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KNOWLEDGE BASED ORGANIZATION AND COMPETENCY BASED ORGANIZATION: A REVIEW OF THEORIES AND APPROACHES

Alexandru-IonuŃ PohonŃu1, Camille Baulant2, Costache Rusu3

1“Gh. Asachi” Technical University of Iasi-Romania, DMEPS, ai.pohontu@gmail.com

2Université d’Angers - France, GRANEM, camille.baulant@univ-angers.fr

3“Gh. Asachi” Technical University of Iasi-Romania, DMEPS, c.rusu@cetex.tuiasi.ro

published in ”Quality-Access to Success”, 20012, vol.13, S5, Ebsco Database

http://connection.ebscohost.com/c/articles/83752721/knowledge-based-organization competency-based-organization-review- theories-approaches

ABSTRACT: Purpose: This article aims to review the key concepts of knowledge-based organization and competency-based organization. Design/methodology/approach: Based on literature an overview it is made for understanding the key concepts related to knowledge and competency-based organization approach. Findings: This overview identifies that knowledge and competence have emerged as the key drivers of competitive advantage in most of theories. In the new market where the intangibles assets are vital, knowledge and competences plays an important role in obtaining, maintaining and sustainable developing the competitive advantage. Moreover, knowledge-based assets underlying competences and competences in turn underlying the organization’s products and services. Therefore, the main challenge of the firms is its ability to create, transfer, assemble, integrate and exploit the knowledge-based assets. Originality/value: This paper emphasizes the beneficial attributes of competence management in knowledge-based organization, more specifically those involved in process of knowledge sharing. Keywords – knowledge-based organization, competency-based organization, competence transfer, knowledge sharing process

1. INTRODUCTION

The interest in the field of knowledge and competence has grown more and more both in the research literature and in the field of organizational practices. Thus, knowledge-based organizations have become an important trend in the current economy. However, the increasingly dynamic environment has led organization to focus on the necessity of emerging competences in order to acquire and to maintain the competitive advantage. The search for source of sustainable competitive advantage has been for a long time a focus of debate over management literature. Moreover, in the knowledge-based economy in which we live, it is impossible for organizations to be specific, as radical uncertainty manifests increasingly more. Therefore, in order for organizations to survive, they have to come up with news in front of the competition as well regarding the internal procedures. From this point of view, competences and tacit knowledge could be much more effective than academic knowledge as these two types of practical knowledge provides to the organizations the ability to quickly adapt in front of changes in global market.

Competitive advantage occurs when an organization acquires or develops attributes or a combination of attributes that overcome competitors in the market. These attributes can include access to human resources or access to trained human resources who have necessary expertise. Treating staff as the main asset of the organization has inspired the human resource department to become more efficient and to develop programs and policies that align organizational competences with the execution of organizational strategies (Ruouna and Gibson, 2004).

Current speed and level of scientific and technological development and the constant changing market conditions require an increased need for human resources development.

Nowadays knowledge quickly becomes obsolete, so the survival in the economic system requires constant updating of knowledge, competences and adaptation of new knowledge across the whole production activities. Therefore, instead of technical, material or financial resources, the developed

countries of the world are based mainly on human resources, specifically on the knowledge possessed. In a rapidly changing market, organizations can operate based on learning, development and progress instead taking to account the past activities. The combination of work and education, and their harmony is an essential requirement for the current and future worker. Demand for well-trained human resources is changing faster than human resources itself. Due this fact, it is necessary to create new procedures for human resources development that may lead to increased competences, increased adaptive ability, leading to innovation. Dynamics of human resources is achieved by their continuous development, so they became the main capital and source of power for success in any organization.

Despite the increasing importance of knowledge and competence, the main elements from the foundation of knowledge-based organization and competency-based organization, there is no conceptual clarification to describe what actually they mean, and how they differ from each other.

Thus, this paper aims to clarify and elaborate the conceptual issues focusing on a comparative analysis of knowledge and competency-based perspectives.

2. DIFFERENT PERSPECTIVES ON KNOWLEDGE AND COMPETENCE ARCHITECTURES

2.1 Knowledge Architectures

Knowledge becomes the buzzword in theories explaining firms and competitiveness. Due to knowledge, companies will have to deal with the pressure to explore current or present knowledge to become learning organizations and maximize innovation and creativity. Up to date, there is no common agreement in the literature regarding the significance of knowledge, or their definition (Singh, Dilnutt, & Lakomski, 2008). Some researchers believe there are differences between knowledge and information (Nonaka, 1994), the information’s are considered to be "a message flow", while knowledge is based on information and justified by personal beliefs. Other

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researchers are of opinion that all information can be considered knowledge, but knowledge is more than information and know-how (Kogut & Zander, 1992; Machlup, 1980, Zander & Kogut, 1995). Researchers in the field of information management tend to use the concept "knowledge"

to suggest that there is value and uniqueness in examining knowledge management systems compared with traditional information systems (Alavi & Leidner, 2001).

Many researchers believe that knowledge and information are interchangeable; stressing that there is more practically useful in distinguishing knowledge from information in the knowledge sharing area (Bartol and Srivastava, 2002; Huber, 1991, Makhja and Ganesh, 1997).

One of the most popular types of knowledge has its origins in the ideas of Polanyi (1967), who proposes a distinction between explicit and tacit knowledge. His ideas are further developed and popularized by Nonaka (1994), and Nonaka & Konno (1998). Making a summary, recognizing the differences between tacit and explicit knowledge can help organizations and their members to achieve the objectives of knowledge management. Consequently, an organization and its members must perceive which parts of knowledge are explicit and which parts are silent, then choosing the closest methods and practices for managing these different types of knowledge.

Concerning the knowledge sharing, this procedure relates to the provision of information and know-how needed to help others and solve problems, to develop new ideas, or to implement policies or procedures (Cummings, 2004; Pulakos, Dorsey, & Borman, 2003 ). Knowledge sharing can occur through written correspondence or face-to-face communications by networking with other experts, or research, organization and capture knowledge for others (Cummings, 2004; Pulakos et al., 2003). Although knowledge sharing is the term generally used more often than information sharing, researchers tend to use the term knowledge sharing to refer to sharing with others, held in experimental studies where participants are offered a list of information, manuals, and programs. Throughout the years, a series of studies focused on demonstrating that knowledge sharing is essential because it allows organizations strengthen innovation performance and reduce redundant learning efforts (Calantone et al., 2002, Scarbrough, 2003). An organization can successfully promote a culture of knowledge sharing not only directly, by incorporating knowledge in business strategy, but also in the employees attitude and behavior to promote knowledge sharing. (Connelly and Kelloway, 2003, Lin and Lee, 2004).

2.2 Competence architecture

The approach as the main important resource in decision making received significant attention over the last period (Hamel and Prahald, 1994, Barney, 1991, 1996, Eisenhardt and Martin, 2000), the focus being more on complementarities than replacement of industry-based approach of Porter (1980). However, ideas about the importance and capabilities of competences as a resource are not new. Since the late '50s, Penrose's theory (1959) on organizational growth and economic evolutionary theory of Nelson and Winter (1982), focused on the importance of tangible and intangible resources as the basis for competitive and sustainable advantage.

The concept of competence is probably one of the most diffuse in the history of theories of organizational development. This concept is often used to explain the specific approach to recruitment, training, succession planning, performance and motivation, as such, there was a natural

tendency to have the meanings given various and often hardly visible related.

Thus, Keen (1992) presented a fairly wide definition of the concept of competence as the “ability to deal with a situation (even unexpected)”. In his paper, Keen believes that attitudes, knowledge and skills are important elements, which in his point of view, they are necessary in carrying out the work. Another element of competence is thought to be motivation, according to Boda and Virgile (2010), in addition to explicit knowledge, experience and knowledge elements.

Also, Reinhadt and North (2003) emphasize the importance of requirements, which is left outside the definitions above, but involved in it.

Concerning the competence transfer, this process involves transferring competences from individuals with experience to those without experience. This difficult task is achieved by several common situations involving these two parties. In principle there are various means of competence transfer. In addition, these methods can be classified in several ways. A hard way to do this is to divide all the facilities in totally facilitated, semi- and non-facilitated (Koskinen, 2003).

The totally facilitated means occur, for example, in school education or attendance at courses. This means that the competence transfer of complete competences can contribute to learning explicit knowledge. Regarding the semi-facilitated competence transfer, it takes place through the mentoring processes. The main actor in these processes is the experienced person, responsible for transferring the competences to the novice. In other words, the semi-facilitated competence transfer excludes the incidental competences and only hired to meet the explicit requirements of the organization. In terms of non-facilitated competence transfer, it means that the learning takes place at work without help from a specific person. Since knowledge from the experienced employees is mostly silent, they cannot be transferred by fully facilitated competencies.

Another element related to the competency-based organization is the concept of core competences, as fundamental for organizational renewal and as a facilitator for strategic change, is a subject of interest for also managers and teachers. It is a complex and challenging concept because it is difficult to specify theoretically, to identify empirically as a phenomenon and to apply in practice. In essence, core competences are specific strengths possessed by organization in relationship with to competition in the same industry, which provides the fundamental basis for providing added value. Core competences involve collective learning inside the organization, and how the various production competencies are coordinated and integrated in multiple streams of technologies.

It requires communication and a deep commitment to working across organizational boundaries. Identification is undoubtedly the starting point for research in the field of basic skills (Clark, 2000). The process of basic skill identification usually requires employees to identify basic skills through scanning and evaluation the organization's critical resources, capabilities and competences (Prahald and Hamel, 1990).

3. DIFFERENCES AND SIMILARITIES BETWEEN COMPETENCES MANAGEMENT AND KNOWLEDGE MANAGEMENT

During previous studies, the concepts of knowledge, expertise and competence are closely linked and have been discussed extensively in different terms or, regarded as specific resources of the organization (Hitt & Ireland, 1985), invisible assets (Itami & Roehl, 1987), skills (Aaker, 1989), core

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competencies (Hamel & Prahald, 1990), organizational memory (Walsh & Ungson, 1991), intangible resources (Hall, 1992), core capabilities (Amit & Shoemaker, 1993) and collective knowledge (Spender, 1996).

From the beginning of reaching a comparison similarity between competences management and knowledge management, we must concentrate on the basic concepts involved in these two disciplines, specifically knowledge and competence. Thus, despite the existence of a strong link between knowledge and competence, both concepts have different intellectual roots from which they developed. Hence, knowledge is a concept much broader and more abstract, and it was discussed during many ages by philosophers. On the other hand, competence is a more specific term. In his earlier forms this concept was associated with scientific management by Taylor in the early 1900s (Taylor, 1911), and later approached by psychological studies of individual characteristics performance within the workplace (eg. McClelland, 1973;

Boyatzis, 1982). Furthermore, the focus on knowledge and competence is different. It seems that knowledge was treated as being more concerned about the potential success of an organization, and competence were discussed more in terms of performance, but to a high extent, the distinction between these two concepts is relative. In many cases, these concepts refer to the same thing, therefore they are often interchangeable.

3.1 Overview on knowledge management

Over the last decade, the concept of knowledge management has become increasingly popular both in research and practice area. This is justified because the organization is based on an intensive knowledge caused by a continuing changing business environment. Knowledge management is a fairly broad concept and its roots could be found in various disciplines and different practice areas. In this sense, Ståhle (2003) indicate that during a short period of time knowledge management approach has seen three different perspectives:

philosophical (what is knowledge?), business perspective (how to extract value from knowledge?) and technological perspective (effectiveness and effective tools for storage, delivery and use of knowledge).

In essence, it can be summarized that knowledge management is focused on transforming ideas to knowledge, which eventually lead to their conversion of new added value (Ståhle, 2003).

3.2 Overview on competence management

Competence-based management is a part of the foundation of competence based theory, which refers to the dynamic, systemic, cognitive, and holistic and the interaction of these concepts based on competence (Sanchez &Heene, 1997). To date, the studies from the competences sphere occurs in two directions. One refers to teamwork, and collaborative competences. Collaborative competences of a team refers to a group’s ability to work together to achieve a common goal.

This includes the group’s ability to work together in solving the problems, interpersonal competences to work together with different individuals, knowledge and repertoire of procedures shared by a team project in the context of its work (Vartiainen et al, 2003). Another direction in developing the competences management refer to the relevant network, called by Ritter et al (2002) or partnership competence called by Toiviainen (2003).

In a broad sense, this directive covers the management practices where a set of related concepts such as relational competence and capabilities play an important role (Draulans et al, 2003; Heimeriks, 2002).

3.3 Knowledge management versus competences management Despite the fact that there are a variety of studies focused on knowledge management and competences management, these approaches have certain common points and features that need to be understood. Therefore, it can be said that knowledge management has been extensively studied in terms of information technology, while competence management has been studied extensively by researchers from human resources area.

Although these concepts was discussed by various authors, the relationship between knowledge management and competences management has been less studied, with the focus on specific issues such as relevance of the individuals in certain phases in knowledge management, the link between individuals capacity to create and use knowledge (Spanos and Prasacos, 2004); the effect of transparency on innovation in organizations (Cavusgil, Calantone and Zhao, 2003); the importance of knowledge management evaluation (Denrell, Arvidsson and Zander, 2004), and new knowledge and initiatives of competences management approached in Ericsson Business Consulting, which used intranet as the main measure for implementation (Baladi, 1999).

Many of the studies focused on knowledge management are based on common assumptions, however many of them fail to exhibit the fundamental difference between information and knowledge. Knowledge is more than just simple understanding; they are built on individuals or group beliefs. By contrast, competence represents more than a group of knowledge, attitudes and skills needed to perform job tasks. In both approaches, there is concerning about the knowledge creation, dissemination and application. Moreover, in addressing competence management, different from the vision of KM, the focus is placed on the human aspect and the interaction of individuals within the organization. As well, explicit knowledge bears similar traits of competences; both are known and used as the main assets in knowledge-based organizations. Similarly, tacit knowledge could be considered the hidden competences, given that both cannot be accessed quite easily, or accessible within the organization.

Concerning the organization’s internal and external environment, the relational logic developed by knowledge management is distinct. In terms of knowledge management, organizations use knowledge drawn from external view, through actors, such as suppliers, customers or competitors, and in terms of internal knowledge base, through organizational and individual knowledge. On other hand, competence management is based on an interval review focused on resource management and capabilities to enhance competence development. Most of the literature of competence management highlights the importance of human resource management. In other words, competence management at an organizational level is not sustainable without something specific about individual’s competences.

Another important fact is that the knowledge management steps are not arising linear; however, they are clearly presented in the literature, with the inclusion phase measurement, which takes place through the process. On other hand, competences management is presented in pre-defined steps, and they can be highlighted in the process. In other words, it can be discussed about the identification, development and competence evaluation, in general terms.

Moreover, the evaluation of competence is limited by the evaluation of individual’s performance.

Also, another similarity between knowledge management and competence management is the path of their evolution. It seems that both went through a common process,

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from static to dynamic, with a focus on future needs, from the rationalistic/cognitive to a interpretative/narrative approach, from a functional to a much more structured approach, from technology-based to social-learning, from isolated and fragmented to a systemic view, from a unique to a multi- disciplinary approach.

Despite that the comparison of knowledge management and competences management can be developed based on various factors; the analysis cannot allow obtaining a dynamic point of view on the relationship between their two theories. Thus, it must be highlighted the importance of rethinking the concepts of knowledge management and competences management as an interactive and complementary perspective. In his study, Choin and Lee (2003) focus on knowledge management styles, including: dynamic, systematic orientation, orientation towards individuals. According to these authors, organizations classified as belonging to passive style, they are not exploring the knowledge, showing little interest in terms of knowledge management. The style oriented to individuals focus on acquisition and sharing of tacit knowledge and individual interactions. The style oriented to system, prioritize the encoding and reuse of knowledge, the technology it is considered an important aspect. In terms of organizations classified as dynamic, the technology is introduced as a support group; they are closely involved in communication of tacit and explicit knowledge.

Based on these elements, it can be said that knowledge management can contribute to stimulating competences development strategies, thus suggesting a more efficient work in organizational context. On other hand, competences management can stimulate the development of knowledge at individual level, which seems to be the only constraint considering the objectives of knowledge management. In other words, there is an apparent difficulty when we refer to knowledge management at individual level, which can be stimulated by the individual competences development. In the same time, it can be noticed a different direction on these concepts, in terms of individual-organization relationship.

4. CONCLUSION

In conclusion it can be emphasized that successful organizations need both knowledge and competences management, due to the interdependent and mutual relationship. Competences management can lead to specific considerations on business tasks and performance, and makes the related subject to visible issues that have been neglected in many common approaches of knowledge management. On other hand, knowledge management has a broader approach on competences, due the more general nature of their duties. Thus, by suggesting and applying a competences-based knowledge management, the strategic problem is to explore the dynamics of synchronization between different levels of competences development and integration of different perspectives of knowledge management.

In the knowledge-based economy, the objectives focused on competence development tend to be an important for organizational success. Therefore, in order for organizations to remain competitive, regardless the belonging industry or the size, they must consciously use their hidden knowledge associated with organizational skills. Moreover, due to the fact that organizations are facing a dynamic external environment due to the globalization and the changing of the consumer behaviour. Thus, organizations are forced to enter on

new market or to develop new products and services through re-configuration of existing competences and to develop new ones.

As shown in the literature in this field, both competences and knowledge management concepts are moving into an integrated and systematic approach, where the challenge is directed at managing the entire system through which the organization is self-generative and self-renewable in order to cope the changing environment from nowadays.

Through future research, knowledge management and competence management procedures could be studied focusing on their influential factors in order to develop an integrated framework to adapt knowledge sharing and to sustain competence development.

5. ACKNOWLEDGEMENT

This paper was realised with the support of POSDRU CUANTUMDOC “DOCTORAL STUDIES FOR EUROPEAN PERFORMANCES IN RESEARCH AND INOVATION”

ID79407 project funded by the European Social Found and Romanian Government

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