knowledge workers in the new economy

Knowledge Workers in the New Economy

According to Lipsey (2002), the definition of the New Economy is: “A proper noun,

describing one of several aspects of the late 1990s.” He also discerned these meanings

for the New Economy which are an economy characterized by the absence of business

cycles or inflations; the industry sectors producing computers and related goods and

presumably services such as e-commerce; an economy characterized by an

accelerated rate of productivity growth and the full effects on social, economic, and

political systems of the information and communications technologies revolution

centered on the computer (Lipsey 2002). The New Economy is also called post-

industrial society and knowledge economy. People are currently experiencing a

primary transition from the old type of industrial society with its traditional

dominance of manufacturing work and old industrial classes to an information and

knowledge-based society (Evers and Menkhoff 2004). Its members have reached a

higher average standard of education in comparison to other societies and a growing

proportion of its workforce is employed as knowledge workers; in other words, there

is a significant reduction in the number of people working in operational roles, while

employment in professional, knowledge-based roles has risen (Evers and Menkhoff

2004).

In the New Economy of the millennium, knowledge has formed as an asset to be

valued, developed and managed (Bogdanowicz and Bailey 2002). Now, knowledge

drives the global economy. No longer is knowledge considered only an individual’s

personal brightness, knowledge is a component of the intellectual capital of

organizations (cited in Bogdanowicz and Bailey 2002). In this knowledge economy,

data and information proliferate, and the applications and uses to which they are put

transform them into knowledge; then maximize the value of knowledge is the new

challenge in achieving a supportable competitive advantage (Bogdanowicz and Bailey

2002). Its industry produces products with integrated artificial intelligence such as

voice-recognition software and technology which is used increasingly in smart cars

(Evers and Menkhoff 2004).

Knowledge as an asset in an organization results from efforts by knowledge workers,

individuals in whose heads knowledge resides (Bogdanowicz and Bailey 2002). They

bring knowledge with them to the workplace, they have acquired it through education,

training and experience, and, if they leave the workplace, they take with their

additional knowledge acquired there (Bogdanowicz and Bailey 2002). Their leaving

over any personal knowledge depends on whether the organization has transformed it

into organizational knowledge (Bogdanowicz and Bailey 2002). If the new knowledge

workers put together their personal knowledge to the corporate knowledge bank,

knowledge management (KM) of what “everyone knows” is supported (Bogdanowicz

and Bailey 2002). If an organization values knowledge, it must value knowledge

workers (Bogdanowicz and Bailey 2002). “Adding value to the organization and

sharing the value with the knowledge worker more closely aligns the value, valuation

and ownership of knowledge”, claimed by Bogdanowicz and Bailey (2002, p.128).

Since the industrial economy rebuilds itself into a knowledge economy, the people

management function needs a similar innovation to be able to carry out its critical role

in affecting intellectual capital as a sustainable competitive advantage (Thite 2004).

Because intellectual capital is the key competitive advantage in the knowledge

economy, people management should naturally become an integral part of corporate

tactics and a key responsibility of all managers (Thite 2004). Therefore, to fascinate

the attention and resources towards people issues and make every manager

responsible for successful people management is one of the critical challenges (Thite

2004).

Another key challenge is to clarify the implication of the term knowledge worker

(Thite 2004). When people transfer their attention from knowledge to knowledge

work, new ingredients appear (Thite 2004). If knowledge workers give people the

supportable competitive advantage, people need to realize who knowledge workers

are and if and how knowledge workers are different from the other alleged non-

knowledge workers (Thite 2004). If knowledge is defined as innovation and creativity

applied to create new or improve existing products, services, processes, and markets,

then by that explanation, every worker becomes a knowledge worker – that is to say,

an entrepreneur; consequently, people can argue that there is no such thing as non-

knowledge worker (Thite 2004). Thite (2004, p.30) says “The entire participative

management theory is based on this tenet.”

One of the difficulties of the human resource management (HRM) discipline is with

the measurement of its effectiveness (Thite 2004). Compared to other management

functions, people management is more sensitive, personalised, context-dependent and

cannot be managed through a set of advance-assured techniques (Thite 2004). HR’s

contribution to the bottom line is difficult to be measured by the elusory nature of

people issues (Thite 2004). The same HR concept can become a satisfying or

unfavorable practice which is depending on how it is used (Thite 2004). It is clear that

HR has a critical role to play in the New Economy in making people-centric

partnerships, which is finally focused on creating and sharing knowledge (Thite

2004). For instance, Truss (cited in Thite 2004, p.31) points out “even a highly

successful company with a strong record of excellence in people management

practices cannot achieve all-round success”. The distinct fact is that successful people

management depends on whether the parties involved trust each other and treat each

other fairly (Thite 2004).

In the New Economy, Alter (cited in Gray 2006, p.80) argues that: “systems in

organizations are best viewed as work systems.” Gray (2006, p.80) defines a work

system as “a system in which human participants and/or machines perform work

using information, technology, and other resources to produce products and/or

services for internal or external customers.” Work systems can be any activity,

whether it is approving loans in a bank, finding and qualifying sales prospects, buying

gifts on a Web site, or developing software (Gray 2006). Therefore, work systems

concentrate in more than IT, but IT is a central component of most work systems

today (Gray 2006). Alter shifts the approach people think about what it is they do by

transforming their view about IT from being an entity till itself to being embedded in

work systems (Gray 2006). He classifies systems for office automation,

communications, transaction processing, management information, decision support,

knowledge management, corporation requirements planning, and customer

relationship planning, among others, in terms of whether they are work systems, parts

of other work systems, or something else (Gray 2006). Such as, enterprise resource

planning systems are assorted as part of a company’s infrastructure (Gray 2006).

Alter (cited in Gray 2006, p.80) creates a work system framework consisting of nine

elements, as shown in Figure 1: “At the base are participants, information, and

technologies, which interact with work practices; work practices, in turn, affect

products and services, which interact with customers; all are affected by

infrastructure, environment, and strategies; conceived in this way, the framework

helps summarize almost all systems in an organization.”

(cited in Gray 2006, p.81)

The work system approach can be used in three levels, which are identifying the

systems problem, analyzing the work system and finding possible ways of improving

it and recommending and justifying changes (Gray 2006).

Appearing from the mid 1970s onwards, the high performance work systems (HPWS)

method obtained chance as a strategy for firms to enhance competitiveness (Caspersz

2006). This took place against a background where technological developments

combined with globalization of markets had equalized access by firms to other factors

of production, hence developing these sources of competitive success less powerful

(Caspersz 2006). HPWS assist high performance by cultivating employee

commitment to company targets and company performance; this is reached by

inspiring knowledge workers involvement and empowering them with decision-

making responsibilities that influence on corporation achievement (Caspersz 2006).

“The resources, knowledge, and authority of a work system may be contained within

one level of an organization, or it may be divided among many hierarchical levels; the

work system may be distributed across many organizational units of one or many

firms, where each provides a component or module for an inner-organizational

network” Caspersz ( 2006, p.157) says.

An excellent workplace relationship between the employer and employee exists in an

environment of trust and mutual dependence in the New Economy, which should be

plentiful of rapport builds, teamwork thrives, and contention is decreased to a few

isolated situations (McCarty 2005). Knowledge workers hold skills and expertise that

are in high demand, they are pretty unstable, and are usually libertarian for selection

in job opportunities (Siers 2000). These people have the final potency in an

employment relationship because of the libertarian choice. There are a lot of reasons

to keep these people than just money. Siers (2000, p.56) says that: “The appeal needs

to be to the heart as well as the wallet -- motivation through lifestyle, loyalty, respect

and dignity.” To avoid expensive harassment claims, organisations need a strong

policy on handling workplace relationships. Employers should build and maintain

relationships of trust, obligation and accountability with their employees (Siers 2000).

It is unfavorable for business at any time that acting in a sense to isolates staff or

abrogates the responsibility for sustaining and developing a formidable relationship

(Siers 2000).

Workplace relationships are no distinct. If people don’t foster and develop the

partnership recognising the separate roles of the parties and appreciating the

discrimination, it won’t work (Siers 2000). People like to enjoy participating in work,

which values a workplace that is filled with warm, friendly colleagues. With this base

in appropriate position, managers can divert their attention to the more challenging

mission of incubating a workplace ambience that invigorates both the people and the

place (Siers 2000). Because of the workers desire to be treated fairly and feel

comfortable in the workplace, designing the appropriate work to provide intrinsic

affirmation and promote co-worker belonging tends to foster self-confidence and a

positive mood regarding the workplace are required (Fawcett, Brau, Rhoads, Whitlark

and Fawcett 2008).

Now, people have direct access to the sort of information they need to perform their

job; supervision is not about “how to” these days, it’s more about motivation (Siers

2000). Comprehending and fit to an individual’s needs is what blazes people and will

eventually create or support a competitive advantage (Siers 2000). The gentle skill of

cooperation can be learned and practiced in the organisation. Strategies that contribute

to a give-and-take ambience where differences become a source of strength and

solidarity, rather than the cause of stress and conflict, are as near as the closest office

of people’s (McCarty 2005).

Think for a moment about the knowledge economy, in what is a truly global

economy, intellectual property is authority (Siers 2000). Recruiting, developing,

supporting and keeping knowledge providers are a priority for any organisation (Siers

2000). Knowledge management (KM) has formed as a principal component of the

New Economy (Bogdanowicz and Bailey 2002). There is increased organised

knowledge in the form of digitalised expertise, stored in data banks, expert systems,

organisational plans and other media (Evers and Menkhoff 2004).

To struggle with the challenges of the knowledge economy, beyond money, today’s

knowledge workers demand reasonable security of employment, employability,

autonomy, management transparency, open culture, assignments that are challenging

and suit individual personality and orientation, social network, immediate and

frequent feedback and rewards, ownership of ideas and enterprise, and flexible

working circumstances (Thite 2004).

Storey and Quintas (cited in Thite 2004) identify five key human resource

management (HRM) challenges in the knowledge economy, respectively, developing

and sustaining a knowledge and innovation centric culture, accessing tacit knowledge,

securing trust and commitment, handling non-traditional employees, and

organisational vulnerabilities, such as changing balance of power, arising out of heavy

dependence on key knowledge workers. A work systems approach can help a lot to an

organisation even when a complete analysis is not needed (Gray 2006). Business and

IT professionals can use work systems as an organized way to think about the systems

in organisations (Gray 2006). “Any successful workplace relationship is founded on

trust, respect and dignity” Siers (2000, p.56) represents. When these are missing, they

will be substituted by other behaviours (Siers 2000). When knowledge works feel

comfortable about their personal workplace relationships, they can invest in, and

benefit from, being connected to a broader corporate family (Fawcett, Brau, Rhoads,

Whitlark and Fawcett 2008).

Mark:10/30

Reference list

Bogdanowicz, M. S. and Bailey, E. K., 2002, ‘The value of knowledge and the values

of the new knowledge worker: generation X in the new economy,’ Journal of

European Industrial Training; Vol. 26 Issue 2-4, p125-129, 5p, Accession Number:

11870977

http://search.ebscohost.com/login.aspx?

direct=true&db=buh&AN=11870977&site=ehost-live

Caspersz, D 2006, ‘The ‘Talk’ versus the ‘Walk’: High Performance Work Systems,

Labour Market Flexibility and Lessons from Asian Workers.’ Asia Pacific Business

Review; Apr, Vol. 12 Issue 2, p149-161, 13p, Accession Number: 20379963



Evers, H. D. and Menkhoff, T., 2004, ‘Expert knowledge and the role of consultants

in an emerging knowledge-based economy.’ Human Systems Management; Vol. 23

Issue 2, p123-135, 13p, Accession Number: 13359272



Fawcett, S. E., Brau, J. C., Rhoads, G. K., Whitlark, D. and Fawcett, A. M., 2008,

‘Spirituality and Organizational Culture: Cultivating the ABCs of an Inspiring

Workplace.’ International Journal of Public Administration; Vol. 31 Issue 4, p420-

438, 19p, Accession Number: 31271167



Gray, P 2006, ‘Innovating then and Now.’ Information Systems Management;

September, Vol. 23 Issue: Number 4 p80-84, 5p, Accession Number: 11373640


direct=true&db=eoah&AN=11373640&site=ehost-live

http://search.ebscohost.com/login.aspx?direct=true&db=eoah&AN=11373640&site=ehost-live

http://search.ebscohost.com/login.aspx?direct=true&db=eoah&AN=11373640&site=ehost-live

http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=31271167&site=ehost-live








Lipsey, R.G. 2002, ‘The Productivity Paradox: A Case of the Emperor’s New

Clothes.’ ISUMA; Spring, Volume 3, No. 1

McCarty, M 2005, ‘Workplace Relationships.’ Office Pro; May, Vol. 65 Issue 4, p8-

9, 2p, 1 color, Accession Number: 16833305



Siers, C 2000, ‘ROAD RULES FOR WORK.’ New Zealand Management; Feb, Vol.

47 Issue 1, p56, 1p, Accession Number: 3408574



Thite, M 2004, ‘Strategic positioning of HRM in knowledge-based organizations.’

Learning Organization; Vol. 11 Issue 1, p28-44, 17p, Accession Number: 12113584









knowledge workers in the new economy

Documents