Dynamic Resource Capabilities: Managing Workforce Knowledge with a Technology Upgrade

Posted: 12 Dec 2009 Last revised: 29 Oct 2015

Cheryl Gaimon

Georgia Institute of Technology - Operations Management Area; Georgia Institute of Technology - Scheller College of Business

Gulru Ozkan-Seely

University of Washington Bothell

Karen Napoleon

University of Georgia

Date Written: January 1, 2010

Abstract

A model is introduced that integrates workforce knowledge management with the technology upgrade decision to provide a holistic view of how to manage dynamic knowledge-based resource capabilities. The levels of workforce knowledge and technology capability are measured in relation to their ability to generate net revenue. Due to changes in consumer preferences and competition, the ability of workforce knowledge and technology capability to drive net revenue depreciates over time. The manager pursues several strategies to reduce or reverse the effects of depreciation. The manager may invest in a technology upgrade. However, while adding to technology capability, an upgrade makes a portion of workforce knowledge obsolete reflecting skills that are no longer useful. The manager invests in preparatory training (learning-before-doing) prior to the upgrade to reduce obsolescence. The manager invests in general training to directly increase the workforce knowledge over time. Thus while preparatory training is narrowly focused on preparing for a technology upgrade, general training responds to depreciation by enhancing the ability of the workforce to improve existing or create new products. We find that the rates of preparatory and general training follow entirely different paths over time. Conditions are given where a manager uses one training strategy as a substitute for or complement to the other. We show that training strategies are not only impacted by learning phenomena such as the rate of forgetting, but also by the rates of technology depreciation and advancement. Conversely, we show how workforce learning phenomena impact the technology upgrade decision.

Suggested Citation

Gaimon, Cheryl and Ozkan-Seely, Gulru and Napoleon, Karen, Dynamic Resource Capabilities: Managing Workforce Knowledge with a Technology Upgrade (January 1, 2010). Available at SSRN: https://ssrn.com/abstract=1522192

Cheryl Gaimon (Contact Author)

Georgia Institute of Technology - Operations Management Area ( email )

755 Ferst Drive
Atlanta, GA 30332-0250
United States
404-894-4934 (Phone)

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Gulru Ozkan-Seely

University of Washington Bothell ( email )

Bothell, WA
United States

HOME PAGE: http://https://www.uwb.edu/business/faculty/gozkan-seely

Karen Napoleon

University of Georgia ( email )

Athens, GA 30602-6254
United States

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