JHCITP 2 (Trust paper with Imran)

IJHCITP Editorial Board Editor-in-Chief: Ricardo Colomo-Palacios, U. Carlos III de Madrid, Spain Associate Editors: Ángel García-Crespo, Universidad Carlos III de Madrid, Spain David O’Sullivan, National U. of Ireland, Ireland Francesca Sgobbi, Universidad de Brescia, Italy Pedro Soto Acosta, U. of Murcia, Spain Edmundo Tovar-Caro, Universidad Politécnica de Madrid, Spain João Varajão, U. of Trás-os-Montes e Alto Douro, Portugal IGI Editorial: Heather A. Probst, Director of Journal Publications Jamie M. 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García-Peñalvo, Universidad de Salamanca, Spain Juan Miguel Gómez-Berbís, Universidad Carlos III de Madrid, Spain Ahmed Hassanien, Napier U., UK Jeffrey Hsu, Silberman College of Business - Fairleigh Dickinson IGIP U., USA Mona Ibrahim, Mansoura Univeristy, Egypt Salaheldin Ismail, College of Commerce & Business Administration - Helwan U., Egypt Przemyslaw Kazienko, Wroclaw U. of Technology, Poland Habin Lee, Brunel U., UK Euripides Loukis, U. of the Aegean, Greece Nur Naha Abu Mansor, U. Technology of Malaysia, Malaysia Tokuro Matsuo, Yamagata U., Japan Russ Meir, U. of Wisconsin - Green Bay, USA Richard Messnarz, ISCN LTD, Ireland Alok Mishra, Atilim U., Turkey Sanjay Misra, Federal U. of Technology, Nigeria Rubén Posada-Gómez, Instituto Tecnológico de Orizaba, Mexico Li Qin, Fairleigh Dickinson U., USA Eva Rimbau-Gilabert, Open U. of Catalonia, Spain Ismael Rivera, Digital Enterprise Research Institute, Ireland Meir Russ, U. of Wisconsin - Green Bay, USA Ramanjeet Singh, Institute of Management & Technology, Rattan Group of Institutions, India Antonio Trigo, Instituto Superior de Contabilidade e Administração de Coimbra, Portugal Abel Usoro, U. of the West of Scotland, UK Adam Westerski, Universidad Politecnica de Madrid, Spain IGI PublIshInG www.igi-global.com cAll for ArtIclES International Journal of Human Capital and Information Technology Professionals An official publication of the Information Resources Management Association The Editor-in-Chief of the International Journal of Human Capital and Information Technology Professionals (IJHCITP) would like to invite you to consider submitting a manuscript for inclusion in this scholarly journal. The following describes the mission, the coverage, and the guidelines for submission to IJHCITP. m iSSioN The mission of the International Journal of Human Capital and Information Technology Professionals (IJHCITP) is to offer an outlook on the state of the IT profession from the perspective of economic value based on labor performance. Providing a forum for the exchange of research ideas and practices, this journal is a reference convergence point for professionals, managers, and researchers in the IT ield. ToPicS oF iNTEREST (iNclUDE bUT aRE NoT limiTED To): • • • • • • • • • • • • • • • • Competence management within IT Profession Ethics, professional, and social responsibilities of IT professionals Human capital within IT industry Human resource management in IT sector IT Careers IT personnel in new production environments (software factories, offshoring, and nearshoring) IT Profession IT professional associations IT Professionalism IT professionals assessment methods IT Professionals roles IT professionals under the scope of IT governance Licensing and certifying of IT professionals Mentoring, coaching, and counseling of IT professionals Personnel issues in IT standards, models, and frameworks Recruiting, stafing, retaining, and rewarding IT professionals ISSN 1947-3478 eISSN 1947-3486 Published quarterly All submissions should be e-mailed to: Ricardo Colomo-Palacios ricardo.colomo@uc3m.es Ideas for Special theme Issues may be submitted to the Editor-in-chief. 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For a convenient easy-to-use library recommendation form, please visit: http://www.igiglobal.com/ijhcitp and click on the "Library Recommendation Form" link along the right margin. InternatIonal Journal of Human CapItal and InformatIon teCHnology professIonals October-December 2010, Vol. 1, No. 4 Table of Contents Research Articles 1 Trust as an Aspect of Organisational Culture: It’s Efects on Knowledge Sharing in Virtual Communities Abel Usoro, University of the West of Scotland, UK Imran U Khan, University of the West of Scotland, UK 22 A Dynamic Approach to Introduce Competency Frameworks: Application to the IT & Systems Management Domain Alfonso Urquiza Echavarren, Universidad Francisco de Vitoria, Spain 37 Project Managers’ Competence Identiication Heli Aramo-Immonen, Tampere University of Technology, Finland Andrea Bikfalvi, University of Girona, Spain Núria Mancebo, University of Girona, Spain Hannu Vanharanta, Tampere University of Technology, Finland 52 The Determinants of Information Technology Wages Jing Quan, Salisbury University, USA Ronald Datero, Southwest Missouri State University, USA Stuart D. Galup, Florida Atlantic University, USA Kewal Dhariwal, Athabasca University, Canada 70 Learning in Networks of SMEs: A Case Study in the ICT Industry Valentina Morandi, University of Brescia, Italy Francesca Sgobbi, University of Brescia, Italy 84 Facades of Atractive Employer in Indian IT Industry: Existing Employee Perspective R. Saraswathy, National Institute of Technology, India N. Thamaraiselvan, National Institute of Technology, India B. Senthilarasu, National Institute of Technology, India M. Sivagnanasundaram, National Institute of Technology, India Book Review: 103 “Leadership in the Digital Enterprise: Issues and Challenges” Fernando Cabezas-Isla, Universidad Carlos III de Madrid, Spain Cristina Casado-Lumbreras, Karakorum Servicios Profesionales, Spain International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 1 trust as an Aspect of organisational culture: It’s Effects on Knowledge Sharing in Virtual communities Abel Usoro, University of the West of Scotland, UK Imran U Khan, University of the West of Scotland, UK AbStrAct Knowledge sharing is of much interest to both practitioners and researchers because of its potential to quicken learning, enhance innovation, reduce costs, and place organisations on a competitive edge. A principal tool for knowledge sharing has been identiied by researchers to be virtual communities in which research collaboration and other knowledge sharing activities easily take place. Some key factors examined in literature as inluencing knowledge sharing are technological, economic, and cultural. This paper concentrates on organisation culture with speciic focus on trust as its component. While trust has been researched in other contexts, it has not been researched as an organisational cultural component that could affect knowledge sharing in virtual communities. This gap in knowledge is what this paper aims to ill. A conceptual framework is developed to express the relationship between trust components and knowledge sharing in virtual communities. The framework will be veriied in future empirical research; however, possible implications of the research to research and practice are presented. Keywords: Conceptual Framework, Knowledge Sharing, Organisational Culture, Trust, Virtual Communities IntroductIon A real challenge for organisations at the beginning of the millennium was “....how to harness the intelligence and spirit of people at all levels of organisation to continually build and share knowledge” (Senge, 1997, p. 32). Since then researchers have shown that knowledge sharing provides business with competitive advantage (Reid, 2003), enhances innovative performance DOI: 10.4018/jhcitp.2011010101 and reduces redundant learning efforts (Calantone, Cavusgil, & Zhao, 2002; Scarbrough, 2001). Most research has discussed technical and economic aspects of knowledge sharing while very limited attention is given to culture specific factors that affect knowledge sharing. Usoro et al. (2006) classified culture that affects knowledge sharing into organisational and societal categories. They also noted that research in culture is predominantly either value-based or work-practice based and this paper takes the work-practice approach. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 2 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 Organisation culture has many components and trust is one of them. Trust itself can be decomposed. For example, McAllister (1995) categorised trust into affective and cognitive categories. The effect of trust has been researched in different organisational aspects like coordination and control at interpersonal and organisational levels in the works of Shapiro (1987, 1990) and Zucher (1986). At organisational level it can be differently analysed, for example, trust in teams, trust of subordinates to leaders or managers and trust between organisations (Pesamaa & Hari, 2007; Politis, 2003; Selness & Sallis, 2003; Grayson & Ambler, 1999). Nonetheless, Zaheer, Bill, and Vincenzo (1998, p. 141) noted that “considerable ambiguity is evident in the literature about the precise role of trust as it operates at different levels of analysis and its influence on performance.” Thus, this research is one of the efforts at addressing the ambiguity on the role of trust. This research examines trust from the point of view of being a subset of organisational culture, and investigates how it affects knowledge sharing. The rest of this paper will present (a) research problem; (b) existing research; (c) review of literature; (d) IT professionals in virtual communities and knowledge sharing; (e) levels of trust in organisation; (f) dimensions of trust; (g) research model (h) implications; and (i) limitations and future work. rESEArch ProblEm This research is part of a large scale study on the ‘effects of organisational culture on knowledge sharing in virtual communities’. The current paper focuses only on trust factor of organisational culture. To determine the effect of trust on knowledge sharing, the level of trust in an organisation has to be first established and this is investigated in this paper. The research problem can be illustrated by Figure 1 below. The example supposes a virtual community of three institutions: University of the West of Scotland (UWS), Glasgow University and Strathclyde University. Assuming that the trust levels (TL) of two organisations are equal (TLuws == TLglas), the question is whether the amount of knowledge they would share among themselves or with others will vary or be the same. On the other hand, assuming that the trust level of Strathclyde University (see Figure 1) is greater than that of UWS, does this mean that the former institution will be more inclined to share knowledge than the latter? ExIStIng rESEArch Mayer, Davis, and Schoorman (1995, 2007) carried out a pioneer study that dimensioned trust into benevolence, integrity and competence or ability components and Sharratt and Usoro (2007) used this dimension to hypothesize relationships between them and knowledge sharing in virtual communities. They found that all three dimensions have positive relationships with knowledge sharing in virtual communities. This study is not repeating Sharratt and Usoro’s (2007) study but focuses on trust as an organisational cultural factor. The idea of trust existing as a component of organisational culture is supported by other studies (cf., Gupta & Govindarajan, 2000; Park, Ribiere, & Schultel., 2004). Ismail, Nayla, and Yasmeen (2007) researched the relationship of organisational culture and knowledge sharing. They used the organisational cultural factors specified by Govindarajan and Gupta (2000). Apart from trust, they found information systems, communication, rewards and organisation structure to be positively related to knowledge sharing. One of the main limitations in their research was generalisation because they collected data only from Bahraini organisations. Ismail, Nayla, and Yasmeen’s (2007) discussion of relationships between trust and knowledge sharing was not in-depth and although it provides a good foundation for the current study, the context of the latter is virtual communities, making the research reported by this paper unique. Figure 2 clearly draws the boundary to the research and puts trust and knowledge sharing in Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 3 Figure 1. Research problem example the contexts of organisational culture and virtual communities, respectively. This paper, which focuses only on trust, is part of a larger scope of study into how organisational culture affects knowledge sharing in virtual communities. rEVIEw of lItErAturE organisational culture Schein (1985) describes organisational culture as a set of implicit assumptions held by members of a group that determines how the group behaves and responds to its environment. It reflects member’s experiences, their beliefs, attitudes and values. Though organisational culture is described as implicit, the main approach to its is not only value based but also work-practice based (Usoro & Kuofie, 2006). Park et al. (2004) used valuebased approach to study culture and dimensioned organisational culture into trust, sharing information freely and working closely together or making friends. However, he acknowledged that if the purpose of the research is to obtain a global perception then a questionnaire using practice-based approach would be adequate. The researchers who believe that value based approach is not the most appropriate approach argue that organisations show more differences in work practices than in values (Hofstede, 2001, p. 394). In a slight similarity to Park et al.’s (2004) view, Berg and Wilderom’s (2004) consider values as important but at the same time they consider values as sometimes a difficult factor to contain within an organisation: it is difficult to draw a boundary between values that belong to an organisation and those that are not. Thus, they preferred work-practice approach to studying organisational culture more so as the approach would highlight more differences between organisations. Their specified dimensions of culture are: • • • • • Autonomy. External orientation. Interdepartmental coordination. Human resource content. Improvement orientation. Identifying with these arguments, this research also adopts the practice based approach. trust as a concept Trust has been studied in different disciplines like psychology like in psychology (Rotter, 1971, 1980; Elliott & Yannopoulou, 2007) and different contexts like in organisations (Bijlsma & Koopman, 2003), and virtual communities (Casalo, Flavian, & Guinaliu., 2008), to name only a few. Moreover, different approaches have been used. For example Bhatacharya, Devinney, and Pillutla (1998) used a highly statistical and mathematical approach to examine and define it. Nonetheless, they agree (after they examined various definitions and studies across different disciplines) that no matter the approach used or Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 4 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 Figure 2. Research boundary the discipline of study, common characteristics are evident. These characteristics are that: • • • • • • Trust exists in an uncertain and risky environment; Trust reflects an aspect of predictability, that is, it is an expectancy; Trust’s importance differs according to circumstance; Trust has some strength over time and circumstance; Trust exists in an environment of mutuality, that is, it is situation and person specific; and Trust is associated with positive (not negative) outcomes. Rousseau et al. (1998) agreed with the idea of uncertainty (or vulnerability) in trust and expectancy which two characteristics, he considered, are common in most trust definitions. Another scholar who agreed on expectancy characteristic is Rotter (1967, p. 651) with his definition of trust as “an expectancy held by an individual or a group that the word, promise, verbal or written statement of another individual or group can be relied upon.” The variability of importance and strength of trust accounts for each trust situation and the difference in consequence of trusting. For example, the reliability of public transport turning up in time in an African village may be scored the strength of 50%, much lower than in a city as London. However, their importance may be the same as the consequence of a late bus in a relaxed African village but may be as severe as such lateness in London. Bhatacharya et al.’s (1998) also include mutuality in the same way that trust is specific to individuals and situations. A religious clergy or politician can be very much trusted by their followers but even among the followers there are likely to be variations which are also based on the situations – a member of the laity may trust his or her clergy on certain pronouncements but not on others for instance. To emphasise the variability of trust, Barney and Hansen (1994) describes weak, semi-strong and strong forms of trust. The last item on Bhatacharya et al.’s (1998) list is the positive nature of all trusts. Perhaps this is reflected in the idea of competence included in Mayer et al.’s (2007) definition of trust. The trustee is expected to be competent or able to perform. Bhatacharya et al.’s (1998) synthesised characteristics appear comprehensive. However, it can be added that trust is not only between individuals but can have inanimate entities as a party or parties in the trust relationship. Rotter (1967, p. 651) in his definition above included the fact that an entity can be a group and not just an individual. An organisation can also Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 5 constitute an entity in a trust relationship as exemplified in the research literature (cf., Selness & Sallis, 2003; Smith & Barclay, 1997; and Zaher, Bill, & Vincenzo, 1998). Perhaps a way of viewing trust as a process and taking into consideration the foregoing discussion is Figure 3. Using Figure 3, trust can be defined as the expectations that an entity (a trustor) has that another entity (a trustee) will fulfil promises, through proper actions using the trustor’s knowledge and skills; and that the outcomes will be desirable to the trustor. Mutuality and variability of trust have to be noted as implicit in this definition. That variability and mutuality account for different trust relationships and makes measurements and comparative research, such as the one this paper proposes, possible. trust in organisational culture As has been indicated before, trust has been researched as a component of organisational culture. Thus, as shown in Figure 4, Gupta and Govindarajan (2000) include trust in their dimensions of organisational culture. More recently, Park et al. (2004) also positioned trust within organisational culture just as Tyler (2003) did in his research which indicated that the change in the nature of organisations increases the importance of trust within and between them. One of such changes is virtuality with the use of information systems to glue together separated entities of organisations. Trust need to exist within and between these entities for them to share knowledge and collaboratively progress. In an organisation, trust can be noticed in different areas, for example, trust in teams, trust between colleagues and trust of subordinates towards managers. Trust benefits organisations in many ways, for example trust between managers and members reduces or even eliminates monitoring (Costa, Roe, & Taillieu, 2001). Trust works as a lubricant in a wide array of organisational processes (Bijlsma et al., 2003) and economic transactions by creating good relations between actors and saves the organisation monitoring costs (Creed & Miles, 1996; Pow- ell, 1990). It has been empirically proven that trust is positively related to team performance, team satisfaction and relationship commitment (Costa et al., 2001). Trust leads to acceptance of decisions (Tyler, 2003) and acceptance of influence (Tyler & Degoey, 1996). The foregoing discussion indicates that trust is a component of organisational culture and has great importance in organisations. Virtual communities Preece (2000) made the point that virtual communities are complex social systems enabled by complex sets of information technologies. Rheingold (1994), considered as one of the first to present the meaning of a virtual community, described it as a social aggregation that emerges after people using communication technologies (typically the Internet) have carried out enough discussions, with sufficient feelings, to form relationships. Scholars generally agree that members of virtual communities most often do not meet face to face but are connected by technology (Camison, Palacios, Garrigos, & Devece, 2009; Hsu, Ju, Yen, & Chang, 2007, p. 153) which removes the space and time barriers (Andersen, 2005). The motivation is to gain social support and sense of belonging, to share or pursue a common interest which may be fantasies and/ or transactions (Hagel & Armstrong, 1998). Another important reason why people belong to virtual communities has been said to be knowledge sharing which can be research collaboration, data or message exchange (Wang, Yu, & Fesenmaier, 2002). Hence, virtual communities have been recognised an important tool of Knowledge Management (KM) (Camison et al., 2009). Wasko and Faraj (2005) investigated why people share their knowledge with others in electronic networks of practice. They found that both reputation and centrality have significant influences on the helpfulness and volume of knowledge contribution. Knowledge can flow easily when employees view knowledge as a public good belonging to the whole organiza- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 6 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 Figure 3. Stages of trust tion (Ardichvili et al., 2003). Kollock (1999) suggested that there are four possible reasons why a person is motivated to contribute valuable information or resources to a group. They are: • • • • The expectation that one will subsequently receive useful help in return; The increasing of one’s own reputation and status in the group through contributing; A sense of efficacy; and The feeling of belonging to the group. Virtual communities are therefore good platforms for knowledge sharing. Knowledge Sharing Lin (2007) defines knowledge sharing as a social interaction culture, involving exchange of employee knowledge, experience and skills. In Davenport and Prusak’s (1998) opinion, organisations are like knowledge markets, where buyers (people seeking knowledge), sellers (people with substantial knowledge), and brokers (people making connections between buyers and sellers) engage through some form of communication which results in knowledge sharing. Knowledge sharing has been proved by studies to be of great importance to organisations as it provides them with competitive advantage (Reid, 2003). Other researchers have demonstrated that knowledge sharing enhances innovative performance and reduces redundant learning efforts (Calantone et al., 2002; Scarbrough, 2003); and innovative performance is the principal mechanism for organisational growth and sustainability (Sullivan & Dooley, 2010). Hooff and Weenen (2004a) indicated that the practice of mutual knowledge exchange between employees result in jointly creating new knowledge and they identified two dimensions of knowledge sharing: knowledge donating (communicating their personal intellectual capital to others) and knowledge collecting (consulting colleagues to encourage them to share their intellectual capital). It ProfESSIonAlS In VIrtuAl communItIES And KnowlEdgE ShArIng In an organisation IT department consists of various personnel whose skills can generally be divided into technical and non-technical skills (Goles, Hawk, & Kaiser, 2008). Hardware, systems and application software, and telecommunications skills are some of the examples of technical skills (Cash, Yoong, & Huff, 2004). Trigo et al. (2010) described non-technical skills generally to include: (a) business skills, such as knowledge of the organization’s structure, strategy, processes and culture and the ability to understand the business environment; (b) management skills as planning, leading, organizing and controlling; and (c) soft skills. Both technical and non-technical professionals can find virtual communities very useful in sharing their experiences, seeking solutions and learning new techniques. Virtual communities formed by professionals are known as professional virtual communities (PVC). Bifulco and Santoro (2005) developed a conceptual framework for professional virtual communities and described them as emerging human-centred new organisational arrangements aimed at le- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 7 Figure 4. Organisational culture dimensions from the work of Gupta and Govindarajan (2000) veraging knowledge management development, value creation and social welfare. Companies like SUN, Microsoft and others build virtual communities for staff and customers, where they can post a question, reply to queries, find others’ opinions and perform other knowledge sharing activities. The diversity of a virtual community makes it a unique and useful tool for knowledge sharing as its members have different levels of experience and are from different cultures and backgrounds. An answer to a typical question may not be possessed by a friend or colleague in close proximity. On the other hand a virtual community can enable the fetching of the answer from a distant community member who may not even belong to the same organisation as the enquirer. As implied in the foregoing, virtual communities can provide numerous benefits to IT professionals but only a few are listed here: • • • • • • Collaborating in research; Developing new ideas; Learning new techniques; Finding out different opinions about something; Finding out new developments; and Finding different solutions to a problem. This study will help IT professionals from different organisations to understand how their organisational culture affects their knowledge sharing activity in virtual communities which often cut across organisational boundaries. lEVElS of truSt In An orgAnISAtIon Literature shows that trust exists at different levels of analysis. For example, trust exists within individuals, within groups or organisations and between organisations. Mishra (1996) confirmed that trust exists even at institutional level, for example, the public’s trust in their political system. Trust as a factor in an organisation is considered to be very important and much research has been conducted on it (Gupta & Govindarajan, 2000; Park et al., 2004). In organisations, trust can be noticed in teams, between subordinates and their leaders or managers, between different departments, between external (customers/suppliers) and organisations and between organisations. Zaheer et al. (1998, p. 141) noted that “considerable ambiguity is evident in the literature about the precise role of trust as it operates at different levels of analysis and its influence on performance”. To systematically study trust in Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 8 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 an organisation and to simplify its role so that its level in an organisation can be assessed, we have proposed that trust should be based on interactions. Interactions can be internal among members of an organisation or with external entities like suppliers, customers and competitors. Interactions may create a relationship between inter-actionists. On the basis of this main categorisation of interactions in an organisation (internal and external) trust has been divided into internal and external levels (of trust) in this research as shown in Figure 5. • • Internal trust consists of trust between members of organisations. This trust level has different sub levels like trust between subordinates and managers, between managers or between subordinates. External trust consists of trust between an organisation and external entities. Some of the sub levels of external trust are trust between customers and organisation, between suppliers and organisation and inter organisational level. For an organisation trust is operationally defined in terms of the average level of trust among the members of the organisation (Mishra, 1996). In this research organisational trust consists of internal and external trusts which are considered as exhaustive generalisation of the trust levels as seen in existing literature (and to the best of the authors’ knowledge). These literature-supported levels, e.g., trust between organisation and members (Gabarro, 1987; Tyler, 1996), are used as subcomponents of internal and external trust. Full literature support of the subcomponents is presented in the sections that follow. Interpersonal Level Interpersonal trust describes trust between coworkers (Ismail et al., 2007) and is recognised as an attribute of organisational culture (Gupta & Govindarajan, 2000). Organisational members almost always depend on the support and cooperation of each other. It is interpersonal level trust that facilitates cooperation among staff members (Pesamaa et al., 2007). Trust at interpersonal level increases social control and facilitates reciprocity and sympathy (Axelrod, 1984). When there is similarity in ideas and thinking, then performing organisational task effectively and efficiently might not be a problem. When interpersonal trust is high between staff they might have good relationship with each other, staff may use their skills and abilities, and might share their knowledge to help themselves. Politis (2003) empirically showed that interpersonal trust is essential for knowledge sharing and collaboration in teams. Members of virtual communities, having high interpersonal levels of trust in organisations in which they work, might trust other participants of virtual communities making the chances of creating a trusting relationship very high. Participants of virtual communities should cooperate with each other by replying to postings on virtual communities, starting discussion, giving suggestions, providing sources or direction. If an organisation has high interpersonal levels of trust then it should have a positive effect on knowledge sharing in virtual communities. Thus, Hypothesis 1: A high interpersonal level of trust has a positive relationship with knowledge sharing in virtual communities. Internal trust Between Organisation and Staff Internal trust refers to trust between entities inside the organisation, i.e., an organisation towards its members, members towards their organisation and interpersonal trust (between members. Figure 6 lists a sample of studies related to internal level of trust. According to Jude Welles (2005), in a survey in 2004 by Rights Management consultants, about thirty five percent (35%) of new managers and executives in industry failed in their jobs because of their inability to build relationships and teamwork with staff. A good relationship Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 9 between managers and staff is important for organisations. Trust can play a positive role to create enabling relationships between managers and staff. Thus, Gabarro (1987) emphasized that trust is one of the main characteristics that subordinates want in their leaders; and this is very important because these leaders or managers are the principal representatives of the organisation and through them can members trust the organisation. If the managers trust their employees there will be less control and monitoring (Costa et al., 2001), the chance of positive reply from employees towards organisation may be high; and the organisation can expect them to use their skills and share their knowledge with each other to perform tasks. Moreover, the chances are high that employees will share their expertise (knowledge) with other colleagues, be committed to the organisation, be loyal to the organisation, and perform extra roles (Tyler, 1996). Iverson, McLeod and Erwinl (1996) proved empirically that employee trust is a significant determinant of organisational performance. To highlight changing organisational work environment, Costa et al. (2001, p. 226) stated that “traditional forms of management have been replaced by more collaborative approaches that emphasize coordination, sharing of responsibilities and the participation of the workers in the decision processes”. In this new work environment more and more people work from home or from miles away, so controlling such staff is difficult. Thus, to have a trust relationship in such a situation would be very helpful. In this direction, Child and Guido (2003) found that corporate manager’s trust in their foreign entities’ performance is positively related to growth in sales and profits. When an organisation has a high trust level between itself and its staff then the chances are high that members from such an organisation will share their knowledge with other participants in virtual communities which may traverse organisational boundaries. Thus, effect on knowledge sharing in virtual communities. External trust External trust exists between organisation members and external entities like customers, suppliers and other organisations. Figure 7 lists research related to external level of trust. Organisation and Customers Businesses are established to earn money. However, competition and customer’s knowledge of the market are among some of the factors that make it difficult to gain profit. Customers not only want products but also good services. If a business is only about earning money and ignoring customer satisfaction, very soon such a business will disappear from the market. Thus the best strategy for a business is to have a win-win relationship; profit for the business and satisfaction for customers. To compete and gain profit, businesses need to build relationships with customers. Trust plays a significant role in achieving this objective (Guenzi, Johnson, & Castaldo, 2009). Customer trust in an organisation is affected by trust in both the staff and organisation branded products (Guenzi et al., 2009). Trust is one of the important drivers of customer retention (Ranaweera & Prabhu, 2003). Gremler et al (2001) specified dimensions of interpersonal bonds: trust, rapport, care and familiarity. They claimed that customer’s trust in employees has a positive relationship with WOM (word of mouth) of customers about the organisation. The outcome of trust relationships between customers and an organisation may not be limited to profit of business or satisfaction of customers but can extend to willingness to share their experience (knowledge) with the organisation. In virtual communities such customers may respond to questions asked, take part or start discussions, give suggestions and perform other knowledge sharing activities. Thus, Hypothesis 2: A high trust relationship between staff and an organisation has a positive Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 10 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 Figure 5. Categories of trust Figure 6. Internal trust Hypotheses 3: A trust relationship between organisation and customers is positively related to knowledge sharing in virtual communities. Inter-Organisational Level Inter-organisational trust level means trust between two or more organisations some of which may be suppliers, competitors or other types of organisations. Most modern businesses survive on inter-organisational collaborations. A typical organisation often has limited expertise hence the necessity to collaborate with other organisations. Some of the main goals of such collaboration are: to develop new products (Rindleisch & Moorman, 2001), to strengthen supply chains (Wathne & Heide, 2004), to reduce operating costs (Cannon & Homburg, 2001) and to devise industry standards (e.g., the 3G project of Qualcom, Ericsson, and others). For a successful cooperation between two organisations more than friendship is required. Pesamaa et al. (2007) empirically proved that trust and commitment will initiate cooperation between two businesses. Inter-organisational trust reduces costs and opportunistic behaviours (Selnes & Sallis, 2003). Research has found out that inter-organisational trust increases performance (Selnes & Sallis, 2003; Zaheer et al., 1998; Smith & Barclay, 1997). If an organisation has a high inter-organisational trust level then its members might trust members of other organisations easily and will help participants to solve their problems, be more open to start discussion, develop more innovative and original solutions, respond to questions posted by members, guide each other and thus they will be sharing their tacit knowledge with each other. Virtual communities often span across different organisations thus inter-organisational trust can be very important. There seems to be a positive connection between knowledge sharing and high inter-organisational trust level. Thus, Hypothesis 4: Organisation members having high inter-organisational trust level increases knowledge sharing in virtual communities. dImEnSIonS of truSt Previous research has shown some similarity in dimensioning the trust concept. Most of these previous studies were context specific. The dimensions specified by Mayer et al. (1995) which are integrity, benevolence and ability or competence are mostly cited by other Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 11 researchers and many believe that these are very generalized dimensions of trust. These trust dimensions along with those proposed by other researchers are summarised in Table 1 below (Costa et al., 2001; Sako, 1992; Mayer et al., 1995; McAllister, 1995; Ganesan, 1994). As indicated on Table 2, these dimensions from earlier research have been mapped into benevolence, knowledgeableness and openness which are the three trust dimensions adopted and used in this research. suppliers then a trusting relationship may engender between an organisation and suppliers. Benevolence can create a good relationship at inter-organisational level too. Benevolence can initiate a feeling of kindness and helpfulness between human and organisational entities. When entities are benevolent to each other there is a high possibility that they will trust each other. benevolence Knowledge is necessary not only for good performance of tasks but also for earning respect and trust from other employees. In internal level of trust (interpersonal as well as between staff and organisation) knowledgeableness can create a trusting relationship. Generally in an organisation, staff and managers trust those individuals who know their jobs well; for example, in colleges and universities teachers’ knowledge is one of the reasons that their students trust and respect them. Knowledgeableness helps in creating a trusting relationship between parties and this enhances knowledge sharing between colleagues. Knowledgeableness has roots in the ability (competence) dimension of trust which is specified by Mayer et al. (2007). Mayer et al. (2007, p. 346) highlighted the importance of ability (competence) in a supplier/buyer relationship. According to them, “if the supplier’s ability to deliver is questionable, it will not be trusted”. If the external entities of an organisation are able and skilful it may increase the chance for the organisation to trust such an entity. Benevolence means to be kind and helpful. It is the extent to which a party is believed to want to do good for the trusting party, aside from a selfish profit motive (Mayer et al., 2007). It can also imply being forgiven of other’s misgivings. Benevolence is a very important dimension of trust both at internal and external levels of trust of an organisation. The role of benevolence at internal level of trust is very clear and we can find many examples where this dimension can play a significant role. In an organisation if a person is kind, other colleagues generally trust that individual. Similarly when a manager is benevolent to her subordinates, they will likely trust her. Benevolence in external level of trust of an organisation has also a significant role. For example, if customers perceive that an organisation’s staffs are kind and helpful then the chances should be very high that customers will trust such an organisation. Similarly, if an organisation staffs are benevolent to Knowledgeableness Figure 7. External trust Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 12 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 The belief that the second party is highly knowledgeable can create de-motivational factors. For example, if we meet a person who is more highly educated than us, we may shy away from quickly expressing our views because we are afraid of making wrong statements. Conversely, a knowledgeable individual may not share his knowledge with others because of fear of risking his job. McClure and Faraj (2000) found that people think of their knowledge as a private asset and a competitive advantage thus some members of an organisation would not share their knowledge with colleagues. However, Ardichivli et al. (2003) found that only a small minority do not share their knowledge because of information hoarding. from literature are listed and grouped with respect to similarity. On the left dimensions which we specified in this research are listed. The +++ shows strong correspondence between our dimension with those from literature, + represents some correspondence and – means that there is no correspondence. For example, the second line in the Table shows +, +++ and – entries. It means that benevolence has some relationship with integrity, fairness and credibility, +++ means openness has strong relationship and – indicates that it is difficult to find any examples where the relationship between knowledgeableness can be established with those on the right. openness rESEArch modEl If a person is knowledgeable and benevolent but is not open in communication, trust would be dampened. Openness, which refers to expressing of thoughts and feelings without restrictions, is very important in both internal and external levels of trust. In internal level of trust (interpersonal and between staff and organisation) openness helps in creating a trusting relationship. In an organisation, staffs usually trust those colleagues and managers who are honest and fair. If an individual believes that his colleague is unnecessarily hiding information that should be shared then he might not trust that colleague. Staff trusts those managers who are honest in fulfilling their promises. In external level of trust (between organisation and other external entities), openness is equally important. For example, if a supplier is open (and honest) with an organisation, it may create or increase the trust relationship between the organisation and its suppliers. This will help in sharing useful knowledge between themselves. Table 2 presents the dimensions of trust specified in this research. The table consists of mainly two parts. On the right, dimensions The model on Figure 8 consists of dimensions of trust and levels of trust. The three dimensions of trust which are benevolence, openness and knowledgeableness determine the four sub-levels of trust in organisation. The four sub levels of trust are interpersonal, staff and organisations, inter-organisational; and organisation and customers. Each dimension of trust is a component in each of the four levels of trust. The four levels of trust determine the internal and external levels of trust. The model suggests that internal and external levels of trust have positive relationships with knowledge sharing. ImPlIcAtIonS Even though the research is currently at a conceptual rather than an empirical level, a number of implications can be drawn. Firstly, managers should encourage knowledge sharing by building trust relationships with and among organisation members. Having good trust relationships between managers and staff will not only help in sharing knowledge but will affect on organisation performance as a whole. Good trust relationships will help in securing manager’s jobs as Jude Welles (2004) observed Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 13 Table 1. Dimensions of trust from previous researches Dimensions Authors 1. Faith 2. Confidence Cook and Wall (1980) 3. Competence 4. Goodwill 5. Fairness 6. Contractual Sako (1992) 1. Integrity 2. Benevolence 3. Competence or Ability Mayer et al (1995) 1. Cognitive 2. Affective McAllister (1995) 1. Credibility 2. Benevolence Ganesan (1994) Table 2. Dimensions of trust Correspondence with presented dimensions Trust dimensions in several studies grouped with respect to similarity Mayer et al, 2007 Sako, 1992 Ganesan, 1994 Cook and Wall, 1980 Benevolence Benevolence Goodwill Benevolence Faith +++ + _ Integrity Fairness Credibility + +++ _ Competence Competence _ _ +++ _ _ _ Contractual Confidence Openness Knowledgeabl eness Figure 8. Research model: trust levels in an organisation and knowledge sharing Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 14 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 that 35% managers failed in their jobs because they failed to build trust relationships with their employees. Secondly, this research simplifies the role of trust in organisations by dividing the role into internal and external levels; thus contributing to literature that endeavours to clear the ambiguity in the role trust plays in organisations (Zaheer et al., 1998). Thirdly, with regards to customers, this paper shows the importance of creating and maintaining a trusting relationship. The field of customer relationship management has contributions to managers on how to do this. But suffice to say that organisations should maintain their capabilities, transparency (openness) and dependability to their stakeholders who are more than customers. Especially with the current economic recession, stakeholders’ loyalty and support are very important to the existence of organisations. Fourthly, inter-personal trust should be encouraged within an organisation. This would not develop without personal interactions among staff. So, managers should organise and manage in a way that enables sufficient interactions whether face to face or virtually. The managers themselves should show a good example of being trustworthy and making their subordinates feel trusted. Fifthly, inter-organisational relationships cannot be avoided in the current age of collaboration often along supply chain lines. Whether the relationships are horizontal or vertical, trust is its lubricant. Managers should ensure that their organisations keep their side of any contracts they have with their partners or suppliers. By positively contributing to the relationship they will be using their capabilities to build and maintain trust. Finally, the research model will help managers to carry out trust related analysis of the organisation. The research model is simple and defines the different levels and components of trust in an organisation. lImItAtIonS And futurE worK This paper reports on a part of a study that investigates the effect of organisational culture on knowledge sharing in virtual communities. It focuses on trust as an organisational cultural component. The various dimensioning of trust in literature has been synthesised into benevolence, knowledgeableness and openness. Almost every research has some limitations and this paper is no exception to that. Trust has been divided into internal and external levels of trust. These two levels have further sub levels of trust in organisation. In this research only a few sub levels of trust have been identified. Research should be conducted to define the more complete list of sublevels of internal and external levels of trust. This in only a conceptual study and not yet supported by empirical evidence. 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Electronic Journal of Knowledge Management, 1(2), 187–196. Welles, J. (2005, November 14). FCW. Retrieved October 10, 2009, from http://fcw.com/ Articles/2005/11/14/Welles-Trust-in-managers.asp Van Hooff, B., & Weenen, F. D. L. (2004a). Committed to share: commitment and CMC use as antecedents of knowledge sharing. Knowledge and Process Management, 11(1), 13–24. doi:10.1002/kpm.187 Zaheer, A., Bill, M., & Vincenzo, P. (1998). Does Trust Matter? Exploring the effects of internorganisational & interpersonal trust on performance. Organization Science, 9(2), 141–159. doi:10.1287/orsc.9.2.141 Wang, Y., Yu, Q., & Fesenmaier, D. R. (2002). Defining the virtual tourist community: implications for tourism marketing. Tourism Management, 23(4), 407–417. doi:10.1016/S0261-5177(01)00093-0 Abel Usoro lectures in the School of Computing, University of the West of Scotland, UK. His current research interest is in information systems which includes knowledge management, elearning and e-tourism. He has published book chapters, in refereed international conferences and journals (such as International Journal of Information Management, International Journal of Global Information Management and International Journal of Knowledge Management). His academic work has taken him to many countries in Africa, Europe, Asia, North and South America. He is a member of scientific committees of many international conferences and chairs one of them (Conference on Information Technology and Economic Development – www.uws. ac.uk/cited2010). He is also a member of the British Computing Society. Imran Ullah Khan is a Doctoral researcher in the School of Computing, University of the West of Scotland, UK. He obtained MSc Computing and Information Systems from Liverpool JMU, PGCert Research methods from UWS and is on the way to achieve PGCert TLHE. His research interests include organizational culture, knowledge management and autonomous systems. His current research work is on knowledge management with particular emphasis on the cultural aspects of knowledge sharing in on-line communities. He has contributed to international conferences and published in international journal. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 18 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 19 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 20 International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 1-21, January-March 2011 21 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 22 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 A dynamic Approach to Introduce competency frameworks: Application to the It & Systems management domain Alfonso Urquiza Echavarren, Universidad Francisco de Vitoria, Spain AbStrAct Although a wide consensus exists about potential business beneits derived from Competency based HR management practices, reality shows that in practice, Competency Management deployment cases are scarce and dificult to implement. This HR business related problem directly affects IT Software industries, both in HRMS applications development and consultancy related services. Market indicators relect ‘unbalance’ between potential organizational beneits and actual applications deployment. In this context, deining useful, business-oriented Competency Frameworks has become an important challenge for many organizations willing to progress along through continuous HRM improvement processes. This paper addresses the major issues underlying this Competency Management unbalance. A new business-oriented approach proposing an alternative, scope extended methodology is outlined in this publication, after ield validation and wide acceptance from experts in functional HR management and IT Systems professionals from various large size organizations. Therefore, the indings resulting from this research work have both theoretical and practical implications in helping IT management in deining eficient HRMS Competency based applications and deployment strategies. Keywords: CIO Skills, Competencies, Competency Frameworks, Human Capital Management, Systems Management Model IntroductIon: bAcKground And IntErESt In comPEtEncy bASEd mAnAgEmEnt Today’s Human Resources (HR) management evolution from a traditional functional support DOI: 10.4018/jhcitp.2011010102 activity to a process-oriented, business-aligned scenario is shaping the way in which HR professionals work and the scope and architecture of Human Resources Management Systems (HRMS) provided by the Software Industry. Traditionally, large size organizations focussed primary interest in this area towards Payroll and other basic administrative functions automation. Other required management Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 23 activities such as recruitment or training were also performed in a semi or non automated or integrated manner, thus generating relatively large staff departmental units dedicated to HR, not directly linked to main organizational business. Most recent organizational scenarios produced new efforts focussed to generate efficiency, transforming and automating most HR operations in place in which process flows were handled as ‘automated transactions’ and selfservice tasks directly implicating employees became common, enhancing task-driven routines formerly performed by HR departments. Within this background scenario, CM business interest appears very much linked to the new Human Capital (HC) paradigm (Blain & Dodd, 1999). Two new dimensions appear. The first is that a new strategic role is expected from HR, linked to what is known as Talent management. The second one is that HR becomes another component within the organization such as IT, Financial Management, Supply Chain Management, Customer Relations Management or any other, all of them driven to produce products or services generating value to the Customer. HC organizational Talent investment value (Cantrel, Benton, Laudal, & Thomas, 2006) needs now to be continuously measured and managed. Two associated facts are shaping the development of the new economy: • The first is that the Talent market is becoming one of the levers of value determining success in most business markets. Independently of current financial crisis, business markets are generally growing while ‘Talent markets’, particularly in technology driven organizations, seems to be shrinking, so that Talent is considered a most valuable asset requiring new management approaches in today’s organizations. It is in this context where CM practices are viewed as a most valuable HR business approach to define, measure and manage these talent assets, the Human Capital of the organization. • The second one is the growing contribution of Information Technology & Systems to most organizations business results. EBusiness process transformation is boosting the development of new management approaches, such as HRMS’s. It is in this comprehensive management context, conditioned by increasing business expectations from managing and developing organization’s workforce, where CM becomes the integrating key component in HC Management Systems (Sagi-Vela, 2004) reshaping today’s and future E-HRM implementation strategies. Analysts add HR professionals throughout the world have published research initiatives results validating the potential business benefits and performance improvement effects derived from implementing Competency based HR management practices. Probably the most significant starting point in building interest in CM comes from the publication of a most interesting book from (Boyatzis, 1982) in which the Competency orientation effect as a conceptual response to competitive business challenges is identified. CM usually pursues the following goals: 1) Support business objectives, providing information to acquire, maintain, influence, develop and retain the right employees. 2) Align people, processes and technology around shared values. 3) Measure the strategic value of Human Capital investments. 4) Anticipate human capital changes. 5) Learn from industry best practices, leveraging benchmarking data. The reference guide generated by SEI’s People Capability Maturity Model or P-CMM (Curtis, 2001) is another example of trust and confidence in the CM approach. P-CMM is a five level reference model built upon experience in implementing employee’s performance continuous improvement practices in a selected number of multinational and large size organizations. The competency-based practices appli- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 24 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 cation appears in the most significant Process areas of the 3 highest Maturity Levels (Defined, Predictable and Optimizing) within the Model. The stated market CM ‘unbalance’ situation between business potential and actual real deployment extend is proven by our research findings, showing that 86% of Spain´ s largest organizations have interest in deploying improved, comprehensive Competency based management practices, but just 24% of them have put in place long term HRM SW transformation initiatives in place. Management related Competency Framework’s research result indicates that the subject is still immature. Theoretical oriented initiatives such as the work presented by (Ravarini, Moro, Tagliavini, & Guimaraes, 2004) are based in statistically collected information from thousands of IT professionals around the globe, but when it comes to practical implementations, although interesting to consider as a starting reference, they do not fit into the specific business context of individual organizations and are difficult to keep updated and business-aligned in dynamic organizational scenarios. Researchers, HR professionals and IT specialists demand new innovative research efforts to try to break trough potential barriers and speed up the deployment of new, business aligned CM based initiatives. Competency Management (CM) is considered by some authors (Sagi-Vela, 2004) as a complementary methodology to other related HR management practices, such as emotional intelligence or very often, Knowledge Management. Most of today’s known research initiatives relating Intellectual Capital and technology (Mayo, 2002), (Lindgren, Stenmark, & Ljungberg, 2003), Ward and Aurum (2004) are usually focussed to Knowledge Management (KM), while CM contributions are scarce, directed to specific related aspects as corporate organizational effects (Lindgren, 2005) or Competencies development (Hardless, 2005). Both concepts – KM and CM – are closely related, but the first deals more with the capture, analysis, application and reuse of Knowledge within the organization, with the objective of improving business processes quality, reducing costs and generating competitive advantage. CM however is mostly focused towards employee life cycle management in the organization. In the field of IT, several efforts are devoted to the importance of CM in this field (e.g., Colomo-Palacios et al., 2010; Ruano-Mayoral et al., 2010; Trigo et al., 2010). The necessity to suggest new proposals around organizational CM application is evident as indicated by (Grzda, 2004). His research results concludes that a major problem behind the usage of organizational Competency Frameworks is due to the conceptual ambiguity in Competency definitions, due to complex job definitions schemas and formal contradictions in dependant or independent variables definitions used by Competencies. The identified innovation requirements and wide interest concerning Competency Frameworks definition justifies the efforts in this research, mainly focused to provide guidance in IT strategic decision making for Software application developers and consultancy services. The methodological suggested approach to organizational Competency Frameworks described in following parts of this paper has been successfully validated in various large size organizations, considering both theoretical and practical implications. common ASPEctS In orgAnIzAtIonAl comPEtEncy frAmEworKS Competency Frameworks are currently just viewed as a model definition of Competencies, to be used by individuals in HR management processes as maps or indications of behaviour, Knowledge or skills that are valued, recognized and sometimes rewarded by the organization (CIPD, 2008). They may be considered as the language of ‘performance’ in any organisation. In most corporate organizational contexts, the objective behind creating a Framework is to identify the generic and activities related Competencies (and associated levels of compli- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 25 ance) that truly have impact in business results (Draganidis & Mentzas, 2006). The most extended industry methodology relies in creating complex internal Work job analysis aimed at the identification of ‘standard’ corporate job profiles (Pereda & Berrocal, 2001). Job description includes objectives, evaluation criteria, organizational hierarchy and level of autonomy (Pereda & Berrocal, 2001). Following steps are considered: 1. 2. 3. 4. 5. Process Planning and preparation. Corporate and management implication. Employee’s dissemination, seeking active process support from labour workforce. Generic common corporate Competency definition, according to identified mission, values and strategic options. Job profiles definition, from previous job descriptions and required consolidating efforts, each profile is defined in terms of required competencies and performance level, thus finalizing the Competency dictionary. Framework validation, usually in a limited functional segment of corporate organizational scope. This complex and highly cost process involves too many persons (both internal and external consultants) and has also the disadvantage that in changing market or business scenarios, the picture translated to Competencies may become quickly outdated due to change in corporate priorities towards business response. Apart from previous analysis, it may also be interesting to consider the outcome from CIPD’ s research concerning most Frameworks, which shows that the following Competencies are always found in most of them: • • • • • • Communication skills People management Team skills Customer service skills Results-orientation Problem-solving. Other common external type of methodological approach to creating Frameworks relies in working with internal and external expert reviews and statistically based analysis of information (Dawes & Helbig, 2006), (Ravarini et al., 2001). The main problem with these types of approaches relies on people. Many conflicts arise when HR tries to mix internal view and external opinions from collected information, thus agraviating the conceptual ambiguity problem identified in previous chapter. Mixed combinations of two previous approaches are sometimes considered, as the one proposed by (Yang, Wu, Shu, &Yang, 2006) in its POCCI (‘Process Oriented Core Competency Identification’) Model. Although results may be satisfactory, the authors recognize that the process is very complex to develop, as well as highly consumer of time and organizational’ s effort. comPEtEncy frAmEworKS dIffErEntIAl ASPEctS Differences are usually related to the framework content itself. Originally they consisted mainly of behavioural elements (CIPD, 2008) and later on they have become broader and more ambitious in scope, incorporating technical competencies. In some cases (Abel, 2006) they just outline competency definitions but don’t include relevant information concerning compliance levels and required employee’s activity-based expected behaviour associated to each level. In some scenarios the problem is the opposite, too many detailed content makes associated HR support processes bureaucratic and time consuming, thus generating reluctant employee attitudes affecting efficiency. Apart from the various aspects identified so far in this paper, we believe that there is also a missing aspect in all known Frameworks which may be essential to succeed in any large scale transformation process such as CM, particularly in large size, technology driven organization: the deployment definition strategy. Having a just a good Competency definition model is not Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 26 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 enough to successfully approach a significant transformation initiative in HR. What is missing is a strategy definition methodology that includes at least: tion from the particular Business activities Management Model, here the Systems Domain. It has two major advantages compared to other approaches: • 1. • Guide to analyze and diagnose current organizational situation (both in HR processes development and System support. Definition and evaluation of current organizational technology scenarios. A buSInESS AlIgnmEnt orIEntEd APProAch: from SyStEmS mAnAgEmEnt to comPEtEncy modEl dEfInItIon The innovative Competency Model approach suggested in this paper has been produced as a response to many organizations willingness to speed up CM supported transformation processes in a straight, business aligned manner and easy to implement for application in any HR management competency based process such as e-recruitment, e-Learning, Performance management or any other. As in any real business scenario, we have selected a particular functional domain, common and always present in any large size organizations: The IT & Systems management domain. The relevance of this domain relies in the actual fact that Computing and IT related activities are now recognised as one of the most significant forces that are reshaping business development in the new economy (Stiroh, 2000). Far from early predictions that IT management related activities could loose business influence and even easily be externalised (Dearden, 1987), current e-business organizational transformation shows just the opposite effect, particularly in large size organizations (Reich & Nelson, 2003) in which CIO´ s are required to develop new organizational skills, management competencies and ability to cope with on going technology and IT architecture evolution. The original idea consists in shaping the Framework from extracted relevant informa- 2. All organizational activity domains are managed following simple or complex management models. Even in low maturity developed organizations, managers define priorities, objectives, sometimes assigning performance indicators that are periodically reviewed with employees. It is easier and cheaper to work with existent information then initiating new dedicated HR consultancy projects. Shaping the Framework in accordance to the management model will ensure a permanent alignment between the Competencies defined and the business objectives, which are usually ‘incorporated’ in the management performance and objectives indicators. The Framework (as showed in Figure 1) has two major components within its intended scope: the first one is the Competency model definition built following adequate performance business indicators linked to the specific business management model (IT& Systems in our case), rather than using the classical job work assignment’s definition analysis and subsequent job profiles required for the organization. The second component is the Implementation Technical Strategy definition, covering both Processes and associated System support applications reengineering strategy, in which the methodological approach has been the following one: • • • Building a ‘characterization’ of all HR business processes, identifying competencies-related activities and process interfaces. Current’s Processes & System’s status analysis Identification of HR Business Technology scenarios Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 27 Figure 1. Competency framework definition scope proposal for large size organizations • Evaluation and strategic selection of Organizational preferred scenario The Activity Management Model for IT & Systems showed above represents the basis of our Framework as a reference guide to match against the particular model (functional, service-oriented, etc) used internally in each organization and it has been structured around 3 macro-processes: • • • Innovation: it includes all System’s activities driven to generate Business advantages from opportunities generated by technology innovation. System’s Planning, Applications and Systems Architecture or Business alignment IT relationships are typical innovation related activities. Change Management: it covers any Customer’s development or maintenance support (Business Units as Marketing, Customer Sales or Finances) required applications. Infrastructure Support: includes all Data Processing Centers operation and management responsibilities, desktop and network service or help desk support. This macro-processes view of organizational Systems activity is complemented and matched with a 4 views or responsibility levels, thus facilitating a ‘visual’ representation for employees objectives assignments, in accordance to adequate HR management maturity level, usually in 1-INITIAL or 2_MANAGED from P-CMM (Curtis, 2001): The Financial view: measures Business value generated to its customers (internal Business Units) from Systems management. It’s the highest level, due to the fact that the ‘common language’ ensuring alignment between Systems and Business Units requires considering IT products or services as ‘technology related assets’, in away that there in common understanding to evaluate, determine priorities and decide how and when introduce changes in them. The Client view: relates to the customer orientation in any Systems management model in place. It should incorporate indicators that are valued by Business Units (quality of IT services, deployment time measures, etc.). The Process view: used to evaluate whether IT internal processes respond to Business Units service expectations (applications quality, # of maintenance actions in active services, etc.). Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 28 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 The Resources view: is measured in terms of results from Human Capital or Infrastructure management actions performed to achieve results (Training, etc.). With this 2-dimensions model, managers can assign different kind of metrics linked to key performance indicators viewed in this model and potentially usable in evaluating employee’s performance. Systems Management modeling and related CIO’s usage of advanced management tools such as Balanced Score Card incorporating key performance indicators linked to IT business support activities, is now widespread in large Corporations, but never, so far, have been ‘linked’ or ‘used’ to create Competency frameworks. In our model we identified 8 Objectives, which could match in any job assignment scenario within IT, presented in Figure 2. The proposed way to proceed from System’s Management information to Competencies selection is explained with a practical example in which an organization assigns Competencies to the CIO in the next section. An ExAmPlE of thE dynAmIc comPEtEncIES ASSIgnmEnt APProAch The Competency model selected for application to employees working in any IT or System’s support activities is based on a 4 Level scale (level 0 meaning that the Competency is not required, A trough D are Levels matched to Job Competency assignment) associated to generic and specific kind of Competencies (Table 1 and Table 2): The Competency assignment process is performed in two consecutive phases: • In Phase 1, we identify in which of the 4-cuadrant picture of the ‘Credibility – Business perception of dependency on Information’ Matrix. The 2 variables in this matrix reflects at any given time, both the Systems and Business alignment level in the organization plus the relative measure- ment of value generated to business objectives as perceived by IT & Systems Clients (internal Business Units). Each quadrant contains the ‘priority’ Competencies that all Systems employees should work on during next HR management period (Learning to improve Competency level, Performance management, evaluation, variable compensation, etc) (Figure 3): • In Phase 2, we complete the assignment of Phase 1 with those Competencies that are directly linked to the key performance indicators or similar management information that best match the individual employee current responsibilities, using the reference management model indicated earlier: we ‘fit’ the employee in the most significant macro-process of the model and his hierarchy level of responsibility in the System’s department (Figure 4): Examples of application: a) Organization’s CIO, where the System’s activities are located in quadrant B-A: i. Priority Competencies: INI, IDO, CNG ii. System’s Management associated Competencies: INN, ORL, PLO, LID, CNG, PGF iii. Final CIO’s assigned Competencies: INI, IDO, INN, ORL, CNG, PGF(Final recommended number of Competencies in this organization is 6. This may be higher, including the ones discarded (PLO, LID) when combining competencies. b) CPD Operation´ s manager, and the System’s activities are located in quadrant A-A: i. Priority Competencies: OAC, COM, CNG ii. System’s Management associated Competencies: COM, NEG, OAC, LID, PRO, PGF Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 29 Figure 2. Overall 2-dimension systems management reference model iii. Final CIO’ s assigned Competencies: OAC, COM, NEG, LID, CNG, PRO hrmS tEchnIcAl dEPloymEnt StrAtEgy: SElEctIng A buSInESS drIVEn ScEnArIo Any significant corporate HRMS technical deployment strategy such as any one related to Competency based management, requires a methodological approach to ensure long term project success. We outline hereafter the most significant steps suggested for this purpose in this contribution: • HR Processes Characterization: the organization requires a detailed review of final process status review against current situation, including all major business processes to consider, specifying basic activities and interfaces, with particular focus into the most important transformation effects from competencies based practices over current corporate-wide HR processes. • • • Final processes objectives from a Systems point of view: the idea is to establish the business limits and technical challenges in terms of System & Applications Architecture to ensure adequate evolution to final scenarios. Identify possible Technology business driven deployment scenarios to consider by the organization. Evaluate and select the corporate Technology business driven scenario and define the roadmap transition strategy from current to desired scenario. The most challenging and innovative part of the previously outlined approach relies in the identification of alternatives as possible HRMS Technology business driven deployment scenarios to consider by the organization, before considering any technology or application evolution option . The technical HRMS architecture must be directly aligned with the kind of process management model that HR business managers intend to deploy throughout the organization. Different Organizations choose management models basically in terms of levels of desired centralization or distributed operations sce- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 30 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 Table 1. Generic set of competencies Code Competency A B C D E OAC Customer Orientation 4 3 4 1 1 TRE Team Work 4 4 3 3 3 ORL Achievement orientation 4 4 4 1 1 INI Initiative 4 2 2 1 1 IDO Organizational alignment 3 4 3 0 0 ANS Analytic Thinking and synthesis capabilities 4 3 3 2 2 LID Leadership 4 3 2 0 0 COM Communication Abilities 3 2 1 0 0 INN Innovation 4 3 2 1 1 PLO Planning & Organization 4 2 1 1 0 EXP Expertise 3 3 3 2 2 TDC Decision taking attitude 3 2 1 0 0 NEG Negotiation 3 4 1 0 0 Table 2. Specific set of competencies Code Competency A B C D E PGF Financial Mngt. & Planning 3 3 1 0 0 CNG Business Knowledge 4 3 2 1 0 ART Technical Knowl.: Appl & Systems Arch. 3 4 2 2 1 ISW Technical Knowl.: Software Engineering 3 4 2 2 1 PYO Technical Knowl.: CPD Operations 3 4 2 2 1 narios, sometimes even in federated types of architectures in which some shared functions might serve to all corporate Units or Companies and others are handled in an independent manner. The technically aligned approach must fit into the required management model, and in HR business, organizations choose from a range of five possible scenarios to consider by any large size organization, in which Business Units may coexist under Corporate wide department units or incorporating Product or Services independent companies within the group, having local market oriented operations or multinational type of operations in various countries: • • Applications Independency: typical in largely decentralized organizations or starting scenario after merging or acquisitions operations. Units and group companies keep HR process and application autonomy but it may have some disadvantages, such as the lack of a single corporate wide HR directory, added difficulties in establishing corporate wide HR practices and increasing Systems related synergies difficulties in managing infrastructure. Corporate shared HR Directory: including employees administrative related data base information as well as corporate Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 31 Figure 3. Priority competencies assignment and ‘credibility-dependency’ status • • organizational information. This option is a sort of minimal shared HR information option, maintaining autonomy in Units and Companies within the Group, although does not facilitate the deployment of corporate wide HR initiatives. Corporate Shared HR Administration: It represents a step forward from previous scenario into a single Administration System, integrating Payroll, Inventory, Organization Management and HR Planning. This shows the minimum integrating scenario to introduce Shared Services options. Requires interfaces to each Company’s HR management application platform. Corporate Shared HR Management: Integrates all HRMS processes in a single System, thus facilitating the deployment of corporate wide transformation initiatives such as Competency based practices. Generates corporate wide synergies in Systems management and technology evolution. • Corporate Shared Single System: This is the option for those organizations willing to fully integrate all HR Administration and Management processes into a single system, thus maximizing the benefits of generating common HR corporate management culture and practices, sharing infrastructure, Portals, etc. Final evaluation of preferred scenario should be made considering both the interests and view from HR and Systems managers within the organization, complemented by a detailed Cost /Benefits analysis of each option when applied to the particular organization, considering the migration consequences from current to desired final scenario. Only after previous HR business and architectural considerations is when organizations are ready to evaluate SW market applications or in house developments to consider in corporate transformation initiatives such as Competency based management. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 32 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 Figure 4. Competencies assignment according to management indicators hrmS tEchnIcAl dEPloymEnt StrAtEgy: SElEctIng thE rIght APPlIcAtIon Selecting the right or the best suited application to build a new Competency driven HRMS organizational strategy is the final step considered within the Framework’s scope, right after selecting the adequate technology scenario as indicated in the previous step. Current HRMS application market is considered by most Software analysts as a fairly mature market. Although the basic Administrative, transaction oriented applications have a limited growth potential (probably Outsourcing hosted type of services might be the exception to the rule), the strategic, talent management type of applications, driven primarily by Competency Management, seems to be on the high. Before the E-Business transformation processes entered into all major IT large organization’s priorities, the specific Software HR Businesses market consisted in a vast, non integrated application fragmented Market. Companies had options over hundreds (if not thousands) of different, HR Administration or Management solutions (Payroll, Learning, Performance Management, Work Force Planning & Analytics, Competency Management,…). Some were global market - oriented, others vertical cross-industry oriented, most of them local, country driven solutions, aimed to satisfy specific, single market demands. In this context, Competency Management was not an exception to the rule, where early implementations where typically stand-alone or linked to other related HR type of solution, such as Learning or Performance Management, incorporating new technology paradigms as the semantic Learning organizations (Sicilia, 2005). But at present, the above scenario is moving forward very rapidly, in a way that the e-business organizational transformation is driving Industry from the previously stated Software application fragmented scenario to an extremely concentrated one. The vast majority of today’s large Organizations (65% of our largest corporations) in which CM has the largest deployment potential, are automating HR (or planning to do so) within the scope of one, out of the two most successful global, integrated ERP suits – SAP or Oracle (building a comprehensive architecture around the PeopleSoft platform, world leading integrated HRMS solution in the market, acquired in 2005). Current market research (Draganidis & Mentzas, 2006) shows that Competency based Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 33 Management is driving evolution trends in HR management processes, particularly within the scope of most large size organizations. A significant indicator for this trend is the publication of the People-Capability Maturity Model, or People-CMM by the Software Engineering Institute at Carnegie Mellon (USA). PeopleCMM (Curtis, 2001) is a best practice reference to implement state of the art HR management strategies, where CM practices are essential particularly when organizations set up business objectives associated to advances in the 3 highest CMM defined maturity levels. This CM driven related Software applications market demand coming from large size organizations, makes Competency management the most relevant business driver boosting the HRMS market growth in the years to come. In this evolutionary context, Information System’s Solutions Vendors that automate CM processes, typically fall in one of the four Product families indicated hereafter: • • Large Integrated ERP Suites: Those Vendors dominate the high end HRMS market, and are also competitive in the SME Markets. Organizations select these solutions to typically automate various corporate business processes (in areas such as Financials, CRM, HC Management, E-Procurement, etc). Even assuming that these vendors do not always deliver the best solution for any given individual process, their value proposition, is based upon the overall process Integration benefit for the organization, providing proven and reliable comprehensive process automation solutions. SAP, Oracle, or Lawson Software are typical application products within this category. SME Integrated ERP Suites: they provide similar functional scope as the previous Suites, usually delivering simpler parametrization options, much faster to deploy, tailored to specific SME type of organizations. Northgate Information Solutions or the Microsoft Business Solutions (Axapta, • • Navision) are typical products fitting in this category. Standalone E-HRMS: Both large and SME driven solutions from Vendors that are exclusively dedicated to Payroll & HRMS business, not providing support for any other corporate processes (as Supply Chain Management or Financials, …etc). Kronos, Meta4 (particularly in Spain) or Ultimate Software is considered typical products in this category. Standalone CM Solutions: They just automate Competency based Management processes, sometimes in combination with Performance Management or eventually providing support for other related CM process, in a non-comprehensive, integrated way. Mindsolve or GeoLearning offerings are typical solutions within this category. The best suited organizational application is therefore selected after professional evaluation of latest versions of identified or preferred solutions, combining Company / Market / Product required Functionality / Product Architecture information, using if possible, financial & technology expert analyst’s information . Final step in the methodology is about establishing the evolutionary strategy from current situation to the final selected one. The resulting roadmap must carefully consider the detailed gap analysis between current and final scenarios both in terms of business processes and System & Software application, in a way that a detailed Project Plan can be finally established and presented for final organizational approval. rESultS This new dynamic oriented Competency Framework approach has been used in various large size organizations, two of them in a multinational scope environment. About half of the organizations that have used our proposed dynamic Competency assignment approach already had previous experience in the use of classical job profile oriented Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 34 International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 approaches implementing limited scope CM applications. The most relevant conclusions extracted from all participants in the process are summarized in Table 3. An unexpected result extracted from these answers is that the highest valued effect from participants in the process is the improvement in internal communications among employees, managers and organization’s HR professionals. Apart from the previous statement, and focussing only in the HR and Systems Management’s opinion (3 out of 4 of them believe that the management model based approach is “Much more” or “More” efficient then previously known approaches and 65% think that the methodology can easily be translated to any other corporate wide activity domain. This results concludes that this proposed dynamic approach to Competency Model definitions may be an alternative methodology to the classical ones (Corporate Job profiles definition, professionally based market and experts surveys, etc.). The proposal suggests a Competency definition process extracting information and performance indicators directly from the specific activity Management Model, thus ensuring a permanent dynamic alignment between defined Competencies and Business requirements and objectives. • • • • • concluSIonS The overall main objective associated to this research work was to provide an innovative approach to define Competency Frameworks that could efficiently be used by large size type of organizations willing to transform employee’s management processes using Competency based models. The selected activity domain to evaluate this proposal results is the IT & Systems Management domain and the methodology used has been defined as a modified version of the (Draganidis & Mentzas, 2006) proposal, introducing changes in the way the Competency model is constructed and incorporating in it’s scope the Technical deployment strategy definition. The methodological phases followed were: Detailed activity Planning: including ‘state of the art’ analysis about application of the Competency paradigm and industry based proposals and market application evolution trends. Definition of a Reference Management Model for IT & Systems activities domain, with recommendations about key performance indicators and associated performance metrics in this field. Definition and selection of the required, dynamically business oriented Competency Model, as explained in previous parts of this paper. Technical Deployment Strategy Definition for Large size type of organizations, including: ◦ A generic HRM Processes characterization, very much focussed to facilitate the identification of areas in which Competency management affects HR related activities. ◦ Strategy definition method to transform management processes into Competency based practices and selection of best suited application Software implementation option. Final validation of the proposed Framework, introducing new relevant Competency based management practices. The final conclusions obtained from this research are summarized as follows: • About the requirement to establish Competency Frameworks in large size organizations including the technical deployment strategy definition associated to HR Processes & Software applications in its functional scope: no major, comprehensive HR transformation process as the one represented by Competency based management, can be successfully undertaken if the technical deployment strategy is not taken into consideration at early stages of the transformation process. When included within the Competency Framework, we Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 22-36, January-March 2011 35 Table 3. Employees and HR’s opinion on Mngt. model competency based approach organizational effect • • Very High High Low Negative 1. Employees perception on organization’s interest in people’s career development 16.07% 42.86% 21.43% 16.07% 2. Effect on Business results 14.29% 39.29% 41.07% 5.36% 3. Employees professional recognition 32.14% 46.43% 16.07% 5.36% 4. Employability 17.86% 44.64% 25% 12.50% 5. Better internal communication 37.50% 48.21% 10.71% 3.57% 6. Others 21.43% 37.50% 30.36% 10.71% 23.26% 43.16% 24.11% 8.04% ensure a reference roadmap definition to progress in a well defined direction in terms of HR management maturity steps definition path. About the way Competency Model definitions are established: the practical results obtained after field validation in competitive large size organizations allows us to conclude that the proposed dynamic approach to Competency Model definitions may be an alternative methodology to the classical ones (Corporate Job profiles definition, professionally based market and experts surveys, etc.). The proposal suggests a Competency definition process extracting information and performance indicators directly from the specific activity Management Model, thus ensuring a permanent dynamic alignment between defined Competencies and Business requirements and objectives. About HRMS Application Market evolution: large size organizations trend is to rely on general purpose integrated type of ERP, even in scenarios where just HR management Administration or Management processes are the business focus, although HR specific solutions constitute an extended installed base in local markets such as in Spain, while the ‘made to measure’ on in-house applications are almost non existent in this market. • About the acceptance of the proposed method to deploy HRM solutions in large size organizations: around 80% of professionals involved in evaluation of the proposed methodology in real business scenarios have expressed satisfaction with the suggested deployment process, with particular interest in the initial characterization of all business processes and the possibility of evaluating long term HRM strategy in relation to the five proposed business scenarios. rEfErEncES Abel, A. (2006). Knowledge and information management specific competencies framework. 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International Journal of Human Capital and Information Technology Professionals, 1(1), 67–83. Ward, J., & Aurum, A. (2004). Knowledge management in software engineering: describing the process. In Proceedings of the 2004 Australian Software Engineering Conference (ASWEC’04) (pp. 137-146). Yang, B. C., Wu, B. E., Shu, P. G., & Yang, M. H. (2006). On establishing the core competency identifying model: a value-activity and process oriented approach. Industrial Management & Data Systems, 106(1), 60–80. doi:10.1108/02635570610640997 Alfonso Urquiza is Professor at the UFV Engineering and Business Schools, with more than 25 years professional experience in IT & Communications Business engineering and management, recognized HRMS business and technology expert. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 37 Project managers’ competence Identiication Heli Aramo-Immonen, Tampere University of Technology, Finland Andrea Bikfalvi, University of Girona, Spain Núria Mancebo, University of Girona, Spain Hannu Vanharanta, Tampere University of Technology, Finland AbStrAct The objective of this article is to help align higher education of future project managers to the contemporary requirements of global project business. The perspective is project managers’ competencies in knowledge intensive industry, such as in IT branch. In this paper, it is considered that a holistic view of competence selfevaluation helps to assess the current intentional change. The system introduced supports decision making by measuring and capturing the actual drivers designed speciically for the role of project manager. Generalizing the competence identiication process appears to be more constructive than detailing about competence content itself. This study brings valuable and novel empirical data using a sample of students acting as project managers in Spain and a sample of experienced project managers from Finland. A number of possible future studies using the same experimental set up are apparent. Keywords: Competence Evaluation, Higher Education, Intentional Change, Project-Based Business, Project Management IntroductIon Competences and consequently competence evaluation has gradually become a strategic issue in areas of academic research, business and education. Despite the conceptual ambiguity the competence approach is widely adopted. The competence framework literature provides an integrative system for human resource management. For example, competences are often conceptualized as the underlying characteristics of the individual, and as a combination of DOI: 10.4018/jhcitp.2011010103 skills, knowledge and attitudes. In this paper competences refer to traits, knowledge, skills, experience and values that an individual needs to accomplish his or her tasks. Competence assessment becomes a significant instrument for predicting work-role performance, and accordingly a core element for human resource management practices. Competences are linked to individual and organizational performance, or in a more specific level as it is the training outcome. McClelland (1987) suggested that competence ought to become the basis for more effectively predicting individual performance in organizations. The Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 38 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 awareness of the enduring capabilities and dispositions and identify the core component that interacts with the ideal self. This ideal self becomes the driver of intentional change. However, competences are subject to dynamic change as a result of motivation, intervention, tacit and/or explicit education and learning in a given time frame. Both at individual and organizational level learning plans represent a formal tool in competence development. The power of a learning plan enhances the ability to get results through a greater understanding of ones’ own and others’ competences and emotions. Moreover the Intentional Change model (Boyatzis & Akrivou, 2006) can help people to engage in personal transformation successfully. Another field experimenting major transformations is Higher Education, one of the main pillars of any national/regional innovation system and one of the major suppliers of professionals working in the business field. Building a strong strategic bridge between academia and business is in the interest of any nation and universities are main actors in the convergence of Europe towards the knowledge economy (Commission of the European Communities, 2003). Although competences seem to be linked primordially to business environments, universities in their way towards the Bologna process want to align to competence development. The Bologna process started in 1998 when the education ministers of Germany, France, Italy and the United Kingdom signed the Sorbonne Declaration concerning the harmonization of European higher education degree systems. The object of the Bologna Declaration is to create a common European Higher Education Area by 2010 with a view to improving the competitiveness and attraction of European higher education in relation to other continents (The Bologna Declaration, 1999). The modern educational system complements traditional teaching/learning models with competence development. However, the competence topic in universities is still in its infancy compared to the business sector. Its incipient nature is given by the fact that most higher education institu- tions have undergone the following phases: definition, diffusion on their importance and creating awareness among the different communities -students, educators, managers-, linking subjects and competences, among others. One major challenge is competence evaluation and development as well as an in-depth integration of competences among the existing educational models (Bikfalvi, Pagès, Kantola, Marquès, Gou, & Mancebo Fernàndez, 2007). Professional profile of technical competencies such as management of requirements, design, construction, testing, maintenance, configuration, quality, engineering and processes in software engineering projects has been introduced (Colomo-Palacois, Tovar-Caro, Carsía-Crespo, & Goméz-Berbís, 2010). To accomplish project managers’ competence profile this article introduces analysis of human aspects such as self-knowledge, self-control, cognitive capability, motivating oneself, empathy and social skills (Bikfalvi, Mancebo, & AramoImmonen, 2009; Liikamaa, 2006; Spencer & Spencer, 1993; Zwell, 2000; Boyatzis, 1982; Goleman, 1998). Even though Software-based Project Management (e.g., SPMM; Salahelding et al., 2010) methodologies provide support for project management processes in organization, there is always the human intention behind the success. Competences are highly contextdependent. Opting for a project management based competence model seems to easily fit in the complex academic setting, where students are characterized by high diversity in terms of maturity, objectives, motivation (Suominen et al., 2008). On the other hand, indifferently of their academic background, the project management way of working is frequently habitual in any business sector in which they end up as professionals. Most often it is the business sector appearing as a first scenario where students meet competences, either when applying for a job, or once working with the aim of detecting training necessities. Competence evaluation, in general, and in project management, in particular, has received reduced attention in both theory and practice. Therefore, the main purpose of this Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 39 study is to investigate and show the results of a self-assessment of students acting as project managers in academic settings compared to experienced project managers in industry settings. In the conceptual part of this article project management, competence analysis and intentional change are reviewed. Secondly the method is introduced and the research processes is described. Finally the empirical results are presented. ProjEct mAnAgEmEnt The Project Management Institute (PMI) provides us with a materialistic definition of a project. According to the Project Management Body of Knowledge (PMI, 2000), a project is a temporary endeavor to create a unique product or service. From the project learning angle in the concept of a project, the cognitive perspective has to be included (Bredillet, 2008): The project is human capital and financial resources organized in a novel way to undertake a unique scope of work within time and cost constraints, achieving quantitative and qualitative objectives (Turner, 1999). Here is referred to this latter definition which includes a knowledge management perspective to project management. According to Global Industry Classification Standard (GICS) the IT industry includes software production and services, technology hardware and equipment production, and telecommunication services. Research and development as well as businesses in IT domain are often project based. Theoretical approximation of the concept of project management comes from the wide stream of literature (cf., Lampell, 2001; Levine, 2005; Lytras & Pouloudi, 2003; Turner, 2003; Koskinen & Pihlanto, 2008; Kähkönen, Kazi, & Rekola, 2009). Project outcomes are milestones in a knowledge management activity and the various deliverables are knowledge exploitation in meaningful formats. Communication and learning play an important role if we take into account the authors’ description that project deliverables consist of knowledge artefacts integration through a social communication process (Lytras & Pouloudi, 2003). Projects are characteristic in knowledge-intensive organizations, including universities, academia, research groups, R&D departments, business where a group of people having different background, education, experience and skills co-work on the achievement of certain goals within a limited period of time. The project manager is the key to project success (Cleland, 1984; Kezsbom, Schilling, & Edward, 1989; Nicholas, 1994) and project management is an important part of an industrial company’s success. According to Artto and Wikström (2005), project business is defined as the part of business that relates directly or indirectly to projects, with the purpose of achieving the objectives of a firm or several firms. Industrial projects often large-scale, complex projects delivered through various partnerships, are affecting both public and private stakeholders (van Marrewijk et al., 2008). Managing these large national and international projects can pose many demanding tasks for project managers (Marrewijk van, Clegg, Pitsis, & Veenwijk, 2008; Sweis, Abu Hammad, & Shboul, 2008; Flyvbjerg, Bruzelius, & Rothengatter, 2003; Aramo-Immonen & Porkka, 2009). The contemporary networked economy has pushed businesses more and more towards project-based performance. Therefore, project management competencies do have impact on the global society, economy and well-being. comPEtEncE EVAluAtIon Competences are defined as behaviour models (Roberts, 1997), as hidden characteristics of personality with an effect on the performance at work (Spencer & Spencer, 1993), as traits or features of human being (Zwell, 2000) and as features related to effective working performance (Boyatzis, 1982). Based on these definitions the application (named Cycloid) utilized in this research focuses on the assessment of the most essential and critical professional competencies of project Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 40 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 managers (Liikamaa, Koskinen, & Vanharanta, 2003). The application evaluates the project managers’ generic and specific competencies through the process of self-evaluation. The system was built based on the Evolute architecture (Kantola, Vanharanta, & Karwowski, 2005). It aims to illustrate the gap between project managers’ current state and personal vision, i.e. the creative tension (Senge, 1994), within the context of a specific competence. This gap helps both the project manager and the management to evaluate the needs for targeted training and development. The results can be used to direct personnel development and training efforts to areas where they are most needed. Project business could be considered as a research field, when broadening the perspective of the project–centric point of view to an organizational view. This broadening enhances the role of projects managers because of the addressing the organization and enhancing the managerial activities that allows managing multiple projects for the firm business purposes (Pellegrinelli, Partington, Hemingway, Mohdzain, & Shah, 2007; Levine, 2005; Aramo-Immonen, 2009). When having in attention competences for project management some issues are relevant. On the one hand, learning, capabilities and competencies are strongly linked. According to some authors learning and knowledge sharing appear as the most important capability that a project-based firm should have (Hawk & Artto, 1999; Prencipe & Tell, 2001; Ruuska, 2005). On the other hand, characteristics of project managers as well as project management in relation to performance are discussed. It is interesting to know more about what are the characteristics of project managers who appear to be able to handle complexity at pre-defined levels, and are these characteristics imitable? The challenge for the academic and practitioner communities is to possess a credible suite of tools and techniques, well developed through research such as that outlined above, which are based on good evidence and that support practitioners in improving performance in their own environments (Whitty & Maylor, 1990). Performance evaluation takes into account different items acting as determinants for such. According to Isik, Arditi, Dikmen, and Birgonul (2009) it is the same organization and its characteristics having effect on project management comptencies. The assessment of the effects of human resource management on project effectiveness shows contradictory results and has evolved from a technical perspective to a behavioral perspective. As an example, in the evaluation of success of project management the satisfaction of the project team, particularly in terms of interest, challenge, and professional development is a relevant criterion (Belout, 1998). Project, teams and their management have different styles. The requisite variety of project manager’s competences and the managerial complexity of project are in relation (Blackburn, 2002; Aladwani, 2002; International Project Management Association, 2009). In other words more complex and complicated the project is more competencies from project manager are required. In IT industry there is a variety of project governance methods, which are requiring different skills and competencies from project managers. The ‘Water fall’ model is close to traditional industrial investment projects steering style. Rational Unified Process (RUP) is an iterative software development process framework, typically requiring skills needed in matrix organization. SCRUM is an iterative incremental framework for managing complex work (such as new product development) commonly used with agile software development. Although it was intended for management of software development projects, it can be used to run software maintenance teams, or as a general project/program management approach. In this governance style the project management responsibility is changed from a person to another during the project phases (sprints). This kind of approach requires project management competencies as a meta-competence for each project team member. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 41 IntEntIonAl chAngE Sustainable behavioral change is intentional (Boyatzis, 1999; Boyatzis, 2001; Goleman, Boyatzis, & McKee, 2002; Kolb, Winter, & Berlew, 1968; Boyatzis & Kolb, 1969). It is important to note that often an intentional change process must begin with a person wanting to change. This desire may not be in their consciousness or even within the scope of their self-awareness. Wake-up calls, or moments and events that awaken the person to the need for consideration of a change, may be required to bring the person to the process of desired, intentional change (Boyatzis et al., 2002). Before we get into the details, let us step back and ask why we believe this is a sound theory of change. The five discoveries of intentional change theory (ICT) bring us to the next feature of ICT as a complex system (Boyatzis, 1999; Boyatzis, 2001). The change process actually involves a sequence of discontinuities, called discoveries, which function as an iterative cycle in producing the sustainable change at the individual level. These are: 1. 2. 3. 4. 5. The ideal self and a personal vision; The real self and its comparison to the ideal self resulting in an assessment of one’s strengths and weaknesses, in a sense a personal balance sheet; A learning agenda and plan; Experimentation and practice with the new behaviour, thoughts, feelings, or perceptions; and Trusting, or resonant relationships that enable a person to experience and process each discovery in the process. The first discovery: catching your dreams, engaging your passion. The first discontinuity and potential starting point for the process of intentional change is the discovery of who you want to be. Our ideal self is an image of the person we want to be. It appears to have three major components that drive the development of this image of the ideal self: 1. 2. 3. An image of a desired future; Hope that one can attain it; and Aspects of one’s core identity, which includes enduring strengths, on which builds for this desired future.” rESEArch ProjEct The first objective was the assessment of project managers’ generic and specific competencies through the process of self-evaluation. Propose a measure for the intentional change and their drivers that may help in this endeavour since it focuses on the assessment of the most essential and critical professional competencies for project managers. The second objective was the analysis, in an academic context, relating the deployment of social and personal competences with specifics indicators of students’ (at technical studies) performance. Still, the main and most generic application is improving teaching quality in order to configure a student-centered teaching/ learning, where students are target of not just scientific knowledge and career subject, but also competences, having a high demand generated by employers. The third objective was the analysis in business context of experienced project managers. In order to improve knowledge of competence demands in business settings and in order to compare the result with young student’s result. The application used, evaluates the competences of the work role of the project manager by means of 120 statements related to the individuals’ every day work. It requests the self-evaluation of the current competence level and the target level desired by the respondent, identifying the possible creative tension. The responses are given on a fuzzy scale guided by standard linguistic labels (e.g., always, often, seldom, never) (Kantola, 2005). The results can be visualized in detail at the level of 30 competences, grouped in 6 competence groups than can be further classified as personal or social main groups of competences (see Figure 1). Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 42 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 The proposed evaluation was used in two different settings described below. Firstly during 2007 an evaluation was conducted in Finland for competence assessment among experienced project managers from industry. The method utilized was the same as in Spain. In this research 14 project managers were chosen with an age scale varying from 29 to 55. Participants had considerable working experience, namely 5 to 25 years. The industry branch was project based businesses in knowledge intensive technology industry. Secondly during 2008 a part of the study was conducted with students at the University of Girona, Spain. Students were enrolled in their last course of their technical studies. The present organization of university studies gives students the possibility of enrolling in their 4th year of studies after graduating Technical Industrial Engineering (3 years technical study). After accessing the labor market, students usually continue their academic career in order to finish their 4th and 5th year of industrial engineering (5 years higher education). Their proximity Figure 1. Cycloid competence model (Adapted from Liikamaa, 2006; cf., Spencer & Spencer, 1993; Zwell, 2000; Boyatzis, 1982; Goleman, 1998) Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 43 to finishing their degree, the fact that some of them were already working and having some experience in project management made them especially receptive to competence evaluation. They were asked to consider themselves as project managers of their learning career. Approximately one week before the evaluation they were instructed about the use of the application and about the output reports. The application evaluates the competences of the work role of project manager by means of 120 statements related to the individuals’ every day work. It requests the self-evaluation of the current competence level and the target level desired by the respondent, identifying the possible creative tension which we consider the driver for the intentional change. rESultS Participants increase their awareness and their intention to improve competences. The academic results through traditional evaluation systems do not converge with competence evaluation. Creative tension is a hidden element to the traditional evaluation systems. Results at the group level for students are shown in Figure 2 and for experienced project managers in Figure 3. The items are sorted following a decreasing trend in the creative tension, meaning that we show first the major difference between target and current level items. This ordering is helpful in order to determine which field can further be developed, from students’ point of view. Figure 2 shows that a major difference between current and target level competences include: stress tolerance or the ability to handle unfavorable, tiring and stressful matters and situations and strong emotions, in the first place. It is followed by their ability and courage to use foreign languages - language proficiency, performing tasks quickly and effectively – production efficiency, perceiving, considering and understanding other peoples’ emotions and views – understanding others, management focusing on others - management. These are the competences that for which students perceive a bigger gap between their actual and desired levels. We could consider them as their perceived weaknesses. At the same time, the graph shows that students feel strong in developing others, conflict management and trustworthiness. We could consider them as their perceived strengths. Meanwhile, students’ future or desired level is highest in self-assessment, group capabilities and flexibility. Figure 3 shows that for experienced project managers the major difference between current and target level competences include understanding others. It is followed by language proficiency, communications, self-assessment and maintaining order. These are the competences that for which experienced project managers perceive a bigger gap between their actual and desired levels. We could consider them as their development potentials. The graphs show that among students optimism, responsibility, conceptual thinking and seeking information are in the upper end of the graph. Students recognize these features as weaknesses. In the case of experienced project managers these items appear in the lower end of the graph. They perceive them as their strengths. Both groups have a relatively wide gap between current image and future vision. This illustrates the development potential, the creative tension (Senge, 1994). Both students and experienced project managers have high hopes for the future. This is affects their goal orientation and their intention to change. According to Boyatzis (2006) the more optimistic the person is, the greater the amount of “pathways”, for example, alternative ways to meet the goals he or she can produce. Figure 2 also reflects the grouping of the 30 competences previously analyzed into 6 main groups. These results show that there are major development possibilities or students in terms of self-control, followed by cognitive capability, self-knowledge, motivating oneself, social skills and empathy in decreasing order. For experienced project managers (see Figure 3 in Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 44 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 Figure 2. Students as project managers (Spain). The results can be visualized in detail at the level of 30 competences, grouped in 6 competence groups than can be further classified as personal or social main groups of competences. the Appendix) the ranking is as follows: social skills, self-control, self-knowledge, motivating oneself, empathy and cognitive capability. It is interesting to observe that the main difference is conferred by the gap in the present/actual level, while target levels are almost identical. In terms of cognitive capability students have lower levels of both target and current levels. Possible reasons for current lower level might be due to young age (approximately 20-23 years) and still a lot to learn combined with a low level of practical experience. A possible reason for the lower target level in cognitive capability might rely in the fact they relate it exclusively to their studies. Being close to finishing their studies (third and last year) makes it lower than all other competences, which they might not label or interpret as study-related ones. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 45 Figure 3. Experienced project managers (Finland). The results can be visualized in detail at the level of 30 competences, grouped in 6 competence groups than can be further classified as personal or social main groups of competences. When analyzing the main groups of competences, students prioritize personal competences while experienced project managers have a minor bigger differential gap for social competences. Table 1 presents the competence differentials (in terms of creative tension) for students and experienced project managers. For example, optimism in the case of students ranks 6 and in the case of experienced project managers ranks 23. The table shows a ranking of differences in a decreasing order, meaning that the figure shows the competences for which students perceive a major differential compared to experienced project managers. Therefore, developing optimism is 17 positions more important for Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 46 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 the former than the latter. It is followed by conceptual thinking and responsibility with 12 positions, ranking them more important for the Spanish sample of students than for the Finnish sample of experienced managers. On the other hand, group capabilities, meaning creating synergy while reaching for common goals, initiative defined as perceiving opportunities, seizing opportunities and the ability to create new opportunities and selfassessment as understanding one’s own weaknesses and strengths are perceived as most important for the experienced project managers. The differential value zero (0) shows the commonalities (Table 1). Emotional awareness (ability to recognize, understand and analyse one’s own feelings), developing others (noticing other peoples’ development needs and promoting their capabilities), language proficiency (ability and courage to use foreign languages), and conflict management (conciliating and settling of disagreements) are competences that both students and project managers rank as important for development. In summary experienced project managers show social competencies in general to be more problematical than students. Students express the lack of cognitive capability on the contrary to experienced project managers. These results indicate that there is a need for this kind of assessment in order to focus education at both individual and group level taking into account the right set of work role competencies. The evaluation also visualizes the hope, or the positive energy inside the person (Boyatzis, 2006) acting as a positive trigger to intentional change. concluSIon In the conceptual part of this article the concepts of project management, competence evaluation and intentional change are discussed. The results provided by the self-evaluation gave valuable information for individuals, organizations and management. At the individual level the person receives data on his/her perception that might be a trigger for self-reflection and self-development. Meanwhile, the organization through the group reports might design and implement target training according to the individual’s need. Therefore, a more effective impact is expected. However, the implementation and exploitation of competence development is highly context dependent. In academic settings, such evaluation is relatively recent and the competence topic is one step behind business. Therefore, comparing students acting as project managers to experienced project managers makes much sense from the perspective of universities as human resource suppliers for business. Competence standardization and regular monitoring in university settings is far from the degree of such in businesses where the habitual way of working is often by the means of projects. Certain facts might explain this situation: the complexity of university organization, the gap between those in the “ivory tower” (academia) and those “looking for dirty solutions to their regular problems” (industry), the lack of a unique competence model, among others. Competence evaluation and development is suggested to have resource reduction and savings for businesses. Until recently inverting into training targeting different employee communities according to their position was quite habitual. This fact supposes a multiplication of resources. Using competence evaluation a better strategic orientation of resources is possible. Social impact can be perceived at individual and group levels. Employees might note certain satisfaction when companies design training and development plans taking into account their idiosyncrasy and their own needs. Universities, as work force providers for the business sector, are actors in the knowledge society where businesses are the ultimate innovators and wealth generators. Global economy has high expectations in terms of the quality of the education system. Still, certain gaps are perceivable between the two worlds. One possible way to create synergies between the two is through project management. The proposed methodology shows extremes and commonalities for academia and Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 47 Table 1. Abbreviations in the table: Project Manager (PM), Finnish (FIN), Spanish (ESP) Brief definition Experienced PM - FIN Students as PM - ESP Differential Group capabilities Creating synergy while reaching for common goals 9 22 -13 Self-assessment Understanding one’s own weaknesses and strengths 4 14 -10 Initiative Perceiving opportunities, seizing opportunities and ability to create new opportunities 16 26 -10 Trustworthiness Honesty and following professional ethics 20 30 -10 Decision quality Making decisions based on high principles, goals and values 8 16 -8 Leadership Management focusing on people 13 21 -8 Collaboration Working together with others for common goals 19 27 -8 Relationship building Establishing, maintaining and developing beneficial relationships and unofficial networks 7 12 -5 Competence Communications Sincere listening and sending messages 3 7 -4 Maintaining order Maintaining order, quality and accuracy 5 9 -4 Understanding others Perceiving, considering and understanding other peoples’ emotions and views 1 4 -3 Leveraging diversity Pursuing goals together with the diversity of people 18 20 -2 Self-confidence Belief in one’s own capacity, competence and value 21 23 -2 Emotional awareness Ability to recognize, understand and analyze one’s own feelings 17 18 -1 Language proficiency Ability and courage to use foreign languages 2 2 0 Developing others Noticing other peoples’ development needs and promoting their capabilities 28 28 0 Conflict management Conciliating and settling of disagreements 30 29 1 Organizational savvy Recognizing and utilizing organizational dynamics for achieving goals 10 8 2 Flexibility Flexible attitude towards changes and diversity 12 10 2 Commitment Adopting the goals of a group or an organization 26 24 2 Achievement orientation Will to develop or to pursue still better performance 22 19 3 Innovation Natural and open attitude towards new ideas, views and information 15 11 4 Analytical thinking Dividing problems to parts and organizing the parts systematically on rational basis 29 25 4 Stress tolerance Ability to handle unfavorable, tiring as stressful matters and situations and strong emotions 6 1 5 Management Management focusing on matters 11 5 6 Seeking information Satisfying curiosity and thirst for knowledge 24 17 7 Production efficiency Performing tasks quickly and effectively 14 3 11 Responsibility Conscientiousness and the sense of responsibility of one’s own actions 25 13 12 Conceptual thinking Recognizing, applying and defining concepts 27 15 12 Optimism Reaching for goals regardless of obstacles and setbacks 23 6 17 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 48 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 business in terms of perceived development needs using a sample of students acting as project managers and another sample of experienced project managers. Further development and special attention should be centered to a more in-depth integration of project management competence development and evaluation in the traditional teaching/learning system and in project business environment. rEfErEncES Aladwani, A. M. (2002). IT project uncertainty, planning and success – An empirical investigation from Kuwait. Information Technology & People, 15(3), 210–226. doi:10.1108/09593840210444755 Aramo-Immonen, H. (2009). Project Management Ontology – The Organizational Learning Perspective (Tech. Rep. No. 836). Tampere, Finland: Tampere University of Technology. Aramo-Immonen, H., & Porkka, P. L. (2009). Shared knowledge in project-based companies’ value chain. International Journal of Knowledge Management Studies, 3(3/4), 364–378. doi:10.1504/ IJKMS.2009.028846 Artto, K. A., & Wikström, K. (2005). What is project business? International Journal of Project Management, 23(5), 343–353. doi:10.1016/j.ijproman.2005.03.005 Belout, A. (1998). Effects of human resource management on project effectiveness and success: toward a new conceptual framework. International Journal of Project Management, 16(1), 21–26. doi:10.1016/ S0263-7863(97)00011-2 Bikfalvi, A. (2007). Building bridges between academia and industry. Exploring barriers in Catalonia, in Innovation, entrepreneurship and outsourcing. Essays on the use of knowledge in business environments. Unpublished doctoral dissertation, University of Girona, Spain. Bikfalvi, A., Mancebo, N., & Aramo-Immonen, H. (2009). Linking Project Managers’ Competencies development and intentional change. In K. Kähkönen, A. S. Kazi, & M. Rekola (Eds.), The Human Side of Projects in Modern Business (pp. 109-124). Helsinki, Finland: Project Management Association Finland (PMAF) in collaboration with VTT Technical Research Centre of Finland. Bikfalvi, A., Pagès, J. L., Kantola, J., Marquès Gou, P., & Mancebo Fernàndez, N. (2007). Complementing education with competence development: an ICTbased application. International Journal of Management in Education, 1(3), 231–250. doi:10.1504/ IJMIE.2007.015123 Blackburn, S. (2002). The project manager and the project-network. International Journal of Project Management, 20(3), 199–204. doi:10.1016/S02637863(01)00069-2 Boyatzis, R. E. (1982). The Competent Manager. A model for effective performance. New York: John Wiley & Sons Ltd. Boyatzis, R. E. (1999). Self-directed change and learning as a necessary meta-competency for success and effectiveness in the 21st century . In Sims, R., & Veres, J. G. 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International Journal of Project Management, 26(3), 238–250. doi:10.1016/j.ijproman.2008.01.002 Cleland, D. (1984). Matrix Management Systems Handbook. New York: Van Nostrand Reinhold. Colomo-Palacois, R., Tovar-Caro, E., Carsía-Crespo, Á., & Goméz-Berbís, J. (2010). Identifying Technical Competencies of IT Professionals: The Case of Software Engineers. International Journal of Human Capital and Information Technology Professionals, 1(1), 31–40. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 49 Commission of the European Communities. (2003). The role of the universities in the Europe of knowledge. Communication from the Commission. Brussels, Belgium: COM. Koskinen, K. U., & Pihlanto, P. (2008). Knowledge management in project-based companies: An organic perspective. 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Impact of corporate strengths/weaknesses on project management competencies. International Journal of Project Management, 27(6), 629–637. doi:10.1016/j. ijproman.2008.10.002 Kähkönen, K., Kazi, A. S., & Rekola, M. (2009). The Human Side of Projects in Modern Business. Helsinki, Finland: Project Management Association Finland (PMAF) in collaboration with VTT Technical Research Centre of Finland. Kantola, J. (2005). Ingenious Management (Tech. Rep. No. 568). Tampere, Finland: Tampere University of Technology. Kantola, J., Vanharanta, H., & Karwowski, W. (2005). The Evolute System: A Co-Evolutionary Human Resource Development Methodology . In Karwowski, W. (Ed.), International Encyclopedia of Human Factors and Ergonomics. New York: Taylor & Francis. Kezsbom, D. S., Schilling, D. L., & Edward, K. A. (1989). Dynamic Project Management: A Practical Guide for Managers and Engineers. New York: Wiley & Sons. Kolb, D. A., Winter, S. K., & Berlew, D. E. (1968). Self-Directed Change: Two Studies. The Journal of Applied Behavioral Science, 4(4), 453–471. doi:10.1177/002188636800400404 Levine, H. A. (2005). Project portfolio management - A practical guide to selecting projects, managing portfolios, and maximizing benefits. San Francisco, CA: Jossey-Bass. Liikamaa, K. (2006). Piilevä tieto ja projektipäällikön kompetenssit [Tacit Knowledge and Project Managers’ Competences] (Tech. Rep. No. 628). Tampere, Finland: Tampere University of Technology. Liikamaa, K., Koskinen, K., & Vanharanta, H. (2003). Project managers´ personal and social competencies, Project management: dreams, nightmares and realities. In Proceedings of the papers and presentation, Nordnet, Oslo, Norway. Lytras, M., & Pouloudi, A. (2003). Project management as a knowledge management primer: the learning infrastructure in knowledge-intensive organizations: projects as knowledge transformation and beyond. The Learning Organization, 10(4), 237–250. doi:10.1108/09696470310476007 Lytras, M., Pouloudi, A., & Poulymenakou, A. (2002). Knowledge Management Convergence-expanding learning frontiers. Journal of Knowledge Management, 6(1), 40–51. doi:10.1108/13673270210417682 McClelland, D. (1987). Human Motivation. Cambridge, UK: Cambridge University Press. Nicholas, J. (1994). Managing Business and Engineering Projects: Concepts and Implementation. Upper Saddle River, NJ: Prentice-Hall. Pellegrinelli, S., Partington, D., Hemingway, C., Mohdzain, Z., & Shah, M. (2007). The importance of context in programme management: an empirical review of programmepractices. International Journal of Project Management, 25(1), 41–55. doi:10.1016/j. ijproman.2006.06.002 PMI. (2000). PMBOK, A guide to the project management body of knowledge. PA: Project Management Institute, Inc. Roberts, G. (1997). Recruitment and selection; a competency approach. London: Chartered Institute of Personnel and Development. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 50 International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 Salahelding, S., Sharif, K., & Al Alami, M. (2010). Utilization of Project Management Software in Qatari government Organizations. International Journal of Human Capital and Information Technology Professionals, 1(1), 1–15. Senge, P. M. (1994). The Fifth Discipline: the art and practice of learning organization. New York: Currency Doubleday. Shenhar, J., & Dvir, D. (1996). Toward a typological theory of project management. Research Policy, 25(4), 607–632. doi:10.1016/0048-7333(95)00877-2 Spencer, L. M., & Spencer, S. M. (1993). Competence at work: models for superior performance. New York: John Wiley & Sons, Inc. Suominen, A., Jussila, J. J., Koskinen, K. U., & Aramo-Immonen, H. (2008). Requisite variety of expertise in idea generation within a group. In K. R. E. Huizingh, M. Torkkeli, S. Conn, & I. Bitran (Eds.), Proceedings of the XIX ISPIM Conference, Tours, France. Sweis, G., Sweis, R., Abu Hammad, A., & Shboul, A. (2008). Delays in construction projects: the case of Jordan. International Journal of Project Management, 26(6), 665–674. doi:10.1016/j.ijproman.2007.09.009 The Bologna Declaration. (1999). Retrieved from http://www.bologna-berlin2003.de/pdf/bologna_ declaration.pdf Turner, R. (1999). Handbook of project-based management, improving processes for achieving strategic objectives. New York: McGraw-Hill. Turner, R. (2003). People in project management. Aldershot, UK: Gower. Universitat de Girona. (2006a). Guia per a l’Adaptació a l’Espai Europeu d’Educació Superior – 1. Competències. Universitat de Girona. (2006b). Guia per a l’Adaptació a l’Espai Europeu d’Educació Superior – 2. Competències UdG. van Marrewijk, A., Clegg, S. R., Pitsis, T. S., & Veenwijk, M. (2008). Managing public-private megaprojects: Paradoxes, complexity, and project design. International Journal of Project Management, 26(6), 591–600. doi:10.1016/j.ijproman.2007.09.007 Whitty, S., & Maylor, H. (1990). And then came Complex Project Management (revised). International Journal of Project Management, 8(1), 39–44. Zwell, M. (2000). Creating a Culture of competence. New York: John Wiley & Sons. Heli Aramo-Immonen, D.Sc (Tech), has 15 years career as an engineer in international business development, vendor management, purchase and supply chain management, in various managerial and expert positions. Since 2004 she has been a researcher and since 2009 lecturer in Tampere University of Technology (TUT). She has performed 2006 and 2007 as a Head of Industrial Sector in Adult Education Center JAKK. Her research is focused on project management and knowledge management. Present position is Lecturer of Industrial Management and Engineering at TUT Pori, Finland. She has positions of trust in international scientific conferences and journals. Andrea Bikfalvi is Lecturer in the Department of Business Administration and Product Design at the University of Girona, Spain. She has a degree in Business Administration and a PhD in the same area. Dr. Bikfalvi participated in considerable projects at regional level, conceded by the Catalan Regional Development Agency, on the topic of entrepreneurial success, industrial competitiveness, spin-off creation, regional development and family business. Her regular activities include both teaching and research having in common the topic of innovation. She coordinates networks for conducting research related to innovation in teaching among regional, national and international higher education institutions. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 37-51, January-March 2011 51 Núria Mancebo Fernàndez is a Lecturer of Human Resources Management at the Business School and Health and Safety Management at the Polytechnic School of the University of Girona, Spain. She holds a PhD degree in the Department of Business Administration and Product Design at the University of Girona. Her main research interests are human resource management and health and safety management, gender relations at work and public sector industrial relations. She is currently involved in several research projects developing and validating tools to assess performance of organisational innovations. Professor Vanharanta, 1949, began his professional career in 1973 as Technical Assistant at the Turku office of the Finnish Ministry of Trade and Industry. 1975 – 1992 he worked for Finnish international engineering companies, i.e., Jaakko Pöyry, Rintekno and Ekono as process engineer, section manager and leading consultant. His doctoral thesis was approved 1995. In 1995-1996 he was professor in Business Economics in the University of Joensuu. In 1996-1998 he served as Purchasing and Supply Management professor in the Lappeenranta University of Technology. Since 1998 he has been professor in Industrial Management and Engineering in Tampere University of Technology at Pori. The research interests are: Human Resource Management, Knowledge Management, Strategic Management, Financial Analysis, E-Business and Decision Support Systems. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 52 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 the determinants of Information technology wages Jing Quan, Salisbury University, USA Ronald Dattero, Southwest Missouri State University, USA Stuart D. Galup, Florida Atlantic University, USA Kewal Dhariwal, Athabasca University, Canada AbStrAct Anchoring this work to the classical human capital theory, the authors examine the effects of various human capital factors on IT professional compensation. Dividing IT salary into LOW (<$75,000) and HIGH (>=$75,000) ranges and using binomial logistic regression analysis, this paper estimates the effects of IT experience, education, IT degrees, IT certiications, and managerial positions on the probabilities of earning low wages in comparison to high wages, while controlling for industry type, organization size and location, gender, and marital status. Results indicate that the most important factors associated with high salaries are managerial positions, IT experience, education, and organization size. Practical advice is given on how IT professionals can employ these results to increase their compensation. Keywords: Human Capital Theory, Information Systems Personnel Management, Information Systems Stafing, Information Technology Wages, Logistic Regression IntroductIon The information technology (IT) field continues to experience significant changes as we begin to emerge from the downtrend of the latest economic recession. Compensation for IT jobs reached a plateau during recent years, and in fact, decreased for some industries and/ or geographic locations (Brandel, 2009). This trend makes it especially important to discern the variables that determine IT wages. Economists have widely used the human capital theory to identify the competences, DOI: 10.4018/jhcitp.2011010104 knowledge and personality attributes embodied in the ability to perform a specific job function, which produces economic value for the employer (Sullivan & Sheffrin, 2003). For example, propose a professional career and the competency levels related to the professional profiles identified for the organizations subject to this study is proposed Traditional human capital earnings functions focused on education and work experience as the main determining variables (Mincer, 1974). Recent development has expanded the current models by including variables such as training and certifications, organization specific variables such as industry type, location, and organiza- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 53 tion size, and demographic variables such as age and gender (Galup, et al., 2004; Dattero et al., 2005; Galup et al., 2006; Quan et al., 2007 and Quan et al., 2008). Applying the economic theory to IT compensation research has recently gained in popularity. A recent study on IT compensation uses salary data for 1,576 IT professionals in 39 organizations to investigate the relationship between human capital endowments and IT compensation (Ang et al., 2002). The results show that IT salaries are directly determined by human capital endowments of education and experience. Moreover, institutional differences are found to moderate the relationship. A series of work by Quan et al. (2008), Quan et al. (2007) and Dattero et al. (2005) using secondary data found that IT salaries are also related to age, gender, organization type and size, industry type and job functions. This study extends the existing literature of the determinants of IT wages in the following ways. First, the authors built the questionnaire based on extensive literature review and collected the data first hand. Second, the specific type of education (e.g., a degree in MIS), in addition to education level, is considered. This is important because a degree in IT related fields, instead of another area such as liberal arts or the sciences may have different implications for IT wages. Third, managerial positions are considered in the model. Colomo-Palacios et al. (2010) propose a pyramidal model for professional career development of Software Engineers which states that competencies not uniquely pertaining to Software Engineering, such as management skills, are important to stimulate professional development towards higher levels. Higher levels mean higher pays. Finally, binomial logistic regression analysis is used to estimate the odds ratios of making low wages (<$75,000) when compared to high wages (>=$75,000) for the key variables in the study. In the next section, the relevant literature on human capital theory is reviewed. Then, the research questions based on the human capital factors are formulated. This is followed by the development of the binomial logistic regression model. Following this, the nature of our survey is discussed and some summary statistics are presented. The binomial logistic regression model results are then presented and discussed. The paper ends with managerial implications for IT professionals and suggestions for future research. thEorEtIcAl frAmEworK Adam Smith’s (Smith, 1776) 18th century writings discussed the concept of compensating for differences in wages paid to workers based on amenities and risks in the workplace. From this concept, Human Capital Theory (Berndt, 1991) evolved. Human Capital Theory is considered the dominant economic theory of wage determination in the field of labor economics. This is evidenced by its impressive record of scholarship. Liberally including the economics of education, Blaug (1966) bibliographically organized 792 journal articles, books, and research studies. Less than four years later, this number had grown to 1,350 (Blaug, 1970). In 1976, it exceeded 2,000 (Blaug, 1978). This represents a growth rate exceeding 120 publications per year. The connectivity between human capital theory and Nobel Prize awards is perhaps more impressive than the formal publications record. Since 1971, five Nobel prizes have been awarded to scholars in, or affiliated with, the field of human capital theory (Becker, 1993; Wright, 1992). The Nobel distinction belongs to Theodore W. Schultz and Gary S. Becker, the two most pronounced scholars of human capital theory; Milton Friedman and Simon Kuznets (1945), who collaborated to publish an important article linking medical profession incomes to investments in education; and Robert M. Solow (1957), who helped to identify the relatedness of education to the aggregate production function. (Sweetland, 1996, p. 342). Human Capital Theory states that investments made in ones’ occupation are directly correlated to the compensation earned over time that is received for the execution of job Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 54 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 tasks. The term “human capital” relates to the idea of treating educational spending as an investment (Schultz, 1960; Schultz, 1961). In essence, the more education workers have, the more productive they will be when compared to their less educated counterparts. As a result, the educated worker is more likely to command higher wages. Berndt (1991) writes that the implications of education are a well-known and are a straightforward extension of Smith’s idea of equalizing differences. This theory also provides an economic explanation as to why a person will forego earnings and incur additional expenses to undertake an education, for example, formal education, on-the-job training, apprenticeships, and similar activities (Becker, 1962; Berndt, 1991; Mincer, 1957; Mincer, 1962; Mincer, 1974). hyPothESES dEVEloPmEnt To examine the relationship between earnings (dependent variable) and the human capital factors that may affect IT professional compensation (independent variables), we extend the Ang et al. (2002) model by including the following determinants: (1) experience, (2) education including education level and type, (3) certification, (4) decision rights authority, and (5) Institutional differentials such as industry type, firm size and geographic location. We also control for demographic variables such as gender and marital status. The formal research hypotheses are formulated in the remainder of this section. Experience determinant In the IT profession, as in other professions, experience is a primary human capital factor (Auster, 1989; England & McCreary, 1987; Hulin & Smith, 1965; Olson & Frieze, 1987). As an employee gains experience, wages tend to rise (Topel, 1991). Recent evidence indicates that much of the wage compensation is attributable to the accumulation of industry and/or occupation-specific experience (Groen, 2006; Bureau of Labor Statistics, 2009). As it relates to employer specific experience, “Neal (1995) and Parent (2000) argue that the observed correlation between wages and employer tenure is in fact attributable to the wage growth with industry experience that is correlated with employer tenure and generally omitted from wage regressions” (Kambourov & Manovskii, 2009, p. 64). Kambourov and Manovskii (2009) go on to state that tenure in an industry has a very small impact on wages once you account for the effect of occupational experience. Hence, we propose our first research hypothesis as follows. H1: IT wages are correlated with IT experience. Education determinant Education or training is also considered a primary human capital factor (Becker, 1975). The human capital implications of education are a well-known and straightforward extension of Smith’s (1937) idea of equalizing differences (Berndt, 1991). Educated workers are hopefully more productive than their less educated counterparts and thus are more likely to command higher wages. A U.S. Bureau of Labor Statistics (2009) report (Table 1) showing 2008 annual average earnings for persons age 25 and over indicates that earnings increase steadily as an employee gains more education. Human capital theorists believe that an investment made in education or training will yield a lifetime of earnings (Mincer, 1957, 1958, 1962; Schultz, 1960, 1961). The investment is twofold, it consists of direct costs in the form of tuition and opportunity costs in the form of foregone earnings. We go one step further by asking whether a degree in IT or Computer Science makes any difference in determining IT wages. Human capital theory distinguishes two types of training of general and firm-specific and states that they impact earnings differently. We extend this argument by distinguish education in IT and in non-IT. Apparently, a degree in IT related fields, instead of in other ones such as liberal Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 55 Table 1. Earnings and annual average earnings Education attained Median weekly earnings in 2008 (Dollars) Median annual earnings in 2008 (Dollars) Percentage Change from High-school graduate Doctoral degree 1,561 $81,172.00 60.41% Professional degree 1,531 $79,612.00 59.63% Master’s degree 1,233 $64,116.00 49.88% Bachelor’s degree 1,012 $52,624.00 38.93% Associate degree 757 $39,364.00 18.36% Some college, no degree 699 $36,348.00 11.59% High-school graduate 618 $32,136.00 arts or biology, may have different implications for IT wages. Hence, we propose our second set of research hypotheses as follows. H2a: IT wages are correlated with education. H2b: IT wages are correlated with IT related education. certification determinant Academics continue to debate the merits of certifications, especially as potential substitutes for education and/or experience (Quan et al., 2007). Some argue that certifications do not replace experience or degrees obtained via formal education (Adelman, 2000). Some argue that individuals entering the IT workforce lacking formal education may find their employment to be short-lived with limited career opportunities (Bartlett, 2002). Some, however, outright question the value of higher education and argue the merits of alternatives, such as professional certifications (Vedder, 2004). Zeng (2004) points out that certified professionals are considered professionals regardless of whether or not they have a college degree. Realizing the complementary nature of IT certifications to formal education, a number of researchers (Peslak, 2005; Quan et al., 2007; Randall et al., 2005; Zeng, 2004) suggest incorporating IT certifications into both secondary and post-secondary curricula. They argue that education alone is not sufficient, due to the rapid changes in technology and associated changes in the knowledge base and technical skills, to develop professional capabilities in the IT industry. This makes it difficult for educational institutions to deliver relevant and up-to-date IT education (U.S. Bureau of Labor Statistics, 2009). The debate about the importance of certification versus experience centers on the issue of which one is more important. Some regard certifications as almost immaterial without proper experience, while others think certifications are a great complement to experience (Roberts, 2002). We believe that IT certifications, as a form of general training, contribute positively to human capital accumulation, and in turn wage growth. Hence, we propose our third research hypothesis as follows. H3: IT wages are correlated with IT certification. decision rights Authority determinant Decision rights indicate who in the organization has the responsibility to initiate, supply information for, approve, implement, and control various types of decisions (Pearlson & Saunders, 2010). Traditional human capital theory uses years on the job as a proxy for ones influence or Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 56 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 stature in the organization. This is because one accumulates knowledge, skills, and expertise over a career. Employment years alone may not translate into a sufficient knowledge base for sound decisions. Therefore, we use decision rights authority as evidenced by an employee’s job position (e.g., manager) as an indicator of potential wage differential. Hence, our fourth research hypothesis is as follows. H4: IT wages are correlated with managerial positions. Institutional determinants In addition to the four human capital factors already discussed (experience, education, certifications, and decision rights authority), there are several institutional determinants that may influence wages. Typically, explanations for institutional wage differentials include: industry, organization (or organization) size, and geographic location. Industry Market environment theories suggest that industry sectors and labor markets variations may lead employers to different wages to their workers. Hollister (2004, p. 660) states that, “the most common of these explanations is that large organizations hold monopolistic positions in their product markets that allow them to earn excess rents, some of which are shared with the workers through higher wages.” Competition to find high-quality employees with industry specific knowledge is getting more and more difficult even in these recessionary times. Over the past decade, many organizations openly boasted of their ability to “poach” or “brain snatch” quality workers from their competitors (Amaram, 2005). Hence, our fifth research hypothesis is as follows. H5: IT wages are correlated with industry type. organization Size Organization size wage effect is categorized by economic theorists into two groups, neoclassical or institutional. The neoclassical perspective includes the labor quality hypothesis, the efficiency wage explanation, and the theory of compensating wage differentials. The institutional perspective focuses on monopoly power and unionization avoidance (Brown & Medoff, 1989). Scholars have studied this relationship for over a century (Idson & Oi, 1999) and the research spans industries, occupations, countries and time (Bayard & Troske, 1999; Paez, 2003). Brown and Medoff concluded in their 1989 study that the size-wage premium is “sizeable and omnipresent”. They (Brown & Medoff, 1989) consider six explanations for the positive relationship between organization (organization) size and wages: (1) hire higherquality workers, (2) offer inferior working conditions, (3) make more use of high wages to forestall unionization, (4) have more ability to pay high wages, (5) face smaller pools of applicants relative to vacancies, and (6) are less able to monitor their workers. Hence, our sixth hypothesis is as follows. H6: IT wages are negatively correlated with organization size. geographic location Several studies have documented the central role that human capital plays in economic development (Barro, 1991; Rauch, 1993; Simon & Nardinelli, 1996). Since human capital is basically the relationship between supply and demand of skills and knowledge, geographic locations rich in specific competencies will draw employers to compete for in-demand human capital. “Most economists conceptualize human capital as a stock or endowment, which belongs to a place in the same way that a natural resource might. But the reality is that Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 57 human capital is a flow, a highly mobile factor that can and does relocate” (Florida et al., 2008, p. 619). Hence, we propose our seventh hypothesis is as follows. H8: IT wages are correlated with gender. H9: IT wages are correlated with marital status. H7: IT wages are correlated with firm location. The econometric literature on wage determination based on human capital has for the most part been based on regression models of the following form: the natural logarithm of earnings is a function of a measure of schooling, a measure of experience, possibly other factors, and a random disturbance term. In a major departure from the traditional linear model, we employ logistic regression by dividing the annual salary Y into two mutually exclusive categories: LOW for salaries less than $75,000 (Y = 0) and HIGH for salaries at least $75,000 (Y = 1). Using the HIGH group as the reference category, we used the following binomial logistic regression model: control Variable gender The Equal Pay Act of 1963 was enacted to ensure that man and women received equal pay for equal work. Almost 50 years later, the wage differential between women and men is present in the work force. “A 2003 study by the General Accounting Office (now the Government Accountability Office) found that women earned 79.7 percent of what men earned, even after controlling for occupation, industry, years of work experience, job tenure, number of work hours, time off for childbearing, race, marital status, and education” (Alkadry & Tower, 2006). Gender wage differentials are often associated with limited career advancement for women. Truman and Baroudi (1994) examined salary differences among senior IT managers and found that the mean salary for women IT managers was considerably lower than males. In a later study, Dattero et al. (2005) found that gender is a statistically and practically significant factor in assessing a software developer’s salary. control Variable marital Status The wage premium attributable to marriage is well documented (Kenny, 1983; Bartlett et al., 1984). The two most common explanations of why married men earn more than unmarried men are: (1) the division of labor in a married household allocates more of the man’s time to the market, and (2) married men have a lower cost of human capital acquisition, since a spouse may be working to help finance the additional human capital (Cornwell & Rupert, 1995, p. 10). Hence, we propose our final set of research hypotheses as follows. modEl Y = α + β1(Exp) + β2(Edu1) + β3(Edu2) + β4(IT Degree) + β5(Certification) + β6(Manager) + β7(IT Industry) + β8(Geographic location) + β9(Organization Size) + β10(Male) + β11(Marital Status) + ε (2) where: • • • • • • • • • • Y = 1 if wages are at least $75,000 Exp = 1 if IT Experience >=10 years Edu1 = 1 if ‘Bachelors degree’ Edu2 = 1 if ‘Master’s or Ph.D’ Edu0 (‘some college’ or lower) is used as base. IT Degree = 1 if degree in MIS Cosc Degree = 1 if degree in Computer Science Certification = 1 for holder of any of the ICCP certifications (ISA, CDP, CCP, CBIP, CDMP, CSP or ACP) Manager = 1 if ‘Supervisor/Manager’ IT Industry = 1 ‘Communication Carriers (ISP, Telecomm, Data Comm, TV/Cable)’, ‘Computer / Network Consulting’, ‘Data Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 58 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 • • • • Processing Services’, ‘E-commerce / Internet / Computer Services’, ‘Service Provider (ASP, ESP, Web Hosting)’, ‘VAR, VAD, Systems or Network Integrator’, ‘Business Intelligence and Data Integration Consulting’, ‘Computer Hardware, Software, Services Vendor’, or ‘provider of administrative software for K-12 schools’ D_Canada = 1 if organization in Canada D_small = 1 if the number of employees less than 500 Gender = 1 if male Marital status= 1 if married The model produces an odds ratio for each of the independent variables that determine the probability to be in the HIGH group associated with that particular variable. 8 members of the ICCP Education Foundation Board of Directors. Academics and practitioners were included in all three groups. Questionnaire Modifications After Pre-Test Each reviewer submitted comments and suggestions after completing the questionnaire. Approximately 20 comments and suggestions were reviewed and appropriate modifications were made to the questionnaire. Questionnaire Pilot Study and modifications This section contains the background on the development of the questionnaire and the method of data collection. A pilot study was conducted during August 2008 by emailing 100 ICCP members, selected at random, from difference parts of the globe. The pilot study responses were not included in the large-scale study, and the members that participated in the pilot study were not emailed for the large-scale study. The revised questionnaire was reviewed by the ICCP Board prior to distribution. Questionnaire development data collection Item Generation To examine our hypotheses, we surveyed industry practitioners, experts and managers in information technology who are members of the Institute for Certification of Computing Professionals (ICCP). Founding in 1973, the ICCP has dedicated itself to the establishment of high professional standards for the computer industry. It is the standard bearer for professionals in the computer industry. Data for the study were collected using a large-scale web-page based questionnaire. A list of members was obtained from the ICCP. Members were sent an e-mail asking them to participate in the study and directing them to a web-page based questionnaire. The questionnaire (Appendix A) was administered from September 2008 through the end of January 2009. Table 2, Table 3, Table 4, and Table 5 present the frequency distributions of the questionnaire data for the Age, Gender, Job Title, and Industry measures. 6,389 ICCP members mEthodology Human capital and IT compensation literature as well as other relevant literature were reviewed to understand the evolution of the human capital theory. A comprehensive list of items was generated from the literature review. Additional items were added where appropriate to ensure that the constructs were properly represented. 45 items were selected and grouped into five categories; Respondent Background Section, Compensation Section, Education Section, Certification Value Section, and Benefits Section. Questionnaire Pre-test A pre-test was conducted to establish construct validity and to further enhance the content validity, readability, and brevity. The questionnaire was reviewed by 12 ICCP board members, 10 members of the ICCP Certification Council, and Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 59 were asked to participate in the study and we received 208 completed questionnaires (3.25% response rate). For this study, all 208 questionnaires were used to conduct the data analysis. organization type (IT organizations), gender and are not significant factors. The odds ratios are reported in Table 7. The results clearly indicate that more education, higher level of experience, being ICCP certified, and being a manager make it more likely that one is highly paid (making $75K or more). The probabilities (computed from the odds ratios) for being in the high wage group for IT professionals who are with higher level of education, in a supervisor position, with higher level of IT experience, and ICCP certified stand at 0.89, 0.83, 0.76 and 0.73, respectively. All are substantially higher than the 50-50 split if the respondents were evenly distributed between the High and Low wage groups. On the contrary, IT professionals who work for small organizations have only a probability of 0.18 to be in the High wage group, the probability rESultS Using the procedure LOGISTIC in SAS program, we fitted the binomial logistic model using our survey data. The model parameter estimates are given in Table 6 and the odds ratios are given in Table 7. Table 6 shows that IT experience, graduate level education (Education 2), ICCP certification, and managerial position are all positively associated with high salaries, while organization size (small), geographic location (in Canada) and marital status demonstrate the negative effects. A degree in IT or Computer Science, Table 2. Age Value Frequency Percent Valid Percent Cumulative Percent None Selected 1 .5 .5 1.0 25 to 29 11 5.3 5.3 6.2 30 to 34 10 4.8 4.8 11.0 35 to 39 12 5.7 5.7 16.7 40 to 44 17 8.1 8.1 24.9 45 to 49 37 17.7 17.7 42.6 50 to 54 49 23.4 23.4 66.0 55 to 59 45 21.5 21.5 87.6 60 to 64 26 12.4 12.4 100.0 Total 208 100.0 100.0 Table 3. Gender Value Frequency Percent Valid Percent Cumulative Percent None Selected 1 .5 .5 1.0 F 45 21.5 21.5 22.5 M 162 77.5 77.5 100.0 Total 208 100.0 100.0 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 60 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 Table 4. Job title Value Frequency Percent Valid Percent Cumulative Percent None Selected 1 .5 .5 1.0 CIO, CTO, VP, Director 39 18.7 18.7 19.1 Computer Programmer 6 2.9 2.9 22.0 Computer Software Engineer, Applications 7 3.3 3.3 25.4 Computer Software Engineer, System Software 3 1.4 1.4 26.8 Computer Systems Analyst 14 6.7 6.7 33.5 Database Administrator 5 2.4 2.4 35.9 MIS Manager 18 8.6 8.6 44.5 Network and Computer Systems Administrator 3 1.4 1.4 45.9 Network Systems and Data Communications Analyst 3 1.4 1.4 47.4 Non-IT: Financial 1 .5 .5 47.8 Non-IT: Manufacturing / Operations 1 .5 .5 48.3 None Selected 8 3.8 3.8 52.2 Other 57 27.3 27.3 79.4 Project Manager 12 5.7 5.7 85.2 Teacher / Consultant Teacher / Consultant 31 14.8 14.8 100.0 Total 208 100.0 100.0 for those in Canada is 0.26 and for those who are married is 0.27. To make sure we made a good choice of selecting $75,000 as the threshold to separate high and low wage groups, we conducted sensitivity analysis by running the same model with $90,000, $95,000, and $100,000 as the cutoff points (see Table 8). Based on the Akaike’s information criterion, the model with the original selection of $75,000 is apparently the best fit. dIScuSSIon Our model results provide support for many of our research hypotheses (H1, H2a, H3, H4, H6, and H7) and reveal some interesting findings. First, the results provide support for the basic human capital factors of experience and education. High level of IT experience makes its highly likely (0.76) that the worker is in the high wages group. Higher level of education with Master’s or Ph.D. contributes greatest to the probability (0.89) of earning high wage. This highlights the importance of education. In fact, our sample suggests that even a bachelor’s degree is not sufficient for one to earn high wages. Second, managers are highly likely (0.83) to earn high wages. Limited number of studies for IT compensation has specifically examined the role of managerial positions. One study Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 61 Table 5. Industry Value Frequency Percent Valid Percent Cumulative Percent None Selected 1 .5 .5 .5 Agriculture / Forestry / Fisheries 2 1.0 1.0 1.4 Business Services / Consulting (noncomputer related) 4 1.9 1.9 3.3 Communication Carriers (ISP, Telecomm, Data Comm, TV/Cable) 5 2.4 2.4 5.7 Computer / Network Consulting 15 7.2 7.2 12.9 Data Processing Services 3 1.4 1.4 14.4 E-commerce / Internet / Computer Services 3 1.4 1.4 15.8 Education 36 17.2 17.2 33.0 Finance / Banking / Accounting 13 6.2 6.2 39.2 Government: Federal (including Military) 16 7.7 7.7 46.9 Government: State or Local 22 10.5 10.5 57.4 Health / Medical / Dental Services 7 3.3 3.3 60.8 Insurance / Real Estate / Legal Services 20 9.6 9.6 70.3 Manufacturing of Computer Hardware or Software 3 1.4 1.4 71.8 Manufacturing Process Industries (non-computer related) 5 2.4 2.4 74.2 Mining / Oil / Gas 4 1.9 1.9 76.1 None Selected 6 2.9 2.9 78.9 Not for Profit 3 1.4 1.4 80.4 Other 17 8.1 8.1 88.5 Publishing / Broadcast / Advertising / Public Relations / Marketing 1 .5 .5 89.0 Research / Development Lab 4 1.9 1.9 90.9 Retailer / Wholesaler / distributor (non-computer related) 6 2.9 2.9 93.8 Service Provider (ASP, ESP, Web Hosting) 2 1.0 1.0 94.7 Transportation / Utilities 7 3.3 3.3 98.1 Travel / Hospitality / Recreation / Entertainment 3 1.4 1.4 99.5 VAR, VAD, Systems or Network Integrator 1 .5 .5 100.0 Total 208 100.0 100.0 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 62 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 Table 6. Output of LOGISTIC regression Parameter IT Experience (>= 10 years) Education 1 (Bachelor’s) Estimate Pr > ChiSq 1.169* 0.058 -0.121 0.8155 2.062*** 0.0044 Degree in Computer Science -0.638 0.1875 Degree in MIS -0.279 0.7413 1.004*** 0.0054 Education 2 (Graduate) ICCP certification IT industry -0.572 0.3683 Managerial Position 1.579*** 0.0031 Small Organizations -1.621*** 0.0063 Canada -1.041** 0.0327 Male 0.501 0.3574 Marital -0.975 0.0895 Total N = 166 Note: Reference category for the equation is High Wage (≥$75,000) *** significant at the 1% level ** significant at the 5% level * significant at the 10% level Table 7. Odds ratio Effect IT Experience (>= 10 years) Odds Ratio 3.218 Education Level 1 (Bachelor’s) 0.886 Education Level 2 (Master’s/Ph.D.) 7.862 Degree in Computer Science 0.529 Degree in MIS 0.756 ICCP certification 2.728 IT industry 0.565 Managerial Position 4.851 Small Organizations 0.198 Canada 0.353 Male 1.650 Marital 0.377 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 63 Table 8. Sensitivity analysis LOW-HIGH Cutoff Sample Points AIC Information Criterion $75,000 43/123 149 $90,000 71/95 206 $95,000 89/77 218 $100,000 101/65 218 by (Soon Ang et al., 2002) show that project leaders consistently make more money than senior analyst and system analyst across their hierarchical linear models, but supervisor positions are much broader than project leaders. Our study serves as starting point for future theory development for IT compensation by including this important dimension. Third, our results shed light on the long held debate on value of education vs. certification (Adelman, 2000; Bartlett, 2002; Peslak, 2005; Randall & Zirkle, 2005; Roberts, 2002; Quan et al., 2007; Zeng, 2004). Our results show that while an ICCP credential improves the probability of earning high wage to 0.73 low education level (no college education) or average education (college education) do not increase the probability. The combined results seem to suggest that certifications are very important factors for earning high wages in the IT field while only high level of education is relevant. In contrast, an IT related degree (Computer Science or MIS) was found to have an insignificant impact on salary. This was the most surprising result and future research needs to be undertaken to more thoroughly investigate this. A recent study by Trigo et al. (2010) may shed some light on this. They surveyed 102 Chief Information Officers from Iberian (Spain and Portuguese) large companies and find that it is not the technical skills but business knowledge and user support that are important for successful IT positions. In addition, two to five years of work experience is a key requirement as well. The combination of business knowledge and user support skills and work experience undermine the importance of an IT related degree. Fourth, our results did not show that gender was a significant factor. While not statistically significant, males did earn more than their female counterparts in our study --from the odds ratio, a male has 0.62 probability of being in the higher earning group. Additional research seems warranted to determine if gender is becoming less of a factor in determining wages. Finally, mixed results are found for the institutional differentials. Small organizations pay IT professionals significantly less with a probability of earning high wages being only 0.17 when compared to relatively large organizations. In addition, geographic location (the US vs. Canada) is significant in a sense that IT professionals in Canada have only a probability of 0.26 making to the high wage group, when compared to their counterparts in the US. Organization type is not a significant factor. The suggests that at least in the two focal countries in this study, the probability of IT professionals earning high salary is the same for all types of companies. This seems to directly contradict the result by Ang et al. 2002) which states that IT professionals in IT intensive organizations are paid more than those in less IT intensive ones. However, given that their data were collect in Singapore in 2002, we think the two sets of results cannot be directly compared. Study limitations This study has certain limitations. First, the data was collect using an email distribution list from the ICCCP whose membership may not fully represent the general IT professional population. But the fact that the data was collected from members who are also practicing IT professional Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 64 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 in 25 industries and 15 job titles moderated some of this concern. Second, because the data comes from the ICCP membership, potentially some bias toward responses from those who benefit from certification may be present. Third, the data was collected only from North America (Canada and the U.S.). concluSIonS Based on classical human capital theory, this study examines the effects of various human capital factors on IT professional compensation. The set of factors include IT experience, education, degree type, industry type, IT certifications, managerial position, organization size and location, and demographics such as gender and marital status. IT experience, high level of education, IT certifications, and managerial position were found to be significant factors while degree type, organization type (IT vs. non-IT), gender and marital status were found to be insignificant. Our results suggest to IT professionals that if making more money is the goal, they should expand their horizon beyond the pyramid and scope of the IT careers (Colomo-Palacios et al., 2010). It is helpful for them to empower themselves with managerial knowledge and skills that can enable them to move up the organizational career ladder. In addition, people who combine business skills and IT experience to establish effective links between separate operations within organizations are more efficient and effective for successful implementation of IT-enabled business process re-engineering (Galinec, 2010). Other important factors include earning advanced degrees, getting certified, and acquiring as much IT experience as possible. In fact, a highly educated, experienced (10 years) manager with ICCP has about a 0.97 chance of being in the high salary group. Our results also indicate that IT professionals should continuously update their skills by obtaining proper industry certifications. This research suggests a few avenues for future research. First, it may be useful to further divide managerial positions into more detailed groups such as lower level, middle and top management. By doing this, one can discern the marginal monetary reward as IT workers move up the management ladder. Second, the sample used in this research seems biased toward the highly educated with more than 35% of the respondents having Master’s or Doctorate degrees. This is by no means a reflection of the general IT workforce. Future research may want to aim to collect more balanced data set. Third, our results indicate that an IT degree is not a significant factor, which contradict directly with Ang and Slaugher (2002). More research must be done to explain the discrepancy. Fourth, our results indicated that graduate degrees and managerial positions are both significant factors so a future investigation on the effects of an MBA on the wages of IT workers seems warranted. AcKnowlEdgmEnt The authors gratefully acknowledge the support for this research from the Institute for Certification of Computing Professionals. rEfErEncES Adelman, C. (2000). A parallel universe, expanded: Certification in the information technology guild. 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Technical change and the aggregate production function. The Review of Economics and Statistics, 39, 312–320. doi:10.2307/1926047 Sweetland, S. (1996). Human Capital Theory: Foundations of a Field of Inquiry. Review of Educational Research, 66(3), 341–359. Topel, R. (1991). Specific capital, mobility, and wages: Wages rise with job seniority. The Journal of Political Economy, 99(1), 145. doi:10.1086/261744 Trigo, A., Varajao, J., Soto-Acosto, P., Barroso, J., Molina-Castillo, F. J., & Gonzalvez-Gallego, N. (2010). IT Professionals: An Iberian Snapshot. International Journal of Human Capital and Information Technology Professionals, 1(1), 61–75. Tru man, G., & Baroudi, J. (1994). Gender Differences in the Information Systems Managerial Ranks: An Assessment of Potential Discriminatory Practices. Management Information Systems Quarterly, 18(2), 129-141. Vedder, R. (2004). Private vs. Social Returns to Higher Education: Some New Cross-Sectional Evidence. Journal of Labor Research, 25(4), 677–686. doi:10.1007/s12122-004-1018-5 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 67 Wright, J. W. (Ed.). (1992). The universal almanac 1992. New York: Andrews and McMeel. Zeng, F. (2004). A new approach to integrate computer technology certifications into computer information system programs. In Proceedings of the 2004 American Society for Engineering Education Annual Conference & Exposition, Salt Lake City, UT. Jing Quan is an Associate Professor in the Department of Information and Decision Sciences in Perdue School of Business at Salisbury University. He holds a Ph.D. from the University of Florida. His research interests include organizational impact of information technology (IT), IS security, and IT professional and personnel issues. His work has appeared in such journals as Journal of Management Information Systems, Communications of ACM, Communications of AIS, Information Resources Management Journal, International Journal of Information Management, Journal of Global Information Management, and Journal of Computer Information Systems. Ronald Dattero is Professor of Computer Information Systems at Missouri State University. He holds a Ph.D. from Purdue University and holds the Professional Competence Certificate in ITSM (Information Technology Service Management) according to ISO/IEC 20000. His research interests include knowledge management, IT professional and personnel issues, and ITSM. His work appears in such journals as Journal of Management Information Systems, Knowledge Management Research & Practice, Journal of Knowledge Management, Knowledge and Process Management, Information and Management, Information Systems, Decision Support Systems, Communications of the AIS, and Communications of the ACM. Stuart D. Galup is Associate Professor of Information Technology at Florida Atlantic University. He holds a D.B.A. from Nova Southeastern University and is a Certified Computing Professional Certified ITIL® Expert, Certified in the Governance of Enterprise IT, and Consultant/Manager Competence Certificate in ITSM according to ISO/IEC 20000. His professional work in the transformation of information technology organizations was featured in Computerworld and Datamation. His research appears in such academic journals as Communications of the AIS, Communications of the ACM, Information Resources Management Journal, Communications Research, Information Systems Management, and Journal of Computer Information Systems. He is co-author of ‘Building the New Enterprise: People, Processes, and Technology’ and ‘The IT Organization: Building a World-Class Infrastructure’ both published by Prentice Hall. Kewal Dhariwal has been a manager of ICCP research in knowledge standards and impact of professional credentials on promotion in the workplace and learning outcomes assessment for graduates of four year degrees in IT. He has had parallel research projects in supply chain management at Athabasca University for the past 9 years. He was the founder and Director of the NAIT Microcomputer Institute (1985-2001) and adjunct faculty for Information Management at the University of Alberta from 1995-2001. He has managed/manages International education projects in Cuba, Zambia, Zimbabwe, Kenya, Tanzania, Botswana, Indonesia, Thailand, Philippines, India, Saudi Arabia, Libya, Hong Kong, Singapore, Argentina, USA, Trindad & Tobago and works extensively improving competitiveness of small companies as well as fortune 1000 corporations. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 68 International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 APPEndIx A: QuEStIonnAIrE demographics Age Gender (F/M) Marital Status Do you work in the IT field (Y/N)? Job Title Job Function Supervisor/Manager (Y/N) Number of Years for current job title Number of Years with the current company Job Type: Temporary, Term, Permanent, Contracted, Other (please specify) Industry: City: State/Province: Country: Base salary in 2007: % increase from 2006: Bonus in 2007: % increase from 2006: Education Some high school High school graduate Some college Junior college graduate (2 year / Associate degree program) Bachelor’s degree (3 or 4 year degree program) Graduate diploma Master’s degree Doctoral degree Other (please specify) degree major 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Information Science Communications Computer Science MIS/BIS Liberal Arts Business Education Mathematics Economics Chemistry Physics Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 52-69, January-March 2011 69 12. 13. 14. 15. 16. 17. 18. Engineering Science Statistics Management Science Accounting Finance Data Management 21. Management 22. Other IccP credential CBIP CCP CDMP CDP CSP CCPformer ACP ISA Non-ICCP Credential (Please specify)__________ None of any. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 70 International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 learning in networks of SmEs: A case Study in the Ict Industry Valentina Morandi, University of Brescia, Italy Francesca Sgobbi, University of Brescia, Italy AbStrAct This paper contributes to the debate on the participation of SMEs in voluntary business networks by framing the relationship between the different types of network-based learning. Learning about networking, which concerns the capability to set, manage, and terminate a strategic alliance, is opposed to learning by networking, which involves the sharing and the joint creation of technical knowledge. The proposed framework is tested in the case of a network of Italian SMEs in the ICT sector. Empirical evidence conirms that learning about networking enables learning by networking and helps to balance those tensions and conlicts that inevitably mark the existence of inter-irm networks. Learning about alliance management provides networked IT entrepreneurs with the capabilities to compete against larger competitors. As learning paths also drive the evolution of inter-irm alliances, networked entrepreneurs would beneit from choosing collective goals in line with their alliance management capabilities. Keywords: ICT, Learning Process, Management Capabilities, Networks, SME IntroductIon Thanks to the promise of providing a suitable and timely response to intense and rapid change, inter-organisational networks have gained considerable attention by researchers, business companies and institutional actors (Doz & Hamel, 1998; Parkhe et al., 2006). A growing body of literature has examined the formation of inter-firm linkages (Gulati, 1995; Ahuja, 2000; Park & Zhou, 2006), the governance structure of networks (Jones et al., 1997; Rowley et al., 2000), the dynamics of relationships among network participants (Hite & Hesterly, 2001; Kim et al., 2006) and the impact of networking on DOI: 10.4018/jhcitp.2011010105 firm performance (Bell, 2005; Goerzen, 2007). Prior studies suggest that strategic alliances and networks are powerful means to face intense and dynamic knowledge-based competition. They represent cost- and time-effective alternatives to the purchase or the in-house development of proprietary resources (Grant, 1996) without compromising autonomous decision-making at the firm level (Street & Cameron, 2007). However, participation in networks also exposes members to the risk of opportunistic behaviour by partners and requires the development of alliance management capabilities (Kale et al., 2000; Pisano, 1990; Ireland et al., 2002). The use of alliances and networks as means to overcome the constraints imposed by limited resources makes those solutions particularly Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 71 attractive for small and medium enterprises (SMEs). Nevertheless, the available evidence on networks mainly focuses on alliances among large players (see e.g., Browning et al., 1995; Doz, 1996; Simonin, 1997; Kale et al., 2000; Gogan et al., 2007) or local networks of socially and economically intertwined smaller actors in industrial districts (Pyke et al., 1990). Only recently researchers have started to provide evidence on networks of non-district SMEs (for a recent survey see Thorgren et al., 2009), which provide participants with the opportunity to achieve economies of scale and to rationalise internal and external processes (Sher & Lin, 2006). The wide number of potential beneficiaries and the persistence of substantial obstacles to the achievement of the expected advantages (Duysters & Heimericks, 2005) justify the effort of disentangling the processes which underlie cooperation in networks among SMEs. This paper contributes to the debate on the participation of SMEs in voluntary business networks by modelling the relationship between different types of learning. The proposed approach differentiates between learning about networking, defined as the capability to set, manage and terminate a strategic alliance, and learning by networking, which concerns the sharing of technical knowledge and capabilities among network members and the joint creation of new technical knowledge. We argue that learning about networking is an enabling factor of learning by networking. By developing mutual trust and shared values, network participants develop communication skills and learn how to balance those tensions and conflicts which inevitably arise in alliances. Learning about networking consequently provides a favourable environment in support of the sharing and transfer of technical knowledge. The proposed framework is validated through the analysis of a longitudinal case study about an ICT consortium of Italian SMEs. The focus on the ICT industry is motivated by three reasons. First, intense and dynamic competition in the ICT industry encourages firms’ participation in networks. Second, the ICT industry is characterised by the opposition between few large, integrated, often multi-national companies and a plethora of small entrepreneurial firms focused on limited stages of the supply chain. As a matter of fact, specialisation and the parallel need for compatibility among different modules and products have led to the creation of ICT business clusters all over the world (OECD, 2001). Third, IT professionals in general, and small ICT entrepreneurs in particular, often benefit from strong technical skills, opposed to much weaker managerial capabilities (Storey, 1994; Hines, 1995; Orser et al., 2000; ColomoPalacio et al., 2010; Trigo et al., 2010). These characteristics make alliances among small ICT firms an ideal test-bed to observe processes of learning about networking. The rest of the paper is organised as follows. The main features of voluntary networks of SMEs are outlined, followed by an introduction of the key-concepts which underlie learning processes in voluntary networks of firms and presents the proposed framework to identify and model those learning processes. Next, the story of the examined consortium is discussed and the evidence on the observed learning processes under the light of the proposed framework is presented. Finally, some concluding remarks. VoluntAry nEtworKS of SmES SMEs increasingly opt for external relationships as a means to overcome their shortage of skills and resources (Deeds & Hill, 1999; Van Gils & Zwart, 2004). Besides the benefit of cost and risk sharing, external relationships may provide access to additional and complementary resources and know-how that enable the exploration of new business and technological opportunities. Consequently, external relationships support the achievement of competitive advantages otherwise beyond their scope and capabilities of SMEs. Yet, a successful cooperative relationship requires specific management skills (De Man, 2005), which include both alliance capability and alliance portfolio management skills (Draulans et al., 2003; Hoffman, 2007). The Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 72 International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 former is required to match internal resources with partners’ resources. The latter concerns the development of a set of external cooperative relationships according to the business strategy of the firm. Dyadic alliances are often not enough to overcome the constraints imposed on SMEs by their limited resources. The increasing rate of network relationships observed among SMEs (Varamaki & Vesalainen, 2003) drives the attention of this study to multi-lateral cooperative agreements, defined as “a collection of relationships that binds a group of independent organizations together” (Street & Cameron, 2007, p. 241). In particular, this study focuses on voluntary business networks, which aim at increasing the participants’ turnover and involve explicit commitment by members based on a formal contractual agreement. Compared to other types of inter-organisational relationships, voluntary networks are characterized by long-term commitment, explicit agreement upon cooperative goals otherwise precluded, and independence of participants (Yoshino & Rangan, 1995; Gulati et al., 2000; Kale et al., 2000; Speckman et al., 1998). Prior studies have identified the antecedents and the drivers of the outcomes of those networks. In particular cooperative relationships are more fruitful if partners are on the technological frontier (Stuart, 2000). Intranetwork knowledge transfer is supported by equity-based agreements (Mowery et al., 1996), by diversity in the technological background of partners1 (Montoya-Weiss et al., 2001) and by good relational and combinative skills, which favour stability and effective combination of external and internal resources (Lechner & Dowling, 2003). The management of cooperative relationships is supported by a clear state of purpose and a long-term oriented scope, which reduce the likelihood of misunderstandings and competitive tensions among partners (Larsson et al., 1998). Also the help by external intermediaries has proven to be significant in smoothing intra-network tensions (Sherer, 2003). Among the peculiarities of networks of SMEs, the literature has stressed their higher difficulty in capitalising the profits from cooperation (Hobday, 1994) and their higher risk of losing control of their own business compared to large firms (Street & Cameron, 2007). lEArnIng In fIrm nEtworKS Opposite to the large number of studies on the determinants of formation and performance of voluntary networks, research on organisational learning and knowledge transfer in networks is still relatively limited (Street & Cameron, 2007). In addition, the widely shared consensus on the multi-faceted nature of learning2 so far hampered a comprehensive understanding of network-based learning processes. Organisational learning is regarded as a typical outcome of inter-firm cooperative agreements and learning opportunities are expected to result in better economic performance and innovativeness (Powell et al., 1996; Lane et al., 2001; O’Sullivan & Dooley, 2010). The access to partners’ knowledge and capabilities, the acquisition of new skills and competences from network members, and joint product or process innovation represent intangible knowledgebased pay-offs for the members of multi-lateral inter-firm networks (Simonin, 1997). The transfer of technological knowledge to and from partners and the creation of new technical knowledge develop either by integrating different sources of existing knowledge or by jointly exploring new opportunities (Podolny & Page, 1998; Johansson & Ylinenpää, 2006). We name the underling learning process as learning by networking, as it concerns the acquisition and development of technical knowledge involved with the goals of an alliance. Learning by networking cannot be taken for granted, as knowledge transfer among independent organisations is usually more challenging than internal knowledge transfer (Inkpen & Tsang, 2005). Effective knowledge transfer requires adequate absorptive capacity by partners (Mowery et al., 1996), complementary technical knowledge3 (Powell et al., 1996), and the capability to make sense of, internalise Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 73 and routinise past experience: “A firm’s propensity to transform collaborative experience into a form of competitive advantage will depend on its capacity to internalize and routinise lessons drawn from a variety of organizational and individual experiments” (Simonin, 1997, p. 1157). Therefore, learning by networking is not the only type of learning which takes place in a network. Inter-organisational relationships also involve learning about collaboration planning and management (Kale et al., 2000). We label this second learning process as learning about networking. Learning about networking is driven by experience, yet experience alone is not enough to reap the full benefits of collaboration. Organisational experience has to be internalised before turning into collaborative know-how, defined in literature as the capability to identify, negotiate, manage, monitor and terminate cooperative agreements and to apply those skills to subsequent collaborations (Simonin, 1997). The internalisation of experience is leveraged by the creation of organisational roles devoted to codify and share the know-how from prior experiences (Kale et al., 2001), the development of organisational routines to work with partners (Inkpen & Tsang, 2005) and to assess the value of alliances (Draulans et al., 2003), and the establishment of relational capital. The latter is defined as “the level of mutual trust, respect and friendship that arises out of close interaction at the individual level between alliance partners” (Kale et al., 2000, p. 218). Relational capital favours information sharing, cooperation and coordination of joint activities among firms. If collaborative know-how opens up additional communication channels and represents a means to integrate participants’ resources, relational capital reinforces mutual trust and the willingness to collaborate. The above presentation suggests that learning by networking and learning about networking are not independent processes. Effective collaboration among partners takes place only after learning about networking has created the necessary common language and routines to support competence integration and exchange. In other words, if learning by networking is an expected outcome of network-based collaboration, learning about network represents an enabling condition that develops a shared reference framework for cooperative practices (Figure 1). In addition, learning about networking provides crucial skills to manage the inevitable tensions which arise among partners. In successful networks, participants develop the capability to manage conflicting forces and to survive the subsequent crisis which threatens an alliance. Networks usually suffer from tensions due to the contrasts between the advantages from collaborating with potential competitors and the benefits from competing with former partners, to the contemporary need for codified rules to govern usual operations and flexible solutions to cope with unpredictable events, and to the strategic opposition between exploiting current results and exploring future opportunities (Das & Teng, 2000). By providing tools to manage the inherent tensions in a collaborative network, learning about networking facilitates the survival of network-based alliances. In turn, stability increases the partners’ willingness to share technical knowledge and activate processes of learning by networking. thE AlPhA conSortIum A longitudinal case study on a business consortium of ICT small firms established in 2003 provides an interesting opportunity to identify learning processes in a network of SMEs4. Data were collected in spring 2009 via face-to-face interviews with the president of the consortium, a member of the board of directors, and representatives of the local Small Firms Association (SFA). Additional information was provided by the analysis of available documents on network members. The consortium, which in early 2010 included 26 firms between 2 and 40 employees, will be named Alpha. The members of the consortium supply ICT products and services to local private and public clients. All firms are located in a province of Northern Italy Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 74 International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 Figure 1. whose industrial background is characterised by the predominance of entrepreneurial and small firms. In order to bridge the province to the knowledge economy, the local Public Administration (PA) has promoted important investments to renew the ICT infrastructure used by the local public administrative, health and educational organisations and to provide ICTbased services to residential and business users. As the PA is the largest and technically most advanced client in the local market, contracts with the local PA constitute for ICT companies the most stimulating and challenging orders, besides an attractive source of “guaranteed” cash flow. However, participation in public calls for tender requires an ISO certification and a productive capacity usually beyond the span of a small ICT company. Alpha Consortium was consequently established to access this promising market segment otherwise dominated by large, often non-local companies. Up to 2009, the life of the consortium can be divided into three stages: the set up, the initial steps, and the consolidation phase. The following paragraphs describe those stages and outline the incoming business opportunities and challenges. the Set up (2002-july 2003) The birth of the consortium was triggered by two main events. First, an IT chapter was established in 2002 at the local SFA. The new entrepreneurial association encouraged the development of relational capital among ICT entrepreneurs and the exchange of information about problems and business opportunities. By supporting the aggregation of SMEs to exploit synergies and enhance competitiveness, the new chapter encouraged the diffusion of a local entrepreneurial culture supportive of networking. Second, the local government chose to encourage the participation of local ICT suppliers in public calls for tender in order to trigger the development of a qualified local demand for ICT services and to foster the development of local suppliers5. Within the above framework, the board of directors of the IT chapter promoted a consortium to aggregate local SMEs and enter the market of public calls for tender. All ICT associates of SFA were invited to a kick-off meeting, where about half of local small players participated. The consortium was founded in July 2003 with 23 members, including both potential competitors and companies with complementary skills. All the most prominent players among local small companies listed among founders. The memorandum and the regulations of the consortium were prepared by the staff of SFA, who could provide their long experience with consortium legal issues. Whilst the memorandum describes the governance structure and Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 75 entry and exit mechanisms, the regulations state the fundamental rules of job order management, including the allocation of contracts and the coordination mechanisms among partners. Job orders are usually allocated based on competences and rotation among partners, under the supervision of a project manager chosen among the involved firms. However, members who directly lobby to win a contract to the consortium are entitled to participate in it, irrespective of rotation rules. A share between 1% and 10% of each contract won by the consortium is used to cover the operating costs of Alpha. In addiction, new members are required to pay a deposit of 5.000 euros, which is paid back in case they leave the consortium. Alpha is governed by a board of 4 directors and a president, elected by members every three years. The board of directors is in charge of deliberating about project development, investments, entries and exits to and from the consortium, and administrative issues. Although time-consuming, the participation in the board of directors is not rewarded, except a small token paid to the president. the Initial Steps (july 2003- july 2006) The first task of the consortium members was the election of a board of directors. Apart from few exceptions, the members of Alpha had neither cooperated nor interacted before joining the consortium. The weak mutual acquaintance among members and the lack of information about partners’ characteristics led to the election of entrepreneurs who also seated in the steering committee of the IT chapter at the local SFA, who were the most active promoters of Alpha. At the beginning, and possibly due to their technical background, the directors showed a stronger focus on technical issues rather than on marketing initiatives. Alpha promoted technical meetings where entrepreneurs and technicians debated promising technologies and common technical challenges. Alpha organised also social events where members could develop mutual acquaintance. However, according to the opinion of some associates, these activities diverted the attention from the main goal of the consortium, i.e., winning contracts from the local PA. Indeed, between 2003 and 2005 the consortium won only two contracts, both with the same public organisation. Despite the slow growth of turnover, the initial steps of the consortium have been appreciated by most members as Alpha demonstrated the capability to compete with the existing lobby of long established suppliers in the provision of ICT services and products to the local PA. New firms joined the consortium between 2003 and 2006. In addition, since the beginning participation in the consortium has stimulated cooperation among firms that goes beyond the consortium mission. Firms have been increasingly cooperating in joint contracts also with private clients. the consolidation Phase (july 2006 – 2009) The action of Alpha gained an additional impulse after 2006, when a decree by the Italian government forced the exit of the largest local industrial provider of ICT services from the publicly-owned company in charge of managing the ICT services of the local PA. In the same year, as mandated by the memorandum of the consortium, a new board of directors was elected, with partial renewal of the governance board. On the one hand, not all members of the original board of directors were willing to continue, due to the time-consuming nature of the position. On the other one, some members lobbied for a board of directors more prone to marketing activities and less focused on technical issues. As a matter of fact, after 2006 the consortium reduced the frequency of technical meetings. The new board of directors implemented substitute mechanisms to support the transfer of technical knowledge, including a mailing list and a competences repository, the latter stimulated by the local PA. Thanks to increasing commitment towards marketing activities, the new business opportunities risen by the recalled governmental decree Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 76 International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 and the good reputation acquired with previous orders, the consortium gained several contracts with the local PA. According to the president, the profits of the consortium increased because of the growth of new contracts both in number and size. Not all members of the network participated in contracts with the same frequency: some highly specialised firms never engaged into the business activities of Alpha consortium. However, their permanence in Alpha provides indirect evidence of the positive impact of being a consortium member on the reputation of participants. The variety of contracts in size and type made the consortium experience different management solutions. For example, in order to achieve the production capability required by large and complex contracts, the consortium learnt to outsource some tasks to external ICT firms. As the turnover of the consortium rose, administrative tasks absorbed an increasing amount of time from the board of directors. At the end of 2006 a part-time administrative employee was consequently hired to assist the president in daily management operations. In time, the board of directors and the president gained increasing knowledge about the technical skills, the managerial skills and the cooperative attitude of members. This knowledge has favoured a more frequent resort to informal negotiation and moral suasion in order to manage and, when possible, prevent contrasts among partners. Cooperation among members continued to increase also after 2006. In spring 2009 about one third of participants collaborated outside the consortium mission in the provision of products and services to private clients. Cooperation also stimulated mergers among network participants. In 2007, a one-entrepreneur firm merged with another company, whilst a merger among two potential competitors was foreseen in the next future at the time of our interviews. According to the president of Alpha, these events would not have happened without the consortium. the current challenges The consortium is still alive and prospering 7 years after its foundation and no termination is in sight. So far the consortium has achieved several important targets. First of all, the contracts won witness its reputation as a reliable business partner for the local PA. Although Alpha accounts for only 15% of local SMEs, whose turnover represents 50% of the local private ICT market, it became de facto the only channel available to small companies for participating in calls for tender for the local PA. The consortium also gained a reputation as an effective supplier of advanced services and know-how. For example, the firms of the consortium developed an advanced solution for the search engine of the Internet portal of the local PA, previously run by a foreign large firm. The consortium is now debating future opportunities, including the expansion to other geographical markets and the entry in the private sector with proprietary software products developed by members. However, the entry in new markets is hampered by the required investments in assets and knowledge and by the opposition of some members, who resist growth processes and the associated significant changes in the organisation and governance of their company. dIScuSSIon The lifecycle of Alpha Consortium provides insight on how external relationships support SMEs in a dynamic and challenging business environment such as the ICT industry. The consortium mainly targets the increase of the participants’ turnover. However, the above section has reported significant learning processes and their effects on partners and network’s performance. Therefore, Alpha looks suitable for validating the role of learning about networking as an enabler of learning by networking and a tool for conflict management. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 77 learning Processes in Alpha consortium The interpretive framework depicted in Figure 1 suggests that learning about networking is a firm-level process resulting from the interaction between (collective) relational capital developed at the network level and (individual) collaborative know-how developed at the firm level. At the start up of Alpha consortium, the local institutions played a crucial role to initialise trust and relational capital. The opportunity to participate in calls for tender for the local PA emphasised the benefits of joining the network, while the administrative support provided by the local SFA and the commitment by the local IT chapter and the best reputed players helped new members to overcome initial distrustfulness and doubts. Technical meetings and social events further reinforced relational capital in the phase of start up. The beginning of operations activated two distinct flows of collaborative know-how, which respectively involved the board of directors and the firms participating in the consortium. Learning by the board of directors concerned operations such as negotiation of new contracts, allocation of won contracts, management of new entries and exits and conflict management. Informal negotiations and knowledge about each participant’s characteristics and attitudes became in time as useful as formal rules in order to avoid competitive or uncooperative behaviours by partners. In time, the board of directors became aware of the limits of the rotation rule, which does not guarantee that the firms entitled to participate in a job order are those whose capabilities best match with the job technical and managerial requirements. The solution adopted to maximise the fit between required and provided capabilities while formally respecting the pre-emption rule consists in involving the consortium members whose competences are critical for success in early negotiations with the PA, as lobbing for winning a contract entitles participation in the contract irrespective of the rotation rule. In this case, a deep knowledge of members’ capabilities and an early understanding of the requirements of calls for tenders are critical for avoiding contrasts among interested firms. The board of directors also learnt how to optimise the allocation of resources by matching the size of the teamwork with job order characteristics, eventually resorting to outsourcing. In the case of consortium members, interaction with partners and outsourcers in the execution of joint orders represented the main source of learning about networking. Firms learnt how to divide, coordinate and control inter-dependent tasks. The members of Alpha also developed capabilities to lobby with the local PA to win new contracts and with the board of directors for affecting the strategic choices of the consortium. Learning about networking in Alpha consortium develops along a virtuous cycle of interaction between collaborative know-how and relational capital. Individual collaborative knowhow transforms into shared routines and beliefs, while relational capital is filtered by individual collaborative know-how to shape unique learning processes at the firm level. The story of the consortium provides several examples of the continuous swing between the individual and the collective dimension of learning. The need for a stronger market-oriented leadership by some firms resulted in a new composition of the board of directors. Progressive learning about the administrative burden of running a consortium made members accept to share the fixed cost of a part-time administrative staff, initially refused by most firms. However, learning about networking has not been homogeneous in the network, as learning paths depend on the frequency of firm’s engagement in consortium activities and in cooperative experiences outside the consortium with other members of Alpha. Different learning paths result in different opinions about the future challenges of the consortium. Despite a growing convergence towards the opportunity of enlarging the scope of the consortium to new business areas, some firms still regard the cost and risk of managing internal growth processes higher than the prospective benefit of a higher turnover. Although partners do not primarily regard Alpha as a source of technical know-how, some mechanisms exist in support of learning Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 78 International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 by networking. Both the technical mailing list and the competence repository represent voluntary channels to exchange technical knowledge across sub-cliques of SMEs with similar interests. However, the main source of knowledge transfer among the members of Alpha consortium is represented by cooperation in the execution of joint job orders. Horizontal collaborations among partners with similar skills to provide the required productive capacity mainly involve processes of knowledge deepening. On the contrary, vertical collaborations among specialised partners to provide clients with end-to-end services develop integrating capabilities. Significant processes of joint creation of new knowledge did not take place yet in Alpha consortium. However, cooperative innovation has been identified as a strategic option to support the growth of the consortium. At the time of our interviews, the entrepreneurs of Alpha were assessing the pros and cons of widening the scope of the consortium to the provision of innovative proprietary software products to private clients. However, several obstacles to this option have been identified, including the non-negligible relation-specific investments required by the new project and the need to develop new managerial skills to operate in a different business environment. the Enabling function of learning About networking The above paragraph has pointed out how processes of learning about networking and learning by networking unfold with the development of Alpha. In most cases, learning about networking plays the role of an antecedent to learning by networking as it provides a common reference framework that supports the transfer and sharing of technical knowledge. First, learning about networking and mutual knowledge are the main drivers of technical projects jointly executed by partners outside the consortium mission. Learning about networking also stimulated the observed mergers, aimed at improving the technical competence of involved partners. Second, only after learning how to work together the members of the consortium are now discussing cooperative innovation. An additional indirect proof of the enabling role of learning about networking is supplied by the client-specific nature of relational capital and collaborative know-how in the observed case-study. Learning about networking developed by the members of Alpha consortium is focused on a unique and quite peculiar client, the local PA. This focus has led to the development of a relational capital supportive of contextspecific collaborative know-how, which may be hardly transferable to other businesses. In case of significant changes of current rules and goals, the conditional nature of trust among the network members risks to constraint the evolutionary path of the consortium. If partners trust each other and the board of directors as far as it concerns contracts with the local PA, less agreement exists about the opportunity of expanding the consortium in new markets and jointly developing and providing new products and services. This finding underlines that consortium members are at least partially aware of the limits due to the client-specific and region-specific nature of their paths of learning about networking. learning About networking and conflict management The analysed consortium is affected by all types of tension identified by Das and Teng (2000), i.e., the contrast between cooperation and competition, the contrast between stability and flexibility, and the contrast between partners pursuing short-term and long-term targets. Learning about networking proved to be an important tool to manage and balance these competing forces. The diversity of participants in terms of size and specialisation represented a potential source of non-cooperative behaviour and competition among associated firms. However, members have been able to moderate the competitive pushes since the very beginning of the alliance. The careful identification of the consortium Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 79 mission has been a crucial tool for smoothing competitive tensions in Alpha. While private clients represent a competitive arena for the members of Alpha, the local PA is only accessed via consortium-mediated cooperation. By segmenting their market, the members of Alpha clearly identified separate fields for competition and cooperation. In addition, competitive and cooperative forces are balanced by the centralisation of decisional power in the hands of the directors. This choice favours the early identification of potential sources of competition among network members. Also the existence of formal rules to govern standard interactions among partners pushes to cooperation and lowers the risk of opportunistic behaviour. The consortium also developed solutions to smooth tensions between rigidity and flexibility. The development of collaborative know-how led to shared formal procedures whose rigidity is smoothed by their simplicity and leanness. In addition, the flexibility of entry and exit mechanisms moderates the rigidity of the consortium mission and informal bargaining by the president and the other directors supports the identification of more acceptable solutions than those allowed for by the strict application of formal rules. During the start up, the consortium faced the opposition between short and long-term orientation of participants. Whilst most participants were attracted by the short-term opportunity of making business with the local PA, the technical focus of the original board of directors attached importance to long-term growth strategies. The dissatisfaction expressed by network members and the election of a more business-oriented board of directors solved the tension between technology-driven longterm targets and business-driven short-term goals in favour of the latter. At the time of our interviews, the consortium was again exposed to the contrast between the exploration of longterm strategies and the exploitation of existing business opportunities. However, thanks to the accumulated experience, the board of directors is aware of the need to adopt an incremental and progressive approach in redefining the targets of the consortium, as an unbalance between long-term strategic goals and short-term business targets may compromise the consortium performance. concluSIon The examined case study provides qualitative insight about learning processes in an ICT business consortium where entrepreneurial SMEs cooperate to gain economies of scale, increase their productive capacity and integrate their technologies to win contracts from the local PA. Alpha consortium shows that learning about networking is an effective enabler of learning by networking. The continuous interaction between relational capital and collaborative know-how, mediated by individual experience, sketches the path along which each partner learns how to cooperate in the network. Mutual knowledge, trust, shared routines and positive past cooperative experience stimulate the members of Alpha consortium to explore new technical solutions within and beyond the borders of the consortium mission. This case study suggests that both sources of tension and balance points depend on the specific learning paths which take place in a network. The capability to deal with conflict management represents an outcome of learning about networking. The effective management of competitive pushes in Alpha consortium follows from the integrative method adopted by the board of directors, who leverage on their deep knowledge of partners’ goals and competences, as well as on intense two-way communication. The rigidity of the consortium mission (participation in calls for tender for the local PA) and the clear definition of the routines to allocate contracts among network members have been sided by the complementary development of informal routines and practices to face unexpected events. The balance between short term goals –current business with the local PA– and long term goals –growth based on innovative products for the private sector– is driven by the awareness that the collaborative know-how Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 80 International Journal of Human Capital and Information Technology Professionals, 2(1), 70-83, January-March 2011 to support new challenges will progressively emerge as partners experience and metabolise new opportunities, needs and interaction modes. Only after seven years of cooperation the members of Alpha have started to debate learning by networking and innovation as explicit goals of the consortium. However, network participants are aware that, due to the contingent nature of their learning about networking, the existing collaborative know-how is not apt to support successful processes of learning by doing focused on innovation. A new business strategy would require a new round of learning about networking, which should cope with the existing routines developed for cooperating in contracts for the local PA. This study has unveiled some of the complex relationships among the building blocks of learning about networking in a consortium of small firms, as well as their links with learning by networking. The success of Alpha consortium demonstrates that SMEs inter-organisational cooperative relationships are a means to overcome technical and dimensional limits. Nevertheless, benefits can be achieved only after firms engage in learning alliance management capabilities. In addition, the case study confirms the key-role played by a supportive institutional environment and the crucial role of the governance body of the network in building up and supporting collective relational capital. The case study remarks that networking can be a solution for small ICT firms to compete against larger companies. Yet, successful cooperation requires IT entrepreneurs and professionals to develop a growing range of non-IT skills. When engaging in cooperative agreements, IT entrepreneurs should be aware that expected benefits depend on the development of specific alliance managerial and soft skills such as the ability to communicate, mediate tensions, and match resources. Those skills are seldom acquired in the education system. They rather develop from learning-by-doing and internalisation of previous cooperative experience. The analysed case study suggests that third-party brokers, such as local trade associations or alliance management specialists, can provide significant support to IT entrepreneurs at their first networking experience, especially at the stat up of a cooperative agreement. In addition, the case of Alpha consortium highlights how learning paths drive the evolution of inter-firm alliances. Joint innovation becomes possible only when partners learn how to cooperate and mutual trust develops in the network. In a similar way, also cooperation in joint job orders requires a significant amount of relational capital and collaborative know how. Consequently, joint innovation and joint exploration of new markets should not be short-term goals of successful networks of small IT firms. More work is still needed in order to deepen and validate our preliminary results. The analysis of Alpha consortium only partially highlights which mechanisms actually encourage learning about networking and learning by networking. An additional area of future research concerns the actors who most contribute to such learning processes. AcKnowlEdgmEnt We thank Hélena Lopez for useful comments on a previous version of this paper. We are also grateful to the president and all the members of the Alpha Consortium. Financial support from FIRB-NEP4B and FIRB-RISC research grants is gratefully acknowledged. rEfErEncES Ahuja, G. (2000). The duality of collaboration: inducements and opportunities in the formation of interfirm linkages. Strategic Management Journal, 21, 317–343. doi:10.1002/(SICI)10970266(200003)21:3<317::AID-SMJ90>3.0.CO;2-B Bapuji, R., & Crossan, M. (2004). From questions to answers: Reviewing organizational learning research. Management Learning, 35(4), 397–417. doi:10.1177/1350507604048270 Bell, G. G. (2005). Clusters, networks, and firm innovativeness. 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Modelling different types of multilateral co-operation between SMEs. Entrepreneurship & Regional Development, 15, 27–47. doi:10.1080/08985620210157646 Yin, R. (1994). Case study research: Design and methods (2nd ed.). Beverly Hills, CA: Sage Publishing. Yoshino, M., & Rangan, S. (1995). Strategic alliances: An entrepreneurial approach to globalization. Boston: Harvard Business School Press. EndnotES 1 2 3 4 5 “There is a growing consensus in the literature that learning can be behavioural and cognitive, exogenous and endogenous, methodical and emergent, incremental or radical, and can occur at various levels in an organization” (Bapuji & Crossan, 2004: 400). In addition, important learning processes have been identified among networked organisations (Knight, 2002). “What can be learned is crucially affected by what is already known” (Powell et al., 1996: 119). Longitudinal case studies allow to carry out process-oriented empirical research by tracing operational links among variables over time (Yin, 1994). The political willingness to leverage on public investment as a trigger to the development of a local market for advanced ICT services is clearly stated by the provincial E-Society Programme launched in 2004. Nevertheless, very high distance in cultural background and technical know-how turns coordination a challenging task (Pittaway et al., 2004). After completing her PhD in 2008, Valentina Morandi is research fellow at DIMI-University of Brescia (Italy). Her research interests focus on strategic alliances, inter-organizational cooperative agreements, R&D cooperation, R&D processes and technology transfer. Francesca Sgobbi completed her PhD in Industrial Engineering in 1997. She is Associate Professor at DIMI-University of Brescia (Italy). Her research interests concern techno-organisational change, competence assessment, and economics of education. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 84 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 facades of Attractive Employer in Indian It Industry: Existing Employee Perspective R. Saraswathy, National Institute of Technology, India N. Thamaraiselvan, National Institute of Technology, India B. Senthilarasu, National Institute of Technology, India M. Sivagnanasundaram, National Institute of Technology, India AbStrAct Despite advances in technology and major shifts in economy, people remain an organizations most valuable resource. Human capital and intellectual assets make a difference to the competitive advantage of the irm in a knowledge based industry. Employer Attractiveness (EA) is the prerequisite to attract and retain superior quality talent. Employer attractiveness can be deined as the envisioned beneits that a potential employee sees in working for a speciic organization. This study empirically examines the elements of employer attractiveness in Information Technology (IT) industry from the perspective of current employees and determines the most attractive employer in the Indian IT industry. Results show that Indian IT employees valued economic factors, global opportunities, development factors, and application factors. Tata Consultancy Services (TCS) was the most attractive employer, followed by Infosys, Wipro, Polaris Software Lab and Hexaware. Keywords: Application Factor, Corporate Social Responsibility, Development Factor, Economic Factor, Employer Attractiveness, Interest Factor, Social Factor IntroductIon Indian Information Technology (IT) and Information Technology Enabled Services (ITES) industry has recorded tremendous growth and is regarded by developing countries the world over as a model for how they can leapfrog stages of industrial development. Being knowledge based industry-the human capital and intellectual assets make a difference to the competitive DOI: 10.4018/jhcitp.2011010105 advantage of the firm. In the quest for manpower companies are cajoling talent around the world. Global expansion in market opportunities in the IT sector, the shortage in manpower in both numbers and skills has resulted in a seller’s market. So human resource teams are pressurized to devise, optimize compensation packages, and provide opportunities for growth, learning and development and to make employee value proposition lucrative. The internal marketing concept argues that the organisation’s personnel are the first market of any company (George & Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 85 Gronroos, 1989; George, 1990); the underlying principle is that jobs are internal products and employees are the internal customers. Job products must not only attract, develop and motivate employees, but also satisfy the needs and wants of internal customers in addition to catering to the overall objectives of the organization (Berry & Parasuraman, 1991). Technological advances and global competition are creating the contest among employers to attract and retain talented workers resulting in widespread change in employment patterns (Osborn-Jones, 2001). Thus, employer branding is likely to assume greater substance in India in the years to come as it is one of the available panacea. It helps build a brand recall and quick identification of the company in the minds of its target audience. For an Employer brand to be successful it is essential to know the factors that contribute to employer attractiveness. It comprises an imperative idea in information intensive contexts where attracting employees with superior skills and knowledge tunes the competitive edge of a company. In India, getting the right people to work has always been a challenge and employer branding and marketing will play the key differentiating factor. Some apt examples would be Accenture, HCL and Indian Army SSC. Accenture had relatively been an obscure brand in India; Accenture with Tiger Woods has been a winning combination portraying Accenture as a great place to work. In the case of HCL, it was lost among the IT biggies of India such as Infosys, TCS and Wipro. Its TV commercials were well crafted to showcase the HCL brand as an employer to the target audience. The article is structured as follows: This paper begins by giving an overview of IT industry in India. The next section presents the literature review; we then introduce and define the concept of employer attractiveness and the methodology used is elaborated. Implications of the approach are then considered, limitations noted and future research direction outlined and closes with a conclusion. overview Information Technology (IT) industry has definitely been one of the primary drivers in shaping India as the one of the emerging economic superpowers. The Indian IT recorded revenues of US$ 60 billion in fiscal 2009-2010, registering a 25% growth. The IT industry has been performing at a staggering rate of growth of about 50 per cent every year and has sustained global competition. The sector can be classified into 4 broad categories - IT Services, Engineering Services, ITES-BPO Services, and E- Business. Along with abundant growth opportunities, IT sector is one of the highest paying sectors. There is a tremendous demand for trained personnel in IT sector. According to the NASSCOM-McKinsey report, by the end of 2010 the Indian IT and BPO services industry would directly employ approximately 2.3 million people, besides providing indirect employment to another 6.5 million workers, According to a National Association of Software and Services Companies (NASSCOM) report, ‘Strategic Review 2009’ direct employment is expected to be about $1.9 million in the Indian IT industry. The IT industry is currently facing a dearth of talent. Engineers are in high demand in the sector as most of the jobs require extensive mathematical skills as well as logical and analytical abilities. However, most technical people lack good soft skills, and verbal and written communication skills. An aspirant in the industry who has a combination of both these sets of skills can find himself or herself in an advantageous position even at entry level. The two most important IT professionals skills mentioned were: business knowledge and user support. (Trigo et al., 2010). Competencies such as capacity for analysis and synthesis, problem solving, creativity and ability to work autonomously are the most valued. The fulfillment of the profession requires prepared personnel with first rate intellectual capacities (GarcíaCrespo et al., 2009). The skills and quality of the workforce needs to be improved as only Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 86 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 25 percent of technical graduates are suitable for employment in the offshore IT industry in India, while only 10 percent to 15 percent of general college graduates are suitable for employment by the BPO industry, according to McKinsey & Co. lItErAturE rEVIEw The War for Talent: is a moniker crafted by Steven Hankin of McKinsey & Company in 1997, and a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, Harvard Business Press. According to a study by McKinsey & Co the most important corporate resource over the next 20 years will be talent: smart, sophisticated people who are technologically literate, globally intelligent, and operationally nimble. Even as the demand for talent goes up, the supply of it will be going down. The old reality was people needed companies; Capital and geography were the competitive advantage. Jobs were scarce, people accepted standard package that was offered to them and they were vey loyal to the jobs . In the new economy, competition is global, capital is abundant, ideas are developed quickly and cheaply, and people are willing to change jobs often. In such an environment, all that matters is talent. “Talent wins”.The new starking reality is companies need people, talented people are scarce and better talent makes a huge differece and talented people serve as the differentaitor.People are mobile, their commitment is short term and they demand much more. For many companies, this means that people are the prime source of competitive advantage. Talented people, in the right kind of culture, have better ideas, execute those ideas better and even develop other people better. In order to keep the pipeline full of talented people, almost all of the companies are resorting to nontraditional approaches to recruiting and are keen on determining what makes an employer attractive. Resource-based view (RBV) suggests that companies should be defined as a unique set of tangible and intangible resources, a portfolio of core competencies and distinct resources and that the characteristics of a firm’s resources can contribute to sustainable competitive advantage (Barney, 1991). The basis for employer branding is the assumption that human capital brings value to the firm and through skilful investment in human capital, firm performance can be enhanced (Priem & Butler, 2001). Internal Marketing (IM) as defined by Kotler ‘is the task of successfully hiring, training and motivating able employees to serve the customer well’.The spirit of internal marketing according to Bergstrom et al. (2002) refers to effective communication of the brand to its employees, reinforcing the relevance and worth to the employees and diligently linking every job in the organisation to delivery of the ‘brand essence’. As employees are the pivot of internal branding it is very important to sell the brand to the employees even prioir to selling it to the consumers. The focus of internal branding is the current employees. Internal advertising (IA) Berry (1981) is the first to recognise the potential impact of advertising on (current) employee., Gilly and Wolfinbarger (1998) note, marketers today are still overlooking an important internal or ‘second audience’ - their own employees for their advertisements. It is vital that companies make every attempt to make sure that this influence is positive. Future employees can be influenced by mainstream advertising (Ewing et al., 2002). Employer Branding (EB) The name ‘employer brand’ was coined by Ambler and Barrow (1996), who defined it as “the package of functional, economic and psychological benefits provided by employment and Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 87 identified with the employing company”. Employer branding can be described as the “sum of a company’s efforts to communicate to existing and prospective staff that it is a desirable place to work” (Lloyd, 2002; Berthon et al., 2005). Thus it has been described as the company’s image as seen through the eyes of its associates and potential hires, closely coupled to the “employment experience” of what is it like to work at a company, including tangibles such as salary and intangibles such as company culture and values” (Ruch, 2002; Martin et al., 2005). It is a targeted, longterm strategy to manage the awareness and perceptions of employees, potential employees, and related stakeholders with regards to a particular firm. There are two perspectives to an employer brand, the external – this is with regard to how the outside world perceives the employer brand and the internal outlook refers to the employee’s perception of the employer brand. It covers all associations that both present and prospective employees have with an organization How attractive a company’s employment experience is to the outside world depends a lot on how attractive a company’s employment experience is to its own employees. It can be a unique differentiator to project the uniqueness of the organization. An employer brand gives information about employment experience and what is expected out of them. Building a brand is a dual process. One is for prospective employees and the other for the current set of employees. While building brand for prospective employees, initiatives are targeted at building repute in potential recruits about the company as a preferred place to work. On the other hand, while building brand internally, the company has to live up to its standards and incorporate a culture of respect and trust for employees. In short, branding helps to make a candidate want to come to work for a company by selling on whom and what they are. Employee Value Proposition (EVP) It is the reason why a talented person would want to join and stay with an organization.EVP is communicated in company actions and behaviours and evoke both emotive and rational benefits for both current and prospective employees. It reflects the image the organization wants to portray to its target audience. It helps to differentiate - create a unique employee value proposition. Organizational Image Tom (1971) defined organizational image as “a loose structure of knowledge, beliefs, and feelings about an organization”. Previous studies prove that an organization’s image significantly influenced the attraction of applicants to an organization. Applicants were more attracted to organizations with a more favorable image (Belt & Paolillo, 1982; Gatewood, Gowan, & Lautenschlager, 1993; Turban & Greening, 1997) and preferred employers whose images corresponded to their own self-images (Tom, 1971). Employer Attractiveness (EA) is defined as the envisioned benefits that a potential employee sees in working for a specific organization (Berthon et al., 2005). The image of an employing organization and discernments formed based on available information relating to the organization influence initial job choice decisions (Gatewood et al., 1993). EA is the degree to which an applicant has interest in pursuing employment opportunities with an organization (Cable & Judge, 1994; Rau & Hyland, 2002; Schwoerer & Rosen, 1989). Employer Attractiveness is interrelated to the concept of ‘employer branding’. This idea has been dealt in the areas of vocational behavior (Soutar & Clarke, 1983), management (Gatewood et al., 1993), applied psychology (Jurgensen, 1978; Collins & Stevens, 2002), communication (Bergstrom et al., 2002) and marketing (Ambler & Barrow, 1996; Gilly & Wolfinbarger, 1998; Ambler, Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 88 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 2000; Ewing et al., 2002). It has also become the in thing in contemporary business press (Sherry, 2000; Lloyd, 2002; Ritson, 2002), and ‘Best Employer’ status is something that companies die to acquire, as attention is drawn to this shroud in both the contemporary electronic and print media. Initial job choice decisions are often related to the image of the employing organization, and these perceptions are based upon the information about the organization which is available to job seekers (Gatewood et al., 1993). Age, values, gender, work experience, education level, job offers extended and organizational effectiveness are some of the factors that have been used as control variables in examining employer attractiveness (Judge & Bretz, 1992). Respondent selects organization that seems to share similar values (Schneider, 1987; Tom, 1971). An applicant’s intent to apply, attend interview and accept job offers is influenced by business performance, relationship with environment and treatment of minorities (Greening & Turban, 2000). EA has been studied in the context of recruiting and also a tool for retention. Various studies have been conducted wherein EA has been discussed as a dependant variable in relation to Corporate Social Responsibility (CSR) (Koys, 2001). A study by Schmidt Albinger & Freeman (2008) indicates that Corporate Social Performance (CSP) is positively related to employer attractiveness for job seekers with high level of job choice. Employer attractiveness can be classified as internal and external employer attractiveness. Internal employer attractiveness is the degree of attractiveness among the company’s current employees (Figure 1). Attractiveness in the eyes of prospective employees is the external employer attractiveness. This branch can be further subdivided into two categories. First, we have external employer attractiveness from the viewpoint of experts with experience in the field. Second, we have external employer attractiveness from the viewpoint of novices, predominantly students. Novices do not posses expert knowledge, but on the other hand, they bring certain other useful characteristics. The construct employer attractiveness may be thought of as an antecedent of the more general concept of employer Figure 1. Components of employer attractiveness Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 89 brand equity. The stronger organizations employer brand equity relatively strong is the perception of attractiveness of the organization held by the potential employees (Berthon et al., 2005). have identified five factors as the components of employer attractiveness from the perspective of potential employees. The five factors are: Interest Value, Social Value, Economic Value, Development Value, and Application Value. Interest value refers to an exciting work environment, novel work practices that makes use of its employee’s creativity to produce high-quality, innovative products and services. Social value talks about a working environment that is fun, happy, provides good collegial relationships and a team atmosphere. An organization’s working environment is the social value. Above-average salary, compensation package, job security and promotional opportunities put together are the economic value. Development value appraises the extent to which an individual is attracted to an employer that provides recognition, self-worth and confidence, combined with a career-enhancing experience and a springboard to future employment. Application value measures the extent to which an individual is attracted to an employer that provides an opportunity for the employee to apply what they have learned. This study seeks to contribute by identifying and operationalising dimensions of employer attractiveness. We have suggested Global opportunities as another interesting factor which enhances the attractiveness of an employer taking into consideration the mindset of Indian IT employees. mEthodology The objective of this study was to measure the importance of different factors that contribute to employer attractiveness of IT firms among existing employees and to adjudge the best employer in the IT sector. Information Technology is the fastest growing sector of India, a sunrise industry. The total addressable market for global off shoring is approximately $300 billion, of which $110 billion will be offshore by 2010, BFSI vertical accounts for the largest share of export at 31%.BFSI sector includes banks, stock markets, hedge and mutual funds, insurance and mortgage companies, stock trading houses and Non-Banking Financial Institutions (NBFCs). The BFSI segment is highly specialized. Expertise in this domain requires years to build. So, it makes considerable sense to acquire a company and greatly reduce time to market. It helps in reducing turnaround time by 2 to 3 years. The Banking, Financial Services and Insurance (BFSI) IT services market in India is expected to grow from $1.6 billion in 2009 to $2.7 billion in 2013, growing at a CAGR of 14.2 per cent, according to Springboard Research. To represent reality we have chosen top 3 IT companies (TCS, Infosys, Wipro) and two mediocre IT companies (Polaris, Hexaware) of Indian origin. Current employees, were chosen as subrogates to find out the most attractive IT employer. Our seven-factor structure is essentially a refinement and extension of the three dimensions proposed by Ambler and Barrow (1996) and 5 factors proposed by Pierre Berthon, Michael Ewing, and Li Lian Hah (2005). Factors 1 (Interest value) and 2 (Social value) capture their ‘psychological benefits’; our Factors 4 (Development value) Factor 5 (Application value) and factor 6 (Global opportunities expand on their ‘functional benefits’; and Factor 3 has an economic dimension. Factor 1,named as ‘Interest value’, gauges the degree to which an individual is attracted to an organization that is interesting in terms of work environment and calls for the use of employee’s ingenuity to produce ground-breaking products and services. Factor 2, named as ‘Social value’, measures the extent to which an individual is attracted to an employer who caters to the fulfillment of the sense of belongingness. Factor 3, named as ‘Economic value’, refers to an organization’s capacity to take of the physiological and security needs by providing a competitive employment package. Factor 4, tagged as ‘Development value’, refers to the fulfillment of higher order needs esteem and self worth need combined Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 90 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 with a career-enhancing experience. Factor 5, named as ‘Application value’, assesses the extent to which an organization provides an opportunity for the employee to apply what they have learned for self and others. Finally we have proposed Factor 6, named as Global Opportunities which purports to measure world class training, right from the initial years as well as an opportunity to work across domains and geographies. Factor 7 Corporate Social Responsibility (CSR) - refers to a company’s voluntary activities “demonstrating the inclusion of social and environmental concerns in business operations and the interaction of stakeholders” (Van Marrewijk & Werre, 2003). The Analytic Hierarchy Process (AHP) is a mathematically scrupulous, proven process for prioritization and decision-making. The AHP was developed at the Wharton School of Business by Thomas Saaty, allows a decision maker to model a complex problem in a hierarchical structure showing the relationships of the goal, objectives (criteria), sub-objectives, and alternatives. By reducing complex decisions to a series of pair-wise comparisons, then synthesizing the results, decision-makers arrive at the best decision with a clear rationale for that decision. Uncertainties and other influencing factors can also be included. It is a method to derive ratio scales from paired comparisons. The input can be obtained from actual measurement or from subjective opinion. AHP allows some small inconsistency in judgment because human is not always consistent. The AHP technique is extensively used in modeling the human judgment process (Lee et al., 1995). AHP is based on three axioms. Reciprocal axiom, necessitates that, if PC(EA,EB) is a paired comparison of elements A and B with respect to their parent, element C, representing how many times more the element A possesses a property than does element B, then PC(EB,EA) = 1/PC(EA,EB). For example, if A is 5 times larger than B, then B is one fifth as large as A. Homogeneity axiom, affirms that the elements being compared should not differ by too much, else there will tend to be larger errors in judgment. When constructing a hierarchy of objectives, one should attempt to arrange elements in a cluster so that they do not differ by more than an order of magnitude. (The AHP verbal scale ranges from 1 to 9, or about an order of magnitude.)The third axiom states that judgments about, or the priorities of, the elements in a hierarchy do not depend on lower level elements. This axiom is required for the principle of hierarchic composition to apply. AHP has three main steps (Saaty 1994) decomposition, comparative judgments, and hierarchic composition or synthesis of priorities. Problem decomposition: A complex problem is decomposed into levels consisting of a few manageable elements; each element is also, in turn, decomposed hierarchically in lower decision levels. The hierarchy model of the decision problem is developed in such a way that the goal is positioned at the top, with criteria in the middle and alternatives at the bottom of the model. Comparative analysis: On each hierarchy structure level the pair wise comparisons should be done by all possible pairs of the elements of this level. The decision maker’s preferences are expressed by verbally described intensities and the corresponding numeric values on 1-3-5-7-9 scale (Table 1) (Saaty, 1980). Synthesis of priorities: On the basis of the pair wise comparisons relative significance (weights) of elements of the hierarchy structure (criteria and alternatives) are calculated, which are eventually synthesized into an overall alternatives priority list. The priority weights of each element will be calculated based on Eigen vector. Saaty (1980) proposed a measure of the inconsistency in judgments’, called the consistency Index (CI), that is given by CI = (λmax-n)/ (n-1) where max λ is the principal eigenvalue of the judgement matrix and n is its order. When the reciprocal comparison matrix is consistent, λmax = n, and the CI is equal to zero; Otherwise, its value is positive. To overcome the CR =CI/RI (n) order dependency of the CI, Saaty also proposed a normalized measure, called the CR, Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 91 Table 1. Saaty’s scale Intensity Definition Explanation 1 Equal importance Two factors contribute equally to the objective 3 Moderate importance of one over another Experience and judgment favor one factor over another 5 Essential or strong importance Experience and judgment strongly Favor one factor over another Very strong importance An factor is strongly favored and its dominance demonstrated in practice Extreme importance The evidence of favoring one factor over another is of the highest possible order of affirmation 7 9 Saaty (1994) proposed a 10% threshold for the CR (thresholds of CR are 5% and 8% for the 3 by 3 and 4 by 4 matrices, respectively). When the CR is greater than 10%, then, in order to improve the consistency, most inconsistency judgments are usually modified to narrow down difference between aij and i/j to obtain a better consistency (Aguarón & Moreno-Jiménez, 2003). However, if the higher CR is because of expert’s extreme but consistent pair wise judgment, then the CR value is acceptable and valid for further quantitative analysis, even if it is greater than 10% (Fordman, 2001). Application of the AhP model Basic rules for modeling and solving the hierarchical problem involved four stages such as Structuring: This phase involved formulating an appropriate hierarchy of the AHP model consisting of the goal, criteria, sub criteria and the decision alternatives; Data collection: This involved forming a team of evaluators who assigned pair wise comparisons to the major criteria and sub criteria used in the AHP hierarchy. Normalized weights in different hierarchies: The pair wise comparison judgment matrices were combined using the geometric mean approach at each hierarchy level to obtain the corresponding consensus pair wise comparison judgment matrices. Synthesis: The final step for this study was to synthesize the solution for judging the most attractive employer. Goal The goal is a statement of the overall objective. In our case, to find out the most attractive employer. objectives What are the factors that are considered in selecting the best employer? Factors contributing to employer Attractiveness (criteria) were determined based on the existing literature (Ewing & Berthon, 2005) Alternatives Here we consider the 5 Indian IT companies in the finance vertical (BFSI, Banking, Financial Services and Insurance.) were taken into consideration. TCS, Infosys, Wipro 3 topmost Indian based IT companies and Polaris Software lab and Hexaware mediocre companies were chosen to represent a slice of Indian IT reality. calculation of the weights of the criteria First the degree of preference between and within the criteria at each level of the hierarchy in a pair wise form using Saaty’s scales ranging Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 92 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 from 1 – equally preferred to 9 – extremely preferred was obtained from 5 experts. Next step involved the weight calculation of each level to obtain the overall score of each employer with respect to the 7 pair wise comparisons of the main selection criteria. Consistency ratio calculation was done (Table 2). Consistency Index (CI) Consistency Index calculation for the factors CI = (7.55716-7)/6 =.09286 CR = .09286/1.32=.0703484 Consistency Index (CI) calculation for the companies CI = (5.3739-5)/ (5-1) CI = 0.093486 CR = 0.0934864/1.12 = 0.08347 If the value of Consistency Ratio is smaller or equal to 10%, the inconsistency is acceptable. If the Consistency Ratio is greater than 10%, we need to revise the subjective judgment. As 0.08347 and .0703484 is less is less than 0 .1 the judgment is consistent (Figure 2). Based on the vector values for factors determining the employer attractiveness (Table 3) the Indian IT employees valued economic factors, global opportunities, development factors and application factors relatively more than interesting job environment, social factors or Corporate Social Responsibility. So in order to be an attractive employer companies need to take care and make sure that they have right mix of economic factors, development factors, application factors and should also provide room for global opportunities to make the employee employable across platforms and geographical boundaries. Based on the vector values in (Table4) we came to know that Tata Consultancy Services (TCS) was the most attractive employer, followed by Infosys, Wipro, Polaris Software Lab and Hexaware. In Table 5 we are taking into consideration the factors enhancing attractiveness in conjunction with the companies. This helps us to judge how each company is faring with respect to the factors. TCS has scored high on economic factors, social factor, application, development and global opportunities factor and CSR. Infosys has an interesting work environment. The TCS brand as an employer embodies the tremendous opportunities. These include world class training, right from the initial years as well as an opportunity to work across technology platforms, domains and geographies. Their reward and recognition program is perceived a unique mix of monetary and nonmonetary rewards. Hence TCS has scored high on most of the factors. To potential hires as well as for existing employees the employee experience is consistent with the psychological contract. Apart from the brand equity, an unchallenged territory for Infosys, some of the other reasons that make it an all-time favorite as an employer of choice are the learning culture in the organization and the kind of exposure that employees get from projects. To facilitate employee growth, Infosys focuses on strengthening domain and technical competencies. ImPlIcAtIonS Organizations that can attract the best minds will have a distinct edge in the marketplace (Harari, 1998). Employer branding is one of the vital tools to attract new employees and retain Table 2. Random Consistency Index (RI) n 1 2 3 4 5 6 7 8 9 10 RI 0 0 0.58 0.9 1.12 1.24 1.32 1.41 1.45 1.49 Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 93 Figure 2. Hierarchy of decision criteria existing staff. This can be done effectively once organizations understand the factors contributing towards employer attractiveness. Only when organizations work towards integrating economic, development, application and global opportunities factors into the employment value proposition they can hope to successfully rope in competent prospective employees in the Indian IT industry. Creating a unique trade name for an employer helps position the company as an employer of choice. It acts as a tool and opportunity to tell apart a company from its competition. It is a vital strategic driver. It furnishes the organization with a competitive lead and acts as an instrument to magnetize, engage, and retain the “right fit.” Top notch human-capital practices produce greater shareholder worth at companies around the world. The present study has identified the dimensions of employer attractiveness like economic, development, application and global opportunities as the components that contribute to employment brand value in the Indian IT scenario. Being an employer of choice provides companies with a competitive advantage in attracting and retaining employees. Employers of choice have distinctive qualities that influence future employees, for instance, in a way that they accept a job offer and current employees to stay. To existing employees working for a best employer signals congruence with the employment deal expectations. A strong employer brand confirms what a powerful means of differentiation an employer branding can be. Employees will choose best company over others and choose to dedicate themselves to the success if that company measures up in their eyes. It can be thus be concluded that a remarkable reputation, perception and image in the job market builds on both the attractiveness in factors that are of fundamental importance to high performers as well as elaborate efforts, which make this attractiveness visible in the job market to potential and existing employees. This study has identified that the remuneration offered is undoubtedly a key factor, but it is not money in itself, but the fact that a higher package means greater respect in the eyes of ones peers that ultimately decides the choice of job that an employee makes. Talent, today, is very mobile. India, once a major exporter of unskilled manpower, has evolved to one that is a source of highly-skilled expertise. Work in any high-tech area requires the very best talent. This implies putting together teams that comprise the best experts, irrespective Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 94 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 Table 3. Priority Vector for the Factors determining employer attractiveness Factors Priority Vectors Economic .360540677 Social .096999731 Interest .032002774 Application .119045579 Development .161984752 Global .181983323 CSR .047443164 Table 4. Most attractive company Company Priority Vector TCS .350234 Infosys .301342 Wipro .230143 Polaris .114621 Hexaware .101123 Table 5: Priority vectors for companies and factors Factors TCS Infosys Wipro Polaris Hexaware Economic 0.402819496 0.360231588 0.134350441 0.067777667 0.034820809 Social 0.302819496 0.30231588 0.134350441 0.167777667 0.134820809 Interest 0.302819496 0.360231588 0.234350441 0.067777667 0.034820809 Application 0.402819496 0.260231588 0.234350441 0.077777667 0.054820809 Development 0.3402819496 0.296023158 0.2434350441 0.1067777667 0.12034561 Global 0.402819496 0.260231588 0.134350441 0.067777667 0.034820809 CSR 0.292819496 0.280231588 0.134350441 0.22776712 0.08124312 of their nationality. Companies do this in different ways; one is by setting up centers in various countries (thus tapping talent wherever it is) and connecting them through communication links and collaborative work platforms, so as to create a seamless “global” team, virtually. Global Opportunities factor identified by this study is very useful for human resource practioner. This factor is one of the main motivating factors which existing employees keenly look forward to. Those who have worked across domains and geographies have an edge over the other employees. They will be more portable, redployable and can easily fit into talent and leadership pipeline. In order to entice top talent it is essential to incorporate global opportunities into the employment experience as this serves as a bridge to enhance remuneration, develop oneself and also help to groom oneself to assume leadership positions. It also serves as an exciting and novel practice. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 95 The shortage of high quality talent can be offset by investing substantially in the learning and development function to ensure that even if the best didn’t join them, the second best did and were adequately trained to deliver up to the required levels. The retention of keyemployees is assured by means of development opportunities. Career development should be considered as a central factor for employee recruitment and retention (Ans De Vos & Annelies Meganck, 2009). The possibility to grow within the company or to switch function is regarded as the major element within the Employer Branding strategy to prevent key employees from leaving. Application factors add flavor to work environment. This factor freshens up the spirit and mind of the employees. For practicing managers this insight is very useful. The factors suggested can be used as tool to improve the morale and engagement level of the employees. This study has thus helped us to focus on the factors which are of importance to existing employees. Being an employer of choice provides companies with a competitive advantage in attracting and retaining employees. Employer of choice have distinctive qualities that influence future employees, for instance, in a way that they accept a job offer and make current employees to stay. To existing employees, working for a best employer signals congruence with the employment deal expectations. It helps employers to stand out in the clutter; thereby employees will choose best company over others and choose to dedicate themselves to the success if that company measures up in their eyes. It can be thus be concluded that a remarkable reputation, perception and image in the job market builds on both the attractiveness in factors that are of fundamental importance to high performers as well as elaborate efforts, which make this attractiveness visible in the job market to potential and existing employees. The study provides a foundation to further identify and refine antecedents and consequences of employer brand equity. SuggEStIonS for futurE rESEArch This study could be extended further by including all IT companies to get a snapshot of the ingredients of the best employer in the Indian IT scenario. Organizations are constantly endeavouring to recruit the best talent from all over the world .Thus; they need to understand the impact of different cultures and nationalities on the perception of employer attractiveness. Likewise impact of advertisement on employer attractiveness could be explored. This study provides a foundation to emphasis the impact of employer attractiveness on employer branding, future studies could try to further identify and refine antecedents and consequences of employer brand equity. An empirical model could be developed to relate employer attractiveness and employer brand equity. Employer attractiveness can be classified as internal and external employer attractiveness. Internal employer attractiveness is the degree of attractiveness among the company’s current employees. Attractiveness in the eyes of prospective employees is the external employer attractiveness. We have studied internal employer attractiveness. To get a holistic view, potential employee perspective of employer attractiveness could also be gauged. The model could be analysed using Structural Equation Modeling. The study could also be carried out in other service industries like travel, hospitality and Information Technology industries. Since this only a snapshot of current state of affairs, this study can be carried out again to check the elements of employer attractiveness of the employee mindset in an ever-changing IT world. concluSIon Attracting knowledge workers is recognised as a critical success factor by organisations. In order to succeed in the war for talent many organisations realise they need to brand themselves as employers of choice. This research established the factors knowledge workers regard as impor- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 96 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 tant. We have attempted to study the elements that constitute employer attractiveness and tried to adjudge the best employer from the perspective of existing employee. Employer attractiveness is a building block of employer brand and this is one of the solutions to tackle the ever present predicament of employable top talent. The coordinated endeavours of practitioners and researchers from the fields of marketing, public relations, human resources and general management will be required to successfully leverage this critical notion. This research gained an understanding of what knowledge workers view as the most important attributes of their best employer. It is therefore hoped that the findings of this research, will both contribute to and stimulate discussion around the ‘employer attractiveness’ and ‘employer of choice’ concepts. rEfErEncES Ambler, T., & Barrow, S. (1996). The employer brand. Journal of Brand Management, 4(3), 185–206. Backhaus, K. B., & Tikoo, S. (2004). Conceptualizing and researching employer branding. Career Development International, 9(5), 501–517. doi:10.1108/13620430410550754 Bergstrom, A., Blumenthal, D., & Crothers, S. 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Marketing Management: Analysis, Planning, Implementation and Control (8th ed.). Upper Saddle River, NJ: Prentice-Hall, Inc. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 97 Lloyd, S. (2002). Branding from the inside out. BRW, 24(10), 64–66. Sherry, A. (2000). Put some branding iron into your image. Business Review Weekly, 22(28), 66. Mahroum, S. (2000). Highly skilled globetrotters: mapping the international migration of human capital. R & D Management, 30(1), 23–31. doi:10.1111/14679310.00154 Sutherland, M. M. (2002). Employer-of-choice branding for knowledge workers. South African Journal of Business Management, 33(4). Osborn-Jones, T. (2001). Managing Talent: Exploring the New Psychological Contract. Henley-OnThames, UK: Henley Management College. Saaty, T. L. (1990). How to make a decision: The Analytic Hierarchy Process. European Journal of Operational Research, 48, 9–26. doi:10.1016/03772217(90)90057-I Trigo, A., Varajao, J., Soto-Acosto, P., Barroso, J., Molina-Castillo, F. J., & Gonzalvez-Gallego, N. (2010). IT Professionals: An Iberian Snapshot. International Journal of Human Capital and Information Technology Professionals, 1(1), 61–75. R. Saraswathy AravindaRajah is a fulltime doctoral research scholar in the Department of Management Studies, NITT. She is a post graduate in management with specialisation in human resource management and marketing. Her management research currently centers on employer branding and talent management strategies in IT industries. She is interested in learning about the human side of Indian Software and ITES Industry. Her work has been presented in national and international conferences. Thamaraiselvan Natarajan has been involved in research, consultancy and training in the area of brand management, marketing metrics, services marketing and strategic marketing. He was awarded doctoral degree and MBA from National Institute of Technology Trichy, India. He has published various empirical papers in journals and awarded best paper (national & international) for his empirical research on brand extension in International Conference on Business and Information 2006 held in Singapore. He is presently working as an associate professor in National Institute of Technology Tiruchirappalli, India. He also serves as Research Supervisor for doctoral candidates in the area of Marketing & Human Resource Management. Senthil Arasu Balasubramanain teaches and writes in the area of Behavioural Finance, Fundamental and Technical Analysis, Indian Capital Market, International Trade Finance and Documentation. His doctoral thesis was in Share Price Behaviour and Market Efficiency in NSE, India - A Spectral Analysis of Random Walk Hypothesis. He is currently involved in research and consultancy in the area of stock market efficiency, investor behavior, and Equity Research and Risk management. He has a doctoral degree from Madurai Kamaraj University Madurai, India. He is presently working as an assistant professor in National Institute of Technology Tiruchirappalli, India and is also guiding doctoral research candidates in the area of finance. Sivagnanasundaram Manickavasagam is currently pursuing his doctoral programme in National Institute of Technology, Tiruchirappalli, India. His graduation was in engineering and post graduation was in management specializing in marketing. He is working in the area of Services marketing. His work has been presented in various international and national conferences. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 98 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 APPEndIx: QuEStIonnAIrE national Institute of technology tamilnadu department of management Studies Employer Attractiveness Survey Research Scholar: R.Saraswathy Research Supervisor: Dr.N.Thamaraiselvan We are conducting a research on employer attractiveness. We wish to know your valuable opinion about employers. All information will be treated in strict confidence and results will be produced in the form of aggregate data only. Thank you very much for your time and stay at your disposal for any further questions you might have. Please let us know which company you feel is more attractive with regard to the listed values and also indicate your degree of preference for that company in comparison with the other. For e.g. If you feel TCS is more attractive than Infosys with regard to economic value then please indicate a number between 1 to 9 on the left side. While if you favor Infosys more than TCS then please indicate your choice from1 to 9 on the right side. Box 1. ↓ TCS 9 – 7 – 5 – 3 – 1 – 3 – 5 – 7 – 9 Infosys Box 2. ↓ Infosys 9 – 7 – 5 – 3 – 1 – 3 – 5 – 7 – 9 TCS Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 99 Box 3. Intensity Definition 1 Equal importance 3 Moderate importance of one over another 5 Essential or strong importance 7 Very strong importance 9 Extreme importance I. Box 4. I. Economic value in a company indicates above-average salary, compensation package, job security and promotional opportunities provided by that organization. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Box 5. II. Social value in a company talks about the organizational climate a working environment that is fun, happy, provides good collegial relationships and a team atmosphere. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 100 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 Box 6. III. Interest value in a company refers to an exciting work environment, novel work practices that makes use of its employee’s creativity to produce high-quality, innovative products and services. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Box 7. IV. Development value in a company appraises the extent to which an individual is attracted to an employer that provides recognition, self-worth and confidence, combined with a career-enhancing experience and a springboard to future employment elsewhere. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 101 Box 8. V. Application value in a company measures the extent to which an individual is attracted to an employer that provides an opportunity for the employee to apply what they have learned. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Box 9. VI. Global opportunities in a company measures world class training, right from the initial years as well as an opportunity to work across domains and geographies. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 102 International Journal of Human Capital and Information Technology Professionals, 2(1), 84-102, January-March 2011 Box 10. VII. Corporate Social Responsibility (CSR) CSR describes a company’s commitment to be accountable to its stakeholders. It refers to actions that appear to further some social good beyond the interest of the firm. 1 TCS 9–7–5–3–1–3–5–7–9 Infosys 2 TCS 9–7–5–3–1–3–5–7–9 Wipro 3 TCS 9–7–5–3–1–3–5–7–9 Polaris 4 TCS 9–7–5–3–1–3–5–7–9 Hexaware 5 Infosys 9–7–5–3–1–3–5–7–9 Wipro 6 Infosys 9–7–5–3–1–3–5–7–9 Polaris 7 Infosys 9–7–5–3–1–3–5–7–9 Hexaware 8 Wipro 9–7–5–3–1–3–5–7–9 Polaris 9 Wipro 9–7–5–3–1–3–5–7–9 Hexaware 10 Polaris 9–7–5–3–1–3–5–7–9 Hexaware Box 11. Please let us know which value you feel is more attractive and also indicate your degree of preference for that value in comparison with the other. 1 Economic 9–7–5–3–1–3–5–7–9 Social 2 Economic 9–7–5–3–1–3–5–7–9 Interest 3 Economic 9–7–5–3–1–3–5–7–9 Application 4 Economic 9–7–5–3–1–3–5–7–9 Development 5 Economic 9–7–5–3–1–3–5–7–9 Global Opportunities 6 Economic 9–7–5–3–1–3–5–7–9 CSR 7 Social 9–7–5–3–1–3–5–7–9 Interest 8 Social 9–7–5–3–1–3–5–7–9 Application 9 Social 9–7–5–3–1–3–5–7–9 Development 10 Social 9–7–5–3–1–3–5–7–9 Global Opportunities 11 Social 9–7–5–3–1–3–5–7–9 CSR 12 Interest 9–7–5–3–1–3–5–7–9 Application 13 Interest 9–7–5–3–1–3–5–7–9 Development 14 Interest 9–7–5–3–1–3–5–7–9 Global Opportunities 15 Interest 9–7–5–3–1–3–5–7–9 CSR 16 Application 9–7–5–3–1–3–5–7–9 Development 17 Application 9–7–5–3–1–3–5–7–9 Global Opportunities 18 Application 9–7–5–3–1–3–5–7–9 CSR 19 Development 9–7–5–3–1–3–5–7–9 Global Opportunities 20 Development 9–7–5–3–1–3–5–7–9 CSR 21 Global opportunities 9–7–5–3–1–3–5–7–9 CSR Thank You Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 103-106, January-March 2011 103 book review: “leadership in the digital Enterprise: Issues and challenges” Fernando Cabezas-Isla, Universidad Carlos III de Madrid, Spain Cristina Casado-Lumbreras, Karakorum Servicios Profesionales, Spain Leadership in the Digital Enterprise: Issues and Challenges by Pak Yoong Business Science Reference ISBN 978-1-60566-959-5 Copyright 2010 341 pp. As stated in the chapter 16 of this book, “using teams of workers dispersed temporally and geographically has changed the way people work in groups and redefined the nature of teamwork. Emergent leadership issues in computer-mediated communication are vital today because of the increasing prevalence of the virtual organization, the flattening of organizational structures, and the corresponding interest in managing virtual groups and teams (Simoff & Sudweeks, 2010, 232). This sole paragraph is capable of justifying the existence of this book. This publication is capable of addressing the majority of the issues present in the previously described scenario due to its much DOI: 10.4018/jhcitp.2011010107 broad variety of contents. Rather than applying a vertical approach, which could confuse an unfamiliar audience, it explores a myriad of concepts and aspects, all related to leadership issues in online business environment. This book consists of a compilation of studies from a panoply of authors structured in four sections. It follows a linear and logical path that covers emergent leadership styles, significant aspects of the concept and strategies to reach an efficient leadership. Thanks this organization, disinterest and disconcert of the readers is avoided throughout the text. Section 1 contains 5 chapters in which a discussion around some leadership approaches in digital and knowledge environments takes place. This section represents the main contribution of the book, as the rest of the sections expand from the stated here. Section 2 comprises 6 chapters that expose diverse relevant aspects of various leadership trends in digital enterprises. Section 3 includes 3 chapters focused on different strategies that may contribute to leaders’ development in the aforementioned domains. The book concludes with Section 4, which gathers complementary research material through three more chapters. A review of each chapter is detailed in the following paragraphs. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 104 International Journal of Human Capital and Information Technology Professionals, 2(1), 103-106, January-March 2011 The first chapter, The Nature of Distributed Leadership and its Development in Online Environments, presents online environments as a perfect vehicle to develop the concept of distributed leadership. It starts with a review of the traditional leadership literature, and from this point, it intelligently progress to the distributed leadership concept in online environments. In this chapter, the author differentiates a number of contributing factors, such as leader types and technologies adopted, for the appropriate development of this kind of leadership. Chapter 2, Shared Leadership Meets Virtual Teams, explores the concept of shared leadership in the virtual team context. The authors identify some key factors and aspects of virtual teams through a review of the existing literature, and point the differences between leadership in virtual and traditional teams. The chapter concludes with certain emerging leadership styles that may affect virtual teams. Leading in a Knowledge Era is the title of chapter 3. The authors introduce the role of knowledge leaders and how it can affect knowledge workers and knowledge management practices. The authors study the importance of these leaders in this context as they review several dimensions of the knowledge leaders that should conduce to successful knowledge management practices. They also suggest that a transformation in the leadership style is required in this area. The drawback of this chapter is its narrative literature base rather than analytic due to the lack of the later one. Chapter 4, Governance and Leadership of Knowledge Management, portrays a review of the knowledge management concept through a case of study of a large European corporation. The authors identify some crucial aspects of the knowledge management governance such as the location in the organization and the level of formalization and the knowledge management leader’s role. A knowledge management governance framework was developed as a part of the study. The last chapter of the section 1 is Managing in the Time of Virtualness. This chapter concludes Section 1 with a review of the man- agement in virtual teams through a study composed of interviews conducted with different individuals involved in virtual team interactions. The authors portray communication, technology used to enable this communication, and the changes identified in this area as critical factors. As a result of the study, the authors extract a series of recommendations intended to reach an effective performance in virtual teams. Knowledge Brokers in Overlapping Online Communities of Practice is the first chapter of section 2. It introduces the concept of knowledge brokers and their role within online communities of practice. The authors carried a research to identify how these communities facilitate the transition of professional knowledge, and their focus on new knowledge. They also underscore the importance of the connector-leader role in the connection of overlapping online communities of practice and the answer to the knowledge requirements in this communities or local organizations. A downside of this chapter is the impossibility to extrapolate the results of this study to other contexts due to the limited scope of the research. Chapter 7, Enhancing Virtual Learning Team Performance, centers its attention on the understanding of effectiveness, learning performance and satisfaction of virtual learning teams. The authors review four critical factors that impact these aspects: leadership effectiveness, team trust, communication frequency and propensity to trust. They conduct a quasi-experiment to empirically test the impact of these four factors. As a result, the authors conclude that trust serves as a mediating role in the relationship between leadership effectiveness and team satisfaction and team performance. The chapter ends with a series of measures suggested by the authors that may contribute to effectiveness, learning performance and satisfaction of virtual learning teams. Chapter 8, Building Collective Awareness in Virtual Teams, revises the concept of leadership in virtual teams and its impact from a behavioral perspective on collective awareness in this context. The authors divide information into task-oriented activities and relationship- Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals, 2(1), 103-106, January-March 2011 105 oriented activities, and identify collective awareness and leadership as key factors in the success of virtual teams. They apply theoretical and empirical work to analyze the contributions made by e-leaders to collective awareness management. The authors state that collective awareness depends heavily on information, thus the focal activity of e-leaders should be information management. Prof. Scupola poses in chapter 9 the results of a study investigating leadership and leadership styles in e-commerce adoption in small and medium size enterprises in Australia. The chapter starts with a review of ICT adoption frameworks in SMEs that facilitate the comprehension of the rest of the study. The authors use the Dunphy and Sace Model of leadership styles and change Management to analyze different levels and degrees of change in leadership styles. As a conclusion, the relevance of top management and CEO e-commerce leadership for e-commerce adoption is underscored. Chapter 10, Patterns of Facilitation in Online Communities of Practice. In this case, the role of the facilitator is introduced and reviewed in online communities of practice. From the content analysis of facilitators’ posts of diverse communities, the authors identify the most common tasks carried by these facilitators. To conclude the chapter, a series of guidelines are extracted from the analysis. Nevertheless, the limited scope of the study prevents a consistent generalization of its results. E-Leadership Styles for Global Virtual Teams is the last chapter in Section 2. This chapter studies the role of leaders-coordinators in global virtual teams. By means of a single case study based on the laddering method, the authors conducted semi-structured interviews with five individuals. As a result, they suggest the suitability of different leadership approaches and a series of points regarding e-leadership value to organizations. The Application of Blended Action Learning to Leadership Development is the first chapter in Section 3 is focused on blended action learning as a vehicle for supporting leadership development. A number of advantages are dis- cussed by the authors, including the combination of online and face-to-face interactions for this purpose. The role of the facilitator in this context is also underscored. The authors carried a study case in pursuit to reinforce some aspects of the existing literature. Five individuals were part of a blended action learning group, and their opinions were gathered through interviews. Chapter 13, Assessment Strategies for Servant Leadership Practice and Training in the Virtual Organization, introduces the concept of servant leadership as a path to lead by serving others. The authors evaluate the servant leadership approach through Laub’s Organizational Leadership Assessment (OLA). The author states the necessity of other methods to evaluate this kind of leadership. Section 3 ends with chapter 14, Online Networks Can Support the Rise of Virtual Leaders. This chapter explores the rise of self-selected leaders in virtual environments by means of an extended actor network theory (ANT). The review of the ANT in this domain is carried through four different stages: problematisation, interressement, enrolment and mobilization. The author explains how these leaders take advantage of the medium, and points trust as a relevant factor in this context. He also marks the pivotal role of technology in this environment. The last section of the book begins with chapter 15, Leadership in Technology Project Management. It poses a review of the different project managers’ leadership styles in the technology projects context. The author starts with the separation of management form leadership, and continues with a recapitulation of the leadership literature, both antique and more recent. He discusses the main leadership traits and the relation between project management and leadership in different contexts. Chapter 16, The Language of Leaders, focuses on the communication patterns characteristic of emergent leaders. The authors analyze through two different case studies if number, length, and content of messages are sufficient criteria to identify these leaders in asynchronous and synchronous environments. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 106 International Journal of Human Capital and Information Technology Professionals, 2(1), 103-106, January-March 2011 Finally Building Trust in Networked Environments, introduces the concept of trust broker by means of evaluating the paradox of trust in distributed work environments. The authors discuss the concept with clarity. Based on a relational approach to trust in groups as well as empirical studies of distributed work groups, they discuss the relevance of trust brokers in the quick establishment of trust and the enhancement of group performance. Overall, the book represents a solid contribution to the existing literature about the topic due to the dearth of research material concerning emergent leadership in these environments. In most of the cases the authors try take advantage of the extensive literature about traditional leadership and transfer the concepts, when possible, to a digital context. Its organization facilitates the audience to follow well explained concepts making it suitable for a wide range of readers. In the publication predominates limited and in some cases very specific samples studies that narrow the book’s appeal to experienced professionals in managerial positions. Nevertheless, it may serve well to researchers seeking to further study any of the topics depicted or any other reader in pursue of an awareness increase of the matter. rEfErEncES Simoff, S. J., & Sudweeks, F. (2010). The Language of Leaders: Identifying Emergent Leaders in Global Virtual Teams . In Yoong, P. (Ed.), Leadership in the Digital Enterprise: Issues and Challenges (p. 341). Hershey, PA: IGI-Global. Fernando Cabezas-Isla is a Research Assistant and a Ph.D. candidate of the Computer Science Department at Universidad Carlos III de Madrid. He holds an MSc in Computer Science from Universidad Carlos III de Madrid. He has been involved in several research projects as Software Engineer and Software Engineering consultant. Cristina Casado-Lumbreras is the Managing Director at Karakorum. She received her PhD in Psychology from the Universidad Autónoma of Madrid (2002). She has been working in several research institutions and Universities since nineties including Universidad Autónoma of Madrid, Universidad Complutense of Madrid and Escuela de Administración de Empresas (EAE). Her research interests include human capital development, staffing and, lately, emotions in organizational contexts. Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. International Journal of Human Capital and Information Technology Professionals An oficial publication of the Information Resources Management Association Mission The mission of the International Journal of Human Capital and Information Technology Professionals (IJHCITP) is to offer an outlook on the state of the IT profession from the perspective of economic value based on labor performance. Providing a forum for the exchange of research ideas and practices, this journal is a reference convergence point for professionals, managers, and researchers in the IT ield. Subscription Information IJHCITP is published quarterly: January-March; April-June; July-September; October-December by IGI Global. Full subscription information may be found at www.igi-global.com/IJHCITP. The journal is available in print and electronic formats. 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