- Capital deepening - individual workers have improved their performance of particular skills.
- Capital widening - individual workers have exhibited an increased ability to acquire a variety of skills (Lindbeck and Snower, 2000).
Human capital, however, while contributing to the value of the organization, remains the possession of the individual. Individuals can and do learn, develop and acquire knowledge both independently and with the organization. In order to learn, they require neither organizational assets nor organizational capital, yet they can, and do, learn from their experience in the organization. The organization, conversely, cannot develop, learn, or grow independently of its human capital.
Organizational Knowledge and Learning
Knowledge is recognized as a corporate asset and, like all corporate assets, it must be managed: thus, the emergence of KM. Ideally, KM captures, transfers, and leverages what everyone in the organization know. This, of course, is a daunting challenge. Who is "everyone in the organization", and how does the organization manage their knowledge , their human capital, thus transforming it into organizational intellectual capital?
Intellectual capital extends beyond mere knowledge: Stewart (1997) identifies three categories of intellectual capital:
- Human (evidenced in staff's knowledge, skills and talents).
- Structured (comprised of systems for codifying, storing, transmitting and sharing knowledge).
- Relational (resulting from connections between organizations and clients, vendors and partners).
- Filter out information that does not support an individual's immediate or long-term need or goal.
- Present information in the form appropriate for the context and the individual needing the information.
- Focus information into the hands of those who can act upon it and give it value (Covley-Durst, 1999).
The last item is the crux: until it is acted upon, knowledge has no real value. Until a human puts knowledge to use, it is an un-valued asset. Until a human shares tacit and explicit knowledge within the firm., it is the individual's human capital, not the organizaions's. The knowledge possessed by the employees represents a key source of sustainable competitive advantage for organizations (Elsdon and Iyer, 1999). Knowledge is an asset, but it is a slippery asset to value, manage and measure.