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ScottA SnellCornellUniversity393IvesHallIthaca NY14853 CompetingthroughKnowledge TheHumanCapitalArchitecture IBM Youcangetcapitalanderectbuildings butittakespeopletobuildabusiness ThomasJ Watson IBM DidIBMforget 168billion TobinsQ 2 1 Hardware software andservicesNobelprize winningscientists3 768patents 1993 1995 What sHappeningToday IndustryChangesGlobalizationInformationtechnology Needfor OrganizationalagilitySpeedInnovationCost Knowledge basedstrategiesCorecompetenciesInnovationExternalpartnerships Leadingto NewBusinessEquation CoreCompetence isabundleofskillsandtechnologiesthatenablesacompanytoprovideaparticularbenefittocustomers HamelandPrahalad 1994 SONYMiniaturizationPocketabilityFEDERALEXPRESSLogisticsOn timedeliveryHONDAEnginedesign mfg ReliableperformanceMOTOROLAWirelesstechnologyUntetheredcomm CoreBenefittoCompetenceCustomer Knowledge Technologies Processes Relationships CRITERIAvaluableuniqueextendablelearning BenefitsVALUE Costs UNIQUE socialcomplexity causalambiguity LEARNING experiencexchallenge CompetingThroughPeopleIdentify developcoreskillsIntegratediverseactivitiesRespondwithagility speedEmpoweractionInnovate CoreCompetence isabundleofskillsandtechnologiesthatenablesacompanytoprovideaparticularbenefittocustomers HamelandPrahalad KNOWLEDGE customer technology operations managing PROCESSES customersegmentation just in time hrs masscustomization buildtoorder AIM ROICmetrics experimentation TECHNOLOGY Premierpages softwareinstallation TPMtriggers parts service customerpurchasingsystems RELATIONSHIPS customerintimacy Boeing Platinumcouncils supplierpartnerships Sony employeeinvolvement thirdpartyservicemaintainers TPMs distributionagreements UPS Airbourne VirtualIntegration Leadingto ValueUniquenessLearning Alow valueproductcanbemadebyanyoneanywhere Whenyouhaveknowledgenooneelsehasaccessto that sdynamite Weguardourintellectualassetsevenmorecarefullythanourfinancialassets RoyVagelos formerCEOMerck KNOWLEDGE customer technology operations managing PROCESSES customersegmentation just in time hrs masscustomization buildtoorder AIM ROICmetrics experimentation TECHNOLOGY Premierpages softwareinstallation TPMtriggers parts service customerpurchasingsystems RELATIONSHIPS customerintimacy Boeing Platinumcouncils supplierpartnerships Sony employeeinvolvement thirdpartyservicemaintainers TPMs distributionagreements UPS Airbourne PositivelyOutrageousService SouthwestAirlines KNOWLEDGE microbiology biochemistry microbiology imunodiagnostics antibodies conjugates PROCESSES R D Mfg bioconjugation antibodypurification PCRamplification DNAhybridization TQM commercialization TECHNOLOGY immunoassays ELISA serum blood rapiddiagnostics DNAbased RELATIONSHIPS CRC DT CDC U S Army WorldHealthOrg universities distributionnetwork employee science mkt C2 RapidLearning Leadingto Anorganizationatthefrontierofitsintellectualfieldismorelikelytostayatthefrontier Itcanattractandchallengemoreandbetterintellectthanitscompetitors Bysolvingmoreadvancedproblems ithasmorecapacitytosolveothers Andsoon JBQuinn ValueUniquenessLearning BIOTECHINC Benefits Costs Combinationofpeopleandsystemsleadsto HumanCapital SocialCapital OrganizationalCapital BioTech Inc Intellectualcapital People Systems KNOWLEDGE microbiology biochemistry bioconjugation imunodiagnostics PROCESSES R D Mfg bioconjugation antibodypurification PCRamplification DNAhybridization TQM commercialization TECHNOLOGIES immunoassays ELISA serum blood rapiddiagnostics DNAbaseddetection RELATIONSHIPS CRC DT CDC U S Army WorldHealthOrg universities distributionnetwork employee science mkt C2 RapidLearning PEOPLE SYSTEMS CoreCompetence Howdoeshumancapitalcontributetothecorecompetence ValueUnique Resourcesneedtobe BenefitsVALUE Costs DrivesinnovationRespondstocustomerdemandsProvidesexcellentcustomerserviceAchieveshighestqualityInstrumentalinprocessimprovementsDevelopsnewbusinessopportunitiesDirectlyaffectsefficiencyandproductivityMinimizescostsofproduction service delivery NotwidelyavailableinthemarketCannotbeboughtorappropriatedDifficulttoimitateorduplicateSpecializedKSAsDifficulttoreplaceCustomizedtoourfirmDevelopedthroughon the jobexperiencesDistinguishesusfromourcompetitors R D Manufacturing Operations Distribution Sales Sales TMT CustServ HR R D Rapids Fin CustomerService Mfg R D R DPartners CoreKnowledge LowVALUEhigh LowUNIQUEhigh BIOTECH INC MappingHumanCapital KEYFinanceHRTMTMISMfg OperationsMarket SalesR DQualityBiologicalsCust ServiceRapidDiag Legal Reg Distribution Rapids ScottA Snell CornellUniversity C2 RapidLearning HR Legal MIS Biologicals Fin Quality TMT CompulsoryKnowledge IdiosyncraticKnowledge AncillaryKnowledge HighValue LowValue Generic Core Idiosyncratic Ancillary Compulsory Unique HumanCapitalArchitecture HumanCapitaluniquevalue HRMSystem EmployMode CoreHumanCapitalHighValue DirectlinktocorecompetenceHighUniqueness Firm specificknowledgeandskills EmploymentMode knowledgeworkEmploymentRelationship organization focusedExamples softwaredevelopers Microsoft drugresearchers Merck fundmanagers Fidelity gold collar workers HighValue HighValue LowValue LowValue Unique Generic Generic Idiosyncratic Idiosyncratic Ancillary Ancillary Compulsory Compulsory HumanCapitalArchitecture Core HighValue HighValue LowValue LowValue Unique Generic Generic Core Core Idiosyncratic Idiosyncratic Ancillary Ancillary HumanCapitalArchitecture HumanCapitalArchitecture Compulsory EmploymentMode traditionaljobEmploymentRelationship job focusedExamples staffaccountants Andersen salespeople Sears truckdrivers UPS HighValue DirectlinktostrategyHighUniqueness Genericknowledgeandskills CompulsoryHumanCapitalHighValue DirectlinktocorecompetenceLowUniqueness Genericknowledgeandskills EmploymentMode contractworkEmploymentRelationship transactionalExamples assemblers Nike clericalworkers Halliburton payroll Continental catering ARAMARK HighValue HighValue LowValue LowValue Unique Generic Generic Core Core Idiosyncratic Idiosyncratic Compulsory Compulsory HumanCapitalArchitecture HumanCapitalArchitecture Ancillary Ancillary AncillaryHumanCapitalLowStrategicValue OperationalroleLowUniqueness Genericknowledgeandskills EmploymentMode partnershipEmploymentRelationship collaborativeExamples wildducks IBM designengineers w Boeing trainers Merck Forum authors McGraw Hill HighValue HighValue LowValue LowValue Unique Generic Generic Core Core Idiosyncratic Idiosyncratic Ancillary Ancillary Compulsory Compulsory HumanCapitalArchitecture HumanCapitalArchitecture IdiosyncraticHumanCapitalLowStrategicValue IntermittentlinktocompetenceHighUniqueness Specializedknowledgeandskills TRADITIONALJOB BASEDEMPLOYMENT ALLIANCE PARTNER CONTRACTWORK KNOWLEDGEWORK S specificjob T D short term T D currentjob T D external internalequity S immediateperform group Job narrow simple short term PA quality Job customized bonus performance industryexperience S strategycontribute salary Job rotation S solveproblems S best Job security high Job empower PA strategycontribute T D investment PA workw others T D OJT T D team T D continuous S potential S promotew in PA develop Job dynamic Job standardized hourly KEYJobdesignStaffingTrainingAppraisalCompensation LowVALUEhigh LowUNIQUEhigh PlottingHRPractices STUDY 152multi productfirms 200employeesCEO VPHR lineexecs Lepak Snell 2001 Rewards Appraisal Development Staffing JobDesign enriched empoweredcustomized aptitude abletolearn promotefromwithin continuouson the jobfirm specific focusonstrategiccontributiondevelopmental externalequity highwages payforknowledge experience seniorityownershipandperks COMMITMENT BASEDHRMSYSTEM CoreHumanCapital EmploymentMode knowledgeworkEmploymentRelationship organization focused Rewards Appraisal Development Staffing JobDesign clearlydefinedmoderatelyempowered externalrecruitmentachievement limitedtofirm specificshort termfocus developmentalfocusonperformance externalequity marketrate payforperformance PRODUCTIVTY BASEDHRMSYSTEM EmploymentMode traditionaljobEmploymentRelationship jobfocused CompulsoryHumanCapital Rewards Appraisal Development Staffing JobDesign well definedlimitedscope outsourced perhaps contractforaspecifictask limitedtorules procedures administrative hourlyorcontract contingent COMPLIANCE BASEDHRMSYSTEM EmploymentMode contractworkEmploymentRelationship transactional AncillaryHumanCapital Rewards Appraisal Development Staffing JobDesign team basedenriched autonomous abilitytocollaborateachievement continuouson the jobfirm specific team orientedgoalaccomplishment group basedincentivescontract salary pay for knowledge COLLABORATIVEHRMSYSTEM EmploymentMode partnershipEmploymentRelationship collaborative IdiosyncraticHumanCapital HumanCapitalArchitecture lowUniquenesshigh lowStrategicValuehigh HumanCapitaluniquevalue HRMSystem EmployMode RelationalExchange Transactional Internalization Externalization IdiosyncraticHCMode PartnershipHR Collaborative selectonpastexperience developtherelationship evolvingscope rewardsforideas CoreHCMode KnowledgeworkHR Commitment based staffbasedonpotential develop firm specific extensivepay benefits autonomy self direction mistakesareimportant CompulsoryHCMode TraditionaljobHR Productivity based staffbasedoncurrentskill lessdevelopment marketwage focusonSTperformance mistakesabovethewaterline AncillaryHCMode ContractworkHR Compliance based standardize simple outsource focusonrules procedures narrowscope erroravoiding hourlypay Oneflawinknowledgemanagementisthatitoftenneglectstoaskwhatknowledgetomanageandtowardwhatend Knowledgeshouldbemanagedwithinthecontextwherevalueiscreated TomStewart LinkBackToCoreCompetence LowVALUEhigh LowUNIQUEhigh BIOTECHINC MappingSocialCapital TMT Rapids Ext Partner R D Government QualityTeam Production TMT Marketing Sales FOCUSON GovernanceTMTCultureValueChainTaskEnvironmentStakeholdersRemoteEnvironment Production RawMatSup R D Suppliers R D Production TechSupport Customer R D Customer R D Quality TMT R D U S Regulatory Cust Service Customer Culture TMT TMT U S R D TMT U S R D TMT R D U S Mfg TMT U S R D TMT Customer R D ExternalR D Governance Marketing Customer R DTeam Production Sales MIS R D ProductionTeam Production Quality R D Sales Sales TMT Distributors ScottA Snell CornellUniversity PATTERNS Explicit TacitTransactional RelationalEffectiveness Efficiency LowVALUEhigh LowUNIQUEhigh MappingOrganizationalCapital FOCUSON DatabasesPatentsProcessesSystemsManuals LN Feelings LN Sexions Suggestions LN GenNews LN ContactDatabase LN Research
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