Managing Knowledge Capital Holds the Key to Expanding Businesses
The end of the 20th century saw a burgeoning business avenue that was commensurate to the growth of computer system technology and the Internet. We saw the platform for electronic commerce, outsourcing, and virtual offices being laid out and developed. So, here we are at the start of the 21st century, feeling our way and trying to understand how businesses are created and run in a business world that has becoming a virtual environment.
Gone are the concrete office buildings and people rushing to work in order to punch in and earn their daily wages. These days, you can work from any point in the world at any given time. A workplace is no longer a solid permanent structure. In these days of globalization, companies and the workforce have become faceless, yet most valued assets of a company. Companies can now exist in your home, with just a website for an office, but the same sound business concepts still apply. Employees are still needed to keep the company running.
Without the ability to personally supervise employees, the major problem facing the company owner is how to put a price of value on the faceless employee. Business globalization has its benefits in terms of running a cost efficient company. But how do we know that the employees are actually doing the work expected of them? The answer to this query can be found in the book “Managing Knowledge Capital: How Organizations Measure Knowledge Capital and How They Make It Grow”. Written by the brilliant, up and coming business whiz Charles Njongu, he shares with us the knowledge he gained while a student of business at the prestigious New York University.
In his book, Mr. Njongu clearly indicates how companies today are now highly information and technology reliant as opposed to the past century when businesses dealt with tangible products and sales. He asks us at the beginning of the book to consider this question ” in a business that does not exist on a physical level, how does the business owner measure the success of his company? How does he realize his assets and liabilities and determine the company net worth when selling the business or engaging in mergers?
Mr. Njongu presents us with highly informative guidelines that are meant to lead us down the path of understanding both the human and knowledge capital of a company. To quote Mr. Njongu “Any organization that wants to stay competitive in today’s challenging environment must learn to manage knowledge or human capital more effectively or they will not succeed as an organization.”
In various chapters of the book, he discusses how his research provided him with information regarding how today’s business models do not have a uniform approach to measuring its human or knowledge capital and instead rely on outdated and unreliable human resources surveys and data. By collating all the information available to him, he has come to realization that a common method to measure these particular data and further information needed to be developed. He discusses the Human Capital and the Spiral of Knowledge as a way to preserve the knowledge life span of a company. This information, he says is developed through conversion and growth and must be nurtured in order to keep a company running. Mr. Njongu firmly believes that “Knowledge transformation involves tacit-to-tacit, tacit-to-explicit, explicit-to-tacit, and explicit-to-explicit situations.”
This book, borne out of his masteral thesis of the same name, provides the readers with a well researched and comprehensive look into the reasons regarding why human or knowledge capital directly relate as to how employers view their employees. How do the employees transform into the highly profitable assets playing important pawns in the game of business survival. He further explains that “The importance of human capital includes improved customer services, faster problem solving, innovation, high productivity, and a competitive advantage.”
“Managing Knowledge Capital: How Organizations Measure Knowledge Capital and How They Make It Grow” is a must have book for every dedicated company CEO, Human Resources Department Head, IT professional, as well as anybody seriously thinking of engaging in a business in the 21st century. It teaches us all a valuable lesson about the importance of letting the employees feel important and that the business is not just an office but their home where they belong. Charles Njongu also answers some of the nagging questions hounding the business heads of top companies today. Then, he offers us an insight into his new, experimental, yet accurately proven method of securing accurate figures pertaining to human or knowledge capital and its relationship with proper financial valuation of a modern business. .