

* They provide clear, error-free and continuous guidance.

* They invest toward the implementation of the plan.

* They communicate personally and continuously.

* Commitment is the idea that they have, the commitment to change, not just the communication of change.

Competing through people is a fundamental thought that is held in companies and is the ability of an organization to manage talent which provides success when implementing changes.

The economic value of people knowledge, their abilities, and their individual capacities in the organization are expressed in the term of human capital. Below, are some statements, condensed by Bohlander (2007), that show the importance of people knowledge capitalization within the company through its management:

Gordon Moore, (mentioned in Bohlander, 2007) from the Intel Company, says: "If you look at our semiconductors and melt them for silicon, that means a small fraction of the costs; the rest is intellect and errors" (p.15).

Jack Welch, (mentioned in Bohlander, 2007) from General Electric, mentions that "the ability of an organization to learn and quickly translate that learning into an action is the maximum competitive advantage of business" (p.15).

Finally, Lew Platt (mentioned in Bohlander, 2007) states that "the successful companies of the 21st century will be those that do the best job of capturing, storing and leveraging what their employees know" (p.15).

In this way it can be observed that human capital is not tangible, so that it cannot be managed in the same way that companies manage their products or technology. This responds to the fact that employees, but not the organization, have their own capital. If they are withdrawn, then human capital is lost making the company lose the investment in training and development.

METHODOLOGY

The research was carried out with a qualitative methodology approach, using as a case study the company Transformations in the Industry, with coverage all over the central part of Mexico (called El Bajio). The activity of this company is industrial maintenance. This means that from contact with the client, the company performs engineering tasks for the company, both repair and construction. The repairs are in the mechanical, electrical and electronic areas, but they also manufacture machinery upon design for companies, primarily in the manufacturing sector. It has especially focused on the automotive sector. Transformations in the Industry is a company located in the city of Santiago de Queretaro, in the state of Queretaro. The interviews were applied to 20 workers of operational and managerial levels, making triangulation of answers.

Propositions

The research questions were defined in relation to the three topics of the research and, from these, the following propositions were defined.

Regarding the central theme of knowledge management in research: if human capital allows the organization to better meet their consumers, consequently leading the company to offer the right products and services at the time indicated by anticipating the competition and making it competitive "and for that it makes use of their knowledge, skills, specialties, studies, abilities, attitudes among others, which are part of their intellect.

For the topic of human capital: the aspects in terms of knowledge on the part of human capital as their knowledge, skills, studies, attitudes, specialties, proactivity in the work, skills, capacity to generate information, solution of problems, among others, are those that assure the organization the generation of successful organizational changes.

Finally, for the topic of organizational change: the generation of commitment from the worker with the organization, the application of acquired knowledge, the promotion of loyalty through opportunities for development, and promoting the autonomy of the worker in its work, generating opportunities for the development and growth, which is the strategy to be followed by the organization to retain human capital.

RESULTS

From the application of the interviews to the personnel in relation to the propositions of investigation that include the subjects of human capital, knowledge management, change and organizational development, a set of answers and an analysis of the results have been derived.

Within the object of study of the company Transformaciones en la Industria (Transformations in Industry), the aspects of human capital were first analyzed in terms of knowledge that would be valuable in the company to generate an organizational change. In the same way, in terms of knowledge management, how the accumulation and management of skills and knowledge drive the organization to generate organizational change was analyzed. Finally, information was also provided regarding organizational change and development in order to determine which strategies can be utilized to use the knowledge, skills and attitudes of human capital to generate an organizational change in the company.

RESULTS IN TERMS OF GENERATING KNOWLEDGE

During the different stages of the interviews, a lack of profiles and job descriptions was observed, as well as lack of a well-defined organizational structure and in general a lack of planning and organization of the human factor. As a consequence, there is a lack of knowledge of the functions by the occupants and medium performance in relation to the objectives of the organization.

Another factor of human capital that was observed during the interviews is the fact that people who are in the operational area have developed their skills and knowledge with time, derived from daily work. Abilities that people develop through experience within their work are considered skills developed in the company, such as the ability to negotiate or teamwork.

This has allowed for very specific knowledge in each of the areas, but nonetheless people have determined that this knowledge requires a professional base, i.e., formalizing this knowledge through education that involves the participation of professionals in it.

The generation of planning in terms of human capital management is required. Only through an optimal management of human capital on the basis of a well-defined organizational structure will changes and transformations in the industry be generated.

RESULTS IN TERMS OF GENERATION OF ORGANIZATIONAL CHANGES

Another important factor that was observed is the importance of knowledge and skills to achieve efficiency, however, how to measure in terms of the employees of the organization was not established.

There is no idea of how knowledge impacts the organization in a tangible form. Employees recognize that efficiency influences the results. Failures, delays, claims, etc., effect the service given to customers. Each person performs in particular the planning process and sets the objectives, but the main problem is that it is not in a formal way.

A way to measure the efficiency of employees and standards must be set to make organizational changes, this based on the skills and knowledge of each of the people involved in the company.

RESULTS IN TERMS OF ASPECTS RELATED TO THE KNOWLEDGE OF PEOPLE

In the analysis of human capital, it was observed how preparation obtained in the specialization of specific areas and the capabilities they perceive as desirable in the workplace is important.

The employees know their process, as part of an informal communication with the work team. They have some expertise in their area, in a formal way, or through experience, and they have the knowledge to apply it.

There is a great concern about obtaining knowledge, both as employee objective and as the company's vision of growth. It is because they consider that acquiring formal knowledge has an impact on the development of the company, since the employees have displayed areas of opportunity that have not progressed due to lack of knowledge, which in turn is derived from lack of training.

Only a part of the training is provided by external sources as suppliers. This updating or acquisition of knowledge is very low, only in very specific topics and it does not impact the actual development of the competitiveness of the company.

DISCUSSION AND ANALYSIS

The research has been carried out in the framework of the need for an organization to make changes in terms of planning, derived from what has been observed as exploratory research in the internal environment of the company, from which it can be mentioned:

a) The company is growing; it is covering market share in the same city and nearby cities.

b) The people that form the organization have an important base that can be used for strategic planning, such as good team dynamics, knowledge and simple and practical communication processes.

c) The management is interested in executing a change arising from the company's growth.

d) People have expressed their interest in formal knowledge, directly or as project development proposals.

After having carried out the investigation, the following can be deduced:

1. There is no clarity regarding the functions of people in the organization in any position. This is due to a lack of human capital planning and a lack of job profiles, which has not allowed the organization to be aware of what people know as well as their skills.

2. The lack of job profiles means there is no awareness of the administration of talents, therefore, people's potential has not been recognized in a broader way.

3. After the results, it was observed that people's knowledge is not reinforced or extended, whether they have been acquired formally or through experience.

4. Organizational performance is perceived to be diminished due to the lack of specific skills.

5. Existing training has only been given by suppliers in the specific case of technology.

6. The skills developed in the work place are perceived as elements that come as a result of the development of the company in terms of negotiation and teamwork.

7. People skills which are not related to their work (and that are not usually found in their curriculum vitae) have occasionally generated ideas, but they have not been capitalized on in the medium and long-term projects.

8. There is no way to measure the efficiency of people or determine how skills and knowledge are reflected in the competitiveness of the company.

9. People are aware of their knowledge about work and how it derives from the processes within the company, but this knowledge is not formalized.

10. Failures, claims and economic reprimands to the company are detected in some contracts due to delays in time, which are attributed in most cases to lack of knowledge regarding the projects that are held. So, solving problems deals more with what people know or do not know rather than administrative problems.

11. People recognize that they know their function within the company, in most cases this function has been created by them, but there is no strategic planning that allows them to see well-defined positions and objectives.

12. The need to acquire knowledge is recognized, which arises from observing areas of opportunity that have not been taken advantage of because there is no theoretical basis or experience to develop certain projects.

13. The lack of strategic planning has prevented the existence of clear positions, along with training and academic education for people

14. There is little or no resistance of the employees to change; they are willing to adopt new ways of doing things.

15. Regarding the internal and external environment of the organization, there is a lack of knowledge since there is no previous analysis. Only people who work with clients and external suppliers collect certain information, but this is diluted in time and activities. There is no transfer of this information.

16. People remain in the organization for different reasons that allow them to be committed. This commitment is seen in the long-term objectives.

In addition to the reflections derived from this research outcome, it was decided to mention facts that, from the point of view of the company, are part of the analysis carried out in this research and that it is necessary to capitalize. The following observations were made:

a) Capitalize the knowledge that people have by performing a knowledge management process.

b) Take the opportunities that have been presented regarding projects and innovation that have not been considered because people are not formally trained in the required areas.

c) Capitalize on the fact that people do not have resistance to change; this reduces friction in terms of a possible strategic planning proposal.

d) Capitalize on the fact of long-term permanence observed in the staff, which derives from the characteristics they perceive of the company.

PROPOSAL (STRATEGIC PLANNING)

It is necessary to carry out a complete process of strategic planning. The organization's management visualizes it as something necessary and this research aims to give a concrete basis on what to work, which, as a proposal, are presented as follows:

1. As a starting point, the planning should be in accordance with the personnel's goals. The company is a group of people who know each other and who have both a professional and a personal bond, which strengthen the company's philosophy.

2. Perform strategic planning as a process that leads to a competitive advantage to be developed by the company: the production, processing, selection and transfer of knowledge

3. As the first point of planning, an analysis of the company's internal and external environment is required, covering issues such as competence, customers, suppliers, etc. in order to have a clear vision of the situation at a current moment.

4. Make a diagnosis of problems and successes.

5. Carry out a new corporate identity based on the analysis performed.

6. Create an efficient communication system to carry out planning at all levels.

7. Establish the corporate objectives, per departments and up to each of the posts, to give clarity to each process that, together with a definition (subsequently addressed) of positions and their functions, will give clarity to what everyone knows and should know.

8. This process of strategic planning finds support in the points of proposal that are also explained in this document and that can be observed in the following paragraphs.

Analysis, evaluation and job description

The analysis, evaluation and description of positions will provide information to the company for knowledge management and provide a basis for human resources functions, such as recruitment, selection, performance evaluation and, above all, training and development. This will compensate some of the problems detected in the results of this research, such as the lack of continuity in the adoption of knowledge in each job, the administration of talent, loss of advantages of innovation opportunities and projects that have not been taken, etc.

Knowledge management

It is necessary to manage the knowledge that is held and generated within the organization so that it can be a tool to generate value which has to be supported by a well-defined internal communication system and by people who are part of the company. Based on the results, it can be seen that this process can generate entrepreneurial innovation capacity in the company as a way of giving impetus to improvement.

In summary, it can be said that managing knowledge, supported by an efficient communication system and by strategic planning, can bring the following advantages or be an important support to solve problems for the company:

a) Improve the performance of people by allowing them to participate in the establishment of their goals supported and integrated to strategic planning.

b) Improve the transfer of knowledge from one person to another, since if it is established and people know how to do and where to apply it, added to the day-to-day experience in the company, problems can be solved faster and more effectively. Additionally, this task has to be documented as a background of knowledge management in the company.

c) It is necessary to define the identity of the company in a clear manner, such as its objectives, the objectives by area and the objectives of each person, clearly involving each one of them in the process and implementing a series of strategies that lead the company to a single road together. Furthermore, it is necessary, within these strategies, to integrate other strategies aimed at managing what people know.

d) Improve efficiency through the strategic planning of the company, integrating knowledge management strategies, but also integrating strategies for continuous improvement, which grow processes better, within which knowledge management is clearly contemplated as one of them.

e) Finally, improve market share. Although it is observed that the workload flows steadily, the market is growing, a fact that management considers as important. If the company takes advantage of what people know, even not being related to the activities in the organization, it adds capital to the company structure and it could reach a higher level in the quality of its services.

Finally, it is necessary that the improvement in the company focuses on the issues of strategic planning, human capital and knowledge management to achieve a change and development in the organization by taking advantage of the tools the organization already possesses.

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Josefina Morgan Beltran Universidad Autonoma de Queretaro

Elia Socorro Diaz Nieto* Universidad Autonoma de Queretaro

Cesar Alfredo Herrera Almanza Universidad Autonoma de Queretaro
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Author:Beltran, Josefina Morgan; Nieto, Elia Socorro Diaz; Almanza, Cesar Alfredo Herrera
Publication:Competition Forum
Geographic Code:1MEX
Date:Jul 1, 2018
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