The interaction between training and knowledge assets to innovate in SMEs
Petra De Saá-Pérez
Departamento de Economía y Dirección de Empresas, Facultad de Economía, Empresa y Turismo, Campus de Tafira, Universidad de Las Palmas de Gran Canaria, Las Palmas, Spain
Nieves L Díaz-Díaz
Departamento de Economía Financiera y Contabilidad
Facultad Economía, Empresa y Turismo, Campus de Tafira, Universidad de Las Palmas de Gran Canaria, Las Palmas, Spain
José Luis Ballesteros-Rodríguez
Assistant Professor, Finance and Accounting Department, Universidad de Las Palmas de Gran Canaria, Spain
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Country Spain
Biographical statement Assistant professor. Business Administration Department. Universidad
PP: 218 - 230
Abstract
The objective of this paper is to analyze the role of training to improve the knowledge required to innovate in SMEs. In particular, this research integrates the theoretical approaches of human resource management and knowledge management to focus on how training can be critical to articulate the organizational knowledge assets necessary to innovate. To achieve that objective, an empirical study was carried out on 139 SMEs and the main conclusion is that training per se has a negative effect on the innovative capacity of SMEs. Only when training interacts with the knowledge assets of the firm does its effect become positive and highly significant.
Keywords
innovation, training, knowledge assets, SMEs
Article Text
In today's economy, characterized by high competitiveness, resulting from technological advances and globalization, the firm's decision to invest in innovation activities becomes an important strategic issue closely linked to its knowledge management processes as well as to its human resource management (HRM) processes (Lau and Ngo, 2004; Shipton, Fay, West, Patterson and Birdi, 2005; Li, Zhao and Liu, 2006).
From the knowledge management perspective, innovation is considered a dynamic capability that represents the application of explicit and tacit knowledge assets in obtaining new products and processes. In order to innovate firms require the use of existing knowledge assets or the acquisition of new ones. Therefore, innovations differ in the content of basic knowledge that they require, which in turn influences the way that innovation is developed (internally or externally), the cost of implementation and its effectiveness (Gopalakrishnan, Bierly and Kessler, 1999; Smith, Collins and Clark, 2005). Along this line, although various authors have analyzed the positive influence of knowledge assets on the firm's innovation (e.g., Gopalakrishnan et al., 1999; Diaz-Díaz, Aguiar-Diaz, De Saá-Pérez, 2006), few works have considered those issues relating to the HRM processes that have a supporting role to achieve the required knowledge in the organization (Laforet and Tann, 2006).
Recently, some authors have focused their interest in studying which aspects of HRM can contribute to create a human capital with extensive knowledge and skills to enhance the firm capacity to innovate (Wright, Dunford and Snell, 2001; Hatch and Dyer, 2004; Michie and Sheehan, 2005). Training is gaining a growing importance as an essential HRM practice to create, share and use organizational knowledge because it prevents organizational knowledge obsolescence, in order to achieve a competitive advantage (Wright, McMahan and McWilliams, 1994). In this sense, training enables employees to access a range of new knowledge and skills, highlighting new ways of operating to innovate. Training will not only increase the intellectual capital of the organization but will also serve as a trigger for the emergence of new products, processes and technologies as a result (Roffe, 1999; Shipton et al., 2005; Loewe and Chen, 2007).
However, it should be taken into account that investment in training will not always bring greater levels of innovation. In fact, despite the recognition of its importance, there are some authors who draw attention to the low percentage of training that really ends up being applied in the workplace (Axtell, Maitlis and Yearta, 1997; Brown, 2005; Velada and Caetano, 2007). In the same way, Barton and Delbrige (2001) argue that many organizations mistakenly assume that their employees will rise to the occasion when it comes to launching a new product or process. Furthermore, if one considers the particular context of small and medium enterprises (SMEs), the success of training in terms of innovation may be even more questionable, since in such firms the training is often informal, unplanned, reactive and short-termed oriented (Hill and Stewart, 2000; Jameson, 2000; Kotey and Folker, 2007). In fact, some authors suggest that on many occasions SMEs prefer external recruitment of experienced staff than training employees internally because of the fear of not being able to provide them the proper training (e.g., Zambarloukos and Constantelou, 2002; Laforet and Tann, 2006). Thus, as Laforet and Tann (2006:366) point out 'the extent to which small businesses innovate successfully would depend on their capacity to plan ahead, to have a clear strategy and to manage strategically'.
Therefore, the review of the literature shows the need for further research on how training can help to generate greater levels of innovation in organizations, especially the SMEs, so that they get the most from their investment in training. In this way, Patton, Marlow and Hannon (2000) believe that previous research may not have taken into account other variables that have a propensity to impact on the relationship between training and performance. It is necessary to go deeper into the understanding of the role of the context of the organization in terms of training success (Jayawarna, Macpherson and Wilson, 2007). As McAdam, Keogh, Reid and Mitchell (2007:386) suggest, 'SMEs studies relating to innovation should have a theoretical conception of innovation that systematically incorporates people and process issues in addition to that of technical innovation'. In this sense, we agree with Muscatello (2003) who state that the use of the knowledge management perspective in specific business settings, such as training, has not been fully developed.
In order to further develop this line of research, the paper focuses on analyzing the role of training to improve the knowledge necessary to enhance the innovative capacity of SMEs. In particular, this research examines how training can be critical to articulate the organizational knowledge assets needed to innovate, and this analysis will be done by integrating the theoretical approaches of HRM and knowledge management. To achieve this objective, the paper is structured in five sections. The second section presents the theoretical framework of the study and proposes the hypotheses. The methodology is explained in the third section and the principal results of the empirical analysis are presented in the fourth. The fifth and final section sets out the conclusions and implications.
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