HUMAN CAPITAL MANAGEMENT

Dragan Mihajlović1, Biljana Ilić2

Abstract

Research and development management, as well as human capital

management as part of overall management, is a natural, logical consequence of
the necessity of development for the sake of survival under the conditions of
constant changes and actions of market rules.
This especially relates to a new information – techno – economic paradigm
of business running, under the conditions of hyper production of new (high)
technologies and their implementation into all the spheres of human actions at
present. Also, it relates to the era of rapid (turbo) changes of ‘self organising’
chaos of a post-business society in a ‘knowledge society’ that we live in, in the era
of application of knowledge above knowledge – which implies the revolution of
management in process. Only change is constant. A stable organization is the one
that is successful in internal integration, as well as in external integration with
dynamic market.

Key words: management, research and development, human capital,

change, dynamic market.

Human Resource Management (Staffing)

This management function has been given a significant importance lately.

Since man is the only living factor in an organisation, there is no universal pattern
when working or socialising with people that would guarantee business success.
The task and the objective of Human Resource Management (HRM) within an
organisation involves the following: filling vacancies in the organisational structure,
paying attention to education, career advancement and training of employees.
Broadly speaking, the system of managing people involves human resource
research, staff recruitment and filling vacancies, progress or development of
employees, their salaries and bonuses, promotions and health care, positive climate
among employees, between employees and employers as well as with unions, etc. If
not followed by continual advancement, education and training besides keeping
qualified employees, staff recruitment alone does not guarantee business
success.Since we are living in an era when employees learn and enlarge their
knowledge in shorter and shorter periods of time, success and survival of an
enterprise depends on the permanent development and advancement of every
employee.
1
Doc. dr Dragan Mihajlović, Fakultet za menadžment u Zaječaru.
2
Biljana Ilić, student , Fakultet za menadžment u Zaječaru.

1
 Only the companies capable of taking over, encouraging and keeping their
employees will be able to accomplish the planned objectives and to survive in the
market. At the same time, enetrprises have to ’make teams’ and ’renew’ qualified
staff in order to achieve the goals. The main objective of human resource
management in every company is to make sure that right people occupy the right
positions, and that the right people are given a possibility to educate and to develop,
all with the aim of creating a ’learning organisation’.
Merely doing one’s own job is not enough in the modern business world.
When a person starts working, that does not mean he or she has achieved the peak;
on the contrary, that ought to be the beginning of enlarging one’s actual knowledge
from the actual field if interest and work. Through permanent education and
learning the company’s goals become the goals of all the people employed in the
company.
The Learning Organisation

The learning organisation has become one of the most interesting, but also
one of the most misunderstood methods of organisational changes during the 1990s.
However, the roots of this theory are much older. The traces of evolution of the
learning organisation idea date back to Don Michael – and to his book ’On Learning
to Plan – Planning to Learn’ – which was published in 1973 3. The book aroused
great interest and made way for the future solutions regarding learning in an
organisation.
Senge defines a learning organisation as one where its members continually
expand their capacity to create a new way of thinking and where they continually
learn how to function as a team; Garvin says that it is an organisation skilled at
creating new knowledge regarding the ways in which work gets done, etc.
The strategy of the learning organisation is directed at recognising and
accepting the attitude that the only source of sustainable strategic advantage is
learning, while continual experimenting is the way of institutionalising the process
of learning.4.
In 1994, in the researh conducted in fourteen companies with reorganised
activities of organisational learning (3M, Hawlet Packard, Corning, Shell), McGinty
Weston identified threee elements of learning defined as ’those which create
meaning and set perspectives’ in an effort to develop a learning organisation: 5
 Vision, Value, Integrity
 Dialogue
 System Thinking

The research also identifies three key practices of integrating learning into
everyday activities: “mental modelling“, “action learning“ and “leverage learning“.

3
Peter M. Senge, The Fifth Discipline, Currenev Doubledav, 1990, p. 6
4
Biljana Bogićević, Menadžment ljudskih resursa, Faculty of Economics, Belgrade, 2003, p.
25
5
Biljana Bogićević, Menadžment ljudskih resursa, Faculty of Economics, Belgrade, 2003, p.
26

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 The essence of the learning organisation is seen in the absence of a medium
through which people change. People have no attitudes, mental models, values –
they are attitudes, mental models, values. There is no medium by use of which we
can interact with the world around us because the world around us is entwined with
what we are; our environmnent is also part of us, as we are part of the environment.
“The eye cannot see the other eye!“ The learning organisation is a challenge, not
only to individuals and organisations but also to the whole society.
Finally, in order to grasp and make use of organisational learning, it is
necessary to answer three basic questions:
- The question of meaning – the existence of a practical definition easy to
use
- The question of management – the existence of clear guidelines for
pratical implementation in operating councels
- The question of measurement – in order to monitor and advance the
process we need adequate tools to rank the level of learning

The organisation capable of finding adequate answers to the above given

doubts will be capable of turning learning into a meaningful corporate goal.

The Disciplines of the Learning Organisation

Engineers say that the new idea is cretaed after it has been tested and
proven in the laboratory. An idea becomes an innovation once it can be applied in
practice. It is said that when the idea is very important, it is the ’basic information’
and it creates new or transforms the already existing branch od industry. Having this
in mind, we can say that at the moment the learning organisation is only an
invention waiting to become a basic innovation. In other words, in order for the
learning organisation to be applied in practice, it has to have technological
components called the disciplines of the learning organisation: 6
- System thinking
- Personal mastery
- Mental models
- Building shared vision
- Team learning

The Development of the Learning Organisation

It can be said that the learning organisation is developed through

particular phases (Picture 1, Evolution of the learning organisation).
Phase one describes the traditional hierarchy in which top managers have
centralised control over activities within the company but they also control
strategies, including relations with consumers and the environment. In the second
6
Prof PhD Mića Jovanović, Prof PhD Momčilo Živković, Prof PhD Tatjana Cvetkovski,
Organizaciono ponašanje, Megatrend University of Applied Sciences, Belgrade, 2003, p.
402

3
phase of development, top managers delegate more duties to their subordinates and
make them more responsible and independent in making decisions or taking actions.
Phase three marks the employees’ taking part in deciding on strategic questions.
The employees dealing with customers and other elements in the environment
choose the company’s strategy and tactics which are to ensure success in the
particular environment.
Employees are no longer factors of efficient production who are delegated
routine tasks. The strategy is now the outcome of accumulated activities of teams of
employees. These employees work within a general vision, and different parts of the
organisation adapt and change not depending on each other but they contribute, at
the same time, to the company’s mission.
In a way, the existence of the learning organisation increases the knowledge
of the company. Employees participate in all the activities that involve thinking,
including strategy, and there are almost no divisions between different departments
from top to bottom.

Employees
3. Learning organisation
Employees have a broader
view, have all the
information, formulate
The power of strategy, they are in charge
of customers’ satisfaction
influence
on strategic
1. Traditional vertical 2. Horizontal / net
direction hierarcy organisation

Top menagers control Employees work in teams,

everything and are in charge of
quality

Top menagers

Top menagers Employees

The power of influence on ongoing business decisions and activities

Picture 1 – Evolution of the Learning Organisation

Everybody communicate and work together, creating enormous intelligence

and flexibility so as to deal with the fast-moving environment.Designing the
learning organisation means introducing specific changes into the sphere of
leadership, horizontal structure, responsibility delegation, communication /
information transfer, strategy and organisational culture.

Conclusion

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 With the arrival of foreign companies, privatisation and stronger
competitors in the market, the function of human resource management is becoming
more and more significant since human activities are actually human capital.
If we do not acknowledge the fact that successful company running, that is,
successful management of all potentials, including human capital as the most
important element of any company, we will lose the battle with our competitors.
The success of a company is seen through the success of its employees.
If we do not motivate and pay attention to the complexity of human capital,
we will not achieve the planned corporate goals. The most important component in
making a profit and successful business is creating a learning organisation. During
the creation of the learning organisation there is no final destination, there is no
particular place we are to get – it is a life-long process.

References
. 1. Biljana Bogićević, Menadžment ljudskih resursa, Faculty of Economics,
Belgrade, 2003
2. Mića Jovanović, Momčilo Živković, Tatjana Cvetkovski, Organizaciono
ponašanje, Megatrend University, 2003
3. Peter M. Senge, The Fifth Discipline, Currenev Doubledav, 1990