Building Individual Capability Vs. Building Organizational Capabilities

Reasons for Organizations to Fear Losing Knowledge of Employees

Question:

The main aim of this essay is to highlight, whether building individual capability conflict with building organizational capabilities. The essay also discusses the possible reasons for organizations to fear to lose of knowledge of employees. This essay also focuses on the potential risks of focusing on knowledge capture, rather than individual development. The essay also highlights important implications for developing human capital and organizational capability in today's organization.
 

The main aim of this essay is to highlight, whether building individual capability conflict with building organizational capabilities. The essay also discusses the possible reasons for organizations to fear to lose of knowledge of employees. This essay also focuses on the potential risks of focusing on knowledge capture, rather than individual development. The essay also highlights important implications for developing human capital and organizational capability in today's organization. 

Organizational capability is the ability of a firm to manage its workforce and attain competitive advantages over the rival firms. Organizational capability concentrates on internal systems and processes for meeting the demand of the customers. It also creates competencies that are organization-specific and provide the organization with competitive advantages as they are unique (Argyres et al 2012). 

Part 1:

This part of the essay critically examines the possible reasons for organizations to fear to lose knowledge of employees, and they are as follows:

• The bureaucracy of big companies: This is probably the most important reason that the organizations fear losing of knowledge of employees. However, this is the reason, which masks the true reason. No individual will abide by the rules that make no sense. But when the top officials of an organization complain about this reason, it can be implied that they do not feel that they have contributed to these rules (Poorhosseinzadeh et al 2013).
• Fail to find a project that ignites the passion of the talents: Big companies do not have individuals that go to the best and the bright employees and ask whether they are happy with their current project, or do they want to work on something different that they are interested in and which will benefit the organization. In fact HR people, to get into this matter keep up with other things. The bosses of the firm also do not have enough time to make this topic a must have topic instead of nice to have. Top talents in a company are not driven by the power and money but are driven by the opportunity to get involves in something big (Turner and J 2015).
• Poor review of the annual performance: There are many organizations that, do not provide and effective annual review of their employees. In fact, there are many companies, that have an employee annual performance review process, but they rushed through by just filling up a form and send it to the HR. This creates an impression in front of the employees that both the boss and the organization are not interested in the long-term future in the organization (Poorhosseinzadeh et al 2013).
• No discussion related to the development of career: Majority of the employees is not sure what they will be doing in the next 5years. Only a few people could say when they are asked about their future. It is crucial for every individual to discuss their future with the boss. There are many bosses, who never interact with the employees regarding their future career or where they want to be in the future. If the organization starts discussing with the employees, it will benefit the company. If the talented employees of the organization think that there is a path for success for them, then it will help the organization in retaining their talents (Turner and J 2015).
• Lacking accountability: Top talents of the organizations needs accountability from others and does not mind if they are held accountable for the project they are handling. So it is important for the bosses to stay in touch with the top talents. They appreciate the observation, suggestions, and insight provided by their bosses (Turner and J 2015).
• Missing vision: Few questions should always be raised such as: Is the future of the company exciting? What strategy is the company executing? What will be the role of the talented employees? Did the employees have contributed to the vision of the organization? And if the answer to this question is no, then there is lot o work the company needs to do (Turner and J 2015).
• Lacking open-mindedness: talented employees want to share their vision and ideas and expect the organization to listen to them. So it is important for the company to undertake programs that encourage individuals to come forward and share their ideas and vision (Turner and J 2015). 

This part of the essay critically examines the potential risks of focusing on knowledge capture, rather than individual development. In the present scenario, the organizations highly concentrate on capturing knowledge, rather than the development of individuals in the firm. Capturing knowledge plays a vital role in the development of any business. It is highly crucial for the firm to retain their employees, because the employees are the main assets of any organization. The employees, that is associated with the organization for a longer duration becomes the storehouse of knowledge and contributes greatly to the growth of the organization. It is the responsibility of the higher authority to make sure that the employees are satisfied with their job, because job satisfaction, security in the job, proper work-life balance and flexible timings helps an organization in retaining their employees. It is also evident that the employees that are satisfied and happy with their job will be more efficient in their work, thus benefiting the organization (Oladapo and V 2014).

However, the organization while trying to retain their employees ignores the development of individuals in the organization. Development of individual is also equally important for the development purpose because development of the employees help in the development and growth of the employees, who are the most important asset of the company. It is important for the management to treat their employees equally and respectfully, because employees contribute a major proportion in the development of business (Schiemann et al 2014).

Development of employees is important for both the employees and the organization. It helps the employees to enhance their knowledge and skills and perform better in the organization. It is evident that if the employees of an organization are performing well, then it will help the organization in its growth process (Buller et al 2013).

Potential Risks of Focusing on Knowledge Capture Rather than Individual Development

Development of employees is not only important for the professional development, but it also helps them in their personal growth and makes them ready to face any extreme and adverse situation.

Development of the employees also helps the organization in extracting the best from their employees. This will help the company to extend their business further. Development of employees also helps the employees in assessing themselves. It also helps the employee in highlighting the area where they are lacking and where they need to improve (Jiang et al 2014).

Development of employees helps in creating an environment of learning within the organization, which helps in motivating all the employees and developing new skills and techniques. Development of the employees also helps in strengthening the relationship between the employees in the firm. Training plays a vital role in the development process of the employees because it helps them in enhancing their skills and knowledge and function efficiently in the organization (Armstrong et al 2014).

So, the above discussion has clearly highlighted the advantages of the development of employees. If the organization ignores the development of employees, then it will adversely affect the organization and will hinder its growth process. 

This part of the essay critically highlights important implications for developing human capital and organizational capability in today's organization. In the present scenario, there is much evidence that proves that there is a positive relationship between the development of Human capital and organizational performance. The importance given to a human by the organization implies that the value of the market depends more on intangible resources, mainly human resources and not on tangible resources. The organization can grow better by recruiting and retaining talented employees in the organization. It is the duty of the organization to leverage the skills and capabilities of their employees, which can be achieved by encouraging organizational and individual learning and should create an environment that supports sharing, creation and application of knowledge (Arenas et al 2014).

The contribution of Penrose (1959) represented the starting of the resource-based view of the firm (RBV) and later it was articulated by Barney, Dierickx and Cool and Barney. The RVB highlights the significance for an organization of creating a valuable resource set and bundle them in a dynamic and unique way to foster the success of the firm. The competitive advantage of a firm is not dependent on technology, natural resources or economics of sales as they are easy to imitate. Whereas, according to the RBV competitive advantage of a firm is dependent on the rare, valuable and robust to imitate resources that lies within the organization. In the real sense, human capital is considered as an intangible asset. The significance of human capital or collection of capabilities of the employees and how the talents are managed by the HRM of the company become more important than the strategic objectives of the company (Cummings et al 2014).

In the terms of rarity, if the level and types of skills are not distributed equally, such that allowing some firms to acquire the needed talent and other organizations cannot acquire. Then such type of human capital becomes a source of competitive advantage.

Regarding inimitability, there are mainly two reasons why it is difficult to imitate human resources and they are path dependency and casual ambiguity. Firstly it is difficult to capture the exact mechanism by which the interaction of policies and human resource practice creates value. Secondly such type of HR systems depends on the path, and they have consisted of policies that are developed with the passing time, and it cannot be purchased by the competitors in the market (Kamasak and R 2015).

Moreover, when the interdependency between the practices of HR is combined with the company idiosyncratic context, then it creates high barriers to imitation. According to Boxall, the human resource must be latent which have productive possibilities and must be valuable. So it is important for the company to secure exponential talents or the bright and the best employee to attain competitive advantages. The RBV of an organization strengthens the very common and repeated statement that humans are very important assets of any business (Cummings et al 2014).

So the above discussion clearly highlights important implications for developing human capital and organizational capability in today’s organization. 

Conclusion

This essay has clearly highlighted, whether building individual capability conflict with building organizational capabilities. The essay has also discussed the possible reasons for organizations to fear to lose of knowledge of employees. This essay has also focused on the potential risks of focusing on knowledge capture, rather than individual development. The essay has also highlighted the important implications for developing human capital and organizational capability in today's organization.   

References

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Kamasak, R., 2015. Determinants of innovation Performance: A Resource-based Study. Procedia-Social and Behavioral Sciences, 195, pp.1330-1337.

Turner, J.R., 2014. The handbook of project-based management (Vol. 92). McGraw-hill.

Argyres, N., Felin, T., Foss, N.J. and Zenger, T., 2012. The Organizational Economics of Organizational Capability: A Research Agenda. Organization Science, 23, pp.1213-1226.

Poorhosseinzadeh, M. and Subramaniam, I.D., 2013. Talent management literature review. Australian Journal of Basic and Applied Sciences, 7(6), pp.330-338.

Oladapo, V., 2014. The impact of talent management on retention. Journal of Business Studies Quarterly, 5(3), p.19.

Schiemann, W.A., 2014. From talent management to talent optimization. Journal of World Business, 49(2), pp.281-288.

Meagher, K. and Prasad, S., 2016. Career Concerns and Team Talent. Journal of Economic Behavior & Organization.

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Cummings, T. and Worley, C., 2014. Organization development and change. Cengage learning.

Jiang, K., Lepak, D.P., Hu, J. and Baer, J.C., 2012. How does human resource management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms. Academy of management Journal, 55(6), pp.1264-1294.

Buller, P.F. and McEvoy, G.M., 2012. Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, 22(1), pp.43-56.