How human resource management practices facilitate the knowledge transfer, knowledge retention, and innovation–Comparison of two case studies

å ¨æ–‡[[abstract]]It is now changing to an information society in a knowledge economy where knowledge management is essential. With increased mobility of information and the global workforce, knowledge and expertise can be transported instantaneously around the world, and any advantage gained by one company can be eliminated by competitive improvements overnight. The only comparative advantage a company will enjoy will be its process of innovation-combining market and technology know-how with the creative talents of knowledge workers to solve a constant stream of competitive problems-and its ability to derive value from information. Knowledge is a stock of expertise, not a flow of information. Thus, knowledge relates to information in the way that assets related to income (Machlup, 1962). In kogut & Zander's (1992) view, the central competitive dimension of what firms know how to do is to create and transfer knowledge efficiently within an organizational context. Knowledge transfer is a desired strategy in the replication and growth of the firm (whether in size or profits); imitation is a principal constraint (Winter.1987). Knowledge retention is also necessary as to prevent the losing of the knowledge and mobility of the knowledge which is resist in the personnel. Knowledge-retention is a process and practices developed for determining the best method for transferring valuable knowledge, and use of information technology to enable knowledge capture, sharing and reuse (DeLong & Davenport, 2003). We intended to view the knowledge from the board perspective of strategic human resource management (SHRM) on innovation ability which the organization wants to accomplish by using competence-based theory and agency theory to explain the theoretical perspectives. In addition to narrow the view to focus on specific HR practices functions such as training program and incentive. In brief, the intent was to examine the combined effects of knowledge transfer and knowledge retention on innovation. We focus on the information and know-how knowledge which is already exists in an organization (micro underpinning) and emphasis on the effectiveness of the knowledge distribution and organizational memory. This research begins to outlining the major reasons for exploring the knowledge transfer and knowledge retention in an organization using the competence-based theory and agency theory to identifies the result of innovation. In addition, we provide a case retention in different department and different industry. Resources and capabilities have been labeled distinctive competence (Selznick, 1957; Fiol, 1991). Drawing on a behavior psychology perspective, have addressed the linked between HRM practices and competitive advantage(Schuler & Jackson, 1987; Schuler & MacMillan, 1984). Research rooted in the ”behavioral perspective” has shown how HR systems can foster and facilitate innovation and entrepreneurship through eliciting and reinforcing employee role behaviors, such as creativity and innovation, a long-term orientation, tolerance of ambiguity, and trust(Schuler & Jackson, 1987; Schuler & MacMillian, 1984). This perspective has great contribution to the field of SHRM. There are four types of organization competence: managerial competencies, input-based competencies, transformational competencies, and output-based competencies (Lado et al., 1994). The managerial competencies focus on the company’s strategy and the reaction to the environment. The input-based competencies focus on the organization’s knowledge, skill and capability. The transformation competencies as the capabilities include innovation and entrepreneurship, organization culture, and organization learning. Lado et al. (1992) describe this competencies as organizational capabilities required to advantageously convert inputs into outputs. The three important factors include in the transformational competencies are innovation, organizational learning, and promotion organizational culture (i.e. tactic rules, and values). Outputs-based competencies include all invisible strategic assets, reputation, product quality, and customer loyalty. The transfer of knowledge is a topic that has received considerable attention. The successful transfer of technology results in the receiving unit implementing new techniques of production. Kogut & Zanda (1992) propose that what firms do better than markets is the sharing and transfer of the knowledge of individuals and groups within an organization. This knowledge consists of information and of know-how in an organization. By hiring new working is not equivalent to changing the skills of a firm. It is important for a firm that must understand knowledge as embedded in the organizing principles by which people cooperate within organization the firm. these capabilities can be used and economically exploited in the marketplace. Transferred knowledge can reside in design, production, installation, sales and distribution, operation and maintenance, or management (Kogut & Zander, 1992)