The contribution of human capital in gaining a competitive advantage in an enterprise

There is no doubt in anybody's mind (perhaps with exception of some HR departments?) that people are the most valuable and strategic assets in any organization big or small (Boomer, 2004; McElroy, 2002; Edvinsson Kaplan, 1997; Johnson, 2001). However, unless they can be utilized in such a way that on the one hand their personal potential can be actualized on the other hand their performance in the company to be at a maximum such asset could become a liability, "dry wood" (Baird, 2004; Luthens & Youssef, 2004). According to Pfeffer (Luthans & Youssef, 2004) only half of today's organizations and their managers believe that human resources really do matter and only one eighth are world-class organizations such as General Electric Co. or Microsoft corp. Bill Gates agreed with the statement that "[the] most important asset walks out the door every night" while Carly Fiorina of Hewlett-Packard Co, recently observed: "the most magical and tangible and ultimately the most important ingredient in the transformed landscape is people." Living in a globally integrated, tightly regulated competitive environment, to achieve simultaneously growth in human and maximum performance, it requires strategies very well planned due to the complexity of the human kind, otherwise it could be counter productive. When it became common knowledge that the market value of a company was by more than 80% due to the intellectual capital (the intangibles, while the rest was made by financial capital, the tangibles), a new approach to knowledge management was developed. With Leif Edvinsson (in McElroy, 2002) as the architect of the new assets structure and modifications or additions to that by others (e.g. Bontis & Fitz-enz, 2002; McElroy, 2002) together with information technology created the basis for managers to manage companies in a competitive manner. Having knowledge at the center of this new style of management, the study of literature will show that it is the tacit (or implicit) knowledge (an intangible asset) and not the formal or explicit (the tangible) which create a competitive edge for the organization.