INVESTMENTS IN WORKFORCE KNOWLEDGE and TECHNOLOGICAL CAPABILITIES Cheryl Gaimon, Karen Napoleon,...
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Transcript of INVESTMENTS IN WORKFORCE KNOWLEDGE and TECHNOLOGICAL CAPABILITIES Cheryl Gaimon, Karen Napoleon,...
INVESTMENTS IN WORKFORCE KNOWLEDGE
and TECHNOLOGICAL CAPABILITIES
Cheryl Gaimon, Karen Napoleon, Gulru Ozkan
POMS Conference, May 2007
CONTEXT OF RESEARCH
Resource-Based View of the FirmWenerfelt (1984) Strategic Mgt. Jl.Barney (1991) Jl. of Mgt.Teece (1997) Strategic Mgt. Jl.
Knowledge Based View of Resources
Workforce Knowledge Technological capability
Leonard Barton (1992) Strategic Mgt. Jl.Conner Prahalad (1996) Organization Sci.
1
Motivation of the MODEL
Knowledge Based Resources Profit
Drivers of Change:Reduce costs (time, accuracy)
Increase product-mix capability
Enhance product features
Changes in demand
Technological opportunities
2
Changing Technological Capability
Benefits sought elusive...
costs and time exceed expectationsAMT (50-75% failure Majchrzak)
CAD ( time 30%, quality 18% Joglekar & Whitney)
CRM (55% below expectations Rigby et al.)
Implementation failureAMT (Tyre, Hayes Clark, Chew et al...)
IT (Brynjolfsson, Dong & Zhu, ...)
3
Our Model
Holistic view of knowledge management
Technological Capabilitydepreciation, upgrade (decision).
Workforce Knowledgelearning-by-doing vs. depreciation,
general training (decision).Obsolescence,
learning-before-doing (decision).
Strategies prior, during, following upgrade4
Insights Sought
When to pursue learning-before-doing vs. general training? (substitute, complement)
When does technology upgrade substitute for worker knowledge?
How does workforce learning... impact upgrade decision?
How does technological advancement impact decisions? (vendor)
What drives manager’s implementation strategy? 5
LITERATURE: Learning
Killingsworth (1982) Rev. Econ. Studies
learning-by-doing and training output
Bailey (1989) Mgt. Sci.- as time betw. learning & use forgetting .
Argote et al. (1990) Mgt. Sci.
knowledge depreciation
Adler & Clark (1991) Mgt. Sci.preparatory training disruption
Pisano (1996) Research Policy
learning-before-doing disruption & benefits.
6
LITERATURE: Implementation
Hayes & Clark (1985)disruption costs often outweigh purchase costs
Brynjolfsson (1993) Commun. of ACMimplementation major cost of IT investment
Chand et al. (1996) Opns. Res.
Gaimon (1997) Mgt. Sci.
Carrillo & Gaimon (2000) Mgt. Sci.
intro. link worker knowl. & proc. change
Carrillo & Gaimon (2004) Sloan Mgt. Rev.
outcome uncertainty and role of knowl.
7
V(t) level technological capability time t
technology depreciation (μV(t))
_____ a(ti) = 1 upgrade decision
-------- a(ti) = 0 no upgrade8
V(t)
V(0)
V(ti+)
V(ti)
ti time(t)
K(t) level workforce knowledge time t
general training (g(t), decision)learning-by-doing vs. knowledge depreciation (K(t))
knowledge obsolescence BUT learning-before-doing (P(t))
9
ti
time(t)
K(t)
0
K(ti)
K(ti+)
10
P(t) Learning-Before-Doing
preparatory training (p(t), decision) forgetting (P(t))
time(t)P(ti
+)
P(ti)
P(t)
0
Obj. Max Net Revenue - Costs
Revenuedriven by K & V.
Cost of General Trainingincludes tuition, disruption costs to sustain output during training (e.g., overtime)...
Cost of Preparatory Training...
11
Cost Purchase & Implement ith Technology Upgrade
Fixed and variable costsPurchase cost can or over time.
Implementation cost as lead-time.
Also, variable cost as extent of upgrade . disruption costs, compatibility...
12
Optimal Rate of General Training
13
time (t) T
Case(1)
Case(2)
Case(3)
Optimal Rate of Preparatory Training
14
t i t i+1 t i+2 T
time (t)
Analytic Results
If high workforce knowledge depreciation
preparatory training and delayed;
general training over planning horizon;
however, upgrade less likely.
15
Analytic Results
If high rate forgetting: preparatory training & delayed; general training
substitute general for preparatory training
however, an upgrade less likely.
16
Analytic Results
If learning-before-doing highly effective... preparatory training and earlier; general training over planning horizon;
substitute preparatory for general training
and an upgrade more likely.
17
Analytic Results
If technological depreciation smallupgrade more likely
general trainingbut preparatory training.
18
Contributions
Holistic model of knowledge management before, during, following techn. upgrade
Workforce:
learning-by-doing obsolescence
knowledge depreciation learning-before-doing
general training preparatory training
forgetting
Technology:
technology depreciation technology upgrade
19
Contributions
Insights on drivers of solutions wherepreparatory & general training complements - substitutes
techn. capability substitutes for workforce knowledge
Effect on knowledge management due to:rate of technological advancement
dynamic cost of technology
rate that knowledge or technology depreciation occurs
Drivers of rapid or slow implementation strategy
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