The direct effects of such a shift in paradigm reflected in many areas, of which the most prominent ones are as below. a) New concepts like intellectual capital, human capital and knowledge management came into being; b) A newfound freedom engulfed the managerial proceedings; c) Cultures like information sharing or learning came into being; d) It empowered the employees more than ever; e) It started generating competitive advantage from the employees.
From a simple perspective, it is the journey of civilization from agricultural revolution to digital revolution via industrial revolution has influenced the concept of the resources from time to time (like the money replacing grains as the mode of trade), where humans have rediscovered themselves as the prime capital in this digital age. According to Gates (2000:xxii,l) business is going to change more in the next ten years than it has in the last 50 years. These changes will occur because of the flow of digital information.
The successful companies of the next decade will be the ones that use digital tools to reinvent the way they work. The rise of IT industry in the US alone in the tune of $866 billion (Rennie, 2003) even ten years back from now (1997) corroborates Bill Gate's words. There is no doubt that the new economy is constantly favoring three things - one, globalization, two, intangible potential like ideas, information and relationships, and three, inter-connectivity. Thus, the factors, which were considered significant in the sustenance and growth of economy, are no longer seen under same light.
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For example, time, place, money and physical assets – these elements are not as important today as they were in the pre-digital era. Thus the theories of business based on their contribution have become obsolete. Now the geography is not a matter of concern, nor there is any constraint regarding time, thanks to the virtual world, where the new drivers of the new economy are Internet, e-Commerce and Web lifestyle. There is but little doubt that these factors have magically changed the outlook and lifestyle all around the globe, if not radically.
Now anything can take place under any circumstance – this is not uncertainty, but a newfound flexibility – which enables everyone to participate in the business process of any magnitude. Therefore, gone are the days of the 'part-whole' relationship of HRM and the organizations, where an executive could have come to full circle only by concentrating on the methodologies about interrelating the functional components of the organization, viz. , production, distribution, product mix and human resources.
HRM now has moved far, far ahead from the role of 'firm-positioning' to one of 'global-positioning' with branding, where it has only thing in common with its past, and that is, building the 'competitive advantage' of the organization. It is now the rise of the knowledge worker, which is customizing the nature of work and the to-do lists of the management. Negative Challenges Professionals here are no more valued in terms of physical presence or producing hard labor; it is the result at the end is what determining their worth.
In this state of 'perform or perish' scene, one might think of a paradox here too – where the rise of the human at the core of business has forced humans themselves to be isolated in terms of intellectual abilities – because this rise would foster the growth of only who are deserving – undeniably, at the expense of those who are not endowed with high intellect! Thus, the concept of sharing the success has also taken a route with this newfound recognition of human abilities.
This aspect also earmarks a gray area in HRM, as how far it would go on the track of competitive advantage, or what could be the nature of applying it within the organization – because, in this new economy with humans at the helm of transaction, the concept of competitive advantage is bound to boil down to the competition among the peers. There is thus, a possibility of increase in the number of have-nots, while there is the premonition too for the privileged class – who might get isolated with their huge, contrasting amount of wealth.
Thus this is nonetheless a great challenge for HRM on the following grounds: i) It has to take care in educating the employees so that all gets the chance to manifest their potential to the best of their capacity; ii) It has to ensure the prevention of corruption in the rank and file of the already privileged employees; iii) It should not be influenced by any kind of bias or vested interest. These challenges, in fact, add more to the significance of HRM, rather than to its role.
Starting its journey from Personnel Management, the Human Resource Management has walked a long way through the various bends of civilization, all the while evolving with time. However, it was not considered as something indispensable even in the mid-nineteenth century. But with the advent of digital communication and the rise of globalization, HRM has managed a quantum leap – so much so, the revolutionary rise in the importance of HRM can be considered as the hallmark of digital revolution.
The advent of Information Age has created a plethora of opportunities in every direction and discipline, and accordingly the society has undergone a sea change in every respect. It has dethroned the earlier axis of business, i. e. , financial capital and physical assets, and established human resources in its place. Naturally, this new circumstance has pushed HRM to evolve accordingly to carry out the new responsibilities like knowledge management or managing globalization of business, besides matching with the speed of digital communication.
Thus, beginning its journey as a mere support system to the organization, HRM has risen to the rank of chief architect of the present and future of economy by being an integral part of the organization, where recruits, educates, informs, trains, monitors and evaluates the employees of the organization.
Ali, M. Old Management Theory and Employee Motivation". Web Article. Retrieved on Nov 27, 2007, from http://ezinearticles. com/? Old-Management-Theory-and- Employee-Motivation&id=631505 Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99-120.
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