management of entrepreneurship in a knowledge based economy

Transcription

Scientific Editors:
Marek Makowiec, Tomasz Kusio
MANAGEMENT OF
ENTREPRENEURSHIP IN
A KNOWLEDGE BASED
ECONOMY
THE ISSUE OF KNOWLEDGE
AND INTELLECTUAL
CAPITAL MANAGEMENT
MANAGEMENT
OF ENTREPRENEURSHIP IN
A KNOWLEDGE
BASED ECONOMY
AND INTELLECTUAL
CAPITAL MANAGEMENT
CRACOW UNIVERSITY OF ECONOMICS
DEPARTMENT OF ORGANIZATIONAL BEHAVIOUR
MANAGEMENT
OF ENTREPRENEURSHIP IN
A KNOWLEDGE
BASED ECONOMY
AND INTELLECTUAL
CAPITAL MANAGEMENT
Scientific editors:
Cracow 2015
Scientific Editors:
Marek Makowiec, PhD
Tomasz Kusio, PhD
Reviewers:
Professor María Segovia-Vargas
(University of Madrid, Spain),
Professor Teresa Blanco-Hernández
(University of Madrid, Spain)
All papers have been prepared in English by the Authors.
The editors are not responsible for its form and style.
© Copyright by Department of Organizational Behaviour,
Cracow University of Economics, Cracow 2015
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, transmitted or utilized in any form or by any means, electronic, mechanical,
photocopying or otherwise, without permission from the Publisher.
ISBN: 978-83-941580-6-4 (printed version),
ISBN: 978-83-941580-7-1 (PDF, online)
The project has been funded with support from the European Commission, project
Leonardo da Vinci, Number 540455-LLP-1-2013-1-IT-COMENIUS-CMP. This
publication reflects the view only of the authors and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Publishing House:
Department of Organizational Behaviour,
Cracow University of Economics,
ul. Rakowicka 27, 31-510 Kraków, Poland
CONTENTS
INTRODUCTION ..................................................................................
9
Part I
THE DEVELOPMENT AND PRACTICAL USE OF KNOWLEDGE IN
ORGANIZATIONS
Chapter 1 ................................................................................................. 19
Marek Jabłoński
THE KNOWLEDGE AS FACTOR OF THE COMPETITIVENESS OF
ENTERPRISES – RETROSPECTIVE APPROACH
Chapter 2 ................................................................................................. 31
Marek Ćwiklicki, Angelika Wodecka-Hyjek
FACTORS FOR THE DEVELOPMENT OF ENTREPRENEURSHIP IN THE
PUBLIC SECTOR
Chapter 3 ................................................................................................. 45
Sebastian Wacięga
PRACTICAL USE OF KNOWLEDGE ABOUT HISTORY FOR
ENTREPRENEURIAL LEARNING. THE SKETCH OF THE METHOD
Chapter 4 ................................................................................................. 57
Mirosław Borek
KNOWLEDGE MANAGEMENT IN OUTSOURCING
Chapter 5 ................................................................................................. 69
Maciej Jan Malarski
COMPETENCIES REQUIREMENTS FOR SALES PEOPLE AS GUIDELINES
FOR EDUCATION
Chapter 6 ................................................................................................. 81
Grażyna Stańczak
THE CHANGE IN MARKETING TECHNIQUES IN THE ECONOMY OF THE
DIGITAL AGE
PART II
THE ROLE OF INTANGIBLE ASSETS IN ORGANIZATIONAL
TRANSFORMATIONS
Chapter 1 ................................................................................................. 97
Snežana Knežević, Aleksandra Mitrović
THE ACCOUNTING TREATMENT OF INTERNALLY GENERATED
INTANGIBLE ASSETS
Chapter 2 ................................................................................................. 107
Anna Pietruszka-Ortyl
SOCIAL CAPITAL AS COMPARED TO AN ORGANIZATION’S
INTELLECTUAL CAPITAL AND INTANGIBLE RESOURCES
Chapter 3 ................................................................................................. 121
Aldona Wiktorska-Święcka
CREATING OF COMPANY’S SOCIAL INNOVATION POTENTIAL IN THE
CONTEXT OF THE IDEA OF CORPORATE CITIZENSHIP
PART III
INSTRUMENTS SUPPORTING THE DEVELOPMENT, TRANSFER
AND USE OF KNOWLEDGE IN ORGANIZATIONS
Chapter 1 ................................................................................................. 135
Mariusz Makowski
FROM THE ENTREPRENEURIAL TEACHER TO ENTREPRENEURIAL
GRADUATE. CONCLUSIONS FROM PERSPECTIVE PROJECT DEVOTED TO
CREATING NEW CURRICULA FOR TEACHERS
Chapter 2 ................................................................................................. 149
Paweł Łukasik
COMMUNICATION METHODS SUPPORTING ORGANIZATIONAL
LEARNING PROCESS
Chapter 3 ................................................................................................. 159
Andrzej Lis
TEAM LEARNING THROUGH AFTER ACTION REVIEWS
Chapter 4 ................................................................................................. 171
Anna J. Piwowarczyk
CULTURAL INTELLIGENCE OR ENTREPRENEURSHIP IN HIGHER
EDUCATION LANGUAGE COURSES
PART IV
CHANGES AND TRENDS OCCURRING IN HUMAN RESOURCE
MANAGEMENT IN THE FACE OF NEW CHALLENGES
Chapter 1 ................................................................................................. 183
Ana Langović Milicević, Tatjana Cvetkovski, Zlatko Langović
NEW DIRECTIONS IN HUMAN RESOURCE MANAGEMENT
Chapter 2 ................................................................................................. 193
Jolanta Walas-Trębacz
THE APPLICATION OF BALANCED SCORECARD IN THE HUMAN
RESOURCE MANAGEMENT IN THE ENTERPRISE
Chapter 3 ................................................................................................. 209
Piotr Zając
SITUATIONAL LEADERSHIP IN HUMAN CAPITAL MANAGEMENT
INTRODUCTION
Marek Makowiec
PhD, Cracow University of Economics
Tomasz Kusio
PhD, Cracow University of Economics
This publication is a summary of the European project “PERSPECTIVES
– Experiences Entrepreneurial Spirit Challenge in School Education”. The
main objective of this project was the development of European models of
teachers education in primary and secondary schools in order to promote
the development of their skills. Another goal of the project was to develop
a methodology of entrepreneurship education in order to possess the education
tool for improvement of pupils’ knowledge and practice. The project was
implemented by the international consortium, headed by an Italian organization
TUCEP and CUE was one of the partners. The project consortium was formed
of following entities: TUCEP – Tiber Umbria Comett Education Programme
(Italy) – Coordinator, CUE – University of Economics in Krakow (Poland),
UPRC – University of Piraeus Research Center (Greece), RCE – Regional Centre
of Expertise on Learning for Sustainable Development RCE Rhine-Meuse
(Netherland), PRAGMA – Pragma Engineering srl (Italy), STVG – Styrian
Association for Education and Economics (Austria), AEVA – Associação para
a Educação e Valorização dos Recursos Humanos for Distrito de Aveiro, Escola
Profissional de Aveiro (Portugal), JAH – Junior Achievement Magyarország
Oktatási Informatikai Stratégia, Vállalkozásszervezési Alapítvány (Hungary),
TAALUMA – Holistic education for social change (Belgium).
Aspects relating to broadly understood entrepreneurship, knowledge
management and intangible resources in the organization are very important
nowadays and their importance over time will become even greater.
Assuming that entrepreneurship is a specific form of human activity that
triggers in people the strength to overcome various complex and also piled
up around obstacles, problems and resistance, and forces them to engage
in human interaction, the authors of this publication, in order to establish
cooperation necessary when making a particular activity, would like to assist
both those who are considering making the entrepreneurship only option in
their lives, but also those – experienced practitioners, who have to deal with
it every day, leading a particular activity – and are already entrepreneurs.
The publication is also directed towards experts involved in the transfer of
knowledge to others, i.e. scientists, business coaches and teachers shaping the
attitude and personality of young people.
Entrepreneurship becomes nowadays an important factor in the
development of the organization. It can be defined both in terms of setting up
and running businesses, as well as in terms of attitudes and behaviors of specific
individuals.
12
The issue of social innovations is very important when discussing topics
concerning entrepreneurship and innovation for education institutions. New
methods of solving social problems, of which the results can be solutions of
a social nature, refer explicitly to the functioning of educational organizations.
Appropriate educational materials, as well as the orientation of the educational
process, including new teaching methods, constitute an added value to the
current situation of the creation of innovation of a social nature. Thereby
offering and providing knowledge seems to be an important factor in creating
a knowledge-based economy. On the other hand when discussing the results
of the educational process, it is important that in terms of the functioning of
economic organization, knowledge and skills of people who are undergoing
training, are discussed in categories of human capital.
The success of the organization in a competitive market, in terms of
increasing globalization, is the reason of knowledge, skills and experience
of organization employees. Creative thinking and involvement of employees
can undoubtedly positively affect the functioning of the company,
hence the considerable significance in this context has the appropriate
knowledge management. Ability to use the knowledge resources and
efficient management becomes a determinant of competitiveness and
success. Knowledge and the necessity of its generation, dissemination
and management ability are the conditions for success and sustainable
competitive advantage.
Nowadays all economic entities are forced to seek more and better
mechanisms of functioning, guaranteeing them the flexibility, innovativeness,
quick responsiveness and consequently adequate quality. There is a need for
a new recognition of the most important organizational resources which means
people, human capital characterized by competencies, subjectivity, responsibility
and creativity. Success, gained by today organizations, is not based on a carefully
structured process of action, but is largely a derivative of intangible assets being
in the possession of organizations, as well as the ownership of the relevant
product adaptive capacity, promptness in making the right decisions, using
intuition and accepting the risk, at their core there is knowledge, which is part
of intellectual capital.
Earlier, the economy was dominated by the approach relying heavily on
the material resources and thus condensing resources, raw materials, tools,
machinery and equipment, and using only a “little bit” of knowledge. Today,
in terms of the new economy, knowledge-based economy (KBE), the dominant
approach and attitude is to condense knowledge and so appropriate gathering,
sharing and developing it among employees in conjunction with an emphasis
on other intangible resources of the organization.
Intangible resources allow today companies to build a sustainable
competitive advantage, and among them the great importance should be
assigned to the knowledge that allows to provide customers a unique value –
products and services.
INTRODUCTION
The development of computerization has changed the structure of the
strategic resources of the organization. Knowledge-based company focuses
on intellectual capital and creates the majority values from intangible
assets. Knowledge is therefore a critical resource, a strategic one, creating
a competitive advantage and causing differentiation of businesses in the market.
Such companies typically have very few tangible assets, and their intangible
assets are valued generally significantly higher than those materialized. Such
organizations cannot function without a network of different stakeholders
(customers, suppliers) to support and strengthen their knowledge base. What is
the regularity in such entities, is considering knowledge as a strategic resource,
and majority of workers are highly skilled and educated employees whose job is
mainly to exchange possessed data and information into knowledge, using for
that purpose competencies, experience, network of contacts business, etc.
Today, access to the resources of knowledge accumulated over the years
is virtually unlimited thanks to the Internet which has become almost
omnipresent, and the most important issue becomes the ability to correct
selection, proper connection of it in many aspects and efficient incorporation
of it into force. Knowledge thus acquires special importance and becomes one
of the most valuable resources which possession and appropriate usage more
and more often decides and will decide upon the position and importance of the
organization in the industry or sector, both today and in the future.
The aim of the publication is to present the views of different scientific
communities and practitioners of management on issues related to broadly
understood enterprise, knowledge management and human capital in organization.
The first part of the monograph entitled: “The development and practical
application of knowledge in organizations”, include six chapters, where following
topics are discussed:
• The importance of knowledge as an essential factor in the
competitiveness of enterprises with the regard to the retrospective
approach. The various shots of knowledge and its importance in selected
types of organizations were presented. The genesis and importance of
knowledge in modern organizations was also described;
• Factors for development of entrepreneurship in the public sector. The
attempt of identification the factors supporting and limiting social
entrepreneurship was taken;
• Methodical use of historical knowledge for contemporary
entrepreneurship education. On the basis of a practical example the
authors described how to support people at any stage of development in
obtaining historical knowledge concerning regional development which
is at the same time helpful in promoting entrepreneurial attitudes;
• Rank and the importance of knowledge in strategic outsourcing.
The basic issues related to the importance of knowledge transfer and
knowledge management in outsourcing relationships were discussed;
13
• Presentation of the results of research conducted among companies
hiring employees in sales departments. These studies made it possible
to develop applications on identified changes that affect the sales
processes of an organization of modern entities and related competency
requirements necessary for employees engaged in these areas in
organizations;
• Analysis of the factors that have the greatest impact on the optimal
shape of modern marketing, and directly contribute to the reference
in the organization’s success. Description of marketing and solutions
that are currently being used by companies – leaders in their respective
industries.
In the second part of the publication entitled: “The role of intangible assets
in organizational transformations” the following issues were discussed:
• Rank, importance and valuation of intangible assets in the organization.
Despite its immaterial character such resources are often the most
valuable assets in organization. It was presented how the accounting
process of intangible assets within the organization might look;
• Detailed explanation of the definitions: intangible resources, intellectual
capital, intangible assets and an indication of their mutual dependence.
The social capital of an organization was described – its dimensions and
determinants – as part of the intellectual capital of the company;
• The concept of corporate citizenship and issues related to the generation
of social innovation by the company. Forming positive relationships
with the local community, in which the company operates, allows her to
use of valuable and still more desirable resources, which can contribute
to the emergence of social innovations.
14
In the third part of the monograph entitled: “Instruments to support the
development, transfer and application of knowledge in organizations”, the
following topics are described:
• Conclusions from the project “PERSPECTIVE”, dedicated to the
creation of new training programs for teachers. There were presented
the results, conclusions and best practices derived from implemented
international project promoting the ideas of fostering an entrepreneurial
mindset among young people and how to prepare teachers to educate
young people in this area;
• The importance of communication in contemporary organizations.
The results were presented of research on verifying of how and if
communication supports organizational learning thus leading to
generate innovation in organizations;
• Aspects relating to collaborative learning through discussion after
completing the task (After Action Review – AAR). The essence and
assumptions of AAR techniques. An analysis of the process of discussion
INTRODUCTION
after the execution of the task was also presented as well as the attempts
to assess the potential of the AAR in the context of the characteristics of
effective learning in a team;
• Issues concerning the development of entrepreneurial attitudes in
the context of teaching foreign languages in high school. Taking into
consideration issues of intercultural communication the essence
and components of cultural intelligence as an important element of
entrepreneurship was described.
The last, fourth part of the monograph entitled: “Changes and trends
occurring in human resource management in the face of new challenges”
contains studies developing the following topics:
• New trends in human resource management. There were described
aspects concerning, among other things: cultural differences and their
impact on the functioning of international corporations, staff policies,
which unfortunately often do not take into account the cultural
specificities of employees, aging of the population, increasing global
mobility of corporate employees, need of continuous investment in the
human capital which is a source of sustainable competitive advantage;
• Use of Balanced Scorecard in human resource management in
the organization. Balanced Scorecard is a recognized modern
management tool that ensures balance of the measurement elements
of implementation of the strategy in various business areas. One of the
areas of this instrument application is the human resource management.
To be effective, it must be supported by IT systems;
• Situational Leadership in human capital management. Three skills that
a leader should possess are related to situational leadership: flexibility,
diagnosis and partnership. They are essential for managers to be able,
together with their employees, to obtain effects which will result in
organizational success.
The elaboration, in the authors’ opinion, can provide valuable support for
all those seeking information on widely understood organizations management
with particular emphasis on aspects related to entrepreneurship, identification
and then development of knowledge within organizations, increasing
systematically rank/ importance of intangible assets in enterprises and human
resource management in the era of knowledge-based economy (KBE).
The multithreading content discussed in the publication which is directly
connected with interdisciplinary of interests of individuals who are the authors
of individual chapters can be noticed.
We are firmly convinced that the studies included in the monograph will
initiate and stimulate reflection and discussion, and at the same time be an
inspiration to develop the topics, conduct investigations and inquiries and will
contribute to improvement of the functioning of already existing organizations.
15
We also assume that the issues discussed may help in the development of
economic activities of those who are considering such an activity option in the
distal and proximal period of time.
16
PART I
THE DEVELOPMENT AND
PRACTICAL USE OF KNOWLEDGE IN
ORGANIZATIONS
Marek Jabłoński
PhD, Professor, Department of Organizational Behaviour, Cracow
University of Economics
THE KNOWLEDGE AS FACTOR OF THE
COMPETITIVENESS OF ENTERPRISES –
RETROSPECTIVE APPROACH
Keywords:
knowledge, organizational knowledge, levels of organizational knowledge
Summary
The aim of the paper is presenting the knowledge as factor of the
competitiveness of enterprise basing upon retrospective approach. At first
there is produced the review of knowledge definitions on different scientific
fields and origins of knowledge management on management science. Paper
characterizes the knowledge as the primary resource of organization and
specifies organizational knowledge in selected types of organizations, i.e. preTaylorian, Taylorian, Human Relations, Humanized and modern organization.
Final part of the paper is devoted to showing the origins and meaning of
knowledge within modern organization as well as the organizational knowledge
in the broad and narrow sense.
Introduction
The concept of knowledge can be found in the field of different scientific,
i.e. philosophy, psychology, economics. Plato’s interpretation of knowledge
is the basis for defining this concept by Western philosophers1. According to
Plato, knowledge is legitimate and true beliefs associated with the universal
objects2. In this sense, it includes the creation of social effort and mental human
activity ordered by their experiences, communication processes and reasoning3.
Psychologists treat knowledge as a field of cognition based on the senses and
  N.K. Kakabadse, A. Kakabadse, A. Kouzmin, Reviewing the knowledge management literature:
towards a taxonomy, “Journal of Knowledge Management”, Vol. 7, No. 4, 2003.
2
  I. Nonaka, H. Takeuchi, Kreowanie wiedzy w organizacji, Poltex, Warszawa 2000, p. 40-41.
3
  F. Blacker, Knowledge, knowledge work and organizations: an overview and interpretation,
“Organization Studies”, Vol. 15, No. 6, 1995.
1
Marek Jabłoński
the intellect4 according to Psychologists main sources of knowledge are the
processes of thinking and possessed experience. In economics knowledge
is identified as human capital, spending on R&D, technologies determining
growth of economies, i.e. J. Schumpeter’s creative destruction5, models and
theories within endogenous growth theory i.e. learning-by-doing, spillover,
threshold externalities, approach based on the concept of Rostov-growth stages.
However, the conceptualization of knowledge on the basis of management
science was established primarily as a result of the work of P. Romer, particularly
article published in 1986, which is a shorter version of his doctorate dissertation
form 1983. He noted that one of the main sources of technological progress are:
innovation, ideas, concepts, or general knowledge6. It is worth mentioning that
much earlier, many economists have pointed the importance of knowledge as
a factor of production. For example, Alfred Marshall in 1924 indicated that the
role of “nature” in production may be subject to the law of diminishing returns,
while the role of a man is linked to the law of increasing returns. On the other
hand, J. Clark argued that knowledge is the only instrument of production that
is not subject to the law of diminishing returns. Nobel laureate Kenneth Arrow
has proposed dynamic interpretation to explain the increase returns by taking
into account learning by doing (learning-by-doing)7.
Knowledge as the “primary” resource of organization
Knowledge is the information, which is gathered (accumulated) and
systematized in the right way. With such an approach may fade difference
between knowledge and information. Element distinguishing these two
categories is that the transformation of information into knowledge takes
place in the human mind, through the process of judgment concerning the
identification, analysis and interpretation8. Information is a reflection of the
process, activities, while the concept of knowledge reflects the state of the
information available. Thus, the concept of knowledge is wider and deeper than
the notion of information. Knowledge is of dynamic and open nature, while
a closed and static information.
Knowledge is the result of a process of thinking, in which the information
is combined with their understanding of how to use them. In this sense
  J.G. Monks, Operations Management – theory and problems, McGraw-Hill, New York 1982, p.
223.
5
  J. Schumpeter, Teoria rozwoju gospodarczego, PWN, Warszawa 1960.
6
  P. Romer, Increasing returns and long run growth, “Journal of Political Economy”, Vol. 94, No. 5,
1986.
7
  G.M. Meier, J.E. Rauch, Leading issues in economic development, Oxford University Press, New
York-Oxford 2005, p. 79.
8
  M. Martensson, A critical review of knowledge management as a tools, „Journal of Knowledge
Management”, Vol. 4, No 3, 2000; G.M. Steyn, Creating knowledge through management education:
a case study of human resource management, “Education”, Vol. 123, No. 3, 2003.
4
20
THE KNOWLEDGE AS FACTOR OF THE COMPETITIVENESS OF ENTERPRISES – RETROSPECTIVE APPROACH
knowledge represents the human capacity to interpret information by giving
its meaning. New information are not connected to already existing knowledge
resource, but first interpreted and established in particular context. This does
not change the fact that knowledge is the result of observation, experience and
learning process. It is a flexible and dynamic immaterial substance, caused by
a mental processing of information held by the man, and derived from the
environment9.
Knowledge is the basis of all forms of organized activities occurring in
any socio-economic systems. As axiological category is the cornerstone
of ordering things and interactions thus determining the efficiency of each
company. Members of the organization basing on the knowledge adapt
systems and other categories of organizations (ontological, epistemological
and axiological) to gain competitive advantage of enterprise. In this sense,
knowledge is the “original”, and as indicated by A. Koźminski, a fundamental
resource organization (figure 1). This means that knowledge controls the
multiplication processes and configuration of other resources, and also is an
indispensable material of consciously realized projects in the organization10.
It represents factor of production, in addition to land, capital and labor. It
allows to obtain and organize individual organization’s resources and their
spatial coordination to achieve goals. Employee at each station, in addition
to spatial workplace, equipment resources, in the form of fixed assets and
objects of labor, must have adequate knowledge, to combine productive
factors in the process of generating value. As a result, knowledge as a primary
resource is associated with all the “hard” and “soft” resource determining
their configuration setting in the process of generating value. ‘Hard’ resources
of organizations may include: capital (physical and financial); technologies
and know-how; strategies conceived as a long-term action plans clear, both
for employees and for markets; structure conceived as a formal principle
of separation of duties, powers and responsibilities and information within
organization. “Soft” resources include: people with their qualifications,
aspirations, motivations and attitudes; culture, which established patterns
of behaviour, norms and values; knowledge, resources information that is
useful for the functioning of the company; brand, or public perception of the
company and its products; access to the market, which is legally and socially
established contacts with buyers11. resources “hard” are those that are subject
to categorization and counting using of the nominal, ordinal, interval and
quotient scale. “Soft” is such resources, which are not categorized at least one
of the above scale.
  B. Mikuła, A. Pietruszka-Ortyl, A. Potocki, Zarządzanie przedsiębiorstwem XXI wieku – wybrane
koncepcje i metody, Difin, Warszawa 2002, p. 73.
10
  A.K. Koźmiński, Zarządzanie w warunkach niepewności. Podręcznik dla zaawansowanych,
Wydawnictwo Naukowe PWN, Warszawa 2004, p. 96.
11
  Ibidem, p. 93.
9
21
Marek Jabłoński
Figure 1. Knowledge as the “primary” resource of organization
Source: elaborated basing upon: A.K. Koźmiński, Zarządzanie w warunkach niepewności.
Podręcznik dla zaawansowanych, Wydawnictwo Naukowe PWN, Warszawa 2004, p. 96-97.
Organizational knowledge in selected types of organizations
In any organization knowledge is a key factor for competitive advantage.
Its different perception in various types of organizations results from many
factors. However, all can be reduced to two basic. Firstly, in particular types
of organizations developing a competitive advantage was associated with
a different of enterprise resources. Secondly, in the activity of embers of the
organization dominated different types of purposes. These two variables
set out rules for praxeological efficiency to ensure the development
of competitive advantage, i.e. valued knowledge in different types of
organizations (table 1).
In pre-taylorian, taylorian and human relations organizations, operating
in a relatively stable environment, developing a market position was mainly
determined by physical, financial capital resources, technologies and know-how.
These resources which are characterized by quantifiability, concreteness and
strong basis in reality relatively slower subject to change and reconfiguration.
Rules for their use and operation were known, described and codified. As
a result, organizational knowledge associated mainly with technical expertise
(skills in the use of technology)12.
22
  B. Wawrzyniak, Odnawianie przedsiębiorstwa na spotkanie XXI wieku, Poltext, Warszawa 1999,
p. 39.
12
Table 1. Organizational knowledge in different types of organizations
Type of
organization
Analysis
criteria
PreTaylorian,
Taylorian
Human
relations
Nature of the
objectives,
processes, tasks
Routine
Key resources
„Hard” resources
The scope of
knowledge
Distributive set
Type of
knowledge
Technical knowledge
(technology)
Knowledge
representation
Sources of
knowledge
System of
norms and
organizational
principles
External
(knowledge
delivered to
the workplace
and to the
organization)
Routine
and partly
problem
The range of
„framework
instruction”
Humanized
Problem
and partly
innovative
The growing
role of „soft”
resources
Distributive
and fuzzy set
Commercial
knowledge
and associated
with change
management
Selforganization
of employee
actions
Modern
Innovative
„soft” resources
Fuzzy set
Knowledge
related to learning
organization
Employees
innovativeness
External and
partly internal
External and
through the
internal
„Framework
instruction”
Economic
cooperation
netwirks
Executives
Autonomous
and members
task groups,
of informal
quality circles
groups
Members of
organizations
operating in the
network
Knower
Management
Levels of
knowledge
Individual,
Individual,
Individual,
Individual,
group,
group,
organizational organizational
organizational,
organizational
interorganizational
Source: own elaboration.
23
Marek Jabłoński
Within pre-Taylorian organisation knowledge included the ability of the
human factor to organize company’s resources basing upon the division of
labor and specialization. Increasing labor productivity was achieved on the
intensification of human labor. The system elaborated by F. Taylor allowed
the formalization of experience and hidden skills of workers in the objective
principles and organizational rules, which guaranteed “smarter” and not heavier
work in order to achieve higher results13. As a result, knowledge as a key factor
of competitive advantage of Taylorian organizations, might be associated with
system of standards and procedures which formed the basis of organizing
resources. Such an approach to knowledge was also dictated by the dominance
within this type of organization of routine work, which gauges were deviations
from accepted standards.
Human relations organization has enriched knowledge of Taylorian
organization mainly through the use of so-called framework instruction and
the perception of informal groups as productivity factor. In human relations
organization in addition to routine purposes, there were also problem purposes
which gauges were solutions and established deadlines. The fundamental
difference between knowledge of Taylorian and human relations organization
resulted from the freedom of action of workers within the framework
instructions. According to such an approach organizational knowledge might
be interpreted as the ability of the members of the organization for the intended
purposes (implementation of the norms and principles) with a relatively broad
framework instruction at different positions.
Pre-Taylorian, Taylorian, human relations organizations (including
organizational units and positions) were treated as objects isolated from the
environment. As a result, the source of organizational knowledge were outside
the place of its use (specialized institutions within business surroundings,
planning department, chief technologist, functional units responsible for
solving problems). The homogeneous nature of the various functions of the
company, the subordination of the management system and “soft” resources to
“hard” resources of organization and the sphere of regulation caused that the
knowledge of these organizations have “nature” of distributive set14. As a result,
it was possible to distinguish the stock of knowledge corresponding to specific
processes or functions. Set of norms and organizational procedures, appoint
interpretation of information uniquely qualifying them as useful for achieving
the objectives. The subordination of organizational knowledge to “hard”
resources of organization strengthened existing relationships in the structure of
the company, and “closed” the organization to the ambient signals contrary to
the current system of norms and values, thus promoting mechanistic interaction
  Z. Martyniak, Organizatoryka, PWE, Warszawa 1987, p. 18.
  Distributive set is an abstract object covering any quantity capable of being mentally bind
together: A. Łachwa, Rozmyty świat zbiorów, liczb, relacji, faktów, reguł i decyzji, Akademicka
Oficyna Wydawnicza EXIT, Warszawa 2001, p. 11.
13
14
24
between resource. In this sense organizational knowledge related to the “hard”
assets can be linked to the information system of collective entity15. Includes
reflected in the mind of man the relationship between objectively perceived
phenomena and the relations16. Objectification of phenomena occurring in the
environment of the organization was performed by organizational rules and
rules of conduct.
The key factors determining the competitive position of humanized
organization on the market were: operational effectiveness and commercial
efficiency (i.e. the need to use effective marketing strategies). Particularly
important was trading knowledge and knowledge related to change
management17. Therefore there was grow in importance of resources
“soft” organization, in particular: people with their skills, attitudes, values,
organizational culture, brand, access to markets. Despite the increasing role
of human resources in the humanized organization, “soft” resources were still
organized against the imposed technological structure of company.
The interpretation of knowledge of humanized organization was expended
by: systems theory (knowledge in organizational surrounding), mathematical
approach (knowledge within systems optimization) and the formalization
of knowledge teams and employee groups (autonomous task groups, quality
circles). As the result humanized organization knowledge included also:
intuition, the values of employees and subjective rules and principles of work,
especially managerial work (neoclassical school, management by objectives,
exceptions, the theory of the growth of the firm – E.T. Penrose) adapted to the
specific decision-making situation (situational approach). In this sense, the
humanized organization saw knowledge directly related to the human factor
of organization necessary to achieve the target problems. Problem objectives
and tasks became more widespread as a result of increasingly rapid “moral”
obsolescence of stocks of fixed resources of organization and the increasing
competitiveness of markets.
Despite the development of systems theory, sources of humanized
organization knowledge still fall substantially within the organization: R&D
departments, group of employees called to solve specific organizational
problems and develop innovations. An important difference compared with the
previous types of organizations based on the fact that were melted “boundaries”
between stations. On the one hand, integrated workstations were grouping
into autonomous task forces, and quality circles, on the other hand, employees
representatives were included to the boards of companies. These phenomena
are associated with the formation of networks within the organization (around
  W. Flakiewicz, Informacyjne systemy zarządzania – podstawy budowy i funkcjonowania, PWE,
Warszawa 1990, p. 82, 206.
16
  J. Zieleniewski, Organizacja i zarządzanie, PWN, Warszawa 1979, p. 47.
17
  B. Wawrzyniak, Odnawianie przedsiębiorstwa na spotkanie XXI wieku, Poltext, Warszawa 1999,
p. 39-40.
15
25
Marek Jabłoński
processes, tasks, goals), which they were perceived as sources of knowledge and
the development of enterprises. In this sense smoothly functioning networks
within organization can be identified with high levels of organizational
knowledge. Researchers of this trend – simply using the term of knowledge –
analysed knowledge in various aspects of the organization. H. Simon captured
knowledge in terms of bounded rationality in decision-making18. E. Penrose
analysed organizations as a reservoir of knowledge stressing the importance of
accumulation of experience and knowledge in the enterprise19. R. Nelson and
S. Winter also interpreted the company as a reservoir of knowledge, however,
they identified her with cyclical and predictable patterns of behavior and
organizational routines20. P. Drucker proposed the concept of the knowledge
worker and the concept of the knowledge society.
Knowledge of modern organizations
Conceptualization and instrumentalization of knowledge of contemporary
organization was the result of:
• Increase of the role of “soft” resources (off-balance sheet assets) in
developing a competitive advantage of organizations,
• domination of innovative purposes in the set of corporate goals,
• the development of modern management concepts, in particular the
proliferation of institutional and neo-institutional theory of the firm
and a process approach.
Starting in the late 70s of the twentieth century there was we observed
a gradual increase the role of off-balance sheet assets of an organization in
developing a competitive advantage. These assets associated primarily with
the knowledge used in the current functioning of the organization, i.e.: human
resources, hidden assets or intellectual capital. It was emphasized that the
strategy of doing business basing solely on traditional factors of production
does not guarantee sufficient revenue growth for companies. It turned out that
information and knowledge to a greater extent than land, capital and labor
determine the survival of the organization and an increase in revenues in
companies21. As the result, in the second half of 80s of the twentieth century
researchers started to operate the term of organizational knowledge. Referring
  H. Simon, Bounded rationality and organizational learning, “Organizational Science”, Vol. 2, No.
1, 1991.
19
  E.T. Penrose, The theory of the growth of the firm, Basil Blackwell, Oxford 1959.
20
  R.R. Nelson, S.G. Winter, An evolutionary Theory of Economic Change, MA: Belknap Press,
Cambridge 1982.
21
  A. Toffler, Trzecia fala, PIW, Warszawa 1986; N. Bontis, N.C. Dragonetti, K. Jacobsen, G. Roos,
The knowledge toolbox: a review of the tools available to measure and manage intangible resources,
“European Management Journal”, Vol. 17, No. 4, 1999.
18
26
to the Karl Weick sense making theory22 organizational knowledge has been
identified in reality the organization, it became an objective category, separable
from other subsystems of organization and knowledge was included in the area
of interest of enterprise decision makers.
Organizational knowledge of the modern enterprise has been extended due
to the dominance of the innovative objectives, which gauges are not deviations
from accepted standards (routine goals), or solutions and established deadlines
(problematic goals), but productive changes constructed and obtained at
a certain time. Their domination is not associated with the elimination of
routine and problem operations from the sphere of activity of the company.
The knowledge needed to achieve the routine and problematic objectives
is contained in the systems based on ICT, in particular based on the concept
of Business Intelligence. Therefore there is the increasing demand for use of
knowledge for innovative actions in every workplace, so production as well as
administrative positions. As the result, particularly important is the individual
knowledge of every worker.
The development of modern management concepts, process approach and
the proliferation of institutional and neo-institutional theory of the firm resulted
in blurring the boundaries between the organization and the environment.
As a result, plays an important role both organizational knowledge available
to members of the organization and external market players, as well as
knowledge of staff teams and individuals. Modern enterprise organizational
knowledge applies to all members of the organization and structures, systems
and processes, by which all business assets are subordinated to knowledge.
In other words, the existing networks within humanized organization have
been transferred in contemporary organizations to the level of cooperation
between market players. As a result, through networking, modern organization
also implements innovative activities together with other market players, and
the human factor of enterprise is extended to shareholders, stakeholders and
employees of other companies. Today, innovation is more often the result of
R&D activities carried out in cooperation with business partners and the result
of commitment to process innovation all the company’s employees. In summary,
knowledge of contemporary organizations is analysed on four levels, i.e. The
individual knowledge, group knowledge, organizational knowledge and interorganizational knowledge.
Conclusions
Organizational knowledge is created as a result of the integration
of information flows (including codified knowledge of organizational
surroundings) with the reality in which the organization operates, because only
such knowledge to the greatest extent captures the essence and the peculiarities
  M.J. Hatch, Teoria organizacji, Wydawnictwo Naukowe PWN, Warszawa 2002, p. 55-56.
22
27
Marek Jabłoński
of the process of creating value in the company. Consequently, it is marked
by subjectivism. Moreover, it is impossible to give knowledge full objectively
perceived motives and characteristics. In this sense organizational knowledge
does not reflect the true solutions and objectively effective (in the environment
of the organization), but appropriate to the context, where value is generated.
Organizational knowledge resources are increased on four levels, i.e.: individual,
group, organizational and inter-organizational.
Figure 2. Organizational knowledge in the broad and narrow sense
Knowledge of modern organizations can be analysed in a broad and
narrow sense (figure 2). In the first case it relates to a resource (stream) of
information, the rules of interpretation (including the values and experiences)
and context of organization reality and levels of organizational knowledge. In
contrast, organizational knowledge in the narrow sense is associated only with
the processing of information. However, regardless of the scope of its analysis,
organizational knowledge requires a deep understanding of dependencies,
consistency and intangible conditions of the enterprise, hence the special role
and responsibilities of the members of the organization (“soft” resources) in its
development.
Literature:
28
1. Blacker F., Knowledge, knowledge work and organizations: an overview and
interpretation, “Organization Studies”, Vol. 15, No. 6, 1995.
2. Bontis N., Dragonetti N.C., Jacobsen K., Roos G., The knowledge toolbox:
a review of the tools available to measure and manage intangible resources,
“European Management Journal”, Vol. 17, No. 4, 1999.
3. Flakiewicz W., Informacyjne systemy zarządzania – podstawy budowy
i funkcjonowania, PWE, Warszawa 1990.
4. Hatch M.J., Teoria organizacji, Wydawnictwo Naukowe PWN, Warszawa
2002.
5. Kakabadse N.K., Kakabadse A., Kouzmin A., Reviewing the knowledge
management literature: towards a taxonomy, “Journal of Knowledge
Management”, Vol. 7, No. 4, 2003.
6. Koźmiński A.K., Zarządzanie w warunkach niepewności. Podręcznik dla
zaawansowanych, Wydawnictwo Naukowe PWN, Warszawa 2004.
7. Łachwa A., Rozmyty świat zbiorów, liczb, relacji, faktów, reguł i decyzji,
Akademicka Oficyna Wydawnicza EXIT, Warszawa 2001.
8. Martensson M., A critical review of knowledge management as a tools,
„Journal of Knowledge Management”, Vol. 4, No. 3, 2000.
9. Martyniak Z., Organizatoryka, PWE, Warszawa 1987.
10. Meier G.M., Rauch J.E., Leading issues in economic development, Oxford
University Press, New York-Oxford 2005.
11. Mikuła B., Pietruszka-Ortyl A., Potocki A., Zarządzanie przedsiębiorstwem
XXI wieku – wybrane koncepcje i metody, Difin, Warszawa 2002.
12. Monks J.G., Operations Management – theory and problems, McGraw-Hill,
New York 1982.
13. Nelson R.R., Winter S.G., An evolutionary Theory of Economic Change, MA:
Belknap Press, Cambridge 1982.
14. Nonaka I., Takeuchi H., Kreowanie wiedzy w organizacji, Poltex, Warszawa
2000.
15. Penrose E.T., The theory of the growth of the firm, Basil Blackwell, Oxford
1959.
16. Romer P., Increasing returns and long run growth, “Journal of Political
Economy”, Vol. 94, No. 5, 1986.
17. Schumpeter J., Teoria rozwoju gospodarczego, PWN, Warszawa 1960.
18. Simon H., Bounded rationality and organizational learning, “Organizational
Science”, Vol. 2, No. 1, 1991.
19. Steyn G.M., Creating knowledge through management education: a case study
of human resource management, “Education”, Vol. 123, No. 3, 2003.
20. Toffler A., Trzecia fala, PIW, Warszawa 1986.
21. Wawrzyniak B., Odnawianie przedsiębiorstwa na spotkanie XXI wieku,
Poltext, Warszawa 1999.
22. Zieleniewski J., Organizacja i zarządzanie, PWN, Warszawa 1979.
29
Marek Ćwiklicki
PhD, Professor, Department of Management Organization Methods,
Faculty of Management, Cracow University of Economics
Angelika Wodecka-Hyjek
PhD, Assistant Professor, Department of Management Organization
Methods, Faculty of Management, Cracow University of Economics
FACTORS FOR THE DEVELOPMENT OF
ENTREPRENEURSHIP IN THE PUBLIC SECTOR1
Keywords:
factors, entrepreneurship, public sector
Summary
The purpose of this chapter is to identify factors shaping entrepreneurship
in the public sector. The text presents an analysis of the previous condition of
knowledge regarding the topic defined above which results in the classification
of factors, namely reasons causing the development of entrepreneurship, with
an indication of the most important ones as supporting factors (enablers)
and restricting factors (constraints). The structure of the study is subject
to the objective referred to above. First, terminological issues related to
entrepreneurship, with reference to the public sector, are presented. Then, the
results of studies on factors shaping entrepreneurship in the analyzed area are
characterized. As a consequence, the subsequent point presents the results of
studies on factors in the form of their classification.
Introduction
The purpose of this chapter is to identify factors shaping entrepreneurship
in the public sector. The text presents an analysis of the previous condition of
knowledge regarding the topic defined above which results in the classification
of factors, namely reasons causing the development of entrepreneurship, with
an indication of the most important ones as supporting factors (enablers)
and restricting factors (constraints). The structure of the study is subject
  The publication was financed from the resources allocated to the Management Faculty of
Cracow University of Economics, under the grant for the maintenance of the research potential
in 2015.
1
to the objective referred to above. First, terminological issues related to
entrepreneurship, with reference to the public sector, are presented. Then, the
results of studies on factors shaping entrepreneurship in the analyzed area are
characterized. As a consequence, the subsequent point presents the results of
studies on factors in the form of their classification.
Entrepreneurship – terminological issues
Premises for including entrepreneurship in public
management
Entrepreneurship in the public sector appeared as a consequence of
a change in the organizational culture resulting from the implementation of new
principles for the functioning of this sector in the United States of America and
Western Europe at the end of the 20th century2. These principles referred to the
implementation of the idea of New Public Management (NPM), characterized by:
• „Hands-on professional management’ in the public sector.
• Explicit standards and measures of performance.
• Greater emphasis on output control.
• Shift to disaggregation of units in the public sector.
• Shift to greater competition in the public sector.
• Stress on private-sector styles of management practice.
• Stress on greater discipline and parsimony in resource use”3.
NPM may also be described synthetically as the emphasis on rights to
services in relations between the client and the authorities, the recognition of
responsibility towards clients, treating effectiveness and achieving results as the
core principle of action in which innovativeness and professionalism become
the main attributes4.
The general pressure on the rationalization of public expenses resulted
in the interest in the market model of providing public services. D. Osborne
and T. Gaebler emphasized that public authorities are free to choose from
various producers and forms of providing services on the basis of valid tender
procedures5.
  T. Kraśnicka, Przedsiębiorczość sektora publicznego i jej uwarunkowania, [in:] Zarządzanie
publiczne – elementy teorii i praktyki, (ed.) W.A. Frąckiewicz-Wronka, Wydawnictwo Akademii
Ekonomicznej im. Karola Adamieckiego w Katowicach, Katowice 2009, p. 54.
3
  C. Hood., A Public Management for All Seasons?, “Public Administration”, No. 69, 1991, p. 4-5.
4
  P. Zerka, Innowacyjna administracja: oksymoron czy nowy standard?, demosEUROPA Centrum
Strategii Europejskiej, Warszawa 2011, http://www.demosservices.home.pl/www/files/raport_
demos_Innowacyjna_Administracja_PL.pdf, p. 51, [10.05.2015].
5
  D. Osborne, T. Gaebler, Rządzić inaczej: jak duch przedsiębiorczości przenika i przekształca
administrację publiczną, Media Rodzina, Poznań 1994, p. 50, 62.
2
32
FACTORS FOR THE DEVELOPMENT OF ENTREPRENEURSHIP IN THE PUBLIC SECTOR
A separate premise, of a theoretical nature, is the development of
management sciences where the sub-discipline public management is
conventionally separated. One of the assumptions is the possibility to use
principles, methods, etc. coming from the theory and practice of general
management in the public administration6. This also involved attempts to
transfer the experience from the business sector, including entrepreneurship, to
the area of public administration7.
Definitions of public entrepreneurship
Entrepreneurship is characterized by complexity and the statement that it
applies to various types of organizations8. The Polish literature on the subject has
introduced the distinction into economic and non-economic entrepreneurship9.
The latter refers to the public sector.
Entrepreneurship, in general, may be identified as a special type of people’s
activity, acting individually or inside an organization, consisting in the use of
opportunities emerging in the environment, by the implementation of projects
that bring economic and/ or non-economic effects to their entities and to the
environment. In the public sector this means the creation of value for the citizen
(a user of services) through a non-routine combination of resources, being both
the public (social) as well as private responsibility, used in order to detect and
take advantage of opportunities and possibilities for development as well as to
obtain new results (higher value)10.
Internal entrepreneurship (corporate, intra-enterprise) is suggested as the
theoretical basis to understand public entrepreneurship. From this perspective,
this is a process (the activity of individuals or teams) depending on numerous
  A. Frąckiewicz-Wronka, Nowa koncepcja zarządzania sprawami publicznymi: współzarządzanie
rozwojem lokalnym, „Problemy Zarządzania”, No. 3, 2007, p. 39; B. Kożuch, Zarządzanie publiczne.
W teorii i praktyce polskich organizacji, Placet, Warszawa 2004, p. 30; S. Sudoł, B. Kożuch, Rozszerzyć
nauki o zarządzaniu o zarządzanie publiczne jako ich subdyscyplinę, [in:] Osiągnięcia i perspektywy
nauk o zarządzaniu, (eds.) W.S. Lachiewicz, B. Nogalski, Wolters Kluwer, Warszawa 2010, p. 393.
7
  A. Wodecka-Hyjek, The Forms of Enterprising Activities of the Public Sector – Polish Context,
[in:] Knowledge-Economy-Society. Dilemas of the contemporary management, (eds.) W.A. Malina,
T. Rojek, R. Oczkowska, Foundation of the Cracow University of Economics, Cracow 2012, p.
429-443.
8
  S. Sudoł, Przedsiębiorczość – jej pojmowanie, typy i czynniki kształtujące, „Problemy Zarządzania”,
No. 2, 2008, p. 9-13.
9
Ekonomicznej im. Karola Adamieckiego w Katowicach, Katowice 2009, p. 54.
10
  Z. Barczyk, Przedsiębiorczość i samorządność lokalna, Górnośląska Wyższa Szkoła
Przedsiębiorczości im. K. Goduli, Chorzów 2004, p. 81, cit. in: T. Kraśnicka, Przedsiębiorczość
sektora publicznego i jej uwarunkowania, [in:] Zarządzanie publiczne – elementy teorii i praktyki,
(ed.) W.A. Frąckiewicz-Wronka, Wydawnictwo Akademii Ekonomicznej im. Karola Adamieckiego
w Katowicach, Katowice 2009, p. 61.
6
33
factors: individual (subjective), organizational and external (political, economic,
social and educational)11.
One of the first definitions of entrepreneurship is N. Boyet’s terminological
proposition: „Entrepreneurship occurs in the public sector where there is
an uncertain environment, a devolution of power, and at the same time reallocation of resource ownership, to unit management level. It is driven by those
individuals, particularly susceptible to the »manipulation« of their stakeholders
and with a desire for a high level of social »self-satisfaction«, who have the ability
to spot market opportunities and who are able through follower »manipulation«
to act on them”12.
From a broader perspective, the definition of public sector entrepreneurship
with regard to state/ semi-state enterprises was formulated by C. Kearney, R.D.
Hisrich, F. Roche as a „process that exists within the public sector organization
that results in innovative activities such as the development of new and existing
services, technologies, administrative techniques, and new improved strategies,
risk taking and proactivity”13.
More detailed analyses of entrepreneurship make it possible to separate its
main elements, such as:
• Innovativeness – the commitment to the creation of new products,
goods, services as well as the implementation of new business models,
• proactivity – the creation of new businesses for the existing or
new markets, the development of new competences and skill of an
organization or the maintenance of the organization in a condition of
alertness towards opportunities,
• strategic renewal – the reflection of various activities aimed at
stimulating the organization’s activities, building new competitive skills
or changing the strategic sequence in a fundamental manner, essentially
transforming the technological base, systems and processes as well as
challenges towards the previous assumptions about the market and
competition14.
Ekonomicznej im. Karola Adamieckiego w Katowicach, Katowice 2009.
12
  I. Boyett, The public sector entrepreneur – a definition, “International Journal of Public Sector
Management”, No. 9(2), 1996, p. 36-51, http://doi.org/10.1108/09513559610119546, p. 49,
[10.05.2015].
13
  C. Kearney, R.D. Hisrich, F. Roche, Public and private sector entrepreneurship: similarities,
differences or a combination?, “Journal of Small Business and Enterprise Development”, No. 16(1)
2009, p. 26-46, http://doi.org/10.1108/14626000910932863, p. 29, [09.05.2015].
14
  M. Bratnicki, Konfiguracyjne ujęcie przedsiębiorczości organizacyjnej, „Ekonomika i Organizacja
Przedsiębiorstwa”, No. 6, 2008.
11
34
According to another perspective, entrepreneurship may be referred to the
public sector in the following dimensions:
• alertness to profit opportunities – sensing shifts in public preferences,
anticipating common problems, identifying out-of-date practices,
agencies, and other institutions, avoiding undesirable outcomes in the
public interest,
• judgmental decision-making under uncertainty – investment of
public resources to meet political objectives, evaluating the suitability
of various policies for achieving particular outcomes, identifying
gamesmanship nominally in pursuit of public interests but truly in
private interests,
• innovation (introduction of new goods, markets, production methods,
organizational practices) – introduction of new policy proposals,
political positions, or paradigms, Introduction of new procedures
(e.g. the local ballot initiative), changing administrative or electoral
procedures, lobbying and other forms of rent-seeking15.
Factors for the development of entrepreneurship – review of
research results
The analysis of literature on the subject made it possible to select these
studies where the results of research on entrepreneurship and its elements,
mainly innovativeness, are presented.
In the first place, we should note the accountability for taken decisions.
It is understood as the relation between entities accountable and entities
enforcing the accountability in which the latter are assigned rights regarding
sanctions necessary to assess and then punish or reward, on the basis of
standards of conduct accepted by both parties. Public authorities, as is noticed
by R. Behn, are usually held accountable on the basis of formalized standards.
However, informal standards still play an important role in public management
processes16. The standards of cooperation accountability are focused on the
achievement of measurable results of activities by the public sector that are
transparent, effective and satisfactory for clients. Therefore, this set of factors
may be defined as economic and environmental.
Another issue detailed in studies on public entrepreneurship is the widely
understood innovativeness dimension, taking into account, among others, the
capacity to conduct a policy focused on the participation in creating values
  P.G. Klein, J.T. Mahoney, A.M. McGahan, C.N. Pitelis, Toward a theory of public entrepreneurship,
“European Management Review”, No. 7(1), 2010, p. 1-15, http://doi.org/10.1057/emr.2010.1,
[16.05.2015].
16
  R.D. Behn, Rethinking Democratic Accountability, D.C. The Brookings Institution, Washington
2001, p. 3-5, cit. in.: E. Sørensen, Measuring the accountability of collaborative innovation, “The
Innovation Journal: The Public Sector Innovation Journal”, No. 17(1), 2012, p. 3.
15
35
through innovations as well as political decisions from people in power17.
With regard to innovativeness in the public sector, researchers agree that
innovativeness, like entrepreneurship in this area, is determined by a number of
factors with emphasis on the following constraints:
• the accountability of executives of public organizations for made
decisions and the risk of administering public funds,
• the possibility of significant political impacts on decisions,
• the impossibility to overcome rigid principles and procedures,
• the inability to notice long-term benefits18.
M.A. Smith and A.P. Starkey believe that the public sector is burdened
with the risk of relative failure in the implementation of enterprising and
innovative activities due to exposing formal procedures in action that form an
organizational culture opposed to innovations, while the individual attitudes
of employees emphasize the desire to test new ideas which characterize
entrepreneurs in small and medium enterprises of the private sector. The
authors have identified the attributes of organizational culture in public
organizations, substantially determining the development and the tendency to
implement innovations:
• culture of control eliminating risk taking,
• excessive exposing risk leading to avoiding it and abandoning changes,
• unclear accountability for actions,
• the acceptance of the principle which states that it is better not to make
any decisions than to make wrong ones19.
Large institutions of the public sector are averse to risk. Entrepreneurship
and innovativeness are perceived as a problem rather than a potential used for
development. At the same time, researchers notice the need to refer this issue
to the factor of accountability towards a wide group of social stakeholders. In
this respect, it may be assumed that the desire to preserve transparency of the
actions of public officials, which often has a political nature, determines the
aversion to risk related to the accountability for spending public funds.
In other research conducted by I. Miles and R. Røstea the perception of
innovations by the private sector and the public sector from the perspective of
the following factors was compared: principles of organization, organizational
  J. Baruk, Innowacyjność organizacji administracji publicznej funkcjonujących w Unii Europejskiej,
„Przegląd Organizacji”, No. 3, 2013, p. 24.
18
“European Management Review”, No. 7(1), 2010, p. 1-15, http://doi.org/10.1057/emr.2010.1, p. 6,
[10.05.2015].
19
  M. Smith, A. Starkey, The Utilisation of Private Sector Governance Paradigms for the Development
and Implementation of Innovations in the Public Sector, “International Journal of Innovation
Science”, No. 2(3), 2010, p. 103-111, http://doi.org/10.1260/1757-2223.2.3.103, p. 103-106,
[11.05.2015].
17
36
structure, result measurement, management issues, relations with users,
employees, supply chain as well as the time horizon for the implementation of
innovations. The authors noticed that despite clear differences in motivation for
innovative activities, determined by different approach to employees, a diverse
budget or the nature of relations, there also exists a number of factors that are
similar in compared areas. In this matter, they draw attention to the intensity
of changes taking place in the public sector which result in the fact this sector
e.g. starts to perceive citizens as clients of public organizations and these, on the
other hand, begin to compete using the level of providing public services20.
The research on innovativeness of European organizations of public
administration conducted by the Gallup Organization in 2010 in 27 member
states of the European Union as well as Switzerland and Norway concluded that
public organizations in which innovations had recently been implemented saw
managers actively participating in their development and implementation, and
innovative solutions were assessed21.
F. Damanpour and M. Schneider notice that despite institutional barriers
for innovations in the public sector, the individual attitudes of public managers
are significant for the development of innovations because their competences
and individual features foster the creation of a pro-innovation culture22.
Innovativeness in the public sector (like entrepreneurship) is related to
constraints. They include:
• the accountability of executives of public organizations for made
decisions and the risk of administering public funds,
• the possibility of significant political impacts on decisions,
• the impossibility to overcome rigid principles and procedures,
• the inability to notice long-term benefits23.
H.A. De Vries, V.J.J. M. Bekkers, L.G. Tummers, having analyzed factors
determining innovations in the public sector, indicate that most frequent ones
appearing in the literature on the subject include:
• within the group of factors defined as environmental: environmental
pressures (media attention, public pressures, economic challenges,
  I. Miles, R. Røste, Differences between public and private sector innovation, [in:] On the differences
between public and private sector innovation, (eds.) W.T. Halvorsen, J. Hauknes, I. Miles, R.
Røste, NIFU STEP, Oslo 2005, http://unpan1.un.org/intradoc/groups/public/documents/apcity/
unpan046809.pdf, p. 26-29, [15.05.2015].
21
  The Gallup Organization, Innobarometer. Analytical Report. Innovation in Public Administration,
2011.
22
  F. Damanpour, M. Schneider, Characteristics of Innovation and Innovation Adoption in Public
Organizations: Assessing the Role of Managers, “Journal of Public Administration Research and
Theory”, No. 19(3), 2009, p. 495-522, http://doi.org/10.1093/jopart/mun021, [16.05.2015].
23
“European Management Review”, No. 7(1), 2010, p. 1-15, http://doi.org/10.1057/emr.2010.1, p. 6,
[12.05.2015].
20
37
changing technologies, political demands) and participation in
networks and inter-organizational relationships (collaboration with
private partners/involvement of citizens),
• within the group of factors defined as organizational: slack resources
(information, time, money, ICT facilities, talented personel,
communication, professionalism, skills) and leadership styles,
• within the group of individual factors: employee autonomy
(empowerment, voice), organizational position (tenure, mobility) and
job-related knowledge and skills (professionalism/ experience)24.
M. Huczek believes that resources necessary to activate enterprising
processes in the public sector may also be the responsibility of the private
sector or the civic sector. Therefore, the process of public entrepreneurship
often involves the need to cooperate with organizations from other sectors
(private and social)25. W. Townsend suggests that the selection and practice of
cooperation strategies of public sector organizations with other entities is an
equally important factor for the development of innovativeness in the public
sector26. The range of methods for the implementation of various enterprising
activities is wide also in Poland and that is why attention should be paid to
projects of an enterprising nature which include, in particular: the outsourcing
of public services, cooperation with non-governmental organizations, publicprivate partnership, public-social partnership27.
The analysis above should be supplemented with conclusions from the
research on public entrepreneurship in Great Britain. This research indicated
that public entrepreneurs may serve as agents: political, stakeholder and
entrepreneurial28.
  H.A. De Vries, V.J.J.M. Bekkers, L.G. Tummers, Innovations in the Public Sector: A Systematic
Review and Future Research Agenda, IRSPM Conference, Ottawa 2014, http://www.lipse.org/
userfiles/uploads/De%20Vries,%20Bekkers%20en%20Tummers%20Innovations%20in%20
the%20public%20sector.pdf, [12.05.2015].
25
  M. Huczek, Przedsiębiorczość sektora publicznego, „Zeszyty Naukowe Wyższej Szkoły Humanitas
w Sosnowcu”, No. 1, Sosnowiec 2008, p. 22.
26
  W. Townsend, Innovation and the Perception of Risk in the Public Sector, “International Journal
of Organizational Innovation”, No. 5(3), 2013, p. 29.
27
  A. Wodecka-Hyjek, The Forms of Enterprising Activities of the Public Sector – Polish Context,
[in:] Knowledge-Economy-Society. Dilemas of the contemporary management, (eds.) W.A. Malina,
T. Rojek, R. Oczkowska, Foundation of the Cracow University of Economics, Cracow 2012, p.
429-443.
28
  G. Currie, M. Humphreys, D. Ucbasaran, S. Mc’Manus, Entrepreneurial Leadership in the English
Public Sector: Paradox Or Possibility?, “Public Administration”, No. 86(4), 2008, p. 987-1008, http://
doi.org/10.1111/j.1467-9299.2008.00736.x, [10.05.2015].
24
38
Proposal of classification of factors for the development of
entrepreneurship
On the basis of results obtained from the enquiry, we may state that the
factors of entrepreneurship relate to two basic dimensions: accountability and
innovativeness.
In the first case, the factors of entrepreneurship in the public sector include:
• transparency, namely obtaining explicit results of undertaken activities,
• effectiveness of activities,
• potential customer satisfaction,
• means (resources) administered by organizations of the public
administration,
• changes in technological and organizational knowledge of public
administration employees.
On the other hand, the factors for shaping innovativeness, as a significant
element of entrepreneurship, include:
• culture of control that eliminates taking risk,
• excessive exposing risk leading to avoiding it and abandoning changes,
• aversion to risk, the perception of innovativeness and entrepreneurship
as a problem rather than potential for the development,
• political nature of the transparency of actions of public officials,
• unclear accountability for actions,
• acceptance of the principle that it is better not to make any decisions
than to make wrong ones,
• intensity of changes taking place in the public sector,
• change in the perception of citizens as clients of public organizations
and becoming competitive in providing public services,
• attitudes and competences of public managers fostering the creation of
a pro-innovation culture,
• active participation of managers in the development, introduction and
assessments of innovations,
• cooperation of public sector organizations with other entities.
The above lists may be presented in the form of a table taking into account
groups of factors supporting and constraining public entrepreneurship.
39
Table 1. Classification of factors supporting and constraining public
entrepreneurship
Enablers
•
•
•
•
•
•
•
•
•
•
Constraints
the need to change orientation from
bureaucratic to focused on citizens,
the need to care for an increasingly
wider group of stakeholders,
the intensity of changes in the
environment of public organizations,
the potential of resources available to
public organizations,
•
•
•
changes in technological and
organizational knowledge of public
administration employees,
cooperation of public sector
organizations with other entities,
shaping attitudes and building
competences of public managers
fostering the creation of a proinnovation culture,
active participation of managers in
the development, introduction and
assessments of innovations,
potential client satisfaction,
diversity and ambiguity of objectives
treated as the potential for change.
•
•
•
•
•
•
•
•
limited autonomy of management,
aversion to risk,
the perception of innovativeness
and entrepreneurship as a problem
rather than potential for the
development,
excessive exposing risk leading to
avoiding it and abandoning changes,
transparency –obtaining explicit
results of undertaken activities,
effectiveness of actions,
culture of control that eliminates
taking risk,
unclear accountability for
undertaken actions,
political nature of actions by public
officials,
fear of making wrong decisions,
long-term results of implemented
changes.
Conclusions
The essence and evolution of public entrepreneurship clearly shows and
stresses the need to implement guidelines for public management in public
organizations that imply: active support for inter-sectoral and intra-sectoral
cooperation, promotion of competition in providing public services as part
of public tenders, creating conditions for the development of management
forms and not administering the public sector, as well as paying great attention
to achieved results, controlling results on the basis of generated indicators as
well as development of human resources29. The result of the implications is the
  A. Frąckiewicz-Wronka, O potrzebie wprowadzania zasad zarządzania publicznego do
organizacji publicznych, [in:] Wokół polityki społecznej, (eds.) W.K. Głąbicka, M. Brewiński, Polskie
Towarzystwo Polityki Społecznej, Warszawa 2008, p. 11.
29
40
transformation of the public organization management style to a managerial
ones, characterized by the use of a wide range of new methods and techniques
verified in the business sector.
Currently, entrepreneurship in the public sector is a conscious search for
innovative changes, generating new sources of revenue for greater effectiveness
of actions with the active participation of citizens30.
The attempt to identify factors supporting and constraining public
entrepreneurship in this study makes it possible to state that the set of these
factors is diverse both in terms of their origin (individual, organizational,
environmental), importance (small/ great impact) and variability. Variability
is understood as the possibility to change the attribute of the factor’s nature to
constraining or supporting. For example, attitudes and competences of public
managers, depending on their shaping, may either support or constrain the
development of entrepreneurship. This provides an impulse to conduct research
focused on a given organization of the public sector, the result of which will be
the identification of its typical determinants. The text above makes it possible
to initially focus such research in terms of the identification of factors of public
entrepreneurship.
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8. De Vries H.A., Bekkers V.J.J.M., Tummers L.G., Innovations in the
Public Sector: A Systematic Review and Future Research Agenda, IRSPM
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Vries,%20Bekkers%20en%20Tummers%20Innovations%20in%20the%20
public%20sector.pdf, [12.05.2015].
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współzarządzanie rozwojem lokalnym, „Problemy Zarządzania”, No. 3, 2007.
10. Frąckiewicz-Wronka A., O potrzebie wprowadzania zasad zarządzania
publicznego do organizacji publicznych, [in:] Wokół polityki społecznej, (eds.)
W.K. Głąbicka, M. Brewiński, Polskie Towarzystwo Polityki Społecznej,
Warszawa 2008.
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Zarządzanie publiczne – elementy teorii i praktyki, (ed.) W.A. FrąckiewiczWronka, Wydawnictwo Akademii Ekonomicznej im. Karola Adamieckiego
w Katowicach, Katowice 2009.
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unpan1.un.org/intradoc/groups/public/documents/apcity/unpan046809.
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i przekształca administrację publiczną, Media Rodzina, Poznań 1994.
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(eds.) W.S. Lachiewicz, B. Nogalski, Wolters Kluwer, Warszawa 2010.
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„Problemy Zarządzania”, No. 2, 2008.
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“International Journal of Organizational Innovation”, No. 5(3), 2013.
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Sector – Polish Context, [in:] Knowledge-Economy-Society. Dilemas of the
contemporary management, (eds.) W.A. Malina, T. Rojek, R. Oczkowska,
Foundation of the Cracow University of Economics, Cracow 2012.
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Administracja_PL.pdf, [10.05.2015].
43
Sebastian Wacięga
PhD, Consultant and facilitator of the process of strategic planning for
non-profit organizations in Małopolska Institute of Culture in Krakow
(MIK)
PRACTICAL USE OF KNOWLEDGE ABOUT
HISTORY FOR ENTREPRENEURIAL LEARNING.
THE SKETCH OF THE METHOD
Keywords:
entrepreneurship, learning, history, method, tools, game, simulation,
facilitator, teacher, trainer, heritage, knowledge management, competence,
heritage interpretation, history interpretation, key competences, lifelong
learning
Summary
The article presents the sketch of the method of economic education with use
of knowledge about history. History based entrepreneurial learning is a method
for facilitators of learning process that could be described in three steps.
The first step is connected with knowledge about history (know-what
knowledge and know-why knowledge) and means gaining knowledge about
selected historical period or phenomenon.
The second step reveals that this knowledge can be utilized for the purpose
of entrepreneurial learning by interpretation of that knowledge into a story
(know-how knowledge) for participants of the entrepreneurial learning process
(selection of content and aspects to develop, thematisation in accordance
with educational purpose selected by facilitator). In the third step facilitator
of learning process utilizes interpreted knowledge about history as source for
constructing learning tools (know-how knowledge) that are capable to initiate
entrepreneurial learning activities for individuals or groups (questions,
workshops scenarios, games, cooperative projects, etc.).
Introduction
The knowledge management embraces the issue of historic knowledge
as a source for entrepreneurial learning. The knowledge about history can be
utilized as a source of inspirations for teachers and adult trainers providing
entrepreneurship education. It has potential for catalyzing the process of
Sebastian Wacięga
history based entrepreneurial learning. This process is a practice of knowledge
management that transforms and develops knowledge about history into
learning tools and actions inspired by selected and interpreted history.
The preparation of that learning actions could be described in three steps.
The first step, the starting point for educator (facilitator of the learning process)
is gaining objective knowledge about selected period or phenomenon in
history. In the second step the knowledge needs to be interpreted – themathised
and described in language available for participants of the entrepreneurial
learning process. The third step of the preparing the process of history based
entrepreneurial learning is selecting or constructing learning tools for individuals
or groups (questions, workshops scenarios, cooperative projects, games, etc.).
These steps will be illustrated by the example of educational initiative conducted
in Poland by the Malopolska Institute of Culture from 2007 called “Chłopska
Szkoła Biznesu” (Peasant Business School) which became the national winner
in the contest of European Commission called European Enterprise Promotion
Awards 2014 in the category of “Promoting the entrepreneurial spirit”.
Step number one – history as a source of economic education
History according to Bill Nasson is “the study of the past in order to
understand the meaning and dynamics of the relationship between cause and
effect in the overall development of human societies. (…) The claim of history
is (…) to interpret, to handle a rich variety of sources in order to draw out their
general relevance or to reveal their general significance for human understanding
of why and how change occurs”. That means that it involves critical thinking
ability which is also needed to understand interrelations and influences in
contemporary society and economy. History has not only autotelic value but
also has utilitarian dimension. The knowledge about history “equips” learner
with the ability of critical thinking. “The usefulness of history, therefore, is not
only that it constantly offers new ways of viewing and understanding the grip of
the past: it is also a means of generating the confidence about, and absorption
of, critical knowledge, to produce a changing consciousness”1. History allows
to analyze interrelations between facts, figures, persons and recognizes causal
relations between the reasons and results. It also engages the creativity to think
about different possible scenarios of the actions. The history can be perceived
as a system of thinking with “interpretative nature” which collects, orders and
analyzes data as evidence of the passed facts and “create historical narratives”2.
  B. Nasson, History. The meaning and the role of history in human development, [in:] Encyclopedia
of Life Support Systems (EOLSS), UNESCO-EOLSS, Paris 2001, www.eolss.net/sample-chapters/
c04/e6-22-00-00.pdf, [21.06.2015].
2
  Introduction to Standards in Historical Thinking, University of California-Los Angeles. National
Center for History in the Schools, http://www.nchs.ucla.edu/history-standards/historicalthinking-standards, [28.06.2015].
1
46
PRACTICAL USE OF KNOWLEDGE ABOUT HISTORY FOR ENTREPRENEURIAL LEARNING. THE SKETCH OF THE METHOD
Especially, the historical analysis and interpretation of the history3:
• develops the skills of analyze cause-and-effect relationships which
embraces “multiple causation including:
−− the importance of the individual in history;
−− the influence of ideas, human interests, and beliefs; and
−− the role of chance, the accidental and the irrational”,
• develops the attitude that allow to “hold interpretations of history as
tentative, subject to changes as new information is uncovered, new
voices heard, and new interpretations broached”.
The analytical aspect of history is not only one that makes it helpful in
facilitating entrepreneurial learning process. The second aspect is narrative aspect
of history which involves analytical skills as well as creativity and attitude of
openness to different possibilities. This open-mindedness for different options is
close to entrepreneurial sensitivity for opportunities which are points of reference
for thinking and acting according to J.A. Timmons definition of entrepreneurship4.
The additional value that makes the history attractive and convenient source
of inspirations for economic education is its narrative potential. In brief: history
is a story. It means that:
• it can be constructed as a story in accordance with classical Aristotle’s
principles – with its aim and plot, composed episodes and characters,
• a teller of the story (facilitator of entrepreneurial learning process) can
select the figures and aspects of the history that would be presented,
• a story itself triggers imagination, empathy and curiosity.
This last feature of history reveals the connection between the past and the
contemporaneity:
• it allows to see the present as a consequence of the past events and
actions,
• it allows to reflect upon the present with the use of the knowledge about
the past as an inspiration for better understanding of contemporary
phenomena.
Step two – interpretation of the history for the purposes of
entrepreneurial learning
The history based on entrepreneurial learning process uses triple: analytical,
narrative and creative potential of history. These three aspects make the
historical knowledge a particularly attractive source of teaching economics. The
  Historical Analysis and Interpretation, University of California-Los Angeles. National Center
for History in the Schools, http://www.nchs.ucla.edu/history-standards/historical-thinkingstandards/3.-historical-analysis-and-interpretation, [28.06.2015].
4
  A. Kurczewska, Przedsiębiorczość, PWE, Warszawa 2013, p. 87.
3
47
Sebastian Wacięga
problem of interpretation is connected with fundamental choice of facilitator:
what or which aspects should be selected from history to illustrate or to reflect
upon. For example in order to explain the phenomenon of speculative bulbs
excellent exemplary would be Dutch Tulip Bulb Market Bubble – historical
case of “tulip madness” (Dutch. Tulpenwoede) in XVII century when people in
Holland began to perceive tulip bulbs as the best investment location. During
several months of 1637 the price of some tulip skyrocketed about 20 times.
The prices of some of bulbs were comparable to the values of luxury houses in
Amsterdam like famous “Semper Augustus”, which cost merely 1.000 guilders in
1620’s and 5.500 guilders per bulb in 1637 just before the market collapse. Many
of people sold their houses or land to acquire rare tulip bulbs which became
not only investment but also signs of social status. The story of Tulpenwoede
finished with catastrophic fall of the prices and stores overloaded with goods
whose prices become equal to onion bulbs. Many investors were hit by the wave
of bankruptcies which were not held back by “the state honor contracts at 10%
of the face value”5.
This history could be used to reflect upon the speculation crisis, its
mechanisms, reasons and possible consequences. The history of Tulpenwoede
can be thematised with a stress on different aspects, for example:
• the changes in supply and demand during speculation crises,
• the psychology of the speculation market (were the investors rational or
irrational?),
• the role of a state in the free market – possibilities, tools and conditions
of a possible intervention of the state and its consequences.
The choice of perspective and historical details to develop and expose for
the facilitating learning process are related to the educational purpose of the
facilitator (school teacher or adult trainer). After selection of the content, next
important step is the chosen way of interpreting the knowledge. According to
Freeman Tilden, pioneer of interpretation, interpreting heritage is telling the
story. It is an art of choosing the topic, developing it and presenting it to the
receiver. It makes the data “alive”, sharing the knowledge, but first of all catching
the interest of audience and giving them inspirations and personal involvement
into the story. One of the principles of successful interpretation is “provoking”
– inspiring to self-reliant critical thinking and its opposite: to “instructing”
(teaching or transmitting the information)6.
  A. Beattie, Market Crashes: The Tulip and Bulb Craze, [in:] Investopedia, www.investopedia.com/
features/crashes/crashes2.asp, [21.06.2015].
6
  F. Tilden, Interpreting Our Heritage, The University of North Carolina 2008.
5
48
Step three – the creation of tools for entrepreneurial
learning process
Teaching entrepreneurship means developing entrepreneurial competence of
the learner. That is why tools of the history-based entrepreneurial learning should
correspond with the concept of competence-based learning (embracing the
component of knowledge, skills and attitude). The common feature of possible
methods and tools of the history-based entrepreneurial learning is that the
content they use stems from history which became interpreted for the purposes of
learning process. There are many possible tools that meet this condition:
• Tools used in “approaches of competence driven heritage education”
like storyline approach, action learning, problem-based learning, cooperative learning and guided discovery7;
• Case studies analysis with “actualization questions” (for example: where
can you see similar behaviors of investors like during “tulip madness” in
XVII century?, how can you avoid the loss in your investment nowadays?);
• Workshops with role-playing (getting into shoes of a historical figure and
making decisions in this role; exemplary task: if you had been Amsterdam
inhabitant in XVII century how would you have located your money?);
• Simulation games for individuals and groups.
Figure 1. History based entrepreneurial learning in three steps – tentative
model
Among many systems of knowledge categorization there is one which
divides knowledge into four categories8:
• know-what – knowledge about “facts” that are very close t information,
  Acquiring Key Kompetences through Heritage Education, (eds.) J.V. Lakerveld, I. Gusen, A. Biesen
2011, http://the-aqueduct.eu/download/Aqueduct-Manual_EN.pdf, [21.06.2015].
8
  Zarządzanie wiedzą w społeczeństwie uczącym się, Centre For Educational Research and
Innovation, OECD, Warszawa 2000, p. 13-14.
7
49
Sebastian Wacięga
• know-why, refers to the recognition of laws, principles of nature and
causal relations,
• know-how, refers to ability, capacity of making something,
• know-who – knowledge about who disposes of indispensable knowledge.
In the sketched model the knowledge management proceeds from the
know-what and know-why knowledge (knowledge about historical facts and
causal relations between them) to the know-how knowledge (the knowledge
how to interpret, how to apply it into the entrepreneurial learning process).
The source of that knowledge (know-who) lies in works of historians and can
be used (interpreted) by know-how operators – facilitators of history based on
entrepreneurial learning.
The “peasant business school” (2007–2014) – history based
entrepreneurial learning
What is “Peasant Business School” (Chłopska Szkoła Biznesu)?
Educational initiative composed of projects linking historical and
economic education that was initiated in 2007 by the Malopolska Institute
of Culture (MIK) in Kraków in cooperation with the local Friends of
Andrychów Society (Towarzystwo Miłośników Andrychowa). In the years
2007–2014 ca. 30.000 participants took part in the projects financed by
the Polish History Museum, National Bank of Poland and the Municipality
of Andrychów, among them school teachers and pupils and about 100
institutional partners (state and regional centries for teachers development,
labor market institutions, cultural institution and nongovernmental
organizations). In 2014 the Peasant Business School became the national
winner in the European Commission contest European Enterprise
Promotion Awards 2014 in the category of “Promoting the entrepreneurial
spirit”, as well as award of the Minister of Economy of the Republic of Poland
in 20149.
First step – gaining knowledge about local history
The first challenge in 2007 was collecting of data about the local history
of Andrychów for the purpose of preparation of a new educational offer
in the form of an attractive event in local museum (Izba Regionalna Ziemi
Andrychowskiej)10. The source of knowledge were historians’ books, local
  The Peasant Business School Recommendations, http://pbs.mik.krakow.pl/recommendations/,
[28.06.2015].
10
  Izba Regionalna Ziemi Andrychowskiej, http://tma-andrychow.blogspot.com/p/izbaregionalna.html, [28.06.2015].
9
50
documents, museum collection and the knowledge of the museum’s staff. The
following questions were the key to this inquiry:
• which period of the history of the town was the most attractive and
inspiring for the purpose of learning process (and chosen tool of that
process: workshops for school groups in the local museum)?
• which topics taken from the local history would be told to the visitors
and participants of the workshops?
• which characters and important episodes from the history should be used?
The synthetic answer based on the collected materials was that the most
inspiring history for the event and educational activities would be the story of the
bloom of entrepreneurship in the poor village of Andrychów and its neighboring
villages (Roczyny, Inwałd, Sułkowice, Targanice, Wieprz, and Zagórnik) in the
18th century. Their success was based on producing and exporting flax linens
which were sold by specialized traders called Itinerant Drapers (Drelicharze).
The entrepreneurial villagers set up trade partnerships and exported 80% of their
production abroad, to distant cities like Barcelona, Hamburg, Marseilles, Istanbul
and Moscow. After several decades of economic growth Andrychów received
town privileges from the Polish king Stanisław August Poniatowski in 176711.
Figure 2. Male and female itinerary drapers from Andrychow painted by
Kajetan W. Kielisiński
Source: archive of the Society of Andrychow Enthusiasts: A. Błachowski, Ubiór i krajobraz kulturowy
Polski i Ukrainy Zachodniej w ikonografii J. Głogowskiego i K.W. Kielisińskiego, Toruń 2011.
  A. Zwoliński, Miasto Ankwiczów. Z dziejów Andrychowa, Aneks nr 1 Królewski przywilej
lokacyjny, Kraków 1993, p. 164.
11
51
Sebastian Wacięga
The analysis based on historical literature revealed how this growth was
possible and what caused the economic fall in the 19th century.
Second step – interpretation of the local socio-economic
history
The interpretation of the history was focused on the local entrepreneurs who
participated in production or trading processes in the period of a flourishing
linen trade. The story embraced details about linen production and knowledge
about organization and management of local village industry before the
Industrial Revolution. The story was presented in the form of thematic paths
in the local museum: “Peasant Business School” that explained the source of
success and fall of local economy between XVIII and XIX century. Second path
was called “The strength in cluster. What did the cooperation of craftsmen look
like in Andrychów?”12. The interpretation of that history embraced also the
suggestions what are the common sources of the successful entrepreneurship
in presented history and nowadays (unique idea, freedom, know-how, quality,
cooperation, investment, trust – social capital)13.
Third step – constructing of learning tools
Peasant Business School – workshops for schools in museum (2007–
2009)
The first tool constructed on the need of learning process were workshops
for school groups which linked historical and economic education. The pupils
got familiar with the story of business success of XVIII-century entrepreneurs
from Andrychów. Their purpose during workshop was to construct business
plan of a ancient weavers and tradesmen. The pupils received only part
of needed knowledge about business organization and were supposed to
construct their own simple business plans. The stuff of the museum (Maria
Pytel-Skrzypiec, Maria Przybyłowicz) in cooperation with MIK trainers (Piotr
Idziak, Sebastian Wacięga) in project called “Muzeobranie” (2007–2009) acted
as facilitators helping to implement business thinking inspired by local history.
The workshops, which were experimental at first, became a constant element of
the educational activities in local museum.
  Strength in unity. What did the cooperation of craftsmen look like in Andrychow, http://csb.mik.
krakow.pl/files/tablice-w-gronie-2013.pdf, [28.06.2015].
13
  Peasant Business School. Andrychów, or to understand the contemporary, http://pbs.mik.krakow.
pl/files/Peasant_Business_School_ANG_A4.pdf, [25.06.2014].
12
52
Peasant Business School – activities with historical-economic game
(2010–2014)
On the basis of experiences gained in the Andrychow museum the trainers
from Małopolska Institute of Culture designed the game – a simple simulation
of the free market operation, inspired by the history of XVIII-century
entrepreneurship14. Players take on the roles of bakers, blacksmiths or weavers who
trade with each other at local fairs and organize expeditions to cities of Europe.
During 45 minutes of play, the participants develop trade skills and learn how to
plan and cooperate in business. The game has been also used as a tool for group
integration or for simulation to demonstrate in practice the economic phenomena:
• microeconomic (operations of a company, revenue, cost, profit, risk),
• macroeconomic (supply, demand, inflation, monopoly, duopoly).
All these elements are introduced in practice – the players learn in action and
after the game they can reflect upon the changing market conditions and their
decisions made during the game. The board game designed for groups of 12–30
people is conducted by a moderator (school teacher, museum educator, adult
trainer, coach). This person can facilitate the process of entrepreneurial learning
– aid to recognize and understand market phenomena15. The rules of the game
are flexible and a facilitator can modify them depending on the educational
purpose (for example to evoke inflation on the market). The players act as
independent entrepreneurs or as two-member partnerships (microeconomic
dimension) in real time (the player acts simultaneously – there are no rounds in
the game), and the sum of their decisions affects the macroeconomic situation
in the market, for example the prices of bread, wagons and linen. The game was
used at least in three ways:
• as an entrepreneurial learning tool for lessons for teenagers or workshops
for adults (educators, career advisors, history and entrepreneurship
teachers),
• as a learning tool during interschool tournaments which involved thousands
of pupils and hundreds of teachers in several regions of Poland who took
part in competitions (Andrychów, Ropczyce, Goleniów, Toruń)16,
  Chłopska Szkoła Biznesu, [in:] „Board Game Geek”, https://boardgamegeek.com/
boardgame/85216/chlopska-szkola-biznesu, [25.06.2015].
15
  The prototype of the Peasant Business School was created in 2009 and it was honored with the
patronage of the European Year of Creativity and Innovation 2009, The Peasant Business School,
www.create2009.europa.eu/projects/participating_countries/polska_poland.html, [30.06.2014].
16
  Tournaments of the Peasant Business School for the Cup of the Itinerant Draper from
Andrychów organized by the Society of Andrychow Enthusiasts, Podkarpacie Tournaments of
the Peasant Business School named after Rev. Jan Zwierz from Ropczyce, as well as tournaments
organized by 3rd Secondary School in Toruń, Local Action Group in Goleniów and social economy
tournaments conducted periodically by The Regional Centre of Social Policy in Krakow, http://
pbs.mik.krakow.pl/category/turnieje/, [25.06.2015].
14
53
Sebastian Wacięga
• as a tool for local integration and inspiration for grassroots initiatives
for nearly 100 local agents in Poland (local cultural institutions, schools,
NGOs) which organized different events in cooperation with local
partners17. This form of activity turned out unexpectedly to be the
tool for catalyzing local social capital and strengthening “the spirit of
entrepreneurship”.
Conclusions
The key issue for successful entrepreneurial learning is preparation of
the facilitator (school teacher or adult trainer). The preparation embraces
interpretation of the selected history for the educational purpose and in
accordance with learner’s specificity (absorptivity, concentrations ability,
self-reliance, etc.) as well as with competence based education concept which
treats entrepreneurship as one of the key competences for lifelong learning.
According to recommendation of European Parliament and the Council of
the European Union from 2006, key competence called “sense of initiative
and entrepreneurship refers to an individual’s ability to turn ideas into action.
It includes creativity, innovation and risk-taking, as well as the ability to plan
and manage projects in order to achieve objectives. (…) An entrepreneurial
attitude is characterized by initiative, pro-activity, independence and innovation
in personal and social life, as much as at work. It also includes motivation and
determination to meet objectives, whether personal goals, or aims held in
common with others, including at work”18.
Another challenge for the entrepreneurship facilitator is also awareness
of his or her role in the process of entrepreneurial learning. This is the role of
facilitator which helps learners to discover and to construct their own knowledge
on the basis of experience, questions and interpreted history given by facilitator.
“History based entrepreneurial learning” is a practice and process of
knowledge management understood as “the concept under which information
is turned into actionable knowledge and made available effortlessly in a usable
form to the people who can apply it”19. It can be divided into three steps. The
first step is connected with knowledge about history (know-what knowledge
and know-why knowledge). The second step reveals that this knowledge can be
utilized for the purpose of entrepreneurial learning by interpretation of the
history into a story (know-how knowledge). The effective interpretation of the
history works in the third step as a source for constructing learning tools that
are capable to initiate entrepreneurial learning activities.
  Peasant Business School. Cooperation, http://pbs.mik.krakow.pl/cooperation/, [25.05.2015].
  Recommendation of European Parliament And Of The Council of 18 December 2006 on key
competences for lifelong learning (2006/962/EC), http://eur-lex.europa.eu/legal-content/EN/
TXT/?uri=celex:32006H0962, [25.05.2015].
19
  K. Dalkir, Knowledge management in the theory and practice, McGill University, BurlingtonOxford 2005, p. 5.
17
18
54
Literature:
1. Acquiring Key Kompetences through Heritage Education, (eds.) I. Gusen, J.V.
Lakerveld, A. Biesen 2011, http://the-aqueduct.eu/download/AqueductManual_EN.pdf, [21.06.2015].
2. Beattie A., Market Crashes: The Tulip and Bulb Craze, [in:] Investopedia,
www.investopedia.com/features/crashes/crashes2.asp, [21.06.2015].
3. Błachowski A., Ubiór i krajobraz kulturowy Polski i Ukrainy Zachodniej
w ikonografii J. Głogowskiego i K.W. Kielisińskiego, Muzeum Etnograficzne
w Toruniu, Toruń 2011.
4. Dalkir K., Knowledge management in the theory and practice, McGill
University, Elsevier Buttterworth-Heinemann, Burlington-Oxford 2005.
5. Dutch Tulip Bulb Market Bubble, [in:] Investopedia www.investopedia.com/
terms/d/dutch_tulip_bulb_market_bubble.asp, [21.06.2015].
6. Economic history. Was tulipmania irrational? [in:] The Economist, London,
Oct 4th 2013, www.economist.com/blogs/freeexchange/2013/10/economichistory, [21.06.2015].
7. Historical Analysis and Interpretation, University of California-Los Angeles,
National Center for History in the Schools, http://www.nchs.ucla.edu/
history-standards/historical-thinking-standards/3.-historical-analysis-andinterpretation, [28.06.2015].
8. Idziak P., Wacięga S., Peasant Business School. Inspirations for Teachers,
MIK, Kraków 2014, http://pbs.mik.krakow.pl/files/PBS_Inspirations_2014.
pdf, [25.06.2015].
9. Introduction to Standards in Historical Thinking, University of California-Los
Angeles. National Center for History in the Schools, http://www.nchs.ucla.
edu/history-standards/historical-thinking-standards, [28.06.2015].
10. Kurczewska A., Przedsiębiorczość, Polskie Wydawnictwo Ekonomiczne,
Warszawa 2013.
11. Nasson B., History. The meaning and the role of history in human
development, [in:] Encyclopedia of Life Support Systems (EOLSS), Paris 2001,
www.eolss.net/sample-chapters/c04/e6-22-00-00.pdf, [21.06.2015].
12. Nodine T.R., Petrides L.A., Knowledge Management in Education: Defining
the landscape, The Institute for the Study of Knowledge Management
in Education, Half Moon Bay, March 2003, http://iskme.path.net/
kmeducation.pdf, [21.06.2015].
13. Peasant Business School. Andrychów, or to understand the contemporary,
http://pbs.mik.krakow.pl/files/Peasant_Business_School_ANG_A4.pdf,
[25.06.2014].
14. Peasant Business School. Cooperation, http://pbs.mik.krakow.pl/
cooperation/, [25.05.2015].
15. Peasant Business School. Tournaments, http://pbs.mik.krakow.pl/category/
turnieje/, [25.06.2015].
16. Recommendation of European Parliament And Of The Council of 18
55
Sebastian Wacięga
December 2006 on key competences for lifelong learning (2006/962/EC),
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32006H0962,
[25.05.2015].
17. Rusin D., Wacięga S., Edukacja ekonomiczna w oparciu o historię. Przypadek
Andrychowa (2007–2014), „Kwartalnik edukacyjny”, nr 4 (79)/2014, http://
pbs.mik.krakow.pl/downloadable-materials/, [25.05.2015].
18. Strength in unity. What did the cooperation of craftsmen look like in
Andrychow?,
http://csb.mik.krakow.pl/files/tablice-w-gronie-2013.pdf,
[25.06.2014].
19. The patronage of the European Year of Creativity and Innovation 2009, The
Peasant Business School, www.create2009.europa.eu/projects/participating_
countries/polska_poland.html, [30.06.2014].
20. The Peasant Business School Recommendations, http://pbs.mik.krakow.pl/
recommendations/, [28.06.2015].
21. Tilden F., Interpreting Our Heritage, The University of North Carolina 2008.
22. Zarządzanie wiedzą w społeczeństwie uczącym się, Centre For Educational
Research and Innovation, OECD, Warszawa 2000.
23. Zwoliński A., Miasto Ankwiczów. Z dziejów Andrychowa, Aneks nr 1
Królewski przywilej lokacyjny, Kraków 1993.
56
Mirosław Borek
MSc, PhD candidate at Cracow University of Economics
KNOWLEDGE MANAGEMENT IN
OUTSOURCING
Keywords:
outsourcing, knowledge management, knowledge transfer, tacit knowledge,
explicit knowledge
Summary
This paper discusses some fundamental issues related to the importance
of knowledge transfer and knowledge management in the outsourcing
relationship. Knowing that knowledge transfer is not a one-way communication
outsourcers must understand criticality of this element and how to determine
the right approach for conducting it when outsourcing. Knowledge transfer
cannot be considered as one-time set of activities. It is an ongoing process which
encompasses the spirit of collaboration and the willingness to continuously
share information to support the success of the outsourcing deal throughout
the entire agreement term. Putting trust in an external partner, making strategic
information, internal data and specific knowledge regarding the outsourced
product or function accessible is a characteristic feature of outsourcing
cooperation, which is based on partnership.
Introduction
The current business environment, characterized by high complexity and
turbulence, is a vital factor determining the necessity of implementing changes
within business organizations. Contemporary managing tendencies as well
as concepts based on them point to the growing importance of corporate
governance focused on key competences, quality, processes, costs, time,
cooperation and service provision. All of these concepts are aimed at the pursuit
of business development, streamlining and organizing its internal structure,
improving the competitive ability, while minimizing costs, improving the
quality of products and services offered and focusing on customer’s needs.
One of such concepts, in response to rapidly changing environment
conditions, is outsourcing. Outsourcing allows to eliminate the processes which
are redundant or less significant for the core operation of an enterprise and
contributes to redesign of its value chain. As a result, a simple and more efficient
Mirosław Borek
organization system comes into being1. While implementing vital changes
within an organization, outsourcing not only changes an enterprise in the
economic and organizational area, but also in a social one. It is an essential fact
that people play a crucial role in every outsourcing process. They initiate these
changes and become creators of innovations, but can also be the main source
of resistance against them. Human capital determines the essence and success
of outsourcing performance through a potential of creativity, capability, ability,
motivation and knowledge. Knowledge, in this case, plays not only a role of
one of the key intangible resources of each enterprise being engaged in the
outsourcing process, but is also an essential factor of strategic decision making
by these companies. Due to this, adequate and efficient knowledge management
is crucial for both, the outsourcer and the outsourcing service provider.
The notion and essence of outsourcing
Outsourcing stands for a great deal more than acquisition of raw materials
and standardized intermediate goods or services. Therefore, it is no surprise
that this phenomenon is defined in various sources by management scholars
and practitioners.
Generally, outsourcing can be defined as taking advantage of external
resources. The definition is derived from the expression: „outside-resourceusing”. The notion of outsourcing can therefore be determined as a company’s
activities, preceded by an aware business decision2, where some functions
within the organizational structure are separated and allocated to other entities.
It is associated by virtue of a contractual agreement with a partial or whole
transfer of human, tangible resources as well as managerial responsibilities to an
external provider3.
A bit of clarity to outsourcing taxonomy was introduced by Gilley and
Rasheed by classifying this phenomenon as a purchase of something, which was
initially obtained from the internal source (vertical disintegration) or could be
obtained internally regardless of the decision to take advantage of the external
source (“make or buy” decision)4. The very same researchers assert that the
organizations which have no alternative to acquire certain goods or services but
to make use of the external source (e.g. due to lack of capital or professional
know-how), acquire the goods or services not due to outsourcing cooperation
but because internalisation of these actions would never be the option of their
choice. In other words, since rejection of an internal source was not even an
  J.A.F. Stoner, R.E. Freeman, D.R. Gilbert, Kierowanie, PWE, Warszawa 2001, p. 321.
  T.L. Elliott, D.E. Torkko, Word Class Outsourcing Strategies, “Telecommunications”, American
Edition, Vol. 30, 1996, p. 47.
3
  J.P. Lendzion, A. Stankiewicz-Mróz, Wprowadzenie do organizacji i zarządzania, Oficyna
Ekonomiczna, Kraków 2005, p. 19.
4
  K.M. Gilley, A. Rasheed, Making More by Doing Less: An Analysis of Outsourcing and its Effects on
Firm’s Performance, “Journal of Management”, Vol. 26, No. 4, 2000, p. 763-790.
1
2
58
alternative by these companies, thus the operations of these organizations,
whose aim was to acquire goods and services from external providers cannot
even be called outsourcing but procurement. A similar stance must be adopted
in terms of enterprises commencing their activity. Since one of the principle
aspects considered with relation to outsourcing is efficiency of specified
activities performed by the organization internally before they are outsourced,
in regard to new enterprises such scenario does not exist.
The above mentioned definitions of outsourcing, illustrating interpretive
dissimilarity, which can be found in views of different authors, lead to the
conclusion that the phenomenon of outsourcing is defined widely in literature,
and can refer to almost every purchase of goods or services made by a company
from an external entity. However, there are certain features, which play
a significant role and determine the outsourcing nature of relations between an
enterprise and its supplier in each definition of outsourcing. First of all, this
relationship must be long-term. Moreover, it ought to be oriented towards
outcome. It indicates that the service provider can freely determine function
performance or the process, which is to be carried out. It is the free choice of
receiving instructions from the ordering party regarding the manner of service
performance, that distinguishes outsourcing from other relations between
market participants,. The ordering party, being involved in outsourcing, expects
to receive measurable, previously established results of collaboration, leaving
the method of execution up to the service provider.
In economic practice outsourcing ventures are often confused with
subcontracting. The subject sources making distinction between these two
business tools mention, most of all, the term of contract as a key parameter
which distinguishes the two definitions. In the event of subcontracting the term
is shorter with relation to the length of period of outsourcing performance.
The outsourcing subject can be embraced by one of three areas of operation
within an organization: individual, functional and procedural. Outsourcing of
individual actions covers separation of independent work position from the
organizational structure of the enterprise. The level of functional operations
is associated with the organizational structure as functional cost centre, where
each function requires professional knowledge and accountability. The processes
lead to obtain particular outcomes and consist of actions related to each other.
The classification of economic processes taking place within an organization
covers the following categories5:
• strategic processes – which enable an organization to plan and future
development, and the aims are a part of its mission, vision and
intentions,
• operating processes – allow an organization to function and operate on
daily basis,
• supporting processes – provide an efficient performance of strategic
  J. Peppard, P. Rowland, Re-engineering, Gebethner i S-ka.,Warszawa 1997, p. 14-15.
5
59
Mirosław Borek
and operating processes; also, the following auxiliary processes can
be included: procurement of technical equipment and materials or
maintenance, as well as processes in the area of management, including
human resources and IT management.
Since the strategic processes have a direct influence on results achieved by
a company they should not be outsourced beyond the company and must be
included in the subsystem of organization management6.
To be considered as a strategic choice, outsourcing must be a distinctive
feature of specific firms in the industry. It must also concern on two types of
activities that contribute substantially to enterprise’s added value: activities
critical to performance (supporting the core businesses) and activities that
create a competitive advantage7.
As Brown and Wilson point out, apart from strategic, there are two
additional levels of outsourcing: tacital and transformational8. In terms of
tacital (operating) an outsourcing venture is carried out within shorter periods
than strategic horizon of an enterprise. It can be treated as a prompt tool of
meeting certain needs, or to solve an existing issue within an organization.
Transformational outsourcing is commonly used to redefine an enterprise.
It allows a company to hold the position of the market leader, build up
a competitive advantage and contribute to a bigger value for the organization.
Knowledge as intangible asset of an enterprise
Outsourcing process implementation is often associated with a transfer
of tangible and intangible resources. It also refers to a transfer of knowledge
between the parties to outsourcing agreement and internally within each
organization between specified persons, or group of employees.
Transmission and absorption make up the knowledge transfer. Transmission
is connected with deriving knowledge from its base or other source, and then
conveying it to the receiver. Next, acceptance of received knowledge takes place,
as well as its assimilation and use. It’s worth paying attention, that knowledge
must be derived from reliable source, to be absorbed appropriately9.
Knowledge is a resource of intellectual competences and practical skills
(experience). According to literature, the basis for knowledge is data and
  J. Czekaj, Zarządzanie procesami biznesowymi. Aspekt metodyczny, Wydawnictwo UEK, Kraków
2009, p. 31.
7
  B. Quelin, F. Duhamel, Bringing Together Strategic Outsourcing an Corporate Strategy: Outsourcing
Motives and Risks, „European Management Journal”, Vol. 21, No. 5, 2003, p. 647-661.
8
  D. Brown, S. Wilson, The Black Book of Outsourcing – How to Manage the Changes, Challenges
and Opportunities, Willey, Hoboken, NJ, 2005, p. 19-43.
9
  G. Probst, S. Raub, K. Romhart, Zarządzanie wiedzą w organizacji, Oficyna Ekonomiczna,
Kraków 2002, p. 177.
6
60
information, which become knowledge after their processing10. Data constitutes
elements of information which are created by rough and non-processed facts,
figures and occurrences. Currently, the most common method is to record and
store them in the form of formalized documentation. They must be understood
as a set of single facts about a particular occurrence. In terms of organizational
context, data is a formalized documentation of transactions11.
Information stands for harmonized data and all crucial factors used to make
a decision. Information is based on processed data and interpreted so that it can
be useful for its receiver. The principle role of the information is to provide a new
point of view in perceiving and interpreting occurrences or objects, how the
receiver perceives certain issues and influence on its behaviour and judgement.
Information can also be seen as a logical and substantive combination of data
which allows to explain phenomena and to obtain a constructive feedback.
The academic literature defines knowledge in various ways. Galata proposes
knowledge understanding as everything (facts, phenomena and relations
between them), which was observed consciously and recorded and is possible to
convey to others, according to the knowledge holder’s intentions, in particular
conditions and situations to initiate specified behaviours12. The very same
researcher claims that contrary to other resources, knowledge is expanded
during the process of its use13.
According to Applehans, Globe and Laugero, knowledge constitutes
information used to solve a particular problem or make a decision14. Also,
it is considered that knowledge is a piece of information in a particular
context, which allows an enterprise and its employees to operate efficiently.
There is a clear distinction between the terms „information” and
„knowledge”. Information is created at the system level and comprises a flow
of commodities (meanings or messages) capable of yielding knowledge,
affecting it by adding something, changing or restructuring it. Knowledge
is created and ogranized at the process level by a very flow of information,
anchored on the beliefs and commitments of its holder15. Creation of
knowledge takes place not only internally, within an enterprise, but also
in interaction processes with its customers, business partners or other
stakeholders.
  J. Brdulak, Zarządzanie wiedzą a proces innowacji produktu. Budowanie przewagi konkurencyjnej
firmy, Szkoła Główna Handlowa, Warszawa 2005, p. 14.
11
  W.M. Grudzewski, I.K. Hejduk, Zarządzanie wiedzą w przedsiębiorstwach, Difin, Warszawa
2004, p. 75.
12
  S. Galata, Strategiczne zarządzanie organizacjami. Wiedza, intuicja, strategie, etyka, Difin,
Warszawa 2004, p. 50.
13
14
  W. Applehans, A. Globe, G. Laugero, Managing Knowledge. A Practical Web-Based Approach,
Addison-Wesley Information Technology Series, Reading, MA, 1999, p. 18.
15
  F. Machlup, Semantic Quirks in Studies of Information, [in:] The study of Information, (eds.)
F. Machlup, U. Mansfield, John Wiley&Sons, New York 1983, p. 641-671.
10
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Mirosław Borek
The aforementioned definitions of knowledge indicate that it is strongly
personified and directly associated with human factor and human action.
Hence, one can assert that humans are the main carrier of knowledge, and not
an enterprise. Personalized knowledge consists of explicit and tacit knowledge
and can be held by individuals or collectively in groups. Degree of use of
personified knowledge depends on a human and its intellectual abilities16. Apart
from personalized knowledge, an organisation holds also codified and grounded
knowledge which is within an organization regardless of human’s presence17.
Attributes play a crucial role in terms of knowledge significance in the portfolio
of resources within an organization. Due to these attributes knowledge is:
• relativized, which means it has a different dimension with relation to
particular actions,
• relativized and contributes to a new configuration of management,
• collectivised by creating a network of relations and becomming available
for others,
• socialized (tacit to tacit), by transmitting through observation, imitation
and practice from one individual to another18,
• consciously expressed by knowledge holders.
Knowledge is an intangible capital of an enterprise, which should be
skillfully managed, similarly to other resources. Knowledge capital determines
an economic value of potential and intellectual level of a human, creative
abilities and practical skills, which can be possessed by management, owners
and employees of an enterprise. It’s worth mentioning that in current economic
conditions there is a strong relation between increased knowledge capital and
enterprises’ productivity, and capability to their development and survival.
Knowledge and knowledge management in the outsourcing
process
Significance of knowledge management is on the increase in numerous
organizations, since managers have come to the conclusion that effective
knowledge management is a source of market competitiveness of enterprises.
Appropriate management of knowledge is particularly important in the
outsourcing process, since it is one of the key factors for its successful
implementation and performance. Knowledge management in the outsourcing
process is a set of measures which enable to unblock, create, disseminate, transfer
and make use of knowledge in pursuit of outsourcing objectives. It is relevant to
  B. Mikuła, Organizacje oparte na wiedzy, Wydawnictwo Akademii Ekonomicznej w Krakowie,
Kraków 2006, p. 115.
17
  B. Mikuła, Geneza, przesłanki i istota zarządzania wiedzą, [in:] Zarządzanie wiedzą
w przedsiębiorstwie, (ed.) K. Perechuda, Wydawnictwo Naukowe PWN, Warszawa 2005, p. 15-16.
18
  I. Nonaka, H. Takeuchi, The Knowledge-Creating Company. How Japanese Companies Create the
Dynamics of Innovation, Oxford University Press, Oxford 1995, p. 284.
16
62
both parties of the outsourcing agreement, outsourcer and its provider, because
outsourcing is causing the organizational knowledge landscape to change.
While making a decision to collaborate with an outsourcing service
provider, outsourcers face new challenges. Outsourcing leads to a knowledge
gap in their systems, which means loosing processes, personel and knowledge
(including peripheral knowledge) associated with the outsourced activities.
To make outsourcing successful outsourcing organizations have to share their
know-how with external firms, often very strategic knowledge regarding their
business activity. Moreover, as it was mentioned previously, knowledge creation,
its transfer and integration are actions of social nature. When outsourcing
occurs, attentive care relationships and social interactions between outsourcer’s
employees are subject to change, as their positions might be liquidated, for
example, they might be made redundant or transferred to other departments.
Loosing a key employee may contribute to a loss of knowledge and experience,
and sometimes even some strategic customers.
Critical to a successful outsourcing process is knowledge transfer from an
outsourcer to an external service provider. This knowledge transfer should start
in the outsourcing firm with conveying and diffusing knowledge throughout its
different departments. It will allow to leverage the ways that knowledge can be
utilized to solve problems and strengthen outsourcing implementation process
performance. Transferring of explicit knowledge into an outsourcing process
is easy, even without the knowing subjects (employees). On the contrary, tacit
knowledge transfer is a huge challenge due to its nature. Since tacit knowledge
is intuitive, unarticulated and personally contextual, it cannot be transferred by
outsourcing activities without engagement of the tacit knowledge holder. The
only way to effectively manage the transfer of tacit knowledge and to realize its
full potential is internal motivation of knowing subjects, which results in their
close involvement, cooperation and loyalty towards the outsourcing firm. It
must be supported by design or creation of proper environments, processes and
systems that provide the willingness and means for it to take place.
Apart from the knowledge transfer, outsourcing leads to a new knowledge
creation. Some researchers do not treat this issue as part of knowledge
management since it borders and overlaps with innovation management19.
Nevertheless, taking under consideration a broader knowledge management
definition it can be regarded as a part of the process. The process of knowledge
creating which takes place in outsourcing relationship is a dynamic spiral
that shifts from individual employee to organization and further to acrossorganization dimensions and must be supported by relevant information and
data which can improve decision and serve as building blocks in the creation
of new knowledge. In the outsourcing process creation of new knowledge does
not take place exclusively with the supply side. However, in the outsourcing
  J.L. Wellman, Organizational Learning: How Companies and Institutions Manage and Apply
Knowledge, Palgrave Macmillian, New York 2009, p. 34.
19
63
Mirosław Borek
64
relationship an external service provider is the one who has more challenges
and opportunities to create the new knowledge.
Bearing in mind these obstacles, outsources should carry out an audit of
outsourced actions so as to make sure that the employees’ tacit knowledge is
codified in the form of hard copy and/ or recorded in an electronic database,
allowing to have an easy access, if necessary. Carrying out the knowledge
audit allows to make an inventory of outsourcer’s intellectual capital resources,
establishes a range of knowledge currently possessed and used, helps to find out
where and in what form knowledge necessary for outsourcing exists and what
knowledge is lacking for that purpose. Based on knowledge audit, an outsourcer
can properly plan, as well as adjust its existing knowledge management
system to a situation, when an external supplier takes control over outsourced
functions. In addition, the knowledge audit provides the outsourcer with
updated information, both on knowledge of its employees and the one codified
in processes and acquired technologies.
The issue of knowledge transfer and its management varies widely
depending on the type of outsourcing. Partly, it can be found in the event
of outsourcing of secondary functions such as transport services (internal
transportation, storage, 3PL, 4PL), cleaning, security. Both individual’s and
group’s tacit knowledge is of slight significance then. It is because all information
and knowledge necessary to carry out appropriate functions are well codified,
and a tool to obtain, transfer and record knowledge is computer technology, the
knowledge management system is based on. In this case, attention is drawn to
knowledge in the form of procedures, regulations, process descriptions, chart
creation, reports and databases, hence, the knowledge may be easily made
accessible for its users. Moreover, risk of inappropriate use of the outsourcer’s
strategic information is very unlikely since the service provider has a limited
direct access to it. Certainly, we may take into account that the logistics provider
can gather information about the outsourcer’s production output potential
based on the transported loads or having access to the list of the outsourcer’s
customers, pass it on to a third party. However, such general information has
low strategic value.
The outsourcing process of secondary functions creates no new knowledge
and as a result enterprises engaged in outsourcing should apply a technical
approach to build their systems of knowledge management.
A risk of confidential data exposure as well as the outsourcer’s confidentiality
occurs when an organization outsources its production functions. It often
transfers knowledge about a core product in its activity, technological solutions,
patents, know-how and specific knowledge. Therefore, an outsourcer should
adopt a strategy of limited knowledge protection. It is impossible not to
disclose the whole knowledge to the outsourcing partner for the purpose of
service provision, simultaneously, the outsources should take certain actions
in order to minimize the risk of inappropriate knowledge use by the provider.
It can be done by reassigning a trustworthy employee or a team of employees
to work at the outsourcing project at the provider’s premises. During the
process of outsourcing production activities, the parties to the outsourcing
agreement often put in place a strategy of knowledge management where
knowledge creation is based on cooperation. As a result, new and innovative
knowledge comes into being, usually codified and formal. However, during the
performance of outsourcing service, employees of the external supplier also
acquire tacit knowledge. Transformation of tacit knowledge into knowledge,
which is formalized and generally available also for the outsourcer (e.g. in the
form of technical drawings, specifications, quality control reports, descriptions
of technological changes), is a very important management element in
outsourcing process of production functions.
In business practice there are also outsourcing types where the quality of
formal knowledge becomes an issue, which is to be transferred to an external
provider. Procurement outsourcing can be an example here. It’s worth paying
attention that the issue slightly occurs in the event of outsourcing of production
materials, since a thorough specification of acquired goods, their quantity and
purchase sources are known. This knowledge is transferred to the provider
in a codified form. During cooperation a strategy of knowledge availability is
applied, by both transferring knowledge to outsourcing partner, and knowledge
absorption from him.
Different situation takes place in case of technical procurement
outsourcing, due to low quality of data and information, which are transferred
to the provider. Technical procurement specification makes purchase of
various materials and spare parts non-repeatable, where goods are entered into
databases by procurement employees in an unreliable and simplified way. Most
frequently, outsourcer’s database of technical materials do not consist precise
descriptions of goods purchased, manufacturer’s order or catalog numbers and
product names, which are necessary to identify these goods correctly in the
event of repurchasing. The incomplete information causes a huge problem for
the both parties to the outsourcing agreement, both at the stage of submitting
offers, outsourcing implementation, and during its performance. Therefore,
a significant role is played by tacit knowledge held by outsourcer’s employees
working at procurement and maintenance departments, which they most
often do not want to share with the service provider. Unwillingness to share
knowledge results from decreased level of trust towards the external servicing
firm, is engendered by fear of losing an advantage of holding tacit knowledge
and fear to lose a job. This issue gets even bigger when the employees possess
wider knowledge and skills to perform better work than the provider’s
staff. A social approach is appropriate in this situation as well as applying
a strategy of building a system of knowledge management. It is characterized
by establishment of relations between the outsourcer and service provider’s
employees, ability to support communication processes, where the knowledge
is made common and new. A chief business practice in this respect is to relocate
outsourcer’s procurement staff to an external contractor. As a result, the tacit
65
Mirosław Borek
knowledge related to the outsourced activities can be successfully kept and
outsourced, with functions being performed more effectively from the very
beginning.
Literature:
66
1. Applehans W., Globe A., Laugero G., Managing Knowledge. A Practical WebBased Approach, Addison-Wesley Information Technology Series, Reading,
MA, 1999.
2. Brdulak J., Zarządzanie wiedzą a proces innowacji produktu. Budowanie
przewagi konkurencyjnej firmy, Szkoła Główna Handlowa, Warszawa 2005.
3. Brown D., Wilson S., The Black Book of Outsourcing – How to Manage the
Changes, Challenges and Opportunities, Willey, Hoboken, NJ, 2005.
4. Czekaj J., Zarządzanie procesami biznesowymi. Aspekt metodyczny,
Wydawnictwo UEK, Kraków 2009.
5. Elliott T.L., Torkko D.E., Word Class Outsourcing Strategies,
“Telecommunications”, American Edition, Vol. 30, 1996.
6. Galata S., Strategiczne zarządzanie organizacjami. Wiedza, intuicja, strategie,
etyka, Difin, Warszawa 2004.
7. Gilley K.M., Rasheed A., Making More by Doing Less: An Analysis of
Outsourcing and its Effects on Firm’s Performance, “Journal of Management”,
Vol. 26, No. 4, 2000.
8. Grudzewski W.M., Hejduk I.K., Zarządzanie wiedzą w przedsiębiorstwach,
Difin, Warszawa 2004.
9. Lendzion J.P., Stankiewicz-Mróz A., Wprowadzenie do organizacji
i zarządzania, Oficyna Ekonomiczna, Kraków 2005.
10. Machlup F., Semantic Quirks in Studies of Information, [in:] The study of
Information, (eds.) F. Machlup, U. Mansfield, John Wiley&Sons, New York
1983.
11. Mikuła B., Geneza, przesłanki i istota zarządzania wiedzą, [in:] Zarządzanie
wiedzą w przedsiębiorstwie, (ed.) K. Perechuda, Wydawnictwo Naukowe
PWN, Warszawa 2005.
12. Mikuła B., Organizacje oparte na wiedzy, Wydawnictwo Akademii
Ekonomicznej w Krakowie, Kraków 2006.
13. Nonaka I., Takeuchi H., The Knowledge-Creating Company. How Japanese
Companies Create the Dynamics of Innovation, Oxford University Press,
Oxford 1995.
14. Peppard J., Rowland P., Re-engineering, Gebethner i S-ka.,Warszawa 1997.
15. Probst G., Raub S., Romhart K., Zarządzanie wiedzą w organizacji, Oficyna
Ekonomiczna, Kraków 2002.
16. Quelin B., Duhamel F., Bringing Together Strategic Outsourcing an Corporate
Strategy: Outsourcing Motives and Risks, „European Management Journal”,
Vol. 21, No. 5, 2003.
17. Stoner J.A.F., Freeman R.E., Gilbert D.R., Kierowanie, PWE, Warszawa 2001.
18. Wellman J.L., Organizational Learning: How Companies and Institutions
Manage and Apply Knowledge, Palgrave Macmillian, New York 2009.
67
Maciej Jan Malarski
PhD, Department of Management, Faculty of Management, University
of Lodz, Poland
COMPETENCIES REQUIREMENTS FOR SALES
PEOPLE AS GUIDELINES FOR EDUCATION
Keywords:
competencies, sales processes, sales positions, education
Summary
Modern organizations need new forms of acting in sales processes.
Customers’ requirements and needs are changing rapidly and the pressure
from competition is coming even more compelling. Companies are trying to
introduce new forms of sales based on building close relations with customers.
New ways of organizing the sales processes impose new forms of human
behaviour and tough requirements from salespeople. The article presents the
results of broad research made among various companies which employ people
for sales processes. The research was conducted using the analysis of a great
number of recruitment advertisements for sales positions and numerous job
descriptions from the sales area. The analysis was based on competencies
methodology when studying the requirements for sales people. The most typical
requirements were grouped according to division into general and technical
competencies needed on different types of sales positions. The main conclusions
are concentrated on the changes in sales processes and its influence on personal
competencies development of salespeople. The results of the research can be
used by educational organizations which participate in preparing people for
these kinds of profession.
Introduction
In today’s changing labour market conditions, traders are often sought
after by employers in terms of adapting sales activities to market needs. Large
transformations in the broad trade took place among other things by a constant
search for a new way of building relationships between the parties of the
purchase-sale process, and by growth of the strategic role of these relationships
in building competitive advantage. In connection with these changes, the people
working in the areas of trade face new challenges. Vendors need to learn not
Maciej Jan Malarski
only to use different sales models, but also to develop their skills so that they
could be successful in the new market realities.
This article attempts to identify the needs of the market and outline the
required set of characteristics and key competencies for pursuing the profession
of seller. To this end, it analyzes the literature in this field and presents the
research related to the analysis of vacancies on the sales positions and job
descriptions. Understanding the characteristics and competencies required by
employers from candidates to work in the retail sector can provide guidance on
the changes in the educational system of such persons in order to improve their
future functioning on the labour market.
Modern approach to building relationships in the process
of selling
Most of the authors of literature related to the sale argue that this is an area
subject to constant change. According to Rackham and DeVincentis1, in recent
years there has been a change in thinking and approach to sales, mainly due to
the continuous acquisition of new knowledge about the relationship between
the parties to the purchase-sales process and due to an increase of the strategic
role of purchasing in large enterprises. As a result of these changes i.a. the vision
of sales was reshaped and the goals – previously set before the sales teams –
redefined. These transformations led to unprecedented redefinition of sales
of the business-to-business type. Rackham and DeVincentis point out that
in the last 20–30 years the sale has been influenced by new forces, which has
resulted in its change in every respect2. The authors emphasize that in recent
decades aggressive transactional sales has been abandoned for teamwork and
the broad consultancy. According to Sandler each trader should first “master
the art of professional sales”, because the best results are ensured by sales based
on applications, i.e. advisory sales (also called strategic), additionally based on
a coherent sequential system3.
The concept of competencies and their importance in the
management of sales staff
The concept of competence and competence systems is relatively recently
introduced into the realm of organizational management. One of the
forerunners of this concept was McClelland who describing the process of
  N. Rackham, D. DeVincentis, Zespoły sprzedaży w obliczu zmian – jak na nowo zdefiniować
sprzedaż, aby stworzyć wartość dla klientów, Oficyna Wolters Kluwer Business, Warszawa 2010,
p. 37-38.
2
3
  D. Sandler, Nie nauczysz dziecka jazdy na rowerze podczas prelekcji – siedem kroków innowacyjnej
sprzedaży według systemu Sandlera, Oficyna Wolters Kluwer Business, Warszawa 2014, p. 12.
1
70
COMPETENCIES REQUIREMENTS FOR SALES PEOPLE AS GUIDELINES FOR EDUCATION
evaluating employees based on standardized criteria stated that competence
is a better indicator of the success of the employee rather than knowledge or
intelligence as measured by psychometric tests4. The concept of competence was
also popularized by Boyatzis, who introduced the term of field of competence
and the related division into the threshold competencies (specific for a given job
position) and differentiating competencies (allowing for distinguishing between
better and weaker workers)5.
In the literature there are different approaches to the competence of the
traders and sellers. Majewska-Opiełka points out that, although currently the
sellers and the company units responsible for the organization of training are
aware of the need to develop competence of traders, they are still focused on two
main areas: sales techniques and trainings that build attitudes that lead to these
techniques. She also emphasizes, which is overlooked by many, the importance
of elements such as the qualifications of character, emotional intelligence and
mental attitude6.
Thierry and Sauret drew attention to all areas of competence that an
employee should develop. According to them, the most important competencies
in the profession of trader are: sales techniques, knowledge of the product,
emotional competencies and interpersonal skills7. Similarly, in the view of Lake
and Hinckley, there are three groups of features which employees who serve
clients should have: knowledge (skills), personality traits (relationships with
people, thinking styles, emotions), and intelligence IQ8. Lambert, Kerkhoff and
Ohai, experts from the American Society of Training and Development, based
on years of research and experience, as well as the expertise, developed a model
showing the sales competencies. They identified four key sets of competences9:
• Partnership – effective building and maintaining relationships;
• Focus on the client – collecting customer information, and using them
in an effective manner;
• Recommending – selecting and recommending the customer the right
products in order to present to him a satisfactory solution;
• Effectiveness – competencies in this area affect the development and
personal effectiveness.
  B. Jamka, Czynniki ludzkie we współczesnym przedsiębiorstwie – zasób czy kapitał, Oficyna
Wolters Kluwer Business, Warszawa 2011, p. 26 and p. 28.
5
  M. Sołtysińska, I. Kossowska, Szkolenia pracowników a rozwój organizacji, Oficyna Ekonomiczna,
Kraków 2002, p. 36.
6
  I. Majewska-Opiełka, Sprzedaż i charakter – podręcznik dla handlowców i menedżerów zespołów
sprzedażowych, Rebis, Poznań 2004, p. 55-70.
7
  D. Thierry, Ch. Sauret, Zatrudnienie i kompetencje w przedsiębiorstwie w procesach zmian,
Poltext, Warszawa 1994, p. 90.
8
  N. Lake, K. Hickley, Podręcznik obsługi klienta – zdobądź zadowolonych i lojalnych klientów,
OnePress Exclusive, Gliwice 2005, p. 85.
9
  B. Lambert, T. Ohai, E. Kerkhoff, World Class Selling – New Sales Competencies, American
Society for Training & Development, Alexandria VA 2009, p. 56.
4
71
Maciej Jan Malarski
It should be emphasized that the concept of competencies has been
introduced in education system for all levels of teaching process. This means
that all competencies requirements which are stem from business requirements
can be adapted quite easily by schools on the all levels of education.
For the purpose of this article competences have been divided into two
groups: general and technical.
Group of general competencies
Among the general competencies that apply to all employees at different
work posts are the skills that affect the efficiency of the work, its effectiveness,
which result not so much from strict knowledge, but rather from the ability of
the people to respond and behave in a particular situation. Within this group of
competencies often are abilities to build social relations, the ability to participate
in group work and respond to a variety of problems of social nature or related
to cultural differences. Typical competencies are communication, collaboration,
adaptability, flexibility of reaction10. Among the general competences very
important role nowadays is played by the concept of emotional intelligence, i.e.
a set of skills regarding the command and use of our own emotions and the
influence on the emotions of others. The most popular and most frequently
quoted concept of emotional intelligence is the concept of Goleman, who
defines emotional intelligence as the ability to recognize our own feelings and
those of others11.
The classification of emotional competence, distinct from Goleman’s,
is presented by Higgs and Dulewicz, who highlight such competencies as
self-awareness, emotional flexibility, achievement motivation, empathy, and
influence on others, decision making and personality integration12. Another
concept of emotional intelligence EQ presented by Krokowski and Rydzewski
who supported their conclusions by the studies conducted in companies
operating in Poland13.
  T. Czapla, Modelowanie kompetencji pracowniczych w organizacji, Wydawnictwo Uniwersytetu
Łódzkiego, Łódź 2011; M. Armstrong, Zarządzanie zasobami ludzkimi, Oficyna Wolters Kluwer
Business, Kraków 2007; M. Armstrong, Essential Human Resource Management Practice – a guide
to people management, Kogan Page Limited, 2010; L. Spencer, S. Spencer, Competence at Work:
Models for Superior Performance, Wiley1993.
11
  D. Goleman, Emotional Intelligence: Why It Can Matter More Than IQ, Bantam, New York 1997,
p. 16.
12
  M. Higgs, V. Dulewicz, Making Sense of Emotional Intelligence, Nfer-Nelson, Darville House
1999, p. 17.
13
  M. Krokowski, P. Rydzewski, Zarządzanie emocjami – inteligencja emocjonalna – vademecum
użytkownika, Imperia, Łódź 2002.
10
72
Group of technical competencies
Among the technical competences the largest part is taken by the knowledge
of the products sold, sales processes, techniques associated with the customer
service (including computer programs to support customer relationships).
Wendel and Gorman argue that product knowledge is more than just technical
knowledge. In the authors’ opinion, product knowledge consists of elements
such as the physical characteristics of the product, the method of delivery, price,
installation, and training in the use, guarantees and after sales support14.
On the other hand, on the pages of The Queensland Government Business
Development there is a list of information about the product, which the trader
should be familiar with the purpose for which the product was made, how the
product works and was created, how the quality of the product is tested, how the
product is delivered and serviced, the life of the product, the price, comparison
with the product offered by the competition15.
Research methodology
The main objective of the study is to determine the needs of the market
related to the demand for sales staff and to identify the extent to which the
technical and general competencies set new sales approach and can influence
the educational programs. For this purpose, a survey has been conducted
among employers in terms of required job candidates and job descriptions
related to the sale. The information used for the conducting of the study came
from online sources (websites of district labour offices, sites with job offers from
the province of Lodz – Poland) and job descriptions obtained from companies
in the Lodz region. The study was conducted in the period July – September
of 2013. The study sample to carry out this analysis consisted of 1.451 job
advertisements in trade and economic professions (these advertisements were
available on the website the period considered) of 389 companies, and 143 job
descriptions associated with the pursuit of a trader. These descriptions were
from 49 companies (descriptions were obtained from the Internet or through
interviews conducted in the companies). Both the offers and job descriptions
came from companies of various sizes and industries.
The analysis was made in terms of formal requirements and competencies,
which employers expect from employees in occupations associated with trade.
Formal requirements were directly read from the analysed materials, whereas
competences were analysed in two stages. At the beginning all entries regarding
competencies that have emerged in the context of the analysed listings and
descriptions were written down. This was followed by the categorization of
  R. Wendel, W. Gorman, Selling – personal preparation, persuasion, strategy, Random House
Business Division, New York 1988, p. 48.
15
  The Queensland Government Business Development, 2012, http://www.skills.business.qld.gov.au,
[27.09.2014].
14
73
Maciej Jan Malarski
all records and standardization of names to allow for statistical analysis. The
analysis was made in respect of the following categories of job: trader/ sales
representative, seller, customer advisor, leader/ manager, call centre seller, sales
staff/ economist and purchase specialist.
The results of the study
Most surveyed listings (35,4%) were related to the position of the trader/
sales representative. Subsequently, employers sought sellers (20,7%), customer
advisors (13,8%), leaders/ managers (11,5%), call centres sellers (11,0%),
sales staff/economists (4,5%) and purchase specialists (3,1%). For purposes
of presentation of the results, the analysis of the offers was named the first
perspective. Among the studied job descriptions most were related to the
trader/ sales representative (30,8%), followed by customer advisor (22,4%),
seller (18,2%), manager (14,0%), call centres seller (8,4%) and the sales staff/
economists (6,3%). Among the examined descriptions purchase specialists
positions were not analysed. For the purpose of presentation of the results, the
analysis of the job descriptions was named the second perspective.
The results of the research were grouped according to the two groups of
competencies – technical competence and general competence. Technical
competencies include: computer skills, foreign language, negotiations skills,
sales techniques, business approach, creating relationships with clients,
presentations skills, identifications of client’s needs, sales processes knowledge.
General competencies are divided into two groups. The first is the one that
was seen in the analysis of both perspectives (offers and job descriptions).
It included: communication skills, time management, leadership, teamwork,
analytical thinking, creativity, stress tolerance, adaptability, and presence.
The second group of general competencies are competencies that have been
identified only in the first perspective and they include: self-motivation,
availability, ambition, energy, savoir vivre, loyalty, emotional maturity,
accuracy. The frequency of occurrence of individual competencies, for
all the tested positions related to sales, in two perspectives (offers and job
descriptions) is shown in the graphs below.
74
Figure 1. Prevalence of technical competencies in the two research
perspectives (n1 = 1.451, n2 = 143, results in percent)
Source: own research.
Figure 2. Prevalence of general competencies (the first group) in two
research perspectives (n1 = 1.451, n2 = 143, results in percent)
75
Maciej Jan Malarski
Figure 3. Prevalence of general competencies (second group) in the first
perspective (n1 = 1.451 results in percentages)
First perspective
As it can be seen in the graphs of the distribution of competencies required
for positions related to sales, requirements related to the general competence
occur more often. Two competences are prevalent – communications skills and
time management in the first group (figure 1), and self-motivation in the second
group (figure 2). Other competences rank definitely lower. It is worth noting
the low prevalence of emotional maturity. Within the technical competences the
spans are smaller; the most desirable competence is computer skills, and the
next – foreign language. Quite surprising is the low position of the skills that are
associated with recognizing customer needs, building customer relationships
and knowledge of sales processes.
Second perspective
Analysing the job descriptions of sales positions, it can be noted that among
the technical competencies dominate computer skills and sales techniques
(in the first perspective far lower). High on the index is foreign language and
relationships with clients. Among the general competencies at the highest level
there are communication skills, time management ranks the second (as in the
first perspective). On the third and fourth places are teamwork and analytical
thinking.
76
The differences between the various positions
Considering the differences in the distributions of competencies between
the different positions (treating the first and second perspective inclusively) it
can be seen that the spans between the intensity of competence are quite large
and are mainly due to the type of work performed at different positions. In the
framework of technical competence in the highest degree dominate computer
skills on specialist positions, a call centre seller (nearly 80%) and a seller (over
65%), in the second place there are language skills – to the greatest extent on the
position of a specialist in the purchase department (nearly 90%) and a specialist
in sales department (over 55%). Negotiations and sales techniques are in
the highest degree on the position of leader/ manager, in the lowest – on the
position of a seller and a call centre seller.
In the context of general competencies on the positions of trader/ sales
representative, a call centre seller and a customer advisor required at the highest
level were communications skills (above 70% in all cases), followed by time
management (over 60%). The lowest rate of communications skills was on the
positions of a leader/ manager (45%), and time management scored the lowest
for the call centre seller position. Specialist positions were characterized by the
highest level of competence of teamwork (above 35%) and analytical thinking
(over 30%). Leadership competence was the most desirable on the position of
a leader/ manager (above 60%) and, what is quite surprising, on the position of
seller (nearly 40%). It is significant that the competence of creativity is quite low
on all positions (the highest on customer advisor positions – nearly 20%).
Levels of competence and the sales process
Analysing the results in terms of the implementation of the sales process
it should be noted that the occurrence of general and technical competencies
to a small extent confirms the orientation of the surveyed enterprises on
advisory sale related to recognizing customer needs, focus on the customer
and recommending16. Among the wanted people for sales positions dominate
traditional skills that are associated with the sheer fact of the effective
communication with customers (communication skills), focus on the effective
performance of the tasks (time management), individual work (self-motivation)
and the use of information technology (computer skills). Low expectations are
for capability of building deeper business relationships with customers and
application of advanced sales techniques. A slightly different picture emerges
from the analysis of job descriptions. The distribution of competence indicates
the importance of sales techniques and building relationships with customers,
but at a very low level there is the ability to identify customer needs. People
working on sales positions should have very high communication skills, manage
  B. Lambert, T. Ohai, E. Kerkhoff, World Class Selling – New Sales Competencies, American
Society for Training & Development, Alexandria VA 2009.
16
77
Maciej Jan Malarski
their time well. Also the teamwork skills and analytical thinking are required
among sales people.
Conclusions
Changes in the sales processes appear to be imminent. The role of the client
in the process is changing clearly in the direction of its sophistication, wiser
relationships between a sales person and a client, personalized approach to
service, adapting the offer to his recognised and agreed needs. These changes
affect the competency requirements in relation to the sales staff. However,
a survey conducted among the businesses recruiting and employing sales staff
does not suggest that entrepreneurs are definitely moving in this direction. The
scheme of competencies rather suggests an attitude for the implementation of
sales processes by classical methods which mainly focus on communication
skills, with the use of sales techniques, and lesser focus on building relationships.
Low skills are required, however, regarding the skills in business approach,
recognizing customer needs and understanding of sales processes.
The further research should be provided in order to understand of the
reasons for this situation. Undoubtedly, it is important to pose the following
questions: whether companies by applying the competency requirements are
successful in the market and are able to compete, if so, whether this is due to the
immaturity of the customers market, lack of knowledge among the management
of the company about other ways in which the sale is conducted, or the weak
pressure from the competition.
Presented results should be regarded as a reference for educational
institutions which offer specialized courses for sales people. It should be
emphasized that business requirements are not far from traditional approach to
processes of sales, however taking into account global changes in sales processes
it is even more important to introduce new standards of educating people for
sales positions and changing the mentality of sales managers. That should be an
advantage and one of the most important goals for educational institutions.
Literature:
78
1. Armstrong M., Essential Human Resource Management Practice – a guide to
people management, Kogan Page Limited, 2010.
2. Armstrong M., Zarządzanie zasobami ludzkimi, Oficyna Wolters Kluwer
Business, Kraków 2007.
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kapitał, Oficyna Wolters Kluwer Business, Warszawa 2011.
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emocjonalna – vademecum użytkownika, Imperia, Łódź 2002.
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i lojalnych klientów, OnePress Exclusive, Gliwice 2005.
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i menedżerów zespołów sprzedażowych, Rebis, Poznań 2004.
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nowo zdefiniować sprzedaż, aby stworzyć wartość dla klientów, Oficyna
Wolters Kluwer Business, Warszawa 2010.
12. Salovey P., Sluyter M., Emotional Development and Emotional Intelligence,
BasicBooks, New York 1997.
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kroków innowacyjnej sprzedaży według systemu Sandlera, Oficyna Wolters
Kluwer Business, Warszawa 2014.
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Oficyna Ekonomiczna, Kraków 2002.
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Performance, Wiley 1993.
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business.qld.gov.au, [27.09.2014].
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w procesach zmian, Poltext, Warszawa 1994.
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Random House Business Division, New York 1988.
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Grażyna Stańczak
MSc Eng., owner of EUROPOINT, a training and consulting company
THE CHANGE IN MARKETING TECHNIQUES IN
THE ECONOMY OF THE DIGITAL AGE
Keywords:
marketing, managing clients, marketing analysis, client capital, relation
intelligence
Summary
The publication is an analysis of factors that have an impact on the
optimal form of modern marketing and directly contribute to an organization’s
success. Proposals of marketing actions and solutions used by more successful
companies are also discussed.
The author talks about the increased importance of long-term relationships
companies have with their clients, indicates how the computing revolution
and new technologies enable perfecting relation intelligence, and the roles and
functions that the marketing of a modern organization must have to connect
clients with the company.
Introduction
The last decade has brought significant changes in the ways that companies
attract clients. Tools and strategies that were considered innovative are today seen
as antiquated, and are being replaced by new ones. It can be said that marketing
is another field, besides computing, that has evolved so quickly. However, many
modern organizations do not change their marketing departments, which are most
often a separate organizational body, as it was popularized in the previous era1.
When marketing began to develop, it was focused mostly on building
brands, promoting sales and impersonal transactions, which were based on one
directional mass marketing, focused on selling the product or service to broad
markets. The focus was on the product and brand, and marketing departments
were built as separate bodies. Today, however, because of the digital revolution,
marketing is forced to use different tools and methods to connect customers
  M. de Swaan Arons, F. van den Driest, K. Weed, Nowa machina marketingowa, “Harvard Business
Review”, November 2014, p. 40.
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Grażyna Stańczak
with the company. It should be concentrated on building long, positive relations
with clients and be able to take advantage of the fact that today, clients need
and seek deep relations with companies and with each other, and that they
want to have an impact on the final shape of the offered products or services.
Companies should form two directional communication with individual clients
or narrow segments and build long relations promoting the products that the
client values the most in specific periods of life. Now this is possible because we
have technologies that allow for direct interactions with clients, collecting and
analyzing information about them and adjusting the offer to their needs2.
This article analyzes the most important factors that have an impact on the
optimal shape of modern marketing, its role in organization and the suggested
tools that should be used by modern marketing people. Proposals of marketing
actions and solutions used by market leading companies will also be presented.
The client in the center of attention
A simple definition of marketing says that it is a process of building positive
(profitable) relations with clients through creating value for clients and in
return, receiving certain specific values from them3.
According to this, the center of attention of every company should be the
client and the process of building long-term relationships with them. Companies
that can build good relations with their clients in the right time, and effectively
manage these relations, will achieve decisive, competitive dominance4. Thus, it
seems that the most important role in the marketing of every company should be
focusing on the client and that the product or service be created for their needs.
To achieve this, marketing people should learn and understand the needs of their
clients before the company offers anything. Only a perfect understanding of the
client’s needs can allow companies to offer products or services that will interest
the client. In extreme cases, the power of sales become useless. The client will be
looking for the perfect product, not the other way around. Thus, the new rule
of any company is put the client in the center of attention and precisely defining
their needs, and only then the product will be adjusted for these needs. Customer
service and the price-quality ratio come as a later priority.
The success of brands like Amazon, Google or Dell were largely based on
understanding the customer and placing their needs in the center of attention.
Many of those companies no longer simply ask “what does the customer need?”,
but try to predict the future, asking “what will the customer need in a year, two
years or even 10 years?”5.
  R.T. Rust, C. Moorman, G. Bhalla, Zmiana podejścia do marketingu, “Harvard Business Review”,
December 2010-January 2011, p. 62-71.
3
  G. Amstrong, P. Kotler, Marketing. Wprowadzenie, 10th Edition, Warszawa 2015, p. 70.
4
  V. Kumar, Zarządzanie wartością klienta, Warszawa 2010, p. 80.
5
  M. Staniszewski, Klient na pierwszym miejscu, „Harvard Business Review”, July-August 2014, p.
122-123.
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THE CHANGE IN MARKETING TECHNIQUES IN THE ECONOMY OF THE DIGITAL AGE
Also, besides asking “what else can we produce?”, today companies ask:
“what else can we do for our clients?”. Factories and products are no longer the
basis of business- they are currently the customer and the market.
The client will pick the offer that will provide them the most benefits.
Companies put much effort into looking for technological innovations, because
they believe that creating new products will give them the edge in the market.
The competition will be won by the company that offers innovations that let
the customer reduce costs and risks in the entire life cycle of the product,
from its purchase, through its consumption and utilization. This is why
companies should focus more on post-production innovations rather than just
technological innovations.
For example – Hyundai successfully implemented a post-production
innovation by introducing “Hyundai Assurance”, an option of selling their cars
during the peak of the 2008–2009 recession. Not willing to cut prices like their
competitors, Hyundai asked its customers: “why aren’t you buying?”. Of course,
the most frequent answer was the fear of losing your job during the financial
crisis. Because of this, Hyundai guaranteed its customers that should they lose
their job within a year from their purchase, they will be able to return the car
without any impact on their credit rating. In the first month after introducing
the post-production innovation, sales were almost doubled, while the rest of the
industry was dealing with severe losses.
In reality, innovative technologies are sometimes perceived as the greatest
threat of competitive dominance. It isn’t necessary to worry about the release of
every product of rival companies and every new feature they bring. The only ones
that are dangerous are those which are an attempt to take control of purchase
criteria of customers and cause a change in the market which disrupts the postproduction competitive dominance. A high indicator of failure of new products in
many industries proves that companies still invest too much in product innovation,
but cannot modify the purchase criteria of customers. Technology is necessary, but
isn’t enough to cause markets to evolve. Post-productive action, however, convinces
customers to evolutionary, generational and revolutionary changes6.
Marketing that focuses on communicating with customers
In order for an organization to focus on the customer, it must create an
intelligent relation, which many companies lack. They do not understand,
for example, how many different types of relations customers can have with
a company; they also don’t know how to modify and strengthen these bonds.
People expect nowadays that the company knows, what kind of relations they
want and expect, so that the companies may fulfill their part of the contract.
Unfortunately, many brands do not meet those expectations.
  N. Dawar, Kiedy marketing jest strategią, “Harvard Business Review”, July-August 2014, p. 113123.
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Grażyna Stańczak
Although companies pay huge costs for CRM programs (Customer
Relationship Management), some of them don’t really know what good
relations with customers are about, and don’t know how to use them to achieve
success. Data collected in CRM, like gender, age, income and education are
then associated with purchase information, which allows dividing clients into
profitability levels. Using only such constructed templates can lead to many
mistakes, like losing the chance to build a good relation. For example, someone
who wants to become a “friend” of the brand, share their observations about
improving certain solutions, can be treated as a part of a normal transaction,
which wastes the opportunity to create a proper relation with them.
To better understand relations with customers, companies must improve
the relation intelligence of CRM systems. Currently, many companies deal
with a huge influx of data, like e-mails, instant messaging or phone calls, many
of which contain signals about relations. Because this information is often
scattered, these companies cannot properly deal with collecting and analyzing
it. These signals indicate what kind of relations customers expect, and in what
direction these connections may evolve.
The biggest effort is required when collecting internet data. Web searching
technology that uses robots can be useful in this- special programs that support
search engines (web crawling) and data mining technology to collect signals
from social media websites7.
“Radian6” is an example of such a program, which gives companies
a platform that is able to listen to and interact with the clients, post its own
comments, collect information and engage customers from a whole web of
social media. “Radian6” (web dashboard) allows real-time monitoring of
every situation, in which the customer mentions the given company, brand
and touches on important matters for the businessman, including monitoring
information about competition. The system searches through millions of blog
posts, including comments and reviews on forums or social media8.
The new shape of marketing
Focusing on the customer must not be only the domain of the marketing
department in a company. The development of information technology has
made it possible for every department of the company to interact through
clients, especially through electronic communication. This means that today it
is no longer possible to relay the task of understanding the customer just to the
marketing department. In the old way of thinking, the needs of the customer
were handled only by marketing, sales and customer service. The new way of
thinking is based on the idea that no matter what department the employee
  S. Fournier, J. Wittenbraker, Odkryj tajemnice relacji z klientami, “Harvard Business Review”,
November 2014, p. 60-71.
8
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84
works for and what their role in the company is, they must understand the rules
of marketing and focus on the client. David Packard, the deceased founder of
Hewlett-Packard once said: “Marketing is too important to give it only to the
marketing department”9.
Today, companies that want to successfully compete must give up the
idea of selling specific products, and build long term relationships with
their customers. To make this possible, it seems necessary to transform the
marketing department, which should take control over some functions that
have contact with customers, e.g. CRM, customer service, or expanding its
influence on the research and development area, or even the financial or
legal departments.
In order for a marketing director to effectively manage such
a department, he or she must have a strong operational position and report
to the president of the company. Thanks to this, he or she becomes the
person responsible for designing and realizing the company’s strategy of
forming relationships with the customers and overseeing all departments
that have contact with them10.
An optimal approach is based on organizing the marketing department
around relations with the customers, creating positions tied to relations and
expanding the competence of that area. From the relations that a company has,
the marketing department must isolate both the positive and profitable bonds,
as well as the negative and less profitable ones. Next, a strategy must be selected
– it can be maintaining positive relations, moving clients in their direction,
or a different change of mechanisms. In order for a strategy to be effectively
executed, marketing specialists should train the personnel, modify recruitment
procedures, introduce the right motivational elements and prepare processes to
care for relations.
To make this emphasis on relations truly effective, it should extend far
beyond marketing related departments. Relation intelligence should be a part
of every department that has contact with clients, or an impact on them. This
concerns two functions especially: information technology and customer
service, which are unfortunately often outsourced.
The companies computer systems should be capable of collecting and
analyzing specific types of data about nuanced relations, which are hidden
in consumer activity through direct contact with the company, as well as
social media. An optimal solution is for the director to oversee a team of
programmers responsible for CRM, and hire personnel to analyze the contents
by hiring psychologists, for example. These people are better prepared to reach
conclusions from data analysis than analysts who specialize in computing, who
are usually given the task of managing data about relations with customers.
  G. Amstrong, P. Kotler, Marketing. Wprowadzenie, 10th Edition, Warszawa 2015, p. 55-56.
9
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Grażyna Stańczak
Another very important function of the company which has a big impact on
relations is customer service. Often, this is given to third party companies who
usually underpay their employees; this causes companies to standardize and
write in large compilations the answers that should be given when talking to
customers. This approach does not serve building long term relationships with
clients. To implement the correct approach, companies must teach customer
service representatives the value of relations and tell them what relations people
maintain or want to maintain with the company. This is why marketing should
have an impact on managing customer service.
Marketing should also have a direct impact on research and development. It
is more important to include clients in the designing process, so that decisions
that concern products would be made based on the clients' actual needs.
Introducing inventive technology without deeply investigating needs can cause
severe losses.
The marketing department should be able to share knowledge concerning
clients with all other departments that maintain contacts with them – PR, sales,
web designers or even the financial and legal departments11.
Decisive processes and marketing cooperation with other
departments
Considering the above mentioned issues it is possible to conclude that
marketing people in the current, unstable environment must play new, very
important new roles and must cooperate with other departments. The value and
effectiveness of marketing actions is greater in companies that emphasize on
cooperation in the structures of that department. Cooperation effectiveness can
be improved by using simple tools that strengthen the decision-making process,
like: creating unambiguous roles, precisely formulating decisive criteria and
properly defined procedures.
An important matter is to determine the fragile points where marketing
collides with other departments, and improve the decision making processes in
those areas (e.g. the business strategy, sales, information technology, analysis,
price policy or finances).
No company is able to take care of these areas at the same time, especially
since in every marketing organization certain colliding areas between
organizational bodies are more important than others. Organizations that are
able to isolate the most important decisions and improve their effectiveness will
build better and stronger marketing departments12.
  S. Fournier, J. Wittenbraker, Odkryj tajemnice relacji z klientami, “Harvard Business Review”,
November 2014, p. 60-71.
12
  A. Joshi, E. Gimenez, Jak procesy decyzyjne usprawniają marketing, “Harvard Business Review”,
November 2014, p. 51-59.
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86
The impact of the development of computing technology on
marketing
New challenges in marketing have caused marketing bosses to be more
important in the ranks of their company. They have joined the elite of most
organizations that consists of financial directors, operational directors and sales
directors.
A marketing director should be well oriented in a changing business
environment and trends that appear in the market, starting with the development
of mobile devices and new channels of marketing communication, new formats
of advertisements and methods of grading their effectiveness.
It can be said that computing technology now plays a main role in marketing.
It has mostly brought the ability to measure the effectiveness of funds spent on
marketing. The times when it was sarcastically said that half of the marketing
budget is wasted are now the past, and marketing departments feel more
pressure from managers and company owners to increase sales. No one wants
to make a mistake and it is a common goal to increase income and gain new
customers because that is hard evidence that a modern marketing organization
should listen to.
To increase IT knowledge and use new and innovative tools, marketing
people are forced by the dynamic growth of the internet and mobile channels of
communicating with people. New trends in technology and contact points with
clients cause old strategies not to work. As observers of these trends, marketing
people are often the most advanced in the organization in using these new tools.
This is why the most sought out skills among marketing directors are mobile
marketing and marketing analysis. Content creation and managing innovation
are also extremely important13.
Marketing is quickly becoming one of the most technology dependant
business functions, which is why in the near future marketing directors might
be spending more money on technology than is currently spent by computing
directors. And it isn’t just about increasing the budget for digitization because
of moving funds from traditional media to electronic media. Companies
spend more marketing funds on technology and expenses for things associated
with technology, as well as service providers whose offers are associated with
technology. Effective management of all of these resources is not an easy task.
There are over 1000 providers of marketing programming in the world that
offer a wide variety of products: CRM platforms, Content Management Systems
(CMS) and applications that enable direct interactions with clients14.
New technologies are thus strategically important for the shape of modern
marketing and strengthening its position in a company. Because of this, many
  M. Jankowska, Rosnąca rola dyrektorów marketingu, “Harvard Business Review”, July-August
2014, p. 24-25.
14
  S. Brinker, L. McLellan, Między technologią informacyjną a marketingiem, “Harvard Business
Review”, November 2014, p. 73-79.
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Grażyna Stańczak
companies have a marketing technology director who combines both of these
functions.
New measures in marketing
The most important value of any company is not just gaining new customers,
but also keeping them and increasing their base. One marketing consultant put
it this way: “The only value that your company can create is the value coming
from the customers – the ones you have, and the ones who you will have in the
future. Without customers, there is no profit”15.
This perception of values requires methods of evaluating results oriented
on the client – not only gaining and keeping a client, but also long term value,
or client capital. Thanks to these measures it is possible to determine both
current and future marketing results, which are a result of a better relation
with customers. Gary Armstrong and Philip Kotler indicate in their book that
the result of marketing investments is the higher value and satisfaction for
the client that have an impact on gaining and keeping customers. This in turn
increases the long term value of individual customers and the client capital of
the company as a whole. A greater client capital tied with marketing investment
costs makes it possible to determine the return from marketing investments16.
As it was indicated in previous parts of this elaboration, companies should
focus more on relations with their customers than product marketing. To
measure the effectiveness of the selected strategy, companies should consider
these matters:
• Lesser emphasis should be placed on product profitability; greater
emphasis should be placed on client profitability. Some products can, for
example, be sold below costs only to improve relations with customers;
• Companies should concentrate less on sales, and more on the life value
of the customer. This is because current sales tell us only about the
current situation of the company; it is possible that a company with high
sales income also has bad prospects and can be qualified as declining.
The life value parameter of the customer allows determining future
profits from relations with a specific client, considering the discount
value to represent the value of money in time. Thanks to this approach
the company must be interested in its own condition in a longer
perspective;
• Instead of brand capital (its value), companies should focus more on
customer capital (the sum of the life value of customers);
• Companies should in a lesser degree focus on current market share;
greater emphasis should be put on the combined capital of customers
(the value of the customer base of the company divided by the global
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16
customer value in the market). Market share shows the sales value of
the company compared to its competition in the current moment, while
global customer capital share is a long term measure of the companies
competitiveness considering profitability levels17.
Marketing of the most effective companies
The analysis of decisive factors when it comes to achieving dominance by
certain companies over others was conducted in the “Marketing 2020” project.
According to the organizers of the project it is the most versatile analysis of
the best marketing structures. The project was conducted by EffectiveBrands
(with a number of partners: Association of National Advertisers, the World
Federation of Advertisers, Forbes, Spencer Stuard, MetrixLab, and Adobe).
Detailed interviews with over 350 company presidents, marketing directors
and advertisers were conducted, as well as a number of round tables for
marketing directors from many cities in the world. Questionnaires, containing
over 80 questions about the skills of marketing workers in data analysis, brand
strategy, cooperation with other departments, and training, were conducted.
Conclusions were drawn on the basis of about 10 000 questionnaires conducted
in 92 countries18.
As part of the project, companies were divided into two groups, based on
their achieved results. Three year income in relation to the achievements of
competitors was used as the deciding criteria. The first group was composed of
companies with above average results, and the other with below average results.
Strategies, organizational structures and skill of these groups were compared.
Based on research, elements necessary to achieve above average results, as well
as the character of companies that achieve such results, were determined.
The first common feature that ensures a competitive advantage is possessing
large databases that contain detailed observations concerning consumers. The
best companies are distinguished by combining data concerning what their
consumers do with data about why they do it.
Currently, marketing people are equipped with huge databases about
consumers, however, they usually use them in a limited spectrum – e.g. only to
improve the direction of communication. The most effective companies go a lot
farther – they use their databases to get information about motives called “the
universal truths about people” which their consumers really listen to.
The creators of the project give the example of Nike+, a company that has
a deep understanding of the motives that guide athletes. Shoes produced by the
company are equipped with sensors; they also come with devices connected to
18
  M. de Swaan Arons, F. van den Driest, K. Weed, Nowa machina marketingowa, “Harvard
Business Review”, November 2014, p. 40.
17
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Grażyna Stańczak
90
the internet. Thanks to this, Nike+ not only registers the time of each run, but
also gives the user vital information, allows them to communicate with friends,
other enthusiasts, or trainers. Users are awarded for good results – they can
share them with their friends, compare them with other members of the Nike+
community, and receive useful tips.
Another common characteristics of the most effective companies is
a convincing and clear purpose of the brands existence. These organizations
care about all three purposes of the existence of the brand – functional benefits
(effects that the customer will receive thanks to the brand), emotional benefits
(ways of satisfying the emotional needs of the customer) and social benefits
(care for balanced development). A convincing and clear reason for the brands
existence binds clients with the company and ensures consistent messages in
all interactions with the client. For example, a Starbucks coffee is refreshing,
provides an occasion to spend time together, and the company purchases coffee
while adhering to the rules of fair trade.
Another good example is the Dulux brand of AkzoNobel, which has
formulated a common motive for all departments in all countries: “the colors
of the environment have a big impact on emotions”. Based on this, the company
has created a marketing campaign called “let’s color the world” and gives away
paint to volunteers (about 80% of them are employees of the company), who
renovate run-down districts of many cities in the world.
This approach has brought together the actions of a once decentralized
company and cause an increase in market share of the brand.
Another characteristics deemed as valuable by the organizers of the
“Marketing 2020” project is “participating in the customers experience”. The
authors of the project have concluded that soon it might be the most important
measure. As an example they use the company McCornik – a producer of spices
and food aromas, which promises “to promote the art of taste, knowledge about
taste and a love for taste”. It is shown in many of the companies actions – for
example, McCornik publishes sponsored publications that resemble cookbooks;
FlowerPrint, a website, has also been established, which, thanks to advanced
technology, is able to recognize and learn the preferences of customers and
generate recipes for specific clients. The used algorithms analyze every recipe
considering the unique flavor profile which is then associated with the flavor
preferences of an individual user. The service is able to generate personalized
e-mails, shopping lists and recipes sent to tablets and mobile devices.
The project distinguishes give motors of organizational effectiveness:
integration with the business strategy, inspiring, focusing employees on
priorities, creating interdisciplinary teams and developing internal skills.
Effective marketing is integrated with the business strategy – direct links
between marketing and a general managing unit are created, tight relations
with the president of the company are built and marketing is integrated with
other departments. The leaders of marketing departments of the most effective
companies not only integrate their department with the marketing strategy,
but also actively participate in its creation. Thanks to this, marketing is much
more integrated with other functions of the company, which is necessary to
achieve success. Another way of boosting relations with other functions is
a common leader responsible for both marketing and another department. For
example, at Motorola, the senior vice-president of marketing is also responsible
for computing technology, at Visa the marketing director also directs human
resources, and Unilever has given both marketing and communication and
balanced development to one person.
Leaders of these companies emphasize on inspiring. This is one of the most
neglected aspects that drives marketing, as well as one of the most powerful,
which connects all organizational levels with the purpose of the brand and
increases engagement, thanks to which all employees are motivated by the
same mission. The key to inspiring employees is creating thrilling messages and
programs that drive the entire team to action. At Dulux, this was giving paint
and brushes to thousands of employees and sending them to many different
districts in the whole world.
An important element is also concentrating the attention of employees
on priorities. In the most effective companies both local, as well as central
marketing employees understand the strategy in the same way, thanks to which
the internal cohesiveness of the company is maintained.
Leaders of highly effective companies organize operative and flexible
interdisciplinary teams, whose members are characterized by flexible roles and
fluid responsibility. These organizations use less strict procedures of approving
projects, thanks to which teams can react quickly.
“Marketing 2020” also reveals tendencies in the needs for new marketing
positions. Because of the expansion of social and digital marketing, next
to specialists with a general understanding of marketing terms many new
specialties have arisen, e.g. an analyst for privacy protection in digital
communication. The organizers of the project have concluded that it is
worth classifying these marketing professions according to wide categories
of their functions. It is thus possible to divide marketing people devoted
to “thinking”– using analytic skills to acquiring and analyzing data, and
selecting appropriate media for marketing campaigns, “action” marketing
people who create content, design campaigns and realize them, and “feeling”
marketing people who focus on relations with the customer engaging in
different roles – from customer service, through social media, ending on
internet communities.
The project indicates that both the most effective and less effective
companies differ considerably in the intensity and quality of training. Marketing
personnel must have professional knowledge at least about traditional actions in
marketing and communication like market studying, gaining information about
competitors, planning media presence, etc. The best marketing structures invest
even in creating special internal marketing academies. For managers who are
members of the company’s board of directors, advanced courses concerning
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Grażyna Stańczak
strategic matters can be useful. For these leaders training concerning digital
technologies and social media can also be educating19.
Conclusions
The goal of this elaboration was to analyze factors that determine the
shape and roles of marketing in modern organizations that achieve market
success. From the presented thoughts it can be said that modern marketing
should be focused on the customers, building appropriate, long-term
relations with them, and developing a deep understanding of their needs.
When creating an offer, companies should focus in a greater degree on postproduction innovations – giving the customer the greatest benefits, reducing
their costs and minimizing the risk taken by the customer in the entire
lifecycle of the product. This approach is possible in companies where the
marketing department not only has an impact but also actively participates
in creating the business strategy, has greater privileges and control over other
departments that have contact with the customer.
Over the last few years more companies have changed their approach from
managing brands to managing customers; this has forced a redevelopment
of marketing departments, increasing their privileges and impact on the
organizations activity. Thanks to rapid growth of technology it is now possible
to correctly and effectively manage relations with clients.
Modern marketing should focus on perfecting relation intelligence with
clients, developing and expanding new IT competencies, analyzing collected
data about customers and a constant use of new and innovative tools, but it
should especially have a strong position in the company and have an impact on
the entire organization.
Literature:
1. Amstrong G., Kotler P., Marketing. Wprowadzenie, 10th Edition, Warszawa
2015.
2. Brinker S., McLellan L., Między technologią informacyjną a marketingiem,
“Harvard Business Review”, November 2014.
3. Dawar N., Kiedy marketing jest strategią, “Harvard Business Review”, JulyAugust 2014.
4. de Swaan Arons M., van den Driest F., Weed K., Nowa machina
marketingowa, “Harvard Business Review”, November 2014.
5. Fournier S., Wittenbraker J., Odkryj tajemnice relacji z klientami, “Harvard
Business Review”, November 2014.
6. Jankowska M., Rosnąca rola dyrektorów marketingu, “Harvard Business
92
  M. de Swaan Arons, F. van den Driest, K. Weed, Nowa machina marketingowa, “Harvard
Business Review”, November 2014, p. 40-49.
19
Review”, July-August 2014.
7. Joshi A., Gimenez E., Jak procesy decyzyjne usprawniają marketing, “Harvard
Business Review”, November 2014.
8. Kumar V., Zarządzanie wartością klienta, Warszawa 2010.
9. Rust R.T., Moorman C., Bhalla G., Zmiana podejścia do marketingu,
“Harvard Business Review”, December 2010-January 2011.
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July-August 2014.
93
PART II
THE ROLE OF INTANGIBLE
ASSETS IN ORGANIZATIONAL
TRANSFORMATIONS
Snežana Knežević
PhD, Аssociate Professor, Faculty of Organizational Sciences, University
of Belgrade, Belgrade, Serbia
Aleksandra Mitrović
MSc, Teaching Assistant, Faculty of Hotel Management and Tourism,
University of Kragujevac, Serbia
THE ACCOUNTING TREATMENT OF
INTERNALLY GENERATED INTANGIBLE
ASSETS
Keywords:
internally generated intangible assets, software, web site, the accounting
treatment, cost model, the capitalization treatment
Summary
Intangible assets generally present the exclusive rights that provide
benefits to the owner. Despite their lack of physical existence, this property
can be an extremely valuable resource for the enterprise. Intangible
investment in recent times has an increasing importance in creating
competitive strength of small and medium-sized enterprises. Global
competition encourages enterprises to invest more in order to create or
maintain competitive advantage. The successful positioning of small and
medium-sized enterprises in the market can contribute largely intangible
property. Intangible portfolio enterprises may also have an important role as
collateral for a loan from the bank.
The research presented in this paper will be the accounting treatment of
intangible assets that are internally generated – recognition and measurement
of internally generated intangible assets. In this article, special attention will be
given to the application of the cost model for internally generated intangible
assets – software.
Introduction
Cost accounting is a branch of management accounting focused on the
application of various techniques for monitoring and cost control. It is more
suitable for applications in manufacturing companies. It is closely related with
financial accounting as well.
The material is evaluated and balanced at purchase price and the unfinished
production and final products in the amount of consumption of fixed assets
and materials calculated at purchase prices and expenditures in cash due to
the costs of processing, which together form the cost price, while expenditures
of sold products are measured by the cost price. Thus, for the evaluation of
tangibles and expenditures the purchase price is important or cost price that are
a consequence of expenditure in previous periods, which is why they are called
historical cost of money or expenditure.
The main reasons for accepting the principles of the real cost lie in the
fact that the actual cost is easy to control, that it presents a realistic fact, that
it is eligible for the calculation of expenditures and financial results, that it
accomplishes the functions of accounting documentation, which assumes the
recording of the actual transactions. Actual cash expenditures on the basis of the
purchase of assets and expenses and cash inflows from income enable control of
business by means of money, which would not be the case if the daily prices as
on the balance sheet date or reproduction price were used for the evaluation.
The costs are rather capitalized than included in expenditures, if they are
expected to generate benefits beyond the current period.
The resources of companies are divided into tangible and intangible.
Intangible assets comprise precisely intangible resources.
The first part will deal with the accounting aspects of including the
costs and performances with a focus on cost price as a central element
in the operational bookkeeping. After that, the second part is dedicated to
the recognition and valuation of intangible assets. The third part is related
to internally generated intangible assets. Within the fourth part, attention is
paid to identifying the cost price of internally generated intangible assets with
significant attention paid to the software as a form of intangible asset that
can be internally generated or purchased. Recognition and measurement of
intangible assets is considered under applicable accounting standards relating
to this type of asset. This is followed by a conclusion and presentation of
references.
Accounting coverage of costs and performances
98
Costs denote the value of the spent funds (factors, elements) of production
calculated on obtaining a product or achieving some service. The costs are
the inputs, investment in manufacturing or business process; performances
(products and services) are outputs or the consequences of a business process,
expressed by material and by value. Among the costs and performances
a correlation exists and a basic requirement of the economy is that the values
of the performances (outputs) are greater than the costs (inputs) for their
generation.
THE ACCOUNTING TREATMENT OF INTERNALLY GENERATED INTANGIBLE ASSETS
The calculation of costs and performances is also known under other
names, such as: cost accounting, cost calculation, internal accounting, and as an
integral part of management accounting. The internal accounting is not subject
to the legislation, except for the information provided by financial accounting
and therefore the organization and content are largely subordinated to the
internal needs of enterprise management at different levels of the management
structure1.
The organizational financial and operational bookkeeping can form
a unique accounting of the enterprise, in which individual classes and groups
of accounts serve the needs of both accounting, which is based on the process
(calculation) chart of accounts and the method of calculating the company’s
results according to the costs of sold performances. Another organizational
form is common accounting in which the classes and groupings of accounts are
strictly separated to those comprising the financial accounting (with balance
sheets), which have their own balance in the general ledger and to accounts
of internal accounting, which also have their balance in the general ledger.
This second model is based on the accounts framework and calculation of the
company’s results using the method of total costs.
In the system of calculating according to the actual costs the main purpose
of including business costs by cost position is a more accurate allocation,
transfer, schedule of overhead costs to cost holders, and thus obtaining as real as
possible cost prices of products and services. The cost price, depending on the
groups of costs it includes, can be:
• the cost price of production, including only the costs of the functional
areas of production,
• commercial (full) cost price, including the total costs of all functional
areas,
• the cost price by the variable costs2.
The cost price of production is the instrument of division of production
areas costs to inventories of unfinished and finished goods and to the costs of
sold products, the values of performances inventories (unfinished and finished
products) at the end of the accounting period, without which it would not
be possible to compose the balance sheet and income statement in financial
accounting.
Another important area of using full (average) cost price of performance
is in the assessment of profitability or the conduct of policy of performances
sales price effects in the long term, because if in a longer period, the selling
price cannot cover the full cost price (cost price of production plus the
  See more: G. Ilić, K. Škarić-Jovanović, R. Radovanović, Accounting work book, Modern
Administration, Belgrade 1980, p. 177-181.
2
  See more: D. Malinić, V. Milićević, N. Stevanović, Managerial Accounting, Faculty of Economics,
Belgrade 2012, p. 243-250 and 254-257.
1
99
associated costs of administration and sales), the performance flows should be
eliminated from the production program. In the short term, and particularly
with the existence of free (unused) production capacity, the authoritative cost
price is according to the variable costs for assessing the cost-effectiveness or
performance sales cost. The fixed costs are given for the embedded (practical)
capacity and they do not change with the performance volume, and thus are
not relevant to the pricing policy in the short term, therefore authoritative
are marginal, differential and variable costs for the performances that are
produced or are planned to be produced.
The third part in which necessary are the data on cost provided by the
internal accounting are individual business decisions or the so called alternative
decision-making in which only relevant are differential (additional) costs or
revenue/ costs or costs, revenues and investments. It is about the decisions of
whether to introduce a new product, exclude the existing one, to make changes
in the product range, to buy or produce a semi-product, to accept the new order
and a host of everyday decisions in the area of business, seeking co-measuring
the costs and benefits (revenues). This type of calculation or planning we call
project planning, because co-measured in it are the costs and revenues for the
entire life of case being decided on, for example, to decision on selling the sell
semi-finished product or further processing it, working in one, two or three
shifts, and so on.
The fourth area or aim of internal accounting is to provide information
for periodic planning and cost control, both at the company level and business
functions, small organizational parts, such as plants, workshops, offices and the
like. For this purpose in the internal accounting places are formed for costs,
centers of sales, profit or investment centers. The cost centers are responsible
for the amount of costs, revenue centers are responsible for revenues amount,
profit centers for the amount of costs and revenues, and investment centers for
the amount of costs, revenues and the volume of assets used for the acquisition
of profit. This control is the calculated on improving the efficiency of operations
in the places where there is a need for it, but also on incentive rewarding of
responsible persons and executives that have contributed to boosting the results
of operations.
All the aforementioned, as the aim of internal accounting, are in fact its
contribution to the management goals of the company, because the accounting
is a subsystem of management system of the company.
Intangible assets – recognition and evaluation
100
Intangible assets are valued in accordance with IAS 38 and IFRS 3, as well as
other relevant standards (IAS 36 and other).
The cost price of internally generated intangible assets represents the totality
of the expenses incurred from the moment it first met the recognition criteria. The
re-disclosure of expenditure previously recognized as an expense is not allowed.
For the recognition of intangible assets, it is necessary that the following
requirements are met – the ability to identify, control over the asset and the
probability of inflow of future economic benefits.
Internally generated intangible assets may be recognized only if it is
resulting in the development stage and under precisely defined conditions.
Newer methods relating to the evaluation of patents and pointed out are the
Patent Value Predictor model and PRISM or Brand evaluation, such as Brand
Assets Valuator, Aaker model and other.
The objective of International Accounting Standard 38 – Intangible assets, is
to prescribe the accounting treatment of intangible assets not specifically dealt
with other accounting standards. This Standard requires an entity to recognize
an intangible asset if, and only if, certain criteria are met. This standard also
defines how to measure the bookkeeping value of intangible assets and requires
certain disclosures about intangible assets.
The important issue is the accounting treatment of intangible assets. In this
regard, it is important to note the following rules for the valuation of intangible
assets:
• the initial measurement at purchase cost or fair value,
• subsequent valuation – the model of purchase price or revaluation
model,
• testing for impairment (IAS 36) – respecting the principle of prudence.
Another important issue that relates to intangible assets is the possibility
of its evaluation and the methods that can be applied for this purpose. Classic
quantitative methods that can be applied for this purpose are – cost based,
market and income approach.
Internally generated intangible assets
Sometimes it is difficult to assess whether internally generated intangible
asset meets the conditions for the recognition due to problems with:
• identifying whether and when there are assets that can be identified that
will generate future economic benefits,
• a reliable determination of the acquisition value (cost price). In some
cases, the cost price of internal generation of intangible assets cannot be
distinguished from the cost of maintaining or improving the internally
generated goodwill or performing daily activities of the entity.
To assess whether internally generated intangible asset meets the criteria for
recognition, the entity classifies the generation of the assets in two following
phases:
• research phase,
• development phase.
101
If an entity cannot distinguish the research phase and the development
phase of an internal project to create an intangible asset, the entity treats the
expenditure on the basis of that project as if they were incurred only in the
research phase.
Intangible assets arising from research (or from the research phase of an
internal project) are not recognized. Typical examples of such activities are those
whose aim is to gain new knowledge, the search for alternatives for materials,
devices, products, processes, and more.
The expenditure arising from research (or from the research phase of an
internal project) is recognized as an expense when it is incurred.
For intangible assets resulting from the development phase it is valid
to recognize it as assets if the company is able to demonstrate the technical
feasibility of completing the intangible asset, its intention to use or sell the
intangible assets after it completes it, the way the intangible assets will generate
future economic benefits, the availability of adequate technical, financial and
other resources, as well as its ability to definitively gauge the expenditure
attributable to the intangible asset during its development.
Identifying the cost price of internally generated intangible
assets
The cost price of internally generated intangible assets includes all directly
attributable costs necessary to create, produce and prepare the asset for
functioning in the way that leadership predicted. As the examples of directly
attributable costs cited are the costs of materials and services used in generating
the intangible asset, costs of employee benefits (as defined in IAS 19), the
commission for registration of legal rights and amortization of patents and
licenses used. In the cost price of internally generated intangible assets the
following cannot be involved – expenses resulting from the sale, administration
and other general overhead expenditure unless they are impossible to be directly
attributed to preparing the asset for use, identifying the inefficiencies and initial
operating losses incurred before the assets realized the planned performance
and expenses relating to the training of employees for the usage of such asset3.
Further in the paper, attention was paid to the accounting treatment of
software as a form of intangible assets. Companies can create certain intangible
assets within the company as it is, for example, the software for the realization of
a particular business process.
The software can be generated internally or purchased on the market. The
software acquired through purchase on the market is recorded as any other
intangible asset acquired through purchase.
  I. Tatić, P. Petrović, R. Stojanović, S. Mitrović-Vučetić, V. Nešić, J. Čanak, The practical application
of IFRS in the Republic of Serbia, Association of Accountants and Auditors of Serbia, Accounting
Ltd., Belgrade 2008, p. 944.
3
102
An important part of intangible assets represents software’s that increase
business and economic performance of companies. Internet itself is largely
the product of innovation in the software. The research by OECD (The
Organisation for Economic Co-operation and Development) has shown that
the use of the software provides a positive contribution to the growth and role in
the evolution and development of the knowledge-based economy. The software
also has other important roles, because among other things, it enables global
commerce, facilitates and provides online transactions, telecommunications
and the protection of privacy on the network.
By the beginning of this century, companies in the US have invested
approximately the same amount in the software (intangible assets), as well as
the material investments, given that today information technology is developing
rapidly and companies must keep pace with these developments4. There is
no doubt that the software is of limited lifespan, given that technological
innovations have led to software losing the value5.
Among the common examples of items that are included in spending
resources, or to create obligations for the acquisition, development, maintenance
or improvement of intangible resources, are computer software and licenses.
Some intangible assets may be contained in natural substances, such as
a compact disc (in the case of computer software), legal documentation (license
or patent) or a film. When determining whether a property which contains
an element of both the immaterial and the material should be treated under
IAS 16 – Property, plant and equipment or as an intangible asset under this
standard, the entity uses judgment to assess which element is more significant.
For example, computer software – for the machine tool which is controlled by
a computer, which cannot operate without that specific software as an integral
part associated with the hardware, and is thus treated as property, plant and
equipment. The same applies for the computer operating system. When the
software is not an integral part of hardware, computer software is treated as an
intangible asset6. An example of software recording that are classified as tangible
assets, as an integral part of the hardware is Windows Vista; while examples of
software treated as intangible assets are various bookkeeping programs.
Below we present an example of internally generated software. Table 1
presents the costs of software production and costs in the initial phase of
operation and functioning of software on the basis of an internal calculation of
the company.
  OECD Observer, Issue 285, Untangling intangible assets, 2011, p. 13.
  J. Friedman, B. Diskin, M. Benjet, Unit Valuation of Utilities: The Appropriate Classification and
Appraisal Methodology for Computer Software as an Intangible Asset, “Journal of Properly Tax
Assessment & Administration”, Vol. 3, Iss. 4, 2006, p. 13-22 and p. 14.
6
  International Accounting Standard 38 – Intangible Assets provides that for the purposes of
the practice itself acquired business programs may be treated as assets if they were acquired as
components of hardware and whose existence affects the operation of that hardware.
4
5
103
Table 1. The costs of software production and costs in the initial phase of
operation and functioning of software on the basis of an internal calculation
of the company
Cost type
Per
accounting
report
Expense
for the
period
Capitalized
Planning of the program concept
xxx
xxx
Evaluation of possible solutions
xxx
xxx
Technology selection
xxx
xxx
Final choice
xxx
xxx
Software design
xxx
xxx
Software code development
xxx
xxx
Quality control tests
xxx
xxx
Data backup costs
xxx
xxx
Training personnel to work on
software
xxx
xxx
Allocated general expenses
xxx
xxx
Costs of general management and
administration
xxx
xxx
Current maintenance costs
xxx
xxx
Total:
xxxxxxxx
xxxxxxxx
Source: I. Tatić, P. Petrović, R. Stojanović, S. Mitrović-Vučetić, V. Nešić, J. Čanak, The practical
application of IFRS in the Republic of Serbia, Association of Accountants and Auditors of
Serbia, Accounting Ltd., Belgrade 2008, p. 945.
Assuming that the tax paid and copyright protection, the expenditure that
can be capitalized in creating the software for their own use, are as follows.
104
Table 2. The expenditure that can be capitalized in creating the software for
their own use
Cost type
Amount
Software design
xxx
Software code development
xxx
Quality control tests
xxx
The fee for copyright protection
xxx
Total capitalized:
xxxxxxxx
Source: I. Tatić, P. Petrović, R. Stojanović, S. Mitrović-Vučetić, V. Nešić, J. Čanak, The practical
application of IFRS in the Republic of Serbia, Association of Accountants and Auditors of
Serbia, Accounting Ltd., Belgrade 2008, p. 945-950.
In addition to alternative methods of calculating costs, a good financial
manager will have to understand the basics of different theories or concepts
of cost accounting. Intangible assets that are generated in the company
due to its specific characteristics, requires special attention of financial
accountants.
Conclusions
In order to well understand corporate value, it is necessary to pay special
attention to intellectual capital management and reporting on it.
Intangible assets created in the research phase is not recognized, but such
an expense is recorded as expense in the period, which is logical, since the
company cannot prove the existence of intangible assets in the research phase
of an internal project, nor probable future economic benefits. However, for
intangible assets under development recognition is done in the form of the asset
if specific conditions are met.
If the company has developed cost accounting it will be able to reliably
valuate the costs attributable to the development of intangible assets. Otherwise,
the recognition of an intangible asset will not be possible.
Software development is seen in the context of intellectual capital.
Application software meet the criteria for recognition, and in that sense in the
accounting they can be treated as an intangible asset in the balance sheet of the
company which is the owner. Accounting recognition of software, is permitted
in line with the requirements of IAS 38.
105
Literature:
1. Financial Reporting & Assurance Standards Canada, International
Accounting Standard 16 – Property, Plant and Equipment, http://www.
frascanada.ca/international-financial-reporting-standards/resources/
unaccompanied-ifrss/item45609.pdf, [20.05.2015].
Accounting Standard 19 –Employee Benefits, http://www.frascanada.ca/
international-financial-reporting-standards/resources/unaccompaniedifrss/item45615.pdf, [20.05.2015].
Accounting Standard 38 – Intangible Assets, http://www.frascanada.ca/
international-financial-reporting-standards/resources/unaccompaniedifrss/item45645.pdf, [20.05.2015].
4. Friedman J., Diskin B., Benjet M., Unit Valuation of Utilities: The Appropriate
Classification and Appraisal Methodology for Computer Software as an
Intangible Asset, “Journal of Properly Tax Assessment & Administration”,
Vol. 3, Iss. 4, 2006.
5. Ilić G., Škarić-Jovanović K., Radovanović R., Accounting work book, Modern
Administration, Belgrade 1980.
6. Malinić D., Milićević V., Stevanović N., Managerial Accounting, Faculty of
Economics, Belgrade 2012.
7. OECD Observer, Issue 285, Untangling intangible assets, 2011.
8. Tatić I., Petrović P., Stojanović R., Mitrović-Vučetić S., Nešić V., Čanak J.,
The practical application of IFRS in the Republic of Serbia, Association of
Accountants and Auditors of Serbia, Accounting Ltd., Belgrade 2008.
106
PhD, Assistant Professor, Department of Organizational Behaviour,
Cracow University of Economics
SOCIAL CAPITAL AS COMPARED TO AN
ORGANIZATION’S INTELLECTUAL CAPITAL
AND INTANGIBLE RESOURCES
Keywords:
organization’s intangible resources, intellectual capital, human capital,
knowledge-based economy, social capital
Summary
Starting point of this paper is settlement terms of intangible resources,
intellectual capital and intangible assets and indication of its mutual relations.
The main part of deliberations is dedicated to social capital of organization –
its areas, dimensions and determinants – as the element of intellectual capital
of enterprise. Those analysis are summed up in designation relations between
formation of social capital and creation of intellectual capital.
Introduction
The intensification of interest in “soft elements of an organization” took
place in the 1980s and no clear and explicit position in this respect has been
developed so far, despite numerous studies and research projects in this area.
It may be noted that discourses are practically conducted separately at the
level of an organization’s intangible resources, a company’s intellectual capital or
particular subcapitals creating a company’s intellectual potential. Therefore, the
purpose of the study is to determine mutual relations between these concepts
and to identify connections typical of them, with particular focus on the role of
social capital in shaping the level of an organization’s intellectual capital.
Intangible resources and intellectual capital – mutual
relations
According to the generally binding position, resources include all tangible
and intangible elements necessary for the organization to pursue its objectives in
an effective and efficient manner. Therefore, they are all assets a company uses
in its processes and activities as well as will be understood as a set of available
factors – visible and invisible – possessed and controlled by the company. As
a consequence, they may be tangible (financial, material and human assets) or
intangible (knowledge, organizational culture, reputation, brands, relations with
the environment, intellectual property rights).
According to J. Barney, in order for the resources to constitute the basis
for an effective strategy and contribute to building a permanent competitive
advantage, they should be characterized by strategic value, difficulty in imitation,
rarity of presence and lack of substitutes1 – these are the basic assumptions of
the resource-based approach. In the case of organizations based on knowledge,
these attributes are usually the features of a company’s intangible resources.
The concept of intangible resources itself is not used precisely, it is often
used interchangeably with such concepts as intangible values or intangible
assets. Furthermore, when numerous authors consider these issues they do
not provide a formal or their own definition of intangible resources or present
them very vaguely. They are most often described through a number of criteria
differentiating them from tangible resources2.
Similarly, in the aspect of the classification of an organization’s intangible
resources, there is also no single, commonly accepted position – numerous
typologies were suggested at least several of which deserve special attention3.
The greatest doubt in the perspective of intangible resources results not so
much from the definition of or arrangement of intangible resources but their
connotation with intellectual capital. The fact that knowledge in this matter
is not systematized still does not result in a single explicit resolution as to the
compliance or separability of these concepts. Such concepts as: immeasurable
values, intellectual assets, intellectual capital are often used interchangeably.
The category “intangible values” is commonly used in accounting, the concept
  J.B. Barney, Firm resources and sustained competitive advantage, “Journal of Management”, No.
17, 1991, p. 100.
2
  See: B.E. Becker, M.A. Huselid, D. Ulrich, Karta wyników zarządzania zasobami ludzkimi,
Oficyna Ekonomiczna, Kraków 2002, p. 21; D.J. Teece, Managing Intellectual Capital.
Organizational, Strategic, and Policy Dimensions, Oxford University Press, New York 2000, p. 15-16;
A. Pietruszka-Ortyl, B. Mikuła, Studium zasobów niematrialnych organizacji, [in:] Zeszyty Naukowe
Uniwersytetu Ekonomicznego w Krakowie, No. 820, Prace z zakresu zachowań organizacyjnych,
Wydawnictwo Uniwersytetu Ekonomicznego w Krakowie, Kraków 2010, p. 31-46.
3
  See: R. Hall, A Framework Linking Intangible Resources And Capabilities To Sustainable
Competitive Advantage, „Strategic Management Journal”, No. 14, 1993, p. 136-139; R. Hall, The
Strategic Analysis Of Intangible Resources, “Strategic Management Journal”, No. 13, 1992, p. 608-610;
T.A. Stewart, The Wealth of Knowledge. Intellectual Capital and the Twenty-First Century
Organization, Nicholas Brealey Publishing, London 2001, p. X; M. Bratnicki, Podstawy
współczesnego myślenia o zarządzaniu, Wydawnictwo „Triada”, Dąbrowa Górnicza 2000, p. 50-52;
T. Dudycz, Zarządzanie wartością przedsiębiorstwa, PWE, Warszawa 2005, p. 221; M.J. Stankiewicz,
Konkurencyjność przedsiębiorstwa. Budowanie konkurencyjności przedsiębiorstwa w warunkach
globalizacji, Wydawnictwo „Dom Organizatora”, Toruń 2002, p. 105-109.
1
108
SOCIAL CAPITAL AS COMPARED TO AN ORGANIZATION’S INTELLECTUAL CAPITAL AND INTANGIBLE RESOURCES
“knowledge assets” is most often used by economists, and “intellectual capital”
is the domain of specialists in management and managers.
In the case of estimating the value of intangible resources, the position of
researchers seems to be already more clear because the majority of them refers
rather to the measurement of a company’s intellectual capital. Therefore, it seems
justified to attempt to specify the terminologies, set out the attributes of intangible
resources and clear boundaries between their particular elements. They are the
potential of creating a company’s value and, as a result, the future of competition.
The conducted conceptual analysis4 indicates significant differences in the
perception of the concepts resources, assets, capital and suggests a certain logical
sequence (figure 1) in interpreting concepts, with simultaneous indication of
problematic issues5:
• the attribute of assets is the ability to generate future income – therefore
they need to be measurable in money units, and the income needs to be
definable,
• capital is abstract, aggregated and homogeneous, while resources are
specific and heterogeneous,
• resources are usually exposed to depreciation, while the capital in them
should multiply,
• capital needs to be and should be multiplied – this is its unquestionable
and commonly accepted feature.
Figure 1. Relations between intangible resources, intellectual capital and
intangible assets
  See: Mała encyklopedia prakseologii i teorii organizacji, (ed.) T. Pszczołowski, Zakład Narodowy
im. Ossolińskich – Wydawnictwo, Wrocław 1978, p. 293; Leksykon rachunkowości, (ed.) E. Nowak,
PWN, Warszawa 1996, p. 9 and 75; R. Patterson, Kompendium terminów z zakresu rachunkowości
i finansów po polsku i angielsku, Fundacja Rozwoju Rachunkowości w Polsce, Warszawa 2002,
p. 7 and 138; D. Dobija, Pomiar i sprawozdawczość kapitału intelektualnego przedsiębiorstwa,
Wydawnictwo Wyższej Szkoły Przedsiębiorczości i Zarządzania im. Leona Koźmińskiego,
5
  See: D. Andriessen, Making Sense of Intellectual Capital. Designing a Method for the Valuation
of Intangibles, ELSEVIER Butterworth-Heinemann, Burlington 2004, p. 66-69; D. Dobija, Pomiar
i sprawozdawczość kapitału intelektualnego przedsiębiorstwa, Wydawnictwo Wyższej Szkoły
Przedsiębiorczości i Zarządzania im. Leona Koźmińskiego, Warszawa 2003, p. 26-27.
4
109
In this convention, the concept intangible resources should be perceived
as wide as possible – as non-cash elements that do not have a tangible form,
but have the ability to generate future benefits for an organization6.
Intellectual capital will include these intangible resources that currently
constitute the basis for a company’s market value. Intangible assets, on the
other hand, are part of intellectual capital covered by reporting in financial
statements.
However, it should be emphasized that according to the definition, capital
is owned by a company, while part of intangible resources forming its value
cannot be an organization’s property, as e.g. human resources or relations
with a company’s stakeholders. In addition, the relation: assets – obligations
= capital, when referring to intangible assets, should also determine issues
regarding obligations of an intangible character, which is problematic.
Therefore, it seems justified to use the concept intangible resources and, in
justified cases, the concept intellectual capital.
As a consequence, 3 planes should be determined as part of intangible
resources – the first level would include intangible resources belonging to an
organization and that may be the subject of purchase, sales or exchange (e.g.
patents, copyrights, trademarks), the second level would constitute intangible
elements covered by a company’s control but not subject to separation and
sales (e.g. research-development works in progress, reputation, trade secrets),
and the third level – these intangible resources that may not be fully and
completely controlled by a company (e.g. human resources or relational
capital).
Intangible resources are these elements of an intangible character that
are necessary for an organization to pursue its objectives in an effective
and efficient manner. It is this base of resources that guarantees obtaining
a permanent competitive advantage and a stable market position. Intellectual
capital, on the other hand, is this part of intangible resources that remains
at a company’s current disposal and currently substantially contributes to the
creation of an organization’s value. Intellectual capital is thus a result of the
base of a company’s intangible resources as well as its potential for creating
new value based on these elements (figure 2).
110
  D. Andriessen, Making Sense of Intellectual Capital. Designing a Mathod for the Valuation of
Intangibles, ELSEVIER Butterworth-Heinemann, Burlington 2004, p. 18.
6
Figure 2. Mutual relations between intellectual capital and intangible
resources
Therefore, a company’s competitive position results from mutual
interactions under the conditions of new economy:
• the size and quality of an organization’s base of intangible resources,
• the efficient use of intellectual capital possessed by a company.
We may thus come to a conclusion that an organization’s intangible
resources are responsible for the organization’s potential competitiveness, while
intellectual capital is responsible for its current position. When examining
intangible resources their components are identified, when estimating the level
of intangible resources – intellectual capital is evaluated and when creating
intellectual capital reports – an organization’s intangible assets are determined.
Social capital as a determinant of an organization’s
intellectual capital
According to W.M. McElroy, the negligence of social capital in discussions
on an organization’s intellectual capital indeed means ignoring an organization’s
basic ability to learn, create innovations and adapt to market changes7. Thus, the
unquestionable need to determine the correlation between these values.
The concept social capital itself comes from sociology and political sciences,
and presently it gained a micro- and macroeconomic dimension. It is perceived
as “glue”, “binder” connecting people as part of relations resulting from the
participation in a network of relations. It creates a context and is the result of
mutual relations.
  M.W. McElroy, Social Innovation Capital, 2001, http://www.macroinnovation.com/images/
Social_Innovation_Capital.pdf, [10.05.2015].
7
111
S. Walukiewicz quite clearly and disputably separates social capital from
human capital, emphasizing the fact that human capital is always connected with
a single human being, while social capital is generated where there is interaction
in a positive (trust, solidarity, understanding, etc.) or negative (suspiciousness,
hypocrisy, etc.) sense between at least two persons. To conclude, he defines
social capital as all formal and/ or informal relations between at least two
persons treated as independent human beings. The formula is specified by the
characteristics that social capital is the supplementation of human capital in the
sphere of intangible assets8. He thus ignores the context of social capital as an
organization’s attribute, he also deviates from comparative discussion of social
capitals of several companies which currently is a noticeable trend in the field of
these problems.
It is believed that the concept social capital was specified as early as in 1916
by L.J. Hanifan who defined it as “intangible elements that count the most
in the everyday life of people”9. The concept was successively developed by
P. Bourdieu10, J. Coleman11 or R.D. Putnam12, P. Dasgupta13 and N. Lin14.
The definitions include the identification of social capital with benefits
seized from relations and networks and/ or from standards, and sometimes it is
connected with relations, networks and/ or standards themselves. It is perceived
in three perspectives – social capital as concurrent standards and networks
(Coleman, Putnam), social capital as standards (Fukuyama) and social capital as
networks (Bourdieu, Dasgupta, Lin)15.
M. Paldam16 introduces another perspective for perceiving social capital –
emphasizing the prism of trust. He claims that there are three basic concepts for
  S. Walunkiewicz, Kapitał społeczny. Skrypt akademicki, Instytut Badań Systemowych Polskiej
Akademii Nauk, Warszawa 2012, p. 26, 85, 97.
9
  L.J. Hanifan, The Rural School Community Center, “Annuals of the American Academy of
Political and Social Science”, No. 67, 1916, p. 130-138; quot. after: B. Jamka, Czynnik ludzki we
współczesnym przedsiębiorstwie: zasób czy kapitał? Od zarządzania kompetencjami do zarządzania
różnorodnością, Oficyna Wolters Kulwer business, Warszawa 2011, p. 156.
10
  P. Bourdieu, The Forms of Capital, [in:] Handbook of Theory and Research for the Sociology of
Education, (ed.) J.G. Richardson, Greenwood Press, New York 1986, p. 248.
11
  J.S. Coleman, Social Capital in the Creation of Human Capital, “The American Journal of
Sociology”, No. 94, 1988, p. 95-120.
12
  R.D. Putnam, Bowling Alone. The Collapse and Revival of American Community, Simon and
Schuster, New York 2000, p. 19.
13
  P. Dasgupta, The Economics of Social Capital. Working Paper, University of Cambridge,
Cambridge 2005, p. 12-13.
14
  N. Lin, Social Capital: A Theory of Social Structure and Action, Cambridge University Press,
Cambridge 2001, p. 25.
15
  B. Łopaciuk-Gonczaryk, Więzi społeczne, zaufanie i kapitał społeczny, [in:] Więzi społeczne
i przemiany gospodarcze. Polska i inne kraje europejskie, (ed.) S. Golinowska, J. Wilkin, Instytut
Pracy i Spraw Socjalnych, Warszawa 2009, p. 37.
16
  M. Paldam, Social Capital: One or Many? Definition and Measurement, “Journal of Economic
Surveys”, No. 14(5), 2000, p. 629.
8
112
defining social capital. The first refers to trust, the second to cooperation and
the third to social networks17.
Elements most often found in the definitions of social capital thus include18:
• the participation in networks of relations (contact network),
• the access and use of resources (in particular, intangible resources –
knowledge and competences),
• shared standards and values,
• trust,
• generating specific benefits to pursue objectives (social, political,
economic).
J. Coleman emphasizes the following attributes of this resource19:
• as compared to other types of resources, it is most difficult to measure
because it is hidden in relations between people,
• it is subject to constant changes that depend on the modification of
social relations,
• the majority of forms it takes, is a by-product of other actions,
• it may be used by all members of a given social structure through the
access to this structure, it is not necessary to bring any contribution in
its establishment,
• it cannot be the property of a given unit, but is the effect of common
projects,
• when it is not renewed or strengthened, it is consumed and disappears.
The concepts of social capital are most often referred to three areas of
social life – the micro-social level in which social capital is presented as
a certain resource of units, the meso-social level in which it is a resource
of social groups such as a local government community or a company, and
the macro-social level in which it is identified with the factor of social
development.
In the levels referred to above it is a network of formal as well as informal
relations between people that facilitate mutual cooperation and coordination
of activities. These relations as part of the network may be characterized by
bilateral trust, honesty or solidarity20, but we cannot forget that the quality of
social capital is determined by the people’s capacity for mutual cooperation.
This aspect is emphasized, in particular, by F. Fukuyama who defines social
capital as the ability to cooperate through informal rules and standards
  M. Bugdol, Wymiary i problemy zarządzania organizacją opartą na zaufaniu, Wydawnictwo
Uniwersytetu Jagiellońskiego, Kraków 2010, p. 38.
18
  M. Marcinkowska, Kapitał społeczny przedsiębiorstwa – próba syntezy literatury przedmiotu,
19
  M. Gajowiak, Kapitał społeczny. Przypadek Polski, PWE, Warszawa 2012, p. 19-20.
20
17
113
between people within a group or an organization in order to pursue the
interests of its members21.
Corporate social capital also exists at an inter-organizational level of
analysis consisting of resources controlled by members of the organization
connected by numerous relations of exchange and cooperation. We may thus
speak about internal and external social capital of a company. Internal social
capital is created by internal stakeholders and takes into account the resources
of a company (as well as the resources of these stakeholders – employees
and management of the company). External social capital of an entity may
be associated with its activities, widely understood environment or market
(figure 3)22.
Figure 3. Components of a company’s social capital
Source: M. Marcinkowska, Kapitał społeczny przedsiębiorstwa – próba syntezy literatury
przedmiotu, „Przegląd Organizacji”, No. 10, 2012, p. 20.
The following are thus responsible for the level of an organization’s internal
social capital:
• human capital, corresponding to the thinking, creative part of
intellectual capital and understood as knowledge, experience, skills,
  F. Fukuyama, Zaufanie. Kapitał społeczny a droga do dobrobytu, PWN, Warszawa-Wrocław
1997, p. 4.
22
„Przegląd Organizacji”, No. 10, 2012, p. 20-21.
21
114
intellectual capacity and talents of an organization’s employees,
• interpersonal relations prevailing in a company, including especially
relations and bonds between internal stakeholders of an organization.
As a consequence, it should be emphasized that the conscious use of
social capital resources possessed by an organization is subject to creating
appropriate conditions for the existence of relations between different forms of
its intellectual capital – to the flow of knowledge between relevant components
and, as a consequence – the flows of capitals. Internal social capital, as the sum
of human capital and interpersonal relations in an organization, affects and is
connected with all elements creating organizational capital, namely both with
infrastructure, relational capital, innovative capital and corporate organizational
culture. Its basis is human capital that shapes interpersonal relations in an
organization, namely the dimension of organizational behaviours. These, in
turn, determine relational capital, especially interactions with stakeholders or
relations with clients, while relational capital is connected with infrastructure
because it creates databases and results from strategies and systems of actions
determining the selection of appropriate processes and methods for their
management.
There is also strict correlation between social capital and a company’s
organizational culture because these components of intellectual capital
shape one another. Organizational culture itself affects relational capital
and innovative capital. In combination with social capital and, in particular,
with human capital, it determines an organization’s predispositions as to
undertaking innovative projects. Innovative capital, on the other hand, decides
on the strategy and organizational structure as well as co-creates intellectual
property.
The concept of F. Fukuyama presenting social capital as a cultural resource
of a long-term nature perfectly fits with this context. Social capital should
then be treated as a permanent attribute of social structures that is of essential
importance especially in the management of dispersed teams of office workers
and affects the effectiveness of knowledge-based work.
The concept of the structure of social capital suggested by M. Bratnicki and
J. Strużyna, according to which social capital is the sum of cognitive capital
(common terminology, common language, common answers), the dimension
of interpersonal relations (trust, standards, obligations, identification) as well
as structural capital (links in the network, configuration of the network, an
organization’s, responsibility) remains within this convention23.
Building social capital in order to achieve competitive advantage requires24:
  Przedsiębiorczość i kapitał intelektualny, (eds.) M. Bratnicki, J. Strużyna, Wydawnictwo
Akademii Ekonomicznej im. Karola Adamieckiego w Katowicach, Katowice 2012, p. 70-72.
24
23
115
• support for the development of practitioner communities, including
the creation of informal groups of employees (as part of which they will
share their knowledge and experience, solve problems together, etc.) as
well as building the loyalty and commitment of employees,
• collecting experience building trust between employees as well as
fostering the transparency of the work environment in which there are
no reasons to show mistrust and in which trusting employees is a rule,
• supporting cooperation at all levels of the company (as well as in
relations with the environment),
• developing common contexts of operation, interpretation, language,
symbols, standards, principles etc. by employees,
• using a suitable technology making it possible to create and maintain
the network of relations.
We should not forget that every company creates relations with its
environment. It is social capital that helps make these relations permanent
and advantageous for all participants. In addition, the indirect effect of
connected social and relational capitals on companies’ operating and
financial results is indicated. Social capital also facilitates the creation of
human and relational capital. It may thus be a unique catalyst for building
intellectual capital. Thanks to trust, loyalty and the commitment of the
participants of the network of relations, sharing the same standards and
values, social capital is built which, in turn, reinforces the existing human
and relational capital and thus allows a company to more effectively use the
intellectual capital25.
Conclusions
Assuming the concept26 and structure of intellectual capital, according to
L. Edvinsson and M.S. Malone, as the starting point and summing up the
discussion on a company’s social capital, the following relations should be
emphasized.
External social capital (coming from the environment and developed with
an organization’s environment) is usually identified both at the micro, meso and
macro level, while a company’s internal social capital – most often at the micro
and meso level. Thus, internal social capital in the form of bonds and relations,
skills of interaction, common standards and values as well as a specific level of
trust between units, units and groups and between groups should be treated
  Ibidem, p. 21-22.
  As proposed by the authors “intellectual capital means possessed knowledge, experience,
organizational technology, relations with clients and professional skills that give Skandia
competitive advantage on the market” – see: L. Edvinsson, M.S. Malone, Kapitał intelektualny,
PWN, Warszawa 2001, p. 40.
25
26
116
as an element of human capital, namely subcapital of a company’s intellectual
capital (figure 4).
Client capital as a component of structural capital along with internal social
capital shape on organization’s relational capital – again at the micro-, mesoand macro- level, that is developed in the context of and under the influence
of external social capital which comprehensively and substantially affects and
catalyzes the development of an organization’s intellectual capital.
When emphasizing the qualities of social capital as a factor substantially
stimulating the development of an organization’s intellectual capital, it is worth
emphasizing its other advantages:
• it helps employees find jobs, enriches the resources of potential
candidates to work in companies, reduces the fluctuation of personnel,
• it affects the professional success as well as the level of the management’s
remuneration,
• it supports innovative actions,
• it increases the effectiveness of the functioning of employees,
teams of employees (especially in functional structures) and entire
organizations,
• it develops entrepreneurship and helps create new business entities,
reduces the number of bankrupt companies at the same time increasing
the life and longevity of organizations,
• it improves relations with suppliers, fosters the creation of networks of
partner relations and enables the flow of knowledge and learning from
group members,
• it facilitates the transfer of knowledge which affects an improvement in
the effectiveness of organizations and their results,
• it facilitates the exchange of resources between units as well as the
acquisition of the best resources,
• it enables growth in the scale of activities, entering into new markets,
• it helps reduce transaction costs,
• it helps reduce organizational barriers,
• it affects greater consistency and complexity of activities,
• it facilitates risk management and results in greater stability of an
organization’s functioning.
117
Figure 4. Social capital as well as intellectual and relational capital of an
organization and their mutual relations
We should also not forget that social capital is presently perceived as the
highest stage of development in a dynamically operating network27, which is of
essential importance towards the binding paradigm of networking. Relations
prevailing in the network may lead to the emergence of trust and willingness
to cooperate which determines the creation of social capital – it may thus
be the basis for certain common projects, and their success may lead to the
reinforcement of social capital itself.
To sum up, the main factors of social capital as determinants of an
organization’s intellectual capital include: trust, sense of community and
affiliation, unlimited communication, democratic decision making, sense of
common responsibility, social standards28.
Literature:
1. Andriessen D., Making Sense of Intellectual Capital. Designing a Method
for the Valuation of Intangibles, ELSEVIER Butterworth-Heinemann,
Burlington 2004.
2. Barney J.B., Firm resources and sustained competitive advantage, “Journal of
Management”, No. 17, 1991.
3. Becker B.E., Huselid M.A., Ulrich D., Karta wyników zarządzania zasobami
ludzkimi, Oficyna Ekonomiczna, Kraków 2002.
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28
  M. Bugdol, Wymiary i problemy zarządzania organizacją opartą na zaufaniu, Wydawnictwo
Uniwersytetu Jagiellońskiego, Kraków 2010, p. 38.
27
118
4. Bourdieu P., The Forms of Capital, [in:] Handbook of Theory and Research
for the Sociology of Education, (ed.) J.G. Richardson, Greenwood Press, New
York 1986.
5. Bratnicki M., Podstawy współczesnego myślenia o zarządzaniu,
Wydawnictwo „Triada”, Dąbrowa Górnicza 2000.
6. Bugdol M., Wymiary i problemy zarządzania organizacją opartą na zaufaniu,
Wydawnictwo Uniwersytetu Jagiellońskiego, Kraków 2010.
7. Coleman J.S., Social Capital in the Creation of Human Capital, “The
American Journal of Sociology”, No. 94, 1988.
8. Dasgupta P., The Economics of Social Capital. Working Paper, University of
Cambridge, Cambridge 2005.
9. Dobija D., Pomiar i sprawozdawczość kapitału intelektualnego
przedsiębiorstwa, Wydawnictwo Wyższej Szkoły Przedsiębiorczości
i Zarządzania im. Leona Koźmińskiego, Warszawa 2003.
10. Dudycz T., Zarządzanie wartością przedsiębiorstwa, PWE, Warszawa 2005.
11. Edvinsson L., Malone M.S., Kapitał intelektualny, PWN, Warszawa 2001.
12. Fukuyama F., Zaufanie. Kapitał społeczny a droga do dobrobytu, PWN,
Warszawa-Wrocław 1997.
13. Gajowiak M., Kapitał społeczny. Przypadek Polski, PWE, Warszawa 2012.
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Sustainable Competitive Advantage, „Strategic Management Journal”, No.
14, 1993.
15. Hall R., The Strategic Analysis Of Intangible Resources, “Strategic
Management Journal”, No. 13, 1992.
16. Hanifan L.J., The Rural School Community Center, “Annuals of the American
Academy of Political and Social Science”, No. 67, 1916.
17. Jamka B., Czynnik ludzki we współczesnym przedsiębiorstwie: zasób czy
kapitał? Od zarządzania kompetencjami do zarządzania różnorodnością,
Oficyna Wolters Kulwer business, Warszawa 2011.
18. Leksykon rachunkowości, (ed.) E. Nowak, PWN, Warszawa 1996.
19. Lin N., Social Capital: A Theory of Social Structure and Action, Cambridge
University Press, Cambridge 2001.
20. Łopaciuk-Gonczaryk B., Więzi społeczne, zaufanie i kapitał społeczny, [in:]
Więzi społeczne i przemiany gospodarcze. Polska i inne kraje europejskie,
(ed.) S. Golinowska, J. Wilkin, Instytut Pracy i Spraw Socjalnych, Warszawa
2009.
21. Mała encyklopedia prakseologii i teorii organizacji, (ed.) T. Pszczołowski,
Zakład Narodowy im. Ossolińskich – Wydawnictwo, Wrocław 1978.
22. Marcinkowska M., Kapitał społeczny przedsiębiorstwa – próba syntezy
literatury przedmiotu, „Przegląd Organizacji”, No. 10, 2012.
23. McElroy M.W., Social Innovation Capital, 2001, http://www.macroinnovation.
com/images/Social_Innovation_Capital.pdf, [10.05.2015].
24. Paldam M., Social Capital: One or Many? Definition and Measurement,
“Journal of Economic Surveys”, No. 14(5), 2000.
119
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polsku i angielsku, Fundacja Rozwoju Rachunkowości w Polsce, Warszawa
2002.
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[in:] Zeszyty Naukowe Uniwersytetu Ekonomicznego w Krakowie, No. 820,
Prace z zakresu zachowań organizacyjnych, Wydawnictwo Uniwersytetu
Ekonomicznego w Krakowie, Kraków 2010.
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Oficyna Wolters Kluwer business, Warszawa 2012.
28. Przedsiębiorczość i kapitał intelektualny, (eds.) M. Bratnicki, J. Strużyna,
Wydawnictwo Akademii Ekonomicznej im. Karola Adamieckiego
w Katowicach, Katowice, 2012.
29. Putnam R.D., Bowling Alone. The Collapse and Revival of American
Community, Simon and Schuster, New York 2000.
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konkurencyjności przedsiębiorstwa w warunkach globalizacji, Wydawnictwo
„Dom Organizatora”, Toruń 2002.
31. Stewart T.A., The Wealth of Knowledge. Intellectual Capital and the TwentyFirst Century Organization, Nicholas Brealey Publishing, London 2001.
32. Teece D.J., Managing Intellectual Capital. Organizational, Strategic, and
Policy Dimensions, Oxford University Press, New York 2000.
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Systemowych Polskiej Akademii Nauk, Warszawa 2012.
120
PhD, Associate Professor, University of Wroclaw
CREATING OF COMPANY’S SOCIAL
INNOVATION POTENTIAL IN THE CONTEXT OF
THE IDEA OF CORPORATE CITIZENSHIP
Keywords:
innovations in management and governance, social innovations, business
responsibility, non-material assets, corporate citizenship
Summary
While looking for new ways to control the processes taking place in the
business space, nowadays one increasingly recognizes the importance of social
innovation, which is believed to be potential and ability to raise competitiveness.
Taking issue of corporate citizenship becomes now therefore important, because
the economy does not operate in a social vacuum, but determines the inevitability
of a new perspective on issues related to socio-economic development. Forming
of positive relationships with the local community in which they operates,
allows companies to use the valuable and increasingly appreciated intangible
forms of non-material assets that generate social innovations.
The purpose of this chapter is – beside of dissemination of the idea of
corporate citizenship – paying particular attention to issues related to the
generation of social innovation by the company and bringing examples of
practices in their management through the use of selected tools of corporate
citizenship.
Introduction
Even two decades ago, when one began to consider innovation as an
opportunity to increase the competitiveness of enterprises, the concept of
social innovation was not commonly known and implemented into business
practice. If the term appeared in the business context, mostly it was about
„social” effect that organizational and/ or technological innovation exercised
within the company and in its environment. Even today, the term „social
innovation” remains ambiguously defined, which opens space for multiple
approaches. Social innovations are interdisciplinary, cross-cutting, they
cover different sectors and areas. Undoubtedly, this contributes to the variety
of meanings and applications of this concept. The diversity of possible
approaches stems from the fact that social innovation is firmly embedded
in institutional practice. Ultimately, this practice determines specifics,
aspects and perspectives on what social innovation is and/ or what it is
not. In addition, social innovation is the issue in statu nascendi. Depending
on i.a. the context, depth, breadth, scope, sector its essence and specificity
changes. The term itself appears in several problem areas relating to: social
transformation, social entrepreneurship, development of new products,
services and programs, public governance model and management model of
the organization. In this last aspect, it is important in view of the foregoing
considerations conducted.
Drivers of social innovation are emerging knowledge society and
knowledge-based economy, which enhance the mobility and activity of society,
its level of expertise, scale and extent of globalization of cultures, markets and
consumption. They are also favored by the growing culture of participation
and inclusion of various groups of stakeholders/ users in the process of social
innovation. In the contemporary public debate, including the scientific
one, the principle is to dispute social innovation as these, which is one of
the characteristics of a single economic system. In this context, it adds new
meanings to concepts of management, particularly of both material and nonmaterial assets of the organization, like human, social, cultural and knowledge
capital. Freedom of access to information and the impact and influence
of the media ensures that consumers are becoming more knowledgeable,
which affects the perception of the company. It can be concluded that the
factor distinguishing companies, which is becoming increasingly important,
becomes its social commitment. That’s why the field of considerations of this
chapter is the issue of corporate citizenship (CC), which goes beyond the rigid
framework of business management as such, and focuses on the relationship
and impact on the social environment. Corporate citizenship is a part of the
concept of corporate social responsibility (CSR) and links with issues such as,
among others, business ethics, diversity management, sustainable development,
corporate governance, socially responsible investing, social investing. Since all
of these areas relate to the social impact, they influence attitudes of people
and organizations, connect with potential for social innovation that can be
pushed when implementing them in the form of management concepts
to the company’s business practices. The purpose of this chapter – beside
of dissemination of the idea of corporate citizenship – is paying particular
attention to issues related to the generation of social innovation by the
company and bringing examples of practices in their management through
the use of selected tools of corporate citizenship.
122
CREATING OF COMPANY’S SOCIAL INNOVATION POTENTIAL IN THE CONTEXT OF THE IDEA OF CORPORATE CITIZENSHIP
Social innovation – definitions and basic assumptions of the
concept
Definitions of social innovation as a major differentiator recognize their
„new” nature of ideas and solutions. Such an approach should not be surprising
in the context of the etymology of the word: „innovation” comes from the Latin
„innovatis” and means „renewal”, „creating something new”. The factor of being
„new” is therefore a common theme in the literature on innovation, which,
however, stresses that this „newness” does not necessarily involve „new” in
a strict sense. So says, among others, E.M. Rogers, who emphasizes that it does
not matter whether the idea is objectively new or not. The perception of being
„new” of one idea by the individual determines its reaction to it. If the entity
believes that the idea is new, one has to deal with an innovation1. Moreover,
for many authors, the „newness” does not necessarily mean completely new or
unfamiliar, but rather „different” or „alternative” and/ or more efficient than
the previous/ current practice2. Other researchers believe that social innovation
defines primarily impact, not the characteristic, which is the „newness”, e.g.
K. Gillwald argues that social innovation represents social achievements, which,
compared with existing solutions, provides better ones. Thus, social innovation
is determined to a lesser extent by its absolute novelty and more by its
consequences3. Social innovation means therefore new solutions that function
better than current practices and make a significant improvement in services.
In the scientific literature, there are three different ways of defining
social innovations. The first one focuses on non-technical innovations in the
organizational context, the second one takes into account the social innovation
combined with technological innovation, and the third one examines the
concept of social innovation as independent and new social practices4.
The first line in the literature in the field of social innovation can be
analyzed through the prism of management. As noted by F. Moulaert et al., such
an understanding was dominant in research on social innovation in the nineties
of the twentieth century5. Under this line of discussing, social innovation
relates to the improvement of social capital in order to increase organizational
effectiveness and thus the ability of the organization to compete6. Examples of
  E.M. Rogers, Diffusion of Innovations, Free Press, New York 1995.
  G. Mulgan, Social innovation. What it is, why it matters and how it can be accelerated, Young
Foundation, London, 2007, p. 5.
3
  S. Neumeier, Why do Social Innovations in Rural Development Matter and Should They be
Considered More Seriously in Rural Development Research? – Proposal for a Stronger Focus on Social
Innovations in Rural Development Research, „Sociologia Ruralis”, Vol. 52, No. 1/2012, p. 50.
4
  J. Schmitt, Social Innovation for Business Success. Shared Value in the Apparel Industry, Berlin,
Heidelberg, Wiesbaden 2014, p. 5-17.
5
  F. Moulaert, F. Martinelli, Towards alternative model(s) of local innovation, „Urban Studies”, Vol.
42, No. 11/2005, p. 1973.
6
  Ibidem, p. 1974.
1
2
123
this kind of social innovation are: dynamic management, flexible organizations,
developing skills and competencies, as well as networking among organizations7
and marketing innovations8.
The second stream in the literature in the field of social innovation
examines it in the context of coexistence with technological innovations. This
trend is visible in the light of current research on innovation9. However, it
refers to the protagonist in research on social innovation, F.W. Ogburn, who
distinguishes technical and social innovation, and technology considers as
a stimulator of social progress. Ogburn assumes that cultural development is
lagging behind technological innovation. In order to maintain the pace of
technological innovation, it is necessary, that the social innovation adjusts to
it10. S. Roth relatives this position, while indicating that every innovation has
a social dimension, which is necessary for new products heading for the market
success. Social innovation is therefore key factor for the success of technological
innovation11. The purpose of this line of analysis in the literature is to explore
the concept of social innovation as „a pre-condition, compensating products
and consequences of technological change”12.
The third trend presents social innovation as an autonomous concept and
means social practice. Social innovations are detached from technological
innovation and should be treated as an independent object of studies. W.
Zapf ’s work can be considered as a starting point for theoretical school of
social innovation in this line. The researcher defines this concept as new ways
to reach the objectives, in particular new organizational forms, new rules,
new lifestyles which change the direction of social transformation and ways of
solving problems better than earlier practices. They should, therefore, be worth
imitating and institutionalized13.
All this three approaches to the major characteristics of defining social
innovation include common features. According to them social innovation:
• is cross-sectoral: social innovation often occurs between different
sectors and engages in the joint action people working in different
sectors,
  F. Pot, F. Vaas, Social innovation, the new challenge for Europe, „International Journal of
Productivity and Performance Management”, Vol. 57, No. 6/2008, p. 468.
8
  A. Kesselring, M. Leitner, Soziale Innovationen in Unternehmen, Study compiled by order of the
Unruhe Stiftung, Vienna 2008, http://www.zsi.at/attach/Soziale_Innovation_in_Unterne hmen_
ENDBERICHT.pdf, p. 9, [07.07, 2015].
9
  J. Howalt, M. Schwarz, Social innovation: concepts, research fields and international trends,
Dortmund: Sozialforschungsstelle, Dortmund 2010, p. 51.
10
  F.W. Ogburn, Kultur und sozialer Wandel. Ausgewählte Schriften, Neuwied, Berlin 1969, p. 169.
11
  S. Roth, Neu für wen? Erste Aufnahmen aus der Sozialdimension der Innovationen, Bern:
Fachhochschule, Bern 2009, p. 232.
12
  J. Howalt, M. Schwarz, Social innovation: concepts, research fields and international trends,
Dortmund: Sozialforschungsstelle, Dortmund 2010, p. 28.
13
  W. Zapf, Über soziale Innovationen, „Soziale Welt”, Vol. 40, No. 1-2/1989, p. 177.
7
124
• is open and collaborative: social innovation often involves and engages
a large number of people and organizations,
• has both grassroots and bottom-up basis: social innovation is often
bottom-up and means local actions,
• means pro-sumption and co-production: more often the line
between producer and consumer obliterates: users become producers
(prosumers), and recipients of services social policy – active creators of
this policy (co-producers),
• bases on mutualism: that is the belief that individual and collective wellbeing can be achieved only by mutual dependence, mutual aid,
• creates new roles and relationships: social innovation is related „with”
and developed „by” users, not delivered „to” and „for” them,
• means better use of assets and resources: social innovation often
recognizes, exploits and coordinates assets and resources which would
otherwise be wasted, under-used or not used at all; in some cases, these
assets and resources can be latent, intangible and/ or physical,
• develops assets and capabilities: many social innovations explicitly aim
to develop the capabilities of beneficiaries enabling them to meet their
needs over the longer term; this capability approach highlights human
agency and advocates participation; it conceptualizes people as active,
creative, and able to act on behalf of their aspirations14.
Since its formation, one has accepted, in a common use, that the term „social
innovation” can be applied to a model of a management of the organization.
It may relate to, among others, building business strategies which involve
changes in human, institutional and social capital, which lead to improvement
of organizational efficiency and competitiveness, organizational restructuring
and modernization of industrial relations and human resource management.
That’s the nature of social innovation considered in the context of the concept of
corporate citizenship and its implementation into business practices15.
Assumptions of the corporate citizenship concept
The concept of corporate citizenship means a new way of doing business,
which assumes that the company is a citizen and considers the social and
environmental responsibility to the communities in which it operates,
together with its economic and financial responsibility to its shareholders and
  J. Caulier-Grice, A. Davies, R. Patrick, W. Norman, Defining Social Innovation. A deliverable
of the project: The theoretical, empirical and policy foundations for building social innovation in
Europe, (TEPSIE), European Commission, DG Research, Brussels 2012, p. 18-20.
15
  A. Wiktorska-Święcka, Zarządzanie kapitałem społecznym w przedsiębiorstwie w kontekście
założeń koncepcji Corporate Citizenship, [in:] Kapitał ludzki i społeczny. Kreowanie i zarządzanie,
(ed.) D. Moroń, Wydawnictwo Uniwersytetu Wrocławskiego, Wrocław 2012, p. 139-154.
14
125
other stakeholders. CC defines the role of the company in the community and
its civic attitude is integrated with the development strategy of the company.
Corporate citizenship is an essential – from the business ethics point of view
– aspect of the company’s involvement in efforts to solve social problems
by launching its own resources. The company establishes and cultivates
contacts and relations with the local community, while becoming a partner,
participating in joint projects or creating their own programs implementing
own resources in the civic responsibilities16. Like the citizens – individuals,
companies – being institutional citizens, care about their own interests,
while seeking ways to reconcile those interests with the common good.
Therefore, they try to coordinate their own strategies to increase profits with
the aspirations of the prosperity of the entire society and try to manage all its
units in such a way that they also pursue social goals17. Therefore, referring
to the perception of the company as a „collective citizen”, which is governed
by law, in the literature it was awarded by the opportunity to apply for certain
rights and privileges arising from citizenship status, for example the right to
freedom, including the freedom of expression and to participate in public
life18. The concept of corporate citizenship means the link of all social activities
of companies that go beyond activities directly related to the economic
activities that are subordinate general corporate purposes19.
Despite a lively debate on the issue of corporate citizenship in the last
few dozen years, the term has been still recognized in the broad framework
and not clear enough, which often leads to controversies. A. Westebbe and
D. Logan concluded that „CC is an activity generally beyond the joint-stock,
made up by the complex commitment of the company to solve social problems.
In this regard, there should be activated all kinds of enterprise resources
with particular emphasis on their specific skills. An important element of
CC is a conscious and intentional communication about social commitment
addressed to the most numerous target groups”20. B. Seitz defines the CC from
an economic perspective as „an active pursuit of the wide use of the social and
natural environment, while building on the belief that profit maximization
requires investment and better shape of social interaction. Thus, CC means an
active look for investment opportunities in society with the use of appropriate
  J. Moon, A. Crane, D. Matten, Can corporations be citizens? Corporate citizenship as a metaphor
for business participation in society, „Business Ethics Quarterly”, Vol. 15, No. 3/2005, p. 427-451.
17
  C. Smith, Nowy model filantropii przedsiębiorstw, [in:] Społeczna Odpowiedzialność
Przedsiębiorstw, „Harvard Business Review”, No. 2/2007, p. 172.
18
  F. Green, Corporations as Persons, Citizens, and Possessors of Liberty, University of Pennsylvania
Law Review, Vol. 94, No. 2, 2014, p. 202-237.
19
  F. Dresewski, Corporate Citizenship. Ein Leitfaden für das soziale Engagement mittelständischer
Unternehmen, „Unternehmen: Partner der Jugend“, Berlin 2004.
20
  A. Westebbe, D. Logan, Corporate Citizenship? Unternehmen im gesellschaftlichen Dialog, Gabler,
Wiesbaden 1995.
16
126
methods”21. D. Matten and A. Crane, while defining the concept of corporate
citizenship , have identified its three dimensions:
• a narrow one, which means the company’s philanthropic activities for
the local community where being a „good citizen” is implemented by
transferring the money to a variety of important social goals,
• equivalent to the concept of corporate social responsibility, which refers
to the „four corporate citizenship responsibilities”: economic, legal,
ethical and philanthropic,
• a wide one, where the concept of corporate citizenship refers to the
political aspects, such as civil rights and the involvement of companies
in multi-level governance issues (global governance)22.
A. Habisch noted that corporate citizenship recommends taking measures
to help companies invest in their social environment and take responsibility.
These activities contribute to build structures and cross-sectoral cooperation to
generate social capital through contacts with local partners from other sectors
(NGOs, politics, other companies etc.) in order to solve specific problems. To
projects in the field of corporate citizenship companies bring not only money,
but also other resources such as the involvement of employees, professional
know-how and organizational skills and information23. Habisch classifies the
company’s social commitment on the basis of two dimensional matrix: on one
axis there is investment time horizon, and on the other the depth of commitment
to the social environment. Depending on the degree of social commitment, the
company acts as a sponsor, a partner or a citizen. On the first level in the role of
the sponsor, the company’s cooperation with an external partner is „sub-productlike” and is a kind of introduction to the interaction in the future. Due to the
infrequency and weak ties of the relationship, this kind of commitment does not
affect the fundamental modification of ethical standards and corporate culture,
which is essential to full civic engagement of the company. On the second,
higher level, the company as a partner, together with partner organizations,
develops specific models to address common challenges, both local and sectoral,
and participates in their implementation. Interacting with partners contributes
to the generation of social capital, which is even more produced on the third
level of social commitment of the company, which is compliance with the role of
the company as a citizen, which may affect the sustained and effective structural
changes in society through the company’s participation in public space. This last
aspect is crucial in the context of social innovations. A feature of the process of
social innovation is primarily a commitment of a complex network of formal
  B. Seitz, Corporate Citizenship, Rechte und Pflichten der Unternehmung im Zeitalter der Globalität,
Gabler, Wiesbaden 2002.
22
  D. Matten, A. Crane, Corporate citizenship: towards an extended theoretical conceptualization,
„Academy of Management Review”, Vol. 30, No. 1/2005, p. 166-179.
23
  A. Habisch, Corporate Citizenship. Gesellschaftliches Engagement von Unternehmen in
Deutschland, Springer, Berlin, Heidelberg 2003, p. 59.
21
127
and/ or non-formal and/ or informal partnerships between various actors. In
most cases, successful innovation relies on the participation and involvement
of many different interest groups – users and beneficiaries of innovation, as
well as manufacturers and suppliers24. Among the numerous participants
(beneficiaries, donors, public institutions, volunteers etc.) of the process of
social innovation, beneficiaries play a key role. According to G. Mulgan, some
of the most effective methods of implementation of social innovation begins at
the moment of realization that people (thus also those who participate within
a company) are competent interpreters of their lives and are able to competently
solve their own problems25.
Examples of social innovation in the practice of
implementation of corporate citizenship
Referring to the three dimensions of corporate citizenship proposed by
Matten and Crane, it should be noted that action in the narrow dimension of the
concept offers a wide spectrum of possibilities, especially:
• support for local actors such as financial, organizational, physical,
• cooperation with local NGOs.
In the subject aspect, supporting of local actors can apply to both public,
private and social partners and take the form of:
• financial subsidies (in the context of corporate giving),
• donations,
• company product donations,
• organizational support.
The spectrum of possible actions in the implementation of corporate
citizenship in the narrow dimension depends on the creativity of a particular
company, the economic situation and the scope of its recognition and social
hierarchy of needs in the local environment. In this regard helpful can be
the cooperation of socially engaged companies with local governments,
communities and NGOs.
Activities in the second dimension: equivalent to the concept of corporate
social responsibility, reflect the fact that the spectrum of CSR applies to
the environment (relationships with internal stakeholders of the company,
employees , the relationship with the market, the external environment and
the way of social reporting). The activities in the field of corporate citizenship
identified with CSR offer the most possible actions in the areas of:
  R. Murray, J. Caulier-Grice, The open book of social innovation, Social Innovator Series, NESTA,
London 2010, p. 30.
25
  G. Mulgan, Social innovation. What it is, why it matters and how it can be accelerated, Young
Foundation, London, 2007, p. 21.
24
128
• corporate volunteering,
• outsourcing to local social actors.
Corporate volunteering is a voluntary engagement of employees of
companies in provision of different kinds of work to help and to support
beneficiaries and to solve various problems of the local community. In the
framework of voluntary activities employees often use their knowledge, skills
and abilities, and the company as their employer supports those activities that
are implement usually during working hours. This support can be financial,
organizational, logistic one.
Socially committed company can also implement the CC while
supporting local non-governmental organizations by entrusting them to
perform certain types of work and jobs (outsourcing), depending on the
economic profile of the entity. In case of systematic cooperation performed
by a company and regular interaction with local players, it is advisable to
establish permanent agreements and partnerships. This cooperation can
apply to both public institutions (local government units, the labor agencies)
and an NGOs.
In terms of the wide dimension of social engagement of a company, it
may take actions which help to create management systems to strengthen
democracy, e.g. by supporting participatory mechanisms in the enterprise (e.g.
in the forms of social dialogue), as well as engagement in public activities (e.g.
lobbying for improvement of the legislative process related to various social and
environmental aspects). In terms of citizenship’s strengthening in the company,
it organizes working time in such a way that employees have opportunity to take
civic activities within the company, e.g. in a trade union or outside, e.g. in the
form of volunteering. Another aspect of responsible citizenship is to minimize
losses covered by society as a result of possession by the company a power in the
territorial governance.
Conclusions
In recent years, one can observe increasing interest of companies in
social innovation. In this regard, R. Neubauer lists four main motives of
implementation of the CC by the company:
• perception of its role as part of a society,
• as a form of guarantee for its long-term existence,
• increasing its value,
• direct, business-related advantages, such as improving of image, support
the local environment, the impact on local policies26.
  R. Neubauer, Corporate Citizenship: Unternehmen in Deutschland – Freunde oder Feinde der
BürgerInnengesellschaft, Freunde oder Feinde von Community Organizing?, http://www.fo-co.info/
Neubauer_corporate_citizenship.htm, [07.07.2015].
26
129
Implementation of social innovation by enterprises proves to be beneficial
to them. Among the social benefits associated with implementing of the concept
of CC to business practice one should mention i.a.:
• social learning of the company, raising standards of its functioning,
• development of social identity and philosophy of the company,
• formation of processes of social change, independent of the state,
• stabilization in the social environment.
The direct economic benefits are also associated with the opening of new
target groups and an increase in goodwill.
Implementation of social innovation, such as corporate citizenship, is also
an important issue from the perspective of benefits of the social commitment of
the company to the public sphere. Due to changes related to the modernization
of social processes, traditionally perceived social state is at the limit of the
guaranteed support of the citizens. Contemporary debate on the role of citizens
in a society increasingly emphasizes the necessity to engage businesses in
the social issues by recognizing that corporate citizenship contributes to the
strengthening of civil society, which is based on „voluntary collective activity,
not oriented to achieve profit. Self-organization, self-determination, civil rights
are now the basis for the integration and participation of citizens in decisionmaking. Civic engagement generates social capital that contributes to the growth
of social welfare and development, because – in an open process of continuous
social learning process – uses continuously from the experience of everyday
life of citizens. In this quality lies understanding of the nature of individual
and collective citizenship that contributes to increasing social, political and
economic cohesion”27.
Literature:
1. Bürgerschaftliches Engagement: auf dem Weg in eine zukunftsfähige
Bürgergesellschaft. Bericht der Enquete-Kommission „Zukunft des
bürgerschaftlichen Engagements“, Deutscher Bundestag, 14. Wahlperiode.
Drucksache 14/8900, [03.06.2002].
2. Caulier-Grice J., Davies A., Patrick R., Norman W., Defining Social
Innovation. A deliverable of the project: The theoretical, empirical and policy
foundations for building social innovation in Europe, (TEPSIE), European
Commission, DG Research, Brussels 2012.
3. Dresewski F., Corporate Citizenship. Ein Leitfaden für das soziale Engagement
mittelständischer Unternehmen, „Unternehmen: Partner der Jugend“, Berlin
2004.
  Bürgerschaftliches Engagement: auf dem Weg in eine zukunftsfähige Bürgergesellschaft. Bericht
der Enquete-Kommission „Zukunft des bürgerschaftlichen Engagements“, Deutscher Bundestag, 14.
Wahlperiode. Drucksache 14/8900, [03.06.2002].
27
130
4. Green F., Corporations as Persons, Citizens, and Possessors of Liberty,
University of Pennsylvania Law Review, Vol. 94, No. 2, 2014.
5. Habisch A., Corporate Citizenship. Gesellschaftliches Engagement von
Unternehmen in Deutschland, Springer, Berlin, Heidelberg 2003.
6. Howalt J., Schwarz M., Social innovation: concepts, research fields and
international trends, Dortmund: Sozialforschungsstelle, Dortmund 2010.
7. Kesselring A., Leitner M., Soziale Innovationen in Unternehmen, Study
compiled by order of the Unruhe Stiftung, Vienna 2008, http://www.zsi.
at/attach/Soziale_Innovation_in_Unterne hmen_ENDBERICHT.pdf, p. 9,
[07.07. 2015].
8. Matten D., Crane A., Corporate citizenship: towards an extended theoretical
conceptualization, „Academy of Management Review”, Vol. 30, No. 1/2005.
9. Moon J., Crane A., Matten D., Can corporations be citizens? Corporate
citizenship as a metaphor for business participation in society, „Business
Ethics Quarterly”, Vol. 15, No. 3/2005.
10. Moulaert F., Martinelli F., Towards alternative model(s) of local innovation,
„Urban Studies”, Vol. 42, No. 11/2005.
11. Mulgan G., Social innovation. What it is, why it matters and how it can be
accelerated, Young Foundation, London, 2007.
12. Murray R., Caulier-Grice J., The open book of social innovation, Social
Innovator Series, NESTA, London 2010.
13. Neubauer R., Corporate Citizenship: Unternehmen in Deutschland – Freunde
oder Feinde der BürgerInnengesellschaft, Freunde oder Feinde von Community
Organizing?, http://www.fo-co.info/Neubauer_corporate_citizenship.htm,
[07.07.2015].
14. Neumeier S., Why do Social Innovations in Rural Development Matter and
Should They be Considered More Seriously in Rural Development Research?
– Proposal for a Stronger Focus on Social Innovations in Rural Development
Research, „Sociologia Ruralis”, Vol. 52, No. 1/2012.
15. Ogburn F.W., Kultur und sozialer Wandel. Ausgewählte Schriften, Neuwied,
Berlin 1969.
16. Pot F., Vaas F., Social innovation, the new challenge for Europe, „International
Journal of Productivity and Performance Management”, Vol. 57, No. 6/2008.
17. Rogers E.M., Diffusion of Innovations, Free Press, New York 1995.
18. Roth S., Neu für wen? Erste Aufnahmen aus der Sozialdimension der
Innovationen, Bern: Fachhochschule, Bern 2009.
19. Schmitt J., Social Innovation for Business Success. Shared Value in the Apparel
Industry, Berlin, Heidelberg, Wiesbaden 2014.
20. Seitz B., Corporate Citizenship, Rechte und Pflichten der Unternehmung im
Zeitalter der Globalität, Gabler, Wiesbaden 2002.
21. Smith C., Nowy model filantropii przedsiębiorstw, [in:] Społeczna
Odpowiedzialność Przedsiębiorstw, „Harvard Business Review”, No. 2/2007.
22. Westebbe A., Logan D., Corporate Citizenship? Unternehmen im
gesellschaftlichen Dialog, Gabler, Wiesbaden 1995.
131
23. Wiktorska-Święcka
A.,
Zarządzanie
kapitałem
społecznym
w przedsiębiorstwie w kontekście założeń koncepcji Corporate Citizenship,
[in:] Kapitał ludzki i społeczny. Kreowanie i zarządzanie, (ed.) D. Moroń,
Wydawnictwo Uniwersytetu Wrocławskiego, Wrocław 2012.
24. Zapf W., Über soziale Innovationen, „Soziale Welt”, Vol. 40, No. 1-2/1989.
132
PART III
INSTRUMENTS SUPPORTING
THE DEVELOPMENT, TRANSFER
AND USE OF KNOWLEDGE IN
ORGANIZATIONS
Mariusz Makowski
PhD, Assistant Professor, Cracow University of Economics
FROM THE ENTREPRENEURIAL TEACHER TO
ENTREPRENEURIAL GRADUATE.
CONCLUSIONS FROM PERSPECTIVE PROJECT
DEVOTED TO CREATING NEW CURRICULA
FOR TEACHERS
Keywords:
entrepreneurship, teachers, curricula, competencies, training, school
Summary
The school is seen as a natural learning environment in which it is
possible to develop the entrepreneurial mindset. It will be a sphere of effective
education provided adequate preparation of teachers. Authors and researchers
from the European „Perspective” project set the goal of training a selected
group of teachers in order they would become a specific opinion leaders, and
consequently, would have made changes in their professional environments.
This was carried out by using the method of study circles, conducting seven
training workshops in Poland in the first half of 2015. This paper presents
a model of work with this method and the collected data on teachers’
professional experience in the context of entrepreneurship. Conclusions derived
from a set of interviews made with teachers draw a picture of a numer of schools
deficiencies in terms of entrepreneurial teaching possibilities. Nevertheless,
there are also listed, in the text examples of good practices for the development
of self-reliance, responsibility and creativity in young people.
„The Perspective”
Author of this article is a member of the research team of EU educational
Mariusz Makowski
project “Perspective”1. It is a project dedicated to improving the way teachers
teach in the context of building the entrepreneurial spirit. The main
„Perspective”`s coordinator is TUCEP – Italian organization located in Perugia2.
There are eight – together with Poland – European Union countries involved:
Italy, the Netherlands, Hungary, Belgium, Austria, Greece and Portugal in this
project. The project was divided into three key activities:
• Implementation of contextual analysis on entrepreneurship in teachers`
education in Europe, this analysis covered: the role of teachers in various
European countries; national strategies, best practices, the pilot studies
of teachers` experiences and stories of success, methodology used in
teachers` education in the field of entrepreneurship, approaches and
tools used in order to adopt the role of facilitator, core competencies
in the fields of entrepreneurship, life-long professional development of
teachers in the EU.
• Conducting workshops based on “study circles” methodology
(peer learning) addressed to school teachers. It is aimed to develop
a European curricula for teachers in primary and secondary schools
supporting the development of their skills and methods used in teaching
entrepreneurship within different subjects and in different contexts.
• Development of a Virtual Learning Environment (VLE), online
application that includes training materials, guidelines for teachers,
examples of good practices (in different areas for different levels and
types of education). VLS`s objective is to provide interactive tools for
teachers enabling them to share experiences, as well as to disseminate
ideas and methods for entrepreneurship education3.
As a part of the contextual analysis on entrepreneurship teaching in Poland
we have made a series of interviews with teachers4. The objective was to describe
the determinants of entrepreneurship education in teachers` perspective. This
article presents the collected data and conclusions from two sources: interviews
  PERSPECTIVE – Experiences Entrepreneurial Spirit Challenge in School Education Project No.
540455-LLP-1-2013-1-IT-COMENIUS-CMP. The manager of the project was Marek Makowiec
PhD, its coordinator was Tomasz Kusio PhD, and previous members of the team were Katarzyna
Tarnawska PhD, and Małgorzata Wypych PhD. All mentioned researchers are working at Cracow
University of Economics.
2
  Tiber Umbria Comett Education Programme, www.tucep.org.
3
  The webside: http://www.perspectiveproject.eu/pl is available also for Polish teachers – some
content have been translated. There are all deliveries and contributions of all international partners
as well as examples of best practices in enterpreneurship education (available in Virtual Learning
Environment), [10.05.2015].
4
  Owing to shortage of place in this article, the full contex analysis (it`s co-author was Małgorzata
Wypych PhD) has not been presented here. It is avaliable on project`s webside: http://www.
perspectiveproject.eu/images/perspectve%20wp2%20final%20deliverable_poland.pdf,
[10.05.2015].
1
136
FROM THE ENTREPRENEURIAL TEACHER TO ENTREPRENEURIAL GRADUATE...
with teachers (2014) and the workshops implemented in the study circle
formula. Study circle workshops were held in the first half of 2015 at the Cracow
University of Economics.
Interviews with teachers – purpose of the study
The object of the study was to assess the competencies needed to teach
entrepreneurship in school from the perspective of teachers. It concerned the
factors related to their development, obstacles to their formation and prospects
for change in the current situation.
Method
The study was based on a qualitative content analysis of the structured
interviews. It utilised interpretative phenomenological analysis5. Teachers`
statements were coded by two competent judges, then there were established
the core expressions (key words), finally the frequency of their occurrence was
detrmined. The comments listed below are the most representative opinions
obtained from the responses to those questions.
Questions asked during interviews related to the competence of
teachers to teach entrepreneurship as well as key competencies (essential for
entrepreneurship) among pupils.
List of questions used in interviews are presented in table below6:
How do you generally assess the situation of teaching entrepreneurship in Poland?
What competencies are necessary for entrepreneurship education?
Do teachers have the listed competencies?
What factors limit the development of core competencies among teachers?
Can you identify the obstacles during promotion of key competencies for pupils?
What kind of training do you think would help teachers?
What kind of activity would you recommend to implement more effective teaching of
entrepreneurship?
What other suggestions do you have about the training needs of teachers?
Group research
In the period of May – June 2014 in the Municipality of Cracow there were
conducted 11 interviews engaging 11 teachers (8 women, 3 men). These were the
people who responded to the earlier mailing, which presented the purpose of the
  I. Pietkiewicz, J.A. Smith, Praktyczny przewodnik interpretacyjnej analizy fenomenologicznej
w badaniach jakościowych w psychologii, „Czasopismo psychologiczne”, 18 (2), 2012, p. 361-369.
6
  The content of questions has been prepared by Perspective`s coordinator – a research team from
the University of Piraeus and in a uniform manner (in the national languages) used in parallel
research conducted in eight European countries participating in the project.
5
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Mariusz Makowski
study and encouraged to share teachers’ experiences7. Among these participants
two of them worked in primary school, three in lower-secondary school, and
the remaining six at a technical secondary school. The goal was to get feedback
not only from teachers teaching the subject “Basics of Entrepreneurship”. Some
of them have had these experiences, and the rest lectured in other subjects.
The results – the content of teachers` opinions after
qualitative analysis
The opinions of the subjects are presented here in the following order: first
are shown opinions that appeared most frequently, the statements that were
selected have had to appeare in statements of at least three teachers interviewed.
Opinions, put in tables (1 – 8) are listed below:
How do you generally assess the situation of teaching entrepreneurship in
Poland?
The weakest area is the education of teachers – (in further points, opinions are an
extension of this thread – how teachers are taught for future work).
Academic staff not prepared to teach the practical aspects of entrepreneurship, lack of
practitioners.
Too little: psychological knowledge, knowledge of key competencies and competence
how to build a sense of efficacy.
Lack of appropriate programs and training courses in current curricula, not very
current knowledge, teaching materials of poor quality.
What competencies are necessary for teaching entrepreneurship?
Having practical knowledge.
Personal characteristics of teachers: authenticity, passion, being teacher as a profession
of choice, not of necessity.
Do teachers have the listed competencies?
Teachers with a passion happen.
What matters is individual motivation.
Many teachers are characterized by low self-efficacy and the resulting anxiousness.
Teachers are low in openness to knowledge, they are resistant to novelty.
There could be observed a fear of confrontation with other teachers, educators,
parents` knowledge.
  The interviewed subjects accounted for 25% of the invited ones in the entire mailing list. After
conducting direct talks, telephones and mailing, finally ¼ recruited teachers agreed to take part
in the study.
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They are (teachers) missing practical knowledge, what is nowadays needed in life
(business).
What factors limit the development of key competencies in teachers?
Lack of innovative, interesting materials.
Resistance to learn new things, lack of cognitive openness.
Low motivation.
Boring trainings („all are the same”) – a need for better trainings, more tailored to
individual needs (coaching).
Organizational factors; too large classrooms, the bureaucracy, rigid programs,
difficulties with access to the Internet, lack of computers in classrooms.
Can you identify obstacles to the promotion of key competencies in pupils?
Shortage of time (due to the programs` overload, rigidity in requirements).
The resistance of pupils and lack of parental support.
Immature pupils, their intellectual and emotional problems and poor social
development.
Lack of trainings on creativity for teachers, the school as a system that limits
creativity („school kills creativity”).
What would You propose to promote these competences?
It would be valuable for teachers to meet with consultants.
Coaching for teachers.
Courses on developmental psychology; how to deal with unwanted child`s behavior,
how to motivate.
Training for teachers in personal, general development needed: work-life balance,
relaxation.
What activity would you recommend for implementation of more effective
teaching of entrepreneurship?
Lessons based on case studies, solving problems with an emphasis on cooperation.
Introducting board games, virtual games, workshops of creativity, survival games.
Visiting companies, conducting virtual businesses.
Do you have other suggestions for the training needs of teachers?
It is recommended to improve openness of teachers for knowledge in other fields.
More trainings in developmental and social psychology.
Providing knowledge of how to build self-esteem, and a sense of efficacy.
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Delivering knowledge for teachers how to properly evaluate children achievements
and how to build their motivation.
No more trainings; instead – provide more useful materials.
Conclusions – Applications
From the material gathered in the interviews the picture can be drawn in
which we can accentuate a number of elements. In teachers` perspective the
main area of difficulties and barriers in teaching entrepreneurship – as well as
learning in an entrepreneurial way – is the way teachers are educated. Future
teachers are trained by people lacking their own entrepreneurial background.
The quality of these practices leaves much to be desired. There is a dominance
of theoretical content of economic nature in the curricula and classes, not
much psychological issues – associated with the social practice8.
The importance of motivational factor was raised. In the respondents`
opinions it was suggested that many teachers have low motivation in terms of
running entrepreneurship classes, as well as taking efforts to train themselves
in this area. Nevertheless, those teachers who care – running reasonable and
valuable entrepreneurship classes – precisely formulated their training needs.
In conversations with teachers appeared a thread of educational
services recipients: the pupils. There were pointed weaknesses in teaching
entrepreneurship also on this side of the school scene, the receivers.
According to some teachers` opinions, a number of their pupils are not
mature enough to learn about entrepreneurship or these children have deficits
(of developmental, intellectual, social or family origins) what makes teaching
them inefficient.
The author realizes that the collected material based on a small sample
of teachers is just a pilot study. Therefore he encourages other researchers
to undertake research on the perception of professional challenges – related
to learning entrepreneurship. It is important to collect data how do these
  The curriculum of the 3 semesters (350 hours) entrepreneurship postgraduate studies has
been published by the Ministry of Education in the „Podstawy przedsiębiorczości” (Basis of
Entrepreneurship) on 23.12.2012. The studies include a series of courses: Macroeconomy Basics,
Individual Entrepreneurship, Small Business Basics, Tax Law, Labor Market and Labor Law,
Business Law, Business Processes and Interpersonal Communication, Vocational Guidance,
Methodology of Entrepreneurship, IT. It also contains courses on psychology and developmental
psychology, psychology of interpersonal differences, teacher’s modern and alternative work
methods. These courses target skills essential for business and entrepreneurship, however unique
didactic method of entrepreneurship education are only marginally present in studies’ program.
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challenges look in the eyes of teachers9. Although the education environment
is hermetic and people are quite reluctant to admit they have some own deficits
or mental barriers and ignorance as well, it is worthwhile to take such attempts.
Without full diagnosis of the situation – though sometimes painful – it is
difficult to establish a reasonable strategy aimed at healing the system in which
future teachers are trained. It should also be noted that this study was not an
independent, separate research activity, but it was part of a broader project, with
a clear hierarchical order. It stands as a prerequisite for further phases of the
Perspective project.
Summary of results and proposal for changes
With regard to the outlined picture of the situation, the former contextual
analysis and interviews with teachers, we can raise a number of recommendations
to improve the status quo. These are – as follow – the recommendations:
• Increasing the knowledge of teachers in the field of: psychological
determinants of entrepreneurship, contemporary theories of motivation,
methods of rewarding and increasing the motivation of teachers to
change their attitudes.
• Broadening the skills of teachers in conducting initial individual
assessment of the level of key competencies as well as possibility
of development of these talents – we assume that not everyone is
able to be a leader, not everyone has predispositions of being an
entrepreneur.
• Making real pupils` attitudes. Entrepreneurship can be developed in
a different area than running his own business.
• Changing attitudes of teachers applying to: supporting pupils’
independent thinking, openness to the views of pupils, the ability to
conduct discussions without defending their own opinion.
• Building autonomy and intrinsic motivation of pupils.
• Developing the skills of leading motivational interviews.
• Introducing changes into the study curricula for teachers; both
postgraduate pedagogical studies and these on entrepreneurship require
to adopt the program of building such abilities as: assessing team work
dynamics, building a sense of efficacy, taking risk, taking responsibility.
In curricula there should be significantly changed the ratio between
the economic content and psychological and developmental content,
favoring the last ones.
  The presentation of this report has met with affirmative adoption at the International Conference
“Role of entrepreneurship in socio-economic development of spatial systems”, the 11th International
Scientific Conference (The Role of Entrepreneurship in Socio-Economic Development of Spatial
Systems), combined with the 7th National Congress of Teachers of Entrepreneurship, which held
in Cracow, 6–7th of October 2014. Teachers and researchers collected there noticed a great need of
such grass-roots exploration of their environment.
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Mariusz Makowski
• Implementing programs of individual port-folios for pupils to increase
their self-efficacy, highlighting the skills of their own competencies. All
that favors optimistic thinking and willingness to risk taking, based on
their earlier successes and achievements.
Study circles
Study circles are the workshops` formula with specific rules. Their
methodology has been developed in Sweden in the`70’s., and training with
the use of this formula have gained great popularity in the Nordic countries10.
Workshops, study circles as a methodology of work has been selected for the
Perspective project by its main coordinator and responsible body – Italian
organization TUCEP. The main features of this method are:
• Equal status of all participants;
• Assumption that the learning proces flows in all directions: teachers
learn from facilitator, facilitators learn from teachers, teachers learn
from each other;
• The facilitator is rather a moderator of discussion than a mentor or
lecturer;
• Stimulating activity of all participants;
• Repeatable meetings. The concept of peer learning11 is the process of
learning from each other; at both participants as well as between the
group and a leader.
The study circles workshops which consisted of 7 meetings were conducted
by the author in the period from January to April 2015. Each of them lasted
6 hours, with the exception of the last – gathering all participants together –
final workshop which lasted 2 hours. Trainings took place at the University
of Economics in Cracow and in The W. Jagiełło High School in Niepołomice.
They were attended by 30 teachers of all levels of teaching, from primary
schools, lower-secondary and secondary schools. Apprentices in secondary
schools of economics were also present. The aim of the study circles with
teachers, was twofold: to assess the current challenges of teaching – developing
entrepreneurial attitudes (diagnosis) as well as collecting good practices in this
field (knowledge and tools). At the same time a leader conducting meetings
(facilitator) presented the participants with his own proposals to enrich the
activities that develop transversal competencies, which are the foundation for
growth an enterprising attitude. Particular workshops, according to education
levels have had the following topics:
  More: S. Larsson, H. Nordvall, Study Circles in Sweden: An Overview with a Bibliography of
International Literature, Linköping University Electronic Press, Linköping 2010.
11
  M.A. O’Donnell, A. King, Cognitive perspectives on peer learning, Mahwah, Lawrence Erlbaum,
NJ 1999.
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• Addressed to primary school teachers: Training in development of
communication skills and creativity with pupils;
• Addressed to lower-secondary school teachers: Entrepreneurship
education joined with elements of coaching;
• Addressed to secondary school junior-teachers: Playing improvising
games as a tool for building an entrepreneurial habits.
These topics – proposed by the author – were the consequence of teachers`
needs analysis and their suggestions recorded during the prior phases of the
project – interviews with teachers.
The results of the workshop were recommendations for improving the
education system in the context of developing entrepreneurial attitudes. It
consisted of identifying neglected areas, diagnosis of poor functioning the
school and widely looking – education system, as well as examples of good
practice worth disseminating. Below, there are recommendations for proposed
changes in teacher training systems collected during 6 workshops in the study
circles formula12.
Study circle I – attendees: primary school teachers
Topic: Training in development of communication skills and creativity
with pupils
The main recommendation of this group of teachers was to introduce classes
on creativity and motivation. The second recommendation was a postulate to
introduce psychological training block, devoted to how to deal with a „difficult”
pupil in the classroom, so that other children could take full advantage of what
teacher offers. Participants argued that the teacher must have a basic sense of
comfort and security in his work so as to implement new, experimental methods
and approaches. It is so because their application requires a big cognitiveemotional commitment. Another recommendation referred to delivering
teachers methods and tools for developing the pupils` intrinsic motivation.
It has been postulated to include it in the path of training for the teaching
profession. Teachers should also inspire acting as a models, inspire pupils by
their own enerpreneurial activity.
Study circle II – attendees: teachers of lower-secondary schools
Topic: Entrepreneurship education joined with elements of coaching
This workshop brought recommendations for planning teachers` training
system as well as the education system in general. They are, as follows:
  In Poland within the project,six study circles workshops took place, two meetings for each
group of teachers who were teaching in primary schools, lower-secondary schools, and junior
teachers in secondary schools.
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Mariusz Makowski
• Developing system of vocational schools;
• Reducing the rigidity of guidelines in education system – more freedom
and flexibility in the work of teacher;
• Providing teachers with tools that would serve them reducing anxiety in
their pupils` functioning; to support children effectively and encourage
to endeavour unconventional tasks, take some risk;
• Broader approach to learning based on the principles of improvisation,
as well as the knowledge of improvisatorial techniques should be
implemented in the curriculum for junior-teachers.
Study circle III – attendees: junior teachers (apprentices) –
secondary school
Topic: Playing improvisatorial games as a tool for building entrepreneurial
habits
Junior-teachers confirmed that it would be important for them to discover
the talents of their pupils. They realize of the rigidity that characterises
current educational system, which they will soon enter as teachers. They
also doubted whether there would be any possibility of such individualized
tutoring and changing school subjects prioritization within the framework
of existing program13. Nevertheless, they declared being fully aware of the
enormous potential of children, and would be eager to try making lessons in
an experimental way, giving pupils the opportunity to choose activities and to
improvise.
Below there are listed the recommendations derived from this workshop:
• Creating the possibilities for teachers to customize the way they teach,
so that the curriculum was adapted to the talents and aptitudes of the
child, not conversely;
• Individualized curriculum should get a place to studying, diagnosing
and discovering talents and strengths of pupils. At the same time
teachers should got created space for a certain amount of testing new
ideas in teaching;
• Creating an area for pupils in which they could decide and participate
in the learning process. Refocusing from the traditional “school shapes
children” towards “a pupil has its share of influence on the shape of how
the school is and will be in the future”;
• Introducing psychological competence of proper responding to pupils
in a way that does not violate their self-esteem and, consequently,
strengthens their belief of self-efficacy into the teachers curriculum.
Learning skills of providing negative feedback, which is not a criticism
  Within the workshop junior-teachers watched some modeling and inspiring materials. Here
apprentices address to TED film by Ken Robinson „How schools kill creativity”, https://www.ted.
com/talks/ken_robinson_says_schools_kill_creativity, [10.05.2015].
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of the person. Another recommendation concerned the application
of improvisatory techniques in the training of teachers. This way they
would become competent and reliable models for their students; wards
could be modelled by really spontaneous and eager to take risk teachers.
The final meeting – which was common for all participants – summarized
the study circles meetings. Researchers and entrepreneurs invited to this meeting
were an added value. After presenting conclusions and recommendations from
study circles, some of them received response from the invited entrepreneurs
and managers. The purpose of such participants` selection was to confront the
proposals of teachers with the knowledge and experience of people that are not
directly related to education.
According to the first speaker14 of a meeting, in the curricula, starting
from their earliest level, intellectual property issues should be implemented.
Both focused on raising awareness what it is, as well as teaching how to make
money on pupils` own ideas. It should be shown to the young people, on one
hand, that their ideas have value, potential, on the other hand, there are people
that can help developing them. The value of ideas should gain appropriate
appreciation. Educational system should support these aims by application of
methods of coaching and mentoring. Another speaker15, a coaching business
leader, identified three main characteristics of graduates that are desirable
from the employer`s point of view. They are: creativity, independent thinking
and responsibility. She stressed the importance of preparing young man to
undertake to work – in elementary meaning. In her experience of recruitment
at times happen candidates who do not fully understand what does it mean:
„to work”. A number of people applicating to the company seems to regard
their presence there in terms of „attempt”, which does not necessarily oblige
a series of self-limitations. She added that entrepreneurs need to contact and
exchange of experiences with teachers, to let teachers know what is most needed
from school practice for business practitioners (eg. recruitment needs). Many
entrepreneurs would have a lot to offer if they are invited to such cooperation.
The teachers collected following recommendations. The systemic
cooperation should be run between teachers (school) and parents. It is necessary
to develop a common strategy for shaping the attitudes of children (among
other – attitudes towards money). If it is not done, the effects of educational
impact of these two different socialization areas will be prone to disturbance,
interference and, in extreme cases, deleting each other. For example, it would
be so in the confrontation of two core parents` beliefs: “you will have whatever
you want from us” contrary to the school`s (teacher`s) message: “there is no free
lunch” – “you should be independent, self-contained and earn for your living”.
  Kamil Kipiel – innovation and technologies broker, President of Centrum Transferu Technologii
Medycznych Park Technologiczny.
15
  Anna Zaroda-Dąbrowska PhD – counselling and coaching firm owner.
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Mariusz Makowski
Overprotective parents bring their children to schools and these children are
– subconsciously awaiting that this type of care at school. In such a climate
of forming beliefs and outlook, even the best curriculum aimed to stimulate
entrepreneurship, in the eyes of a child sounds like “a fairy tale about the iron
wolf ”, abstract message which has no anchor points in the experience gained
at home. Teachers also highlighted importance of activating pupils` selfgovernance and the value of volunteering, so that children since early age could
learn to be responsible, but also enable them real participation in the life of their
school. Volunteering builds awareness of the need and value in engaging in
various extracurricular activities, not expecting immediate gratification. These
conclusions and recommendations, though themselves` valuable, constitute –
including data from contextual analysis of entrepreneurship education curricula
and data collected from interviews with teachers – cumulative material to work
with in the subsequent phases of the Perspective program16.
Conclusions
If one wanted to create a synthesis of what has been made in the
Perspective project he would collect accumulated herein conclusions and
recommendations of teachers, and suggestions of entrepreneurs. Of course, this
material is by no means exhaustive aggregation of data reflecting the situation
of entrepreneurship education in Polish schools. It is at most a single, another
portion of the contribution on research related to diagnosing and improving
practice in teaching. Author – based on many hours spent with the teachers –
made some observations that complement described here fragment of school
reality.
The first thing worth mentioning is teachers` moderate interest in
extracurricular, free forms of training. The response to calls for Perspective
project was low. It is difficult to make teachers more entrepreneurial if they are
not motivated to make such a minor effort. Here the question arises how – if
possible at all – to wake up, develop teachers` motivation. The second important
issue is a need to create safe conditions in an environment where a change is
supposed to happen. If someone plans to introduce a change, a factor that
raises the probability of its occurrence is supportive – predictable, cooperating,
trustworthy – environment. This principle is known and applied in such areas
as relationships` coaching, psychotherapy and education. Change – in itself – is
a stressor, so it has the potential of distress reaction in a person who faces that
change. For someone who has operated for many years in a stereotyped way,
who is a conformist, passive, conservative and cautious person accompanied
by anxiety, a proposal to adopt an enterprising attitude is a huge challenge.
  The next stages of Perspective program consist of four focus groups and writing a 40 hour
curriculum on training facilitators of enterpreneurship education which is targeted for junior
teachers.
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The chances of its assimilation grow in an environment which delivers sense
of security, which is stable (as a system) and in the social surrounding that
offers support and assistance. Meanwhile, in the stories of teachers their work
environment is perceived as distinctly stressfull. The pupils under their care,
parents who visit school, the school authorities – all these sources, are potential
source of troubles (conflicts, work overload) for some teachers. In other words,
the image of the school they draw definitely does not fit the model mentioned
herein: area of security and stability. Teachers often allude to lack of solidarity
among them. School managers are also perceived as persons that care more
about the interests of an institution than their subordinates. In this situation
it is difficult to be surprised that a teacher is not willing to take risk, when in
case of trouble he can not count on the support of school headmaster, or at
least his loyalty. The third thing that should be payed attention creating new
curricula is the future “client” of teachers. Even the most ample curriculum
does not operate in a vacuum. It will be confronted with the “clients” of
educational institutions: pupils and students. One ought to remember that
these young people were formed (and still are) by their family environment.
Interviewed teachers reported that most of their pupils grow up in families
which are relatively prosperous. In these families a range of goods are available
to the children, often without any effort on their part. It is accompanied by the
upbringing model, which could be described as permissive – overprotective.
For such children the entrepreneurial attitude, and promotion of actions under
entrepreneurial spirit would appear as completely weird and unnecessary
concept. According to the principle: „why should I change anything when I’m
well”. Recalling a classic scheme of the communication process – where there
are such elements as sender, message, channel, possible noise and a receiver – in
this project, much space was devoted to characteristics of the sender (teacher,
facilitator, person – model) and to message and channel (curriculum). It seems
that the receiver – a pupil with his background, where he comes from (family),
and goes for (beliefs, life aims, mentality) in mentioned communication process
of new attitudes (entrepreneurship) remains slightly poorly understood and
underestimated subject.
Literature:
1. http://www.perspectiveproject.eu/images/perspectve%20wp2%20final%20
deliverable_poland.pdf, [10.05.2015].
2. http://www.perspectiveproject.eu/pl, [10.05.2015].
3. https://www.ted.com/talks/ken_robinson_says_schools_kill_creativity,
[10.05.2015].
4. Larsson S., Nordvall H., Study Circles in Sweden: An Overview with
a Bibliography of International Literature, Linköping University Electronic
Press, Linköping 2010.
5. O’Donnell A.M., King A., Cognitive perspectives on peer learning, Mahwah,
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Mariusz Makowski
Lawrence Erlbaum, NJ 1999.
6. Pietkiewicz I., Smith J.A., Praktyczny przewodnik interpretacyjnej analizy
fenomenologicznej w badaniach jakościowych w psychologii, „Czasopismo
psychologiczne”, No. 18 (2), 2012.
148
Paweł Łukasik
PhD, Assistant Professor, Department of Organizational Behaviour,
COMMUNICATION METHODS SUPPORTING
ORGANIZATIONAL LEARNING PROCESS
Keywords:
communication, organizational learning, communication methods
Summary
The paper presents research results on the use of communication methods
in the use of organizational learning methods and its influence on innovation.
The first part of the elaboration contains data about the percentage of surveyed
organizations using particular communication methods and organizational
learning methods. The second part of this paper is the presentation of the
research results on communication methods functions in the realization of the
organizational leaning methods.
Introduction
Current economy is more often called the knowledge economy so
an organizational learning became important process for organization
development. There were published a lot of books and articles about the
organizational learning, but there is the lack of papers, in which authors join
together the issue of the organizational learning and communication. This
elaboration is the filling of the gap existing in the literature. The research is based
on methodological aspects of the organizational learning and communication.
The main assumption is that organizational learning is based on methods which
are typical for this process and also business communication is composed of
methods. The relation between the organizational learning and communication
relies on the use of communication methods as supportive tools in the use
of the organizational learning methods. Therefore this chapter contains of
presentation of research results concerning the frequency of communication
and organizational learning methods use and some functions of communication
methods use in the organizational learning methods realization.
Paweł Łukasik
Communication methods use
Communication method is the way of information providing, used
intentionally with the use of particular channels and on the basis of the set of
specified rules and procedures1. There are lots of communication methods. For
example: A. Potocki, R. Winkler, A. Żbikowska (2011)2 describe about thirty
communication methods. Therefore there is necessity of classification making.
Every classification needs criteria to create separated sets of elements. Four
criteria were selected in this paper:
• Degree of method complexity – This criteria of communication
methods division allows to give answer for question if organizational
learning process realization needs complex communication methods
like meetings or maybe simple communication methods like interviews
can play important role in the organizational learning.
• Degree of the interactivity – The nature of the organizational learning
process shows for two-side character of communication process
between employees. But there are some of the organizational learning
methods which need some of the discretion like collecting information
about product or technologies used by competitors. In these cases, the
best method will be the short survey or interview with customers.
• The goal of the communication method – The purpose is the most
important element of every method, including communication
methods. Complex communication methods like meeting can be
usually used to realize more purposes than simple communication
methods. But meeting or conferences are costly and time-consuming
and simple communication methods take less time. Therefore fitting
communication method goals to organizational learning methods plays
important role. It seems that, from the point of view of organizational
learning literature, communication methods directed for problem
solving should be more often used in the use of the organizational
learning methods.
• The communication form – The communication form is the simplest and
the most unequivocal criteria of the communication methods selection.
In the recent years an attention was being put to group communication
and it plays an important role in the organizational learning, but one
should remember about the role of interpersonal communication,
which less attention is devoting. In the frame of communication form
criteria it is standing out interpersonal communication methods,
group communication methods, mass/organizational communication
methods. This classification is agreeable from the McQuail’s
communication levels theory, who dived communication activities of
  A. Potocki, R. Winkler, A. Żbikowska, Komunikowanie w organizacjach gospodarczych, Difin,
2
  Ibidem, p. 16-18.
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150
COMMUNICATION METHODS SUPPORTING ORGANIZATIONAL LEARNING PROCESS
people into mass communication, group/ institutional communication,
intergroup communication, group communication, interpersonal
communication, and intrapersonal communication3.
This paper takes into account thirty seven communication methods
classified with the use of above four criteria. This research includes seven
interpersonal communication methods like information gathering interview,
counselling interview, orientation interview, performance appraisal interview,
grievance interview, correctional interview, negotiation. There have been taken
into account thirteen group communication methods: meetings, briefings,
Lessons Learned method, moderation, Quality Audit Meeting, conferences/
video conferences, informal groups meetings in the form of Quality Circles
or Communities of Practice and other, Group/ Team-Ware, Open Space
Technology, and presentations. The Mass or organizational communication
methods were also the subjects of this research and there were: letters,
instructions and manuals, reports, statements, protocols, electronic mail,
Intranet, Internet, films, poster, leaflets, surveys, newsletter, radio broadcasting,
internal TV, Internet forums, box of ideas.
The communication methods taken into account in this research were
described i.a. by R.B. Adler4 (1989), D. Fisher5 (1993), A. Potocki, R. Winkler,
A. Żbikowska6 (2011), D. Sharman7 (2003), C Collinson i G. Parcel8 (2005),
G. Łasiński9 (2007), R. Winkler10 (2006), R. Rostek, W. Kurda11 (2005), P.
Łukasik12 (2014) and others. On account of empirical character of this paper
communication methods will be not described in details, but research results
on the use of the communication methods in organizational learning will be
  B. Dobek-Ostowska, Komunikowanie polityczne i publiczne: podręcznik akademicki,
Wydawnictwo Naukowe PWN, Warszawa 2006, p. 71.
4
  R.B. Adler, Communicating at work, McGraw-Hill, Inc., New York 1989, p. 124.
5
  D. Fisher, Communication in organizations, West Publishing Company, St. Paul 1993, p. 463.
6
7
  D. Sharman, The Perfect meeting, Century Business An imprint of Random House UK Limited,
London 1993, p. 8-9.
8
  As cited in: P. Carrillo, Lessons Learned practices in the engineering, procurement, construction
sector, “Engineering, Construction and Architectural Management”, Vol. 12, No. 3, 2005, p. 239.
9
  G. Łasiński, Rozwiązywanie problemów w organizacji. Moderacje w praktyce, Polskie
Wydawnictwo Ekonomiczne, Warszawa 2007, p. 123-161.
10
  R. Winkler, Wystąpienie jako forma komunikowania, Zeszyty Naukowe Akademii Ekonomicznej
w Krakowie No. 715, Wydawnictwo Akademii Ekonomicznej w Krakowie, Kraków 2006, p. 54-55.
11
  R. Rostek, W. Kurda, Dobrze poinformowany osiąga lepsze wyniki. Narzędzia komunikacji
wewnątrzfirmowej wspomagające budowanie zaangażowania pracowników – według badań GFMP
Management Consultants, „Personel”, No. 2, 2005, p. 30.
12
  P. Łukasik, Communication method use in the marketing activities directed for organizational
learning and innovation, Zeszyty Naukowe Uniwersytetu Przyrodniczo-Humanistycznego
w Siedlcach, No. 103, Seria: Administracja i Zarządzanie, No. (30)2014, Siedlce 2014, p. 219.
3
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Paweł Łukasik
presented and short information about main purpose of several method will
be provided. The research was conducted in 2013 by survey research and case
study research. There were used 207 correctly filled surveys. The frequency of
the use of several communication methods will be described in this part of the
monograph’s chapter.
The counseling interview and information gathering interview enjoy
the most popularity amongst surveyed organizations. Even 98% surveyed
organizations use them. This result should not be surprise because these
methods are cheap and relatively quick and help to reach the most common
goals in every organization i.e. information gathering and problem solving.
Among interpersonal communication methods only orientation interviews,
serving knowledge transfer to new employees are even frequently used
(91% of surveyed respondents confirm the use of this method). But also
other interpersonal communication methods are used by the majority of
organizations: performance appraisal interview is used by 85% organizations,
grievance interview (method used to gain relevant information from employee,
who has problem with something or somebody in company and want to talk
about this with his/ her superior) is used by 82% organizations, correctional
interview (method in which superior tries to change subordinate’s behavior) is
used by 86% organizations, and negotiations are used in 85% organizations.
Meeting is the most frequently used method among group communication
methods. Different types of meeting use 90% organizations. Briefings similar to
meetings are regularly used by 86% organizations. Project management includes
special communication method which calls Lessons Learned and is dedicated
to project teams which have to gain an experience from finished projects. This
method is becoming more and more popular in organizations which is also
confirmed by this research – 84% of surveyed organizations confirm the use of
this method. Group communication methods especially directed for problem
solving include:
• Moderation (used in 80% organizations) – communication method
dedicated to wide range problem solving including different techniques
and special process of problem analyzing;
• Quality Audit Meeting (used in 79% organizations) – communication
method dedicated to quality problem solving;
• Informal groups meetings e.g. Quality Circles or Communities of
Practice (used in 69% organizations) – they are based on informal
communication and support knowledge sharing;
• Open Space Technology (used in 43% organizations) – the type of
conference in which the rule of voluntariness plays special role and is
the source of creativity.
152
Effective use of every form mentioned above group communication
methods requires transmission of information to all people of those present in
the meeting, therefore presentation can be classified as group communication
method. Conducted research shows that 59% organizations use it. The most
seldom group communication methods used are conferences and video
conferences, accordingly 58% and 30% organizations use it.
The third group of communication methods – mass/ organizational
communication methods – covers the widest range of different techniques, which
the main purpose is providing information. The percentage of organizations
using each of them is differentiated. The use of mass/ organizational
communication methods is as follows (the percentage of organizations using
each of communication methods was given in parenthesis): letters (81%),
instructions/ manuals (85%), reports (89%), statements (79%), protocols (68%),
e-mail (95%), Intranet (84%), Internet (95%), film (41%), poster (64%), leaflets
(55%), surveys (55%), newsletter (65%), radio broadcasting (12%), internal TV
(14%), Internet forums (41%), box of ideas (29%).
Research results which were presented above refer to the general use of the
communication methods in organization mainly located in the South Poland.
The main issue of this chapter is the use of communication methods in the use
of organizational learning methods. It requires the presentation of at least one
organization learning definition from the wide range of them described in the
literature and short description of the organizational learning methods taken
into account in this research.
The use of organizational learning methods
There are lots of definitions of the organizational learning concept, but
there is one given by B. Mikuła13 (2006) which refers to knowledge management
and therefore is especially current. He defines organizational learning as:
“the process with the use of information and knowledge, which leads to the
change in knowledge resources and may affect on human behaviors, may
enhance adaptability of the organization, leading organization to the condition
of high adaptability and proactivity”14. He also created the classification of
the organizational learning methods, in which organization analyzing level
and organizational learning type was the criteria of division. Criteria of the
organization’s analyzing level refers to the way of organization study in which
researcher learns organizational behaviors which are typical for single person,
group and the whole organization. In turn criteria of the organizational learning
type derivates from the theory of the logical sequence of the organizational
learning processes, created also by B. Mikuła15 (2006). He supposed that there
are three main organizational learning processes and they have to be used in
the particular sequence. He called these processes as: traditional learning,
Kraków 2006, p. 48.
14
15
Kraków 2006, p. 165.
13
153
Paweł Łukasik
which relies on information gathering and making sense to them; empirical
learning which relies on the implementation of the learning by doing cycle,
including planning, action and reflection; cybernetic learning, which relies on
reveal by people in organizations their mental models, which decide about their
behaviors. The logical sequence of the organizational learning processes starts
from the traditional learning, leads through empirical learning to cybernetic
learning. Empirical learning should be followed by traditional learning, because
every process of learning from experience needs some basic knowledge, which
is needed to understand the way of doing something. Also cybernetic learning
should be followed by traditional and empirical learning, because the challenge
of the mental models being the underlying reason of the specific activities of the
people in organization can be unnecessary or even harmful for organization.
For example workers who do not know their job can reject the rules, which
are worked out by other employees thorough long time and make the work
effectively16.
Only a few organizational learning methods described in management
literature were selected to this research, because of the complexity of researched
questions. The research includes following organizational learning methods (the
percentage of organizations using each of organizational learning methods was
given in parenthesis): materials analyzing (87%), trainings (72%), team building
(69%), knowledge sharing (81%), e-learning (26%), job’s observation (79%),
customers remarks analyzing (76%), successes and failures analyzing (64%),
informing about requirements regarding performed tasks (77%), breakthrough
products and technologies seeking (29%), questioning of the purposefulness of
taken actions (33%), collecting information about competitors (61%), striving
for the excess of ideas during problem solving (17%), implementation actions
planning (45%), knowledge dissemination about changes in organization (48%),
sharing the knowledge about sector (59%), workers attitudes shaping (64%).
The use of above mentioned organizational learning methods
requires the use of communication methods. The research showed that simple
communication methods, which do not require a long time preparation are the
most often used in the use of the organizational learning methods. The majority
of communication methods used in the realization of the organizational
learning methods is based on the rule of the feedback between interlocutors.
Communication methods directed for problem solving are used in lots of
organizational learning methods. Interpersonal communication methods and
group communication methods are more often used in the organizational
learning methods realization than mass/ organization communication methods.
Therefore the most often used communication methods in the realization of
the organizational learning methods are: orientation interviews, information
gathering interviews, counseling interviews, performance appraisal interviews,
meetings, briefings, Lessons Learned sessions, e-mails.
154
  Ibidem, p. 161-167.
16
The farther part of this chapter presents research results concerning
communication methods functions in the realization of the organizational
learning methods with the special regard of these functions which are connected
with innovation leading.
Communicational support of the organizational learning and
innovations
There are lots of definitions of innovation similar to the organizational
learning concept. In this research innovation is understood as new products,
methods, processes, ideas, concepts, what is in consistent with definition
of J.A. Schumpeter17, J.A. Allen18, Ph. Kotler19, E.M. Rogers20, or Białoń21.
This understanding of innovation is reflected in the interpretation of the
communication methods functions in organizational learning methods
realization as leading to innovations. For example the use of communication
methods in the documents analyzing supports creation of new ideas what
confirms 70% of respondents using this organizational learning method. The
use of communication methods in trainings also enhance the propensity of
people, who participate in it to create new ideas and plan actions based on
the knowledge acquired during trainings, what confirms respectively 70% and
69% respondents, who took part in trainings in organizations they worked for.
Also 80% respondents who share knowledge with colleagues in work confirms
that the use of communication methods leads to the enrichment existing
knowledge with new ideas. Even so simple organizational learning method
as job observation can be the tool of finding the rationalization of job thanks
to the use of communication methods, what confirms 78% respondents
using job observation as the organizational learning method. According to
54% respondents support of the collecting and analyzing of the customers
remarks by communication methods leads to incorporation of the customers
into process of the new products creation. Communication methods
implementation in the successes and failures analyzing leads to preparation of
the guidelines which allow to avoid the problems in the future and making the
success recurrent, what confirms 86% respondents using this organizational
learning method.
  As cited in: M. Dworczyk, R. Szlasa, Zarządzanie innowacjami: wpływ innowacji na wzrost
konkurencyjności przedsiębiorstw, Oficyna Wydawnicza Politechniki Warszawskiej, Warszawa
2001, p. 74.
18
  As cited in: A.H. Jasiński, Innowacje i transfer techniki w procesie transformacji, Difin, Warszawa
2006, p. 9.
19
  As cited in: ibidem, p. 9.
20
  As cited in: ibidem, p. 9.
21
  As cited in: M. Dworczyk, R. Szlasa, Zarządzanie innowacjami: wpływ innowacji na wzrost
konkurencyjności przedsiębiorstw, Oficyna Wydawnicza Politechniki Warszawskiej, Warszawa
2001, p. 74.
17
155
Paweł Łukasik
Breakthroughs seeking plays important role in contemporary organizations
because of still changing business environment. And according to 80%
respondents using communication methods, during breakthroughs seeking,
runs imagination and allows breaking away from the existing ways of thinking,
what leads to innovations. Striving for the excess of ideas during problem solving
is not very popular method, but the use of communication methods during the
realization of this organizational learning method leads to innovations in many
ways. For example the use of communication methods leads to:
• collection of ideas from the wide range of employees (86% – the
percentage of respondents who use striving for the excess of ideas
during problem solving and confirm given communication methods
function in it will be given in parenthesis),
• creating the climate of creativity (80%),
• connection of different knowledge resources (71%),
• taking into account the wide range of information needed for problem
solving (77%),
• finding solutions which did not occur in other organizations (77%),
• finding solutions which were the modification of existing products,
technologies and methods (86%),
• creating more realistic ideas and therefore easier to implement (89%).
Good idea is only the first step to innovation, in which special role
plays implementation. The most of respondents using the planning of the
implementation activities stated that the use of communication methods in the
planning of the implementation actions leads to:
• preparation more realistic plans of changes (72% – the percentage
of respondents who use implementation actions planning and
confirms given communication methods function in it will be given in
parenthesis),
• enhance the awareness of workers of implemented changes (86%),
• collection of the knowledge which is needed to changes implementation
(82%),
• increase the motivation to the realization of implementation actions
(73%),
• the use of the most of ideas given by employees (57%).
156
Learning the new technologies and work methods is also supported by the
use of communication methods, m. al. through: giving the possibility of asking
questions about new technologies and methods what confirm 76% respondents
using communication methods in the learning of new technologies and
methods.
Research results presented above can be illustrated by the example of the
company which used different communication methods in the realization
some of the organizational learning methods. The case study research included
conducting interviews in SMAY Sp. z o.o., which provides construction business
with systems of pressure differentiation for high-rise buildings. Such a system
enables safety evacuation of people during the fire. The work on flag product of
the company began from analysis of the competitive products. SMAY’s engineers
noted that the most of such systems offered by competition could have problems
with working in Polish climate, so they decided to make research which was
the part of R&D process. And communication methods played special role in
this process, because they allowed making conclusions from received results
and prototype a new product. The project team analyzed the results after each
stage of R&D process and created ideas which made the product better. In this
way small company from Poland created innovative product with the use of
communication method – in this case Lessons Learned Sessions were used in
organizational learning method which was analyzing the finished parts of the
project. One more example of the use of organizational learning methods in the
innovative activities was the use of trainings as element of the leading of CNC
technology in production process. These trainings were supported by the use of
presentations, manuals, instructional videos and counseling interviews during
start-up of machinery under the guidance of instructors.
Conclusions
This research shows the importance of the communication for contemporary
organizations. Especially if organizations use separate communication tools
which can lead to the reach of separate purposes. The percentage of organizations
using them seems to be optimistic but it should be remembered that this is only
an opinion of respondents given in surveys. The real use of the communication
methods can be smaller. But even these results show strong interest about this
field of management science. This research confirms also with any doubts
the thesis that: communication methods support organizational learning and
lead to innovations. It is because they play crucial role in such organizational
learning methods like breakthroughs seeking, striving for the excess of ideas
during problem solving or implementation actions planning. Finely, the case of
innovative company shows above statements.
Literature:
1. Adler R.B., Communicating at work, McGraw-Hill, Inc., New York 1989.
2. Carrillo P., Lessons Learned practices in the engineering, procurement,
construction sector, “Engineering, Construction and Architectural
Management”, Vol. 12, No. 3, 2005.
3. Dobek-Ostowska B., Komunikowanie polityczne i publiczne: podręcznik
akademicki, Wydawnictwo Naukowe PWN, Warszawa 2006.
4. Dworczyk M., Szlasa R., Zarządzanie innowacjami: wpływ innowacji na
wzrost konkurencyjności przedsiębiorstw, Oficyna Wydawnicza Politechniki
157
Paweł Łukasik
Warszawskiej, Warszawa 2001.
5. Fisher D., Communication in organizations, West Publishing Company, St.
Paul 1993.
6. Jasiński A.H., Innowacje i transfer techniki w procesie transformacji, Difin,
Warszawa 2006.
7. Łasiński G., Rozwiązywanie problemów w organizacji. Moderacje w praktyce,
Polskie Wydawnictwo Ekonomiczne, Warszawa 2007.
8. Łukasik P., Communication method use in the marketing activities directed
for organizational learning and innovation, Zeszyty Naukowe Uniwersytetu
Przyrodniczo-Humanistycznego w Siedlcach, No. 103, Seria: Administracja
i Zarządzanie, No. (30)2014, Siedlce 2014.
9. Mikuła B., Organizacje oparte na wiedzy, Wydawnictwo Akademii
10. Potocki A, Winkler R., Żbikowska A., Komunikowanie w organizacjach
gospodarczych, Difin, Warszawa 2011.
11. Rostek R., Kurda W., Dobrze poinformowany osiąga lepsze wyniki. Narzędzia
komunikacji wewnątrzfirmowej wspomagające budowanie zaangażowania
pracowników – według badań GFMP Management Consultants, „Personel”,
No. 2, 2005.
12. Sharman D., The Perfect meeting, Century Business An imprint of Random
House UK Limited, London 1993.
13. Winkler R., Wystąpienie jako forma komunikowania, Zeszyty Naukowe
Akademii Ekonomicznej w Krakowie No. 715, Wydawnictwo Akademii
158
Andrzej Lis
PhD, The Faculty of Economic Sciences and Management, Nicolaus
Copernicus University, Toruń; Polish Armed Forces Doctrine and
Training Center, Bydgoszcz
TEAM LEARNING THROUGH AFTER ACTION
REVIEWS
Keywords:
team learning, After Action Review, Lessons Learned
Summary
The aim of the paper is to analyze the potential of After Action Review
as a team learning technique. First of all, the idea and assumptions of AAR
are considered. Secondly, the AAR process is studied. Finally, the potential
of AAR against the characteristics of effective team learning is assessed. The
study is mainly focused on the case of After Action Reviews in the U.S. Army
considered to be the originator and the leader in conducting After Action
Reviews. Moreover, the analysis is enriched by findings and examples from
business companies.
Introduction
Senge (1999) enumerates team learning among the disciplines of the
learning organization1. He defines team learning as “the process of aligning
and developing the capacity of a team to create the results its members truly
desire”2. Referring to Senge’s seminal work, Jashapara (2004) highlights three
following characteristics of effective team learning: “ability to think insightfully
about complex issues and bring together the collective intelligence of the team
rather than the insight of the dominant individual; ability to provide innovative
and coordinated actions (…); [and] ability to share practices and skills between
teams in organizations”3. In order to achieve the aforementioned requirements
team members are expected to practice and master the art of dialogue and
  P.M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization, Random
House, London 1999, p. 9-10.
2
3
  A. Jashapara, Knowledge Management: An Integrated Approach, Prentice Hall, Harlow 2004, p. 62.
1
Andrzej Lis
discussion4. Dialogue and discussion enable teams to externalize tacit knowledge
of their members. Knowledge externalization is achieved through face-to-face
communication and team interaction (dialoguing Ba)5.
After Action Review (AAR) is a team learning technique developed by the
U.S. Army. It is a multipurpose professional discussion supporting organizational
learning in operations6, training7 and leader development. Originated in the
military, AAR was imported to the practice of business organizations and the
theory of management.
The aim of the paper is to analyze the potential of After Action Review as
a team learning technique. Therefore, the following objectives are set:
• to identify the assumptions of AAR,
• to analyze the model of the AAR process,
• to assess the potential of AAR against the characteristics of effective
team learning.
The review of literature and military documents, unstructured interviews
with military commanders conducting AARs and Knowledge Management
and Lessons Learned experts, both in the military and the academia, were
the research methods applied to achieve the aim and objectives of the paper.
The literature review encompassed both military and civilian papers dealing
with the studied issue. The analysis of documentation was focused on the
publications of the U.S. Army recognized to be the originator and the leader
in conducting AARs. The studied documents included doctrines, field
manuals and handbooks. Unstructured interviews with the military experts
from the U.S. Center for Army Lessons Learned and the Polish Armed Forces
Doctrine and Training Center enabled the author to build up the thorough
understanding of the AAR assumptions. Interviews with military officers
conducting AARs during operations and training events provided practical
insights from the field. Dialoguing and discussing with academics specialized in
Knowledge Management helped to realize the potential of the AAR technique
to be applied in business organizations. Moreover, the author’s experience in
the area of Lessons Learned was an important enabler of the analysis. Certainly,
due to unlimited distribution of the study findings, only unclassified data and
information were used to analyze and discuss research problems.
The structure of the paper reflects its objectives. First of all, the idea and
House, London 1999, p. 237.
5
  I. Nonaka, R. Toyama, N. Konno, SECI, Ba and Leadership: A Unified Model of Dynamic
Knowledge Creation, [in:] Managing Industrial Knowledge: Creation, Transfer and Utilization, (eds.)
I. Nonaka, D.J. Teece, SAGE, London 2001, p. 25.
6
  FM 6-01.1, Knowledge Management Operations, Headquarters Department of the Army,
Washington 2012, p. B.1-B.6.
7
  ADRP 7-0, Training Units and Developing Leaders, Headquarters Department of the Army,
Washington 2012, p. 3.12.
4
160
assumptions of AAR are considered. Secondly, the AAR process is studied.
Finally, the potential of AAR against the characteristics of effective team
learning is assessed.
AAR idea and assumptions
After Action Review (AAR) is a team learning technique developed by the
U.S. Army in the 1970s on the foundation of “interviews after combat” conducted
during World War II in the Pacific theatre by S.L.A. Marshal. AAR differentiates
both in form and content from the “performance critique” technique based on
subjective judgment, which had been used earlier in the Army8.
The capability to generate and effectively transfer the real life knowledge
seems to be crucial not only at the battlefield, but in the business environment,
too. Therefore, After Action Review shows great potential to be employed
beyond the military. Originated in the military, AAR was imported to business
organizations by the Shell Oil company in the 1990s. AAR sessions are useful
techniques supporting team learning from success and failure in such companies
as: Colgate-Palmolive, DTE Energy, Harley-Davidson and J.M. Huber9. What
is more, the procedure of military After Action Review was included in
management research and theory. For instance, Garvin, Edmondson and Gino
(2008) mention AAR as an example of specific learning processes and practices
considered to be one of the building blocks in their model of the learning
organization10. Davenport and Prusak (1998) highly appreciate the contribution
of AAR to the development of “ground truth” understood as “knowing what
really works and what doesn’t”11.
Morrison and Meliza (1999) underscore that the idea of After Action Review
is based on the principles of behavioral sciences. In their study they identify the
areas encompassing theoretical concepts and techniques incorporated into the
After Action Review process including such categories as: information feedback,
performance measurement, memory and cognition, group processes and
dynamics, communication theory and techniques and instructional science12.
After Action Review is defined as “a verbal, professional discussion of
a unit’s actions that typically occurs immediately after a training event, combat
operation, or other mission that determines what should have happed, what
  J.E. Morrison, L.L. Meliza, Foundations of the After Action Review Process, U.S. Army Research
Institute for the Behavioral and Social Sciences, Alexandria 1999, p. 5-8.
9
  M. Darling, Ch. Perry, J. Moore, Learning in the Thick of it, „Harvard Business Review”, JulyAugust, 2005, p. 86.
10
  D.A. Garvin, A.C. Edmondson, F. Gino, Is Yours a Learning Organization?, „Harvard Business
Review”, March, 2008, p. 11.
11
  T.H. Davenport, L. Prusak, Working Knowledge: How Organizations Manage What They Know,
Harvard Business School Press, Boston 1998, p. 8-9.
12
  J.E. Morrison, L.L. Meliza, Foundations of the After Action Review Process, U.S. Army Research
Institute for the Behavioral and Social Sciences, Alexandria 1999, p. 23-56.
8
161
Andrzej Lis
actually happened, what worked, what did not work and why, and the key
procedures a unit wants to sustain or improve”13. Besides mission debrief
and lessons learned, AAR is listed among the techniques of learning after
operations14. Nevertheless, After Action Review should be considered in a wider
context of the organizational learning before, during, and after operations. In
recent years, due to the AAR potential, Before Action Reviews and During
Action Reviews have been developed as the modifications of the technique15.
As Baird, Holland and Deacon (1999) highlight, AAR differentiates from other
post-mortem techniques because its objective is to “understand why interim
objectives were not accomplished, what lessons could be learned, and how those
lessons could be quickly driven back into the performance process”16.
Referring to his practical experience in conducting After Action Reviews
during the military career, Scheider (2011) observes some misconceptions
about the AAR technique. First of all he points out that AAR is often considered
as a stand-alone activity while it should be a continuous learning process.
Secondly, the aim of After Action Reviews is not to criticize the others but to
focus on own strengths, weaknesses and possible improvements. Thirdly, AAR
should not be considered as a feedback provided by external experts but selfdiscovery reflection of team members. Fourthly, the way of conducting AAR
should be adjusted to the differences in national cultures17 due to the fact that in
some cultures showing constructive criticism may be difficult to accept18.
AAR process
The After Action Review process consists of four stages: planning,
preparation, execution and follow-up (using AAR outcomes). When planning
AAR, the following elements should be taken into account: participants,
information providers, AAR facilitators, issues/ aspects of the operation
(action) to be discussed, location and time, aids and materials to be used.
AAR preparation encompasses such activities as: the review of objectives,
  Establishing a Lessons Learned Program: Observations, Insights and Lessons, Center for Army
Lessons Learned, Fort Leavenworth 2011, p. 63.
14
Washington 2012, p. 3.11-3.13.
15
  A. Lis, Knowledge Creation and Conversion in Military Organizations: How the SECI Model is
Applied Within Armed Forces, „Journal of Entrepreneurship, Management and Innovation”, Vol.
10, Issue 1, 2014, p. 68.
16
  L. Baird, P. Holland, S. Deacon, Learning from Action: Embedding More Learning into the
Performance Fast Enough to Make a Difference, “Organizational Dynamics”, Vol. 27, Issue 4, 1999,
p. 22.
17
  E.g.: The case of the challenges to incorporate the AAR technique faced by Polish military troops
participating in Afghan operation is analyzed by: A. Lis, How to Strengthen Positive Organizational
Behaviors Fostering Experiential Learning?: The Case of Military Organizations, “Journal of
Entrepreneurship, Management and Innovation”, Vol. 8, Issue 4, 2012, p. 29-30.
18
  R. Scheider, The After Action Review, „The Three Swords Magazine”, No. 19, 2011, p. 13-14.
13
162
organization of the AAR session and finding the right place to conduct AAR.
As regards the AAR agenda, it is usually based on the chronological order of
events, the categorization of warfighting functions (functional areas in civilian
organizations) or key events, themes and issues. While conducting AAR, leaders
or facilitators remind its ground rules, they review objectives to be achieved and
commander’s intent. They provide the short overview of the operation (action,
project) summarizing key events. AAR participants are encouraged to participate
in the discussion in order to bring to the team their perspectives, observations,
insights and lessons. AAR is aimed at the identification of weaknesses to be
improved and strengths to be sustained and developed. It should be highlighted
that AAR is not a critique or an assessment19 Nevertheless, the U.S. Army
doctrine points out the role of AAR to “assess performance, correct deficiencies,
and sustain demonstrated task proficiency. These improvements will enhance
unit performance in future operations”20. Similarly, the U.S. Army doctrine on
the planning process (ADP 5-0, 2012) enumerates After Action Reviews among
the assessment tools used to monitor the progress of an operation21.
Baird, Holland and Deacon (1999) make an attempt to identify the key
success factors for effective After Action Review. According to their findings,
the AAR session should be “focused on few critical issues; done immediately
after the action, inclusive of the whole group; in accordance with a structured
process, leading back to action quickly”22.
In the military, two types of AARs are distinguished: formal and informal.
Formal AARs are usually conducted after the end of an operation/ training, when
commanders and soldiers have enough time for such an event and all necessary
resources are available. Formal AARs require selection and reconnaissance
of the site as well as preparation of aids and materials such as terrain models
and maps. They are conducted by nominated facilitators. Informal AARs are
conducted by commanders during or immediately after an operation/ training
or its phase. Informal AARs provide commanders and soldiers with conclusions
and recommendations to be immediately implemented in order to increase the
unit effectiveness and performance23.
Washington 2012, p. B.1-B.6.
20
  Ibidem, p. B.6.
21
  ADP 5-0, The Operations Process, Headquarters Department of the Army, Washington 2012,
p. 14.
22
p. 23.
23
Washington 2012, p. B.1.
19
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Andrzej Lis
AAR potential for team learning
Insightful collective thinking
AAR is a team learning technique which encourages learning processes
among all participating soldiers and commanders and which enables them to
discuss thoroughly the issue from different perspectives. As a consequence,
the variety of observations, insights and lessons are identified, studied and
shared24. The AAR potential to externalize the opinions of teams members in
order to develop their common understanding of accomplished actions was
highlighted, in the interview conducted by Lis (2012) with the Deputy Director
of the U.S. Center for Army Lessons Learned (CALL) who claimed that After
Action Review “got units, Soldiers and particularly leaders accustomed to
listening to each other’s experiences and appraisal of what actually occurred
in operations and why things happened the way that they did”25. After Action
Review is a technique of externalizing tacit knowledge in the process of dialogue
and discussion. However, as observed by Lis (2014) in his study of the SECI
knowledge conversion model in military organizations26:
Both socialization and internalization processes are embedded into After
Action Reviews, too. Conducting of an analysis of what happened, what
was effective and what still needs an improvement soldiers share their tacit
knowledge (externalization). Simultaneously, thorough discussion and analysis
of the military theory in the context of real life lessons from the battle or
training, military personnel increase their understanding of explicit knowledge
included in military doctrines, directives and manuals (internalization).
To be effective After Action Review is to stimulate free dialogue and discussion
among team members. There is a need for combination of their observations,
insights and expertise in order to reconsider thoroughly accomplished actions
and their outcomes27. Discussing the After Action Review contribution to the
success of the U.S. Army Lessons Learned system Lackey (2003) observes that28:
25
  A. Lis, How to Strengthen Positive Organizational Behaviors Fostering Experiential Learning?:
The Case of Military Organizations, “Journal of Entrepreneurship, Management and Innovation”,
Vol. 8, Issue 4, 2012, p. 27.
26
10, Issue 1, 2014, p. 68.
27
28
  S.W. Lackey, Spreading the Gospel of Lessons Learned: From the PfP Lessons Learned Working
Group to Advanced Distributed Learning, „Connections: The Quarterly Journal”, Vol. 2, No. 2,
2003, p. 80.
24
164
Army behavioral scientists designed AAR to allow the participants in a training
exercise or actual operation to discover for themselves what had happened and
why, instead of having this told to them by external evaluators or their chain
of command. Under the AAR system, exercise observers became “facilitators”
guiding for the participants the process of discovering what the exercise
revealed in terms of unit, leader and soldier performance. By encouraging free
discussion the AAR permitted subordinates to offer constructive criticism of
leader decisions in an open forum. The designers of the AAR and the Army
leadership felt that by allowing subordinates to express their opinions openly,
the AAR gave the commander the “ground truth” about the performance of
the unit.
The “ability to think insightfully about complex issues and bring together
the collective intelligence of the team rather than the insight of the dominant
individual”29 is challenge in all types of organizations. Nevertheless, in
hierarchical structures such as armed forces, it seems to be particularly difficult.
Therefore, the role of After Action Review is of predominant importance for
effective team learning in the military.
Innovative and coordinated action
As stated in the U.S. Army Lesson Learned handbook, the After Action
Review is “a problem-solving process. The purpose of discussion is for
participants to discover strengths and weaknesses, propose solutions, and adopt
a course of action to correct problems”30. First and foremost, AAR focuses the
attention on the accomplishment of the mission (effectiveness). The analysis
of failure in meeting standards (efficiency) is conducted only when it was an
antecedent of the failure to accomplish the task or caused unaccepted losses31.
After Action Review aims to discuss the following issues: “what was supposed
to happen?”, “what happened?”, “what was right or wrong with what happened?”
and “how the task should be done differently next time?”32. As a matter of fact,
finding solutions to the aforementioned questions means that AAR corresponds
with the learning loop from an observation to a lesson identified33. Nevertheless,
Baird, Holland and Deacon (1999) point out that the scope of After Action
Review should be extended including the action phase when conclusions and
  A. Jashapara, Knowledge Management: An Integrated Approach, Prentice Hall, Harlow 2004, p.
62.
30
31
32
Washington 2012, B.1.
33
  N. Milton, The Lessons Learned Handbook: Practical Approaches to Learning from Experience,
Chandos Publishing, Oxford 2010, p. 16-17.
29
165
Andrzej Lis
recommendations are implemented in an organization and lesson dissemination
phase34. Such an extended understanding of After Action Review encompasses
a full lessons learned process35.
After Action Review is a learning technique oriented to action, improvements
and innovations. Simultaneously, AAR builds up trust among team members
which strengthens innovation, coordinated actions. As noticed by Senge (1999)
“[o]utstanding teams in organizations develop the same sort of relationship –
«an operational trust», where each team member remains conscious of other
team members and can be counted on to act in ways that complement each
other’s actions”36. As a matter of fact, initially the aim of introducing AAR into
the U.S. Army was to restore the values of integrity and accountability which
heavily suffered during the Vietnam War37.
Sharing practices between teams
AAR is considered to be one of the techniques of tacit knowledge transfer38.
In his study on knowledge conversion processes in military organizations, Lis
(2014) lists After Action Review among the tools of knowledge externalization.
As he observes “[t]he potential of the procedure to convert tacit knowledge
into explicit knowledge is even more visible when externalized knowledge
is codified as an After Action Report”39 i.e. “a written report that is typically
submitted after a training, combat operation, or other mission that normally
documents a unit’s action for historical purposes but also provides key
observations and L[essons] L[earned]”40. Both After Action Review and
After Action Report are the techniques of knowledge sharing. However, the
former is oriented to knowledge personalization strategy (connecting people)
while the latter implements knowledge codification strategy (collecting
observations, insights and lessons).
Baird, Holland and Deacon (1999) analyze the After Action Review
p. 23-25.
35
  N. Milton, The Lessons Learned Handbook: Practical Approaches to Learning from Experience,
Chandos Publishing, Oxford 2010, p. 16-20.
36
37
  T.H. Davenport, L. Prusak, Working Knowledge: How Organizations Manage What They Know,
Harvard Business School Press, Boston 1998, p. 8-9.
38
39
10, Issue 1, 2014, p. 68.
40
34
166
implementation in Analog Devices company, British Petroleum and Chrysler
and they identify four levels where the AAR procedure was integrated. First of
all, AAR is found to improve performance and communication within product
development teams. Secondly, AAR is used as the tool for semi quarterly
business reviews and it contributes to adding value across teams by identifying
problems, solving them and learning lessons. Thirdly, AAR strengthens
company-customer relationships. Finally, it improves the product development
process by promoting better coordination across department and functional
areas41.
Conclusions
The analysis of the AAR assumptions and lessons from its implementation
both in the military and business shows that After Action Review can be
perceived as an effective technique of team learning. The study confirms that
the AAR technique meets the characteristics of team learning processes i.e.
it stimulates insightful, collective thinking of team members, organizes them
around innovative, coordinated actions and facilitates knowledge sharing
between teams in an organization.
Nevertheless, After Action Review should be considered as an element
of the learning infrastructure of an organization rather than an isolated
learning technique and the remedy to all organizational deficiencies. There
are synergetic effects expected to emerge between After Action Reviews
and learning lessons from failures, sharing best practices or developing
communities of practice. Simultaneously, the focus should be given to the
interconnectivity between After Action Review and positive mindset and
leadership. On the one hand, After Action Review strengthens trust among
team members and it fosters their attitudes to sharing knowledge and
insights, but on the other hand positive leadership, organizational culture
and climate are the prerequisites of effective dialogue and discussion within
After Action Review sessions. The two aforementioned issues seem to be
interesting fields of further exploration of team learning processes through
After Action Reviews.
Literature:
1. ADP 5-0, The Operations Process, Headquarters Department of the Army,
Washington 2012. Retrieved from: http://armypubs.army.mil/doctrine/DR_
pubs/dr_a/pdf/adp5_0.pdf.
2. ADRP 7-0, Training Units and Developing Leaders, Headquarters
p. 26-27.
41
167
Andrzej Lis
168
Department of the Army, Washington 2012. Retrieved from: http://
armypubs.army.mil/doctrine/DR_pubs/dr_a/pdf/adrp7_0.pdf.
3. Baird L., Holland P., Deacon S., Learning from Action: Embedding
More Learning into the Performance Fast Enough to Make a Difference,
“Organizational Dynamics”, Vol. 27, Issue 4, 1999.
4. Darling M., Perry Ch., Moore J., Learning in the Thick of it, „Harvard
Business Review”, July-August, 2005.
5. Davenport T.H., Prusak L., Working Knowledge: How Organizations Manage
What They Know, Harvard Business School Press, Boston 1998.
6. Establishing a Lessons Learned Program: Observations, Insights and Lessons,
Center for Army Lessons Learned, Fort Leavenworth 2011. Retrieved from:
http://usacac.army.mil/cac2/call/docs/11-33/11-33.pdf.
7. FM 6-01.1, Knowledge Management Operations, Headquarters Department
of the Army, Washington 2012. Retrieved from: http://armypubs.army.mil/
doctrine/DR_pubs/dr_a/pdf/fm6_01x1.pdf.
8. Garvin D.A., Edmondson A.C., Gino F., Is Yours a Learning Organization?,
„Harvard Business Review”, March, 2008.
9. Jashapara A., Knowledge Management: An Integrated Approach, Prentice
Hall, Harlow 2004.
10. Lackey S.W., Spreading the Gospel of Lessons Learned: From the PfP Lessons
Learned Working Group to Advanced Distributed Learning, „Connections:
The Quarterly Journal”, Vol. 2, No. 2, 2003. Retrieved from: http://
connections-qj.org/node/2463.
11. Lis A., How to Strengthen Positive Organizational Behaviors Fostering
Experiential Learning?: The Case of Military Organizations, “Journal of
Entrepreneurship, Management and Innovation”, Vol. 8, Issue 4, 2012, doi:
10.7341/2012842.
12. Lis A., Knowledge Creation and Conversion in Military Organizations:
How the SECI Model is Applied Within Armed Forces, „Journal of
Entrepreneurship, Management and Innovation”, Vol. 10, Issue 1, 2014, doi:
10.7341/20141012.
13. Milton N., The Lessons Learned Handbook: Practical Approaches to Learning
from Experience, Chandos Publishing, Oxford 2010.
14. Morrison J.E., Meliza L.L., Foundations of the After Action Review
Process, U.S. Army Research Institute for the Behavioral and Social
Sciences, Alexandria 1999. Retrieved from: http://www.dtic.mil/cgi-bin/
GetTRDoc?Location=U2&doc=GetTRDoc.pdf&AD=ADA368651.
15. Nonaka I., Toyama R., Konno N., SECI, Ba and Leadership: A Unified Model
of Dynamic Knowledge Creation, [in:] Managing Industrial Knowledge:
Creation, Transfer and Utilization, (eds.) I. Nonaka, D.J. Teece, SAGE,
London 2001.
16. Scheider R., The After Action Review, „The Three Swords Magazine”, No. 19,
2011. Retrieved from: http://www.jwc.nato.int/images/stories/threeswords/
THREE_SWORDS_19.pdf.
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Organization, Random House, London 1999.
169
Anna J. Piwowarczyk
MSc, PhD candidate at Cracow University of Economics
CULTURAL INTELLIGENCE OR
ENTREPRENEURSHIP IN HIGHER EDUCATION
LANGUAGE COURSES
Keywords:
cultural intelligence, intercultural communication, multiculturalism, higher
education
Summary
The paper refers to the idea of shaping entrepreneurship approach in the
context of teaching foreign languages at higher education level. Developing
entrepreneurship at university in a global multicultural society means e.g.
teaching students active, adequate self-reliance and taking action in a foreign
language environment, skill to adapt to changing cultural conditions, promotion
of openness and trust towards strangers. The category that came into being as the
effect of searching for the human feature enabling effective functioning on the
border of cultures is cultural intelligence (CQ). The essence and components of
cultural intelligence were presented as an important factor of entrepreneurship.
Introduction
Given the dynamic socio-economic change, increasing globalization,
internationalization and multiculturalism it is worth asking the question of the
identity of the educational process in higher education. Universities still remain
a place where there is extensive secondary socialization, where a young person
learns to communicate with others, adopt new social roles, which shape their
attitudes towards other people. Student groups become increasingly eclectic –
are created with students from different countries and continents. M. Makowiec
emphasizes that communication is a process that underlies all processes in the
organization, affecting their efficacy1. Thus, if communication is the foundation
  M. Makowiec, Komunikacja wewnętrzna w przedsiębiorstwie opartym na wiedzy, [in:]
Zachowania organizacyjne w kontekście zarządzania wiedzą, (ed.) B. Mikuła, UEK i Fundacja
UEK, Kraków 2012, p. 91.
1
Anna J. Piwowarczyk
of the existence of the community, this contemporary, to varying degrees
internationalized universities are faced with a new challenge: how to teach and
communicate in such a multicultural environment?
The article presents the thesis that the process of foreign language teaching
in the university plays an important role in the development of students’
communicative competence in an intercultural environment, contributing in
this way to develop their entrepreneurial attitudes.
The aim of this paper is therefore to present the essence of intercultural
communication and the tools to facilitate its course, which is a model of cultural
intelligence (CQ).
Establishment in the context of foreign language teaching will be understood
as an active student learning, skilful to find and operate in a multicultural
environment, the development of the ability to adapt to a changing cultural
environment, promoting openness and trust in strangers, to support group
work, which leads to innovation and the phenomenon of group synergies,
mutual learning and inspiration.
To achieve the learning outcomes, the process of learning a foreign language
at the university should be understood not only as a new system of education
merely of the language, but as education and improvement of communication
skills in a multicultural society2.
Determinants of the educational process
Foreign language education at universities in Poland is based on
international standards of teaching. Methodological basis for teaching is the
European Framework of Reference for Languages3 (ESOKJ), determined
by the Council of Europe. Another legal regulation is Polish Qualifications
Framework4, an extension of the European Qualifications Framework. The
formal character and shape of the purpose of language learning refers to the
profile of the course syllabus and forms. Polish higher education system has also
been adopted by the subject and the European Parliament in 2006 as European
Framework of key competences for lifelong learning5.
Among the eight groups one can extract competence and soft skills. These
are social skills that allow you to achieve the objective in a situation of social
interaction. The competencies in this area include: the ability to communicate
constructively in different social contexts, tolerance, ability to understand the
  J. Stier, Internationalisation, intercultural communication and intercultural competence, “Journal
of Intercultural Communication”, Issue 11, 2006, http://www.immi.se/intercultural/nr11/stier.pdf,
[11.05.2015].
3
  Europejski System Opisu Kształcenia Językowego, CODN, Warszawa, 2003.
4
  http://www.kwalifikacje.edu.pl/images/download/Publikacje/Raport_referencyjny_PL_na_
strone.pdf, [11.05.2015].
5
  Zalecenie Parlamentu Europejskiego i Rady nr 2006/962/WE z dnia 18 grudnia 2006 r. w sprawie
kompetencji kluczowych w procesie uczenia się przez całe życie, [Dz.U. L 394, of 30.12.2006].
2
172
CULTURAL INTELLIGENCE OR ENTREPRENEURSHIP IN HIGHER EDUCATION LANGUAGE COURSES
different positions, the ability to empathize, negotiating skills and the ability to
create a climate of trust6. These soft skills are important especially in the second
and seventh key area of responsibility defined by the European Parliament and
the Council – they are areas defined as communication in foreign languages and
entrepreneurship.
As can be seen from the above issues, both the assumptions contained in the
CEFR language teaching and ERK, KRK and other regulations of the EU, make
a formal condition of intercultural communication competence development in
the process of teaching foreign languages in high school7.
Openness of our country in the process of internationalization and intensive
development of international exchange programs make a vital saturation of
content classes intercultural communication issues. Modern school must answer
the question, such as how to deal with differences? How to teach young people
entrepreneurship in a foreign cultural environment and which is associated
with openness to others, mutual understanding, tolerance, respect?
Studies show that many managers and a number of organizations
underestimate the role of intercultural skills in their work8, hence the goal of
contemporary college students should be aware who will staff multicultural
businesses and the weight of cultural differences in today’s globalized society.
Intercultural Communication
The mere knowledge of foreign languages is important, but not sufficient
for satisfactory communication that is synthesizing procedure in relation to
another person9. Language is merely one of the tools of communication10, often
talking in a foreign language with representatives of the culture, people do not
realize that they were in a different type of communication, only part of which is
carried out by means of language, and whatever part of it11.
Therefore, an important element in developing the entrepreneurial
mindset in the twenty-first century will be the development of communicative
competence in intercultural environment, which in addition to linguistic
competence12 includes an awareness of cultural factors, knowledge of the
  Ibidem.
  A. Piwowarczyk, Rozwijanie kompetencji społecznych na lektoracie na uczelni wyższej,
„E-mentor”, 2015, p. 12-21; A. Piwowarczyk, Social Competences and Cross-Cultural Differences
from a Perspective of Glottodidactics, [in:] Knowledge-Economy-Society. Managing Organizations:
Concepts and their applications, (ed.) A. Jaki, B. Mikuła, Cracow University of Economics, Cracow
2014, p. 247-253.
8
  B.W. Stening, Cultural Intelligence: Put it (High) on the Asian HRM Agenda, “Research and
Practice in Human Resource Management”, No. 14(2), 2006, p. 74-84.
9
  M. Buber, Ja i Ty. Wybór pism filozoficznych, Instytut Wydawniczy Pax, Warszawa 1992, p. 214.
10
11
  E.T. Hall, Bezgłośny język, PIW, Warszawa 1987, p. 31.
12
  Europejski System Opisu Kształcenia Językowego, CODN, Warszawa, 2003, p. 100-106.
6
7
173
Anna J. Piwowarczyk
elements of the target culture, the right attitude towards diversity, i.e. tertiary
socialisation13 and intercultural sensitivity14.
Intercultural communication is interdisciplinary, is the culmination of
a comprehensive knowledge of man and culture. A thorough analysis of the
concept of intercultural communication reveals a lot of questions, connected
with the notion of even communication.
Is the communication a state of martial15, and thus a tool to limit the
freedom of others, the exercise of power, influence and manipulation of
others? Can a place of encounter with another human being, in which the
unit has a chance to fully develop their humanity, as a person becoming I am in
touch with you16. Or maybe it is just a dynamic two-way process of information17
whether undertaken in the specific context of verbal exchange, vocal and nonverbal signals in order to achieve a better level of interaction18 or maybe a place
to know other people and creating communities19. Regardless of how you
define the communication it is undoubtedly the basis of all social processes
and the condition of the existence of societies. Intercultural communication is
the act of understanding and being understood by the audience with a different
culture20, takes place in a situation when the two units from the other cultural
environment with the language and the other in the non-verbal means of
expression directly (Face-to-Face) communicate with each other21. One of the
principal tasks of the knowledge of intercultural communication is to bring
content to the Initial Cultural awareness in order to facilitate the processes of
communication between people from different cultures22. Cultural primary level
(PPK) is closed, largely unrealized team rules of behavior, acquired in the
process of socialization in a particular social environment and largely control
human communication23. In conclusion it can therefore be stated that the key
to express oneself via language is to identify what you think – in a broader
  M. Byram, Teaching and Assessing Intercultural Communicative Competence, Multilingual
Matters Ltd, Clevedon 1997, p. 34.
14
  M.J. Bennett, Becoming Interculturally Competent, [in:] Toward multiculturalism: A reader in
multicultural education, (ed.) J.S. Wurzel, Newton, MA: Intercultural Resource Corporation, 2004,
p. 62.
15
  W. Gromczyński, Egzystencjalizm Jean-Paul Sartre’a, [in:] Filozofia współczesna, (ed.) Z.
Kuderowicz, Wiedza Powszechna, Warszawa 2002, p. 239-253.
16
  M. Buber, Ja i Ty. Wybór pism filozoficznych, Instytut Wydawniczy Pax, Warszawa 1992, p. 56.
17
  J. Stankiewicz, Komunikowanie się w organizacji, Astrun, Wrocław 1994, p. 44.
18
  Z. Nęcki, Komunikacja międzyludzka, WPSB, Kraków 1996, p. 109.
19
  J. Mikułowski-Pomorski, Jak narody porozumiewają się ze sobą w komunikacji międzykulturowej
i komunikowaniu medialnym, UNIVERSITAS, Kraków 2012, p. 35-36.
20
21
  A. Erll, M. Gymnich, Interkulturelle Kompetenzen. Erfolgreich kommunizieren zwischen den
Kulturen, Klett, Stuttgart 2013, p. 77.
22
  J. Mikułowski-Pomorski, Jak narody porozumiewają się ze sobą w komunikacji międzykulturowej
i komunikowaniu medialnym, UNIVERSITAS, Kraków 2012, p. 200.
23
  Ibidem, p. 199, 200.
13
174
sense and basic – a man with his knowledge and culture that expresses a set
of rules of conduct, perceived and accepted by the community24, so what
G. Hofstede called the collective programming of the mind25 and E. T. Hall’s
Original Cultural Level26.
By adopting the perspective of social communication it is important in the
communication process not only the way in which the sender encodes their
information, but also the ability to accurately decode the message coming
from a different culture, so the communication partner who is the unit with
a different programming of the mind. In this perspective important is an answer
to the questions: Who are the participants of intercultural communication? What
factors determine that they are disparate27?
As shown by the studies28 and observations of researchers29 working in
this field often managers and people working at the crossroads of cultures,
or in a foreign cultural environment have trouble finding and effectively
function in a different cultural environment. The source of difficulty is called
low intercultural sensitivity30. With its low level of association, unawareness
of cultural differences in the proceedings, lack of identification of common
symbols, rituals, facts and artifacts representing the identity of a nation,
and even more lack of adequate skills and effective use of these when
communicating with strangers. As a result of the search features of human
functioning, responsible for skillful managers in a multicultural environment
defined category of cultural intelligence (CQ).
Cultural Intelligence – the essence and components
Cultural intelligence seems to belong to the core competencies in a dynamic
multicultural society, but also on the European and global labor market.
Leaders who want to effectively manage multicultural teams need to learn how
to operate in an environment of various national cultures, ethnic, religious,
organizational, professional, corporate disparities. Companies need leaders who
have the know-how to quickly adjust it in dozens of different cultures on a daily
  J. Szczepański, Elementarne pojęcia socjologii, PWN, Warszawa 1970, p. 78.
  G. Hofstede, G.J. Hofstede, Kultury i organizacje. Zaprogramowanie umysłu, PWE, Warszawa
2007.
26
  E.T. Hall, Bezgłośny język, PIW, Warszawa 1987.
27
  J. Mikułowski-Pomorski, Komunikacja międzykulturowa. Wprowadzenie, Wydawnictwo AE,
Kraków 2003, p. 149.
28
  M.J. Morley, J.L. Cerdin, Intercultural competence in the international business arena,“Journal of
Managerial Psychology”, No. 25(8), 2010, p. 805-809; J. Breidenbach, I. Zukrigl, Tanz der Kulturen:
Kulturelle Identität in einer globalisierten Welt, Rowohlt, Hamburg 2000, p. 20.
29
  Ch. Earley, E. Mosakowski, Cultural Intelligence, “Harvard Business Review”, No. 10/2004.
30
  M.J. Bennett, Becoming Interculturally Competent, [in:] Toward multiculturalism: A reader in
multicultural education, (ed.) J.S. Wurzel, Newton, MA: Intercultural Resource Corporation, 2004.
24
25
175
Anna J. Piwowarczyk
basis. This is capability that can be developed by any would be manager31. Among
many advantages of the CQ should be replaced even if that CQ plays a vital
role in the cultural fit to expatriates, which is considered a major factor in the
success of the foreign delegations32. It emerged as an important factor in effective
performance and interaction among various inside and cultural environments33,
affects intercultural negotiation process and its results34.
CQ is a multidimensional, highly interdependent structure of the different
skills that will help you understand a foreign culture adopted standards and
master the rules of conduct hitherto unknown, allows identifying and dealing
with differences in a different cultural environment, is responsible for the
adaptation in the new environment, and allows for the effective operation of the
different situations or different cultural situations.
Precursors that researched CQ, Ch. Earley and S. Ang, CQ have defined it
as the ability to adapt to different cultural realitie35. In 2004, Ch. Earley and E.
Mosakowski published a slightly different definition: CQ is a seemingly innate
ability of a person from the outside to read culturally foreign to themselves, and so
seemingly incomprehensible gestures as do people raised in a given culture36. An
award-definition, that gained in recent years the most attention of researchers
and which is the subject of detailed analysis is that formulated by S. Ang and
her team as the ability of the individual to effective operation and management of
culturally diverse environments37.
As mentioned above, CQ is a structure composed of four areas: the incentive
component, cognitive, and behavioral metacognitive. CQ model approach is
shown in figure1.
  D. Livermore, L. van Dyne, S. Ang, Cultural Intelligence: Why Every Leader Needs it …,
“Intercultural Management Quarterly. Integrating Culture and Management in Global
Organizations”, No. 2, Summer 2012, p. 21.
32
  M.G. Kittler, D. Rygl, T.D. Puce, Kulturelle Intelligenz, Distanz und Anpassung von Führungskräften
im Ausland, „Zeitschrift für Management“, No. 4, 2009, p. 29-52.
33
  A. Amiri, S. Moghimi, M. Kazemi, Studying the Relationship between Cultural Intelligence and
Employees’ Performance, “European Journal of Scientific Research”, Vol. 42, No. 3/2010, p. 432-441.
34
  L. Imai, M.J. Gelfand, The culturally intelligent negotiator: The impact of cultural intelligence
(CQ) on negotiation sequences and outcomes, “Organizational Behavior and Human Decision
Processes”, Vol. 112, No. 2, July 2010, p. 83-98.
35
  Ch. Earley, S. Ang, Cultural Intelligence: Individual Interactions Across Cultures, Stanford
University Press, Stanford 2003, p. 53.
36
  Ch. Earley, E. Mosakowski, Cultural Intelligence, “Harvard Business Review”, No. 10/2004, p.
140.
37
  S. Ang, L. Van Dyne, Ch. Koh, K.Y. Ng, K.J. Templer, Ch. Tay, N.A. Chandrasekar, Cultural
Intelligence: Its Measurement and Effects on Cultural Judgment and Decision Making,Cultural
Adaptation and Task Performance, “Management and Organization Review”, Vol. 3, No. 3, October
2007, p. 337.
31
176
Figure 1. The Sub-dimensions of the Four Factor Model of Cultural
Intelligence
Cultural
Intelligence
Motivational CQ
Intrinsic
Extrinsic
Self-Efficacy
Cognitive CQ
Cultural System
Cultural Norms
Values
Megacognitive CQ
Awarenes
Planning
Checking
Behavioral CQ
Verbal
Non-Verbal
Speech Acts
Source: L. Van Dyne, S. Ang, The Sub-dimensions of the Four Factor Model of Cultural
Intelligence. Technical Report. Cultural Intelligence Center, 2008, http://linnvandyne.com/
papers/Van%20Dyne_Ang_Livermore%20CCL%20in%20press.pdf, [11.05.2015].
Below there are synthetically discussed the various sub-dimension CQ38.
Motivational CQ refers to the ability of individuals to direct attention and
energy when adopting the new cultures. Includes internal motivation and selfefficacy in people to adopt to new cultures.
Cognitive CQ reflects the level of knowledge and orientation in the
standards, practices, traditions and customs prevailing in different cultures.
Metacognitive CQ refers to the personal level of cultural awareness and the
awareness of the intercultural interaction. It includes the planning, controlling,
revising and reforming mental models regarding the cultural norms for the
countries or groups of people.
Elements of behavioral CQ reflect skillful verbal and nonverbal behavior
when interacting with people from different cultures. Associated with the
change and their behavior to fit the cultural context.
Language classes can serve as an example of intercultural meeting, during
which students develop CQ areas described above. This happens due to the
acquisition of new knowledge, learning about proper behavior in a foreign
culture, shaping the attitudes of openness and respect, and self-reflection.
During the construction of the educational process there is the selection
of relevant learning content, forms and methods of teaching, including, in
  S. Ang, L. Van Dyne, Ch. Koh, K.Y. Ng, K.J. Templer, Ch. Tay, N.A. Chandrasekar, Cultural
Intelligence: Its Measurement and Effects on Cultural Judgment and Decision Making, Cultural
Adaptation and Task Performance, “Management and Organization Review”, Vol. 3, No. 3, October
2007, p. 338.
38
177
Anna J. Piwowarczyk
particular, the use of activating methods, the attitude of a teacher who should be
representative and interpreter at the same time of a foreign culture.
Conclusions
In summary, it can be said that the process of foreign language teaching
in schools apart from learning a foreign language system, contributes to the
development of entrepreneurial attitudes of students. During this intercultural
meeting, four sub-dimension of cultural intelligence are formed. CQ is an
important tool of communication in intercultural environment when a student
group whose members are employees in a moment of international business
sector, the public sector and the nonprofit sector. The study sought to show
that the condition of entrepreneurship in the twenty-first century will be
skilful, appropriate and effective communication in different social and cultural
contexts. According to the Recommendation of the European Parliament and
the Council on key competencies there are soft tolerance, the ability to express
and understand the various positions, the ability to empathize, negotiating skills
and creating a climate of trust. These attitudes are part of entrepreneurship that
can also shape the foreign language classes in school and university bench.
Literature:
178
1. Amiri A., Moghimi S., Kazemi M., Studying the Relationship between
Cultural Intelligence and Employees’ Performance, “European Journal of
Scientific Research”, Vol. 42, No. 3/2010.
2. Ang S., Van Dyne L., Koh Ch., Ng K.Y., Templer K.J., Tay Ch., Chandrasekar
N.A., Cultural Intelligence: Its Measurement and Effects on Cultural
Judgment and Decision Making, Cultural Adaptation and Task Performance,
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PART IV
CHANGES AND TRENDS OCCURRING
IN HUMAN RESOURCE MANAGEMENT
IN THE FACE OF NEW CHALLENGES
Ana Langović Milicević
PhD, Full Professor, Faculty of Tourism and Hotel Management,
University of Kragujevac, Serbia
Tatjana Cvetkovski
PhD, Full Professor, Graduate School of Business Studies Megatrend
University, Belgrade, Serbia
Zlatko Langović
PhD, Associate Professor, Graduate School of Business Studies
Megatrend University, Belgrade, Serbia
NEW DIRECTIONS IN HUMAN RESOURCE
MANAGEMENT
Keywords:
strategic management, human resource, competitive advantage, globalization
Summary
Demographic projections indicate that the world is becoming diverse
than ever before. The success of any system depends on how it responds to
the challenges of diversity. Many sectors proactively respond to demographic
developments which led to a number of educational efforts, through training
and development organizations on how to better manage diversity in the
workplace and in service provision. With increasing levels of multiculturalism,
strategic management of business systems should be considered in light of
the cultural factors that affect their usefulness. Many researchers in their
entirety including the intercultural dimension in business in the last two
decades. With a growing national diversity in today’s business culture is still
an important dimension because there are still significant differences in the
importance for managers from different cultures, which is a clear signal to
corporations that inflexible human resources policy, which is not adapted to
cultural specificities, will allow managers to successfully manage employees.
Thus, studies prove that there are different values among different cultures
and consequently every corporation should be aware of them. Different needs
and expectations of employees in different countries requires a manager of
human resources to implement a policy that is flexible enough to respond to
local specificities and to higher-level personnel meet expectations. Thus, in
terms of human resource management trends we see demographic changes,
aging workforce and increasing global mobility. On the other hand, in the
global economy if it is to ensure the development of business systems must
invest in human resources. Investing in human capital (highly skilled and
highly motivated workforce) creates the potential that can be a source of
sustainable competitive advantage.
Introduction
Many theorists have argued that literature is becoming less and less relevant
to the education of young managers. They find that the right information is given
to those who “work” since modern environment in which we are is imposing
a global business that is changing the traditional approach to education that,
the companies are trying to expand their operations abroad, manage “talent”
more strategicly, and changing the traditional bureaucratic structures, business
communications are becoming intercultural, virtual, horizontal.
The environment requires an innovative approach and a new way of thinking
for the managers and employees. The modern enterprise is becoming a dynamic
development system so universal organizational model of the company now
belongs to the past. The age of the organizational structure with the prevailing
bureaucratic and hierarchical relationships is slowly disappearing and such
an organization, of course, has serious implications when it comes to human
resources management. Models of modern management are a result of changes
in the environment, as well as in the organization of the modern corporation.
In this case these changes reflect primarily the valuation of the human factor.
Human resources are becoming the most important factor in the job, where
teamwork and cooperation take on increasing importance. Such importance of
human resources in the enterprise indicates that the content of human resource
management evolved. Therefore, human resources are becoming the basic
premise of a successful enterprise management.
Globalization and preparing human capital for new demands
184
The development of the Internet has greatly accelerated the process of
globalization. A great number of large companies has created international
companies which perform new business ventures to secure a presence on the
markets of other countries without establishing a separate branch. One of the
biggest challenges that companies faced at the beginning of the XXI century
is how to compete with foreign companies, both in national and international
markets. Some companies cooperate with foreign companies on specific
projects or dislocate production to other countries due to the reduction of trade
barriers between developing countries. Intensifying the international trend of
connecting companies around the world presents a significant challenge for
human resource management functions in terms of creating a balance between
the needs of single strategy and HRM policies at the level of the whole and
the need to adapt to local regulations and customs. Therefore, in recent times,
international human resource management is all the more important for
a growing number of companies around the world.
Due to these changes the characteristics of the labor force are aimed at
increasing the degree of diversification of the working age population in two
dimensions. The primary dimension; including age, sex, race, nationality,
physical ability, sexual orientation and secondary; such as education, previous
work experience, parental status, marital status, religious beliefs, military
experience, geographic location, income level. The most significant changes in
the characteristics of the labor force are reflected in the increasing participation
of women in the working age population and an increase in the average age
of employees. This raises the challenge of management of human resources in
terms of training and retraining of older employees in line with technological
changes. On the other hand it can create youth employment opportunities for
career advancement despite the large number of older colleagues in higher
hierarchical positions.
Investing in education and training people is the most important element
of the development policy of each country is crucial. This is because planning
human resources and their education level is a key issue in every society, it is not
a power but an investment for the future. Although it nowadays acts as a phrase
it is most respected and the best-paid knowledge. The more knowledge a man
has – the better he will be paid. Anyone who has knowledge feels safer because
you always can easily find a new job and it is easier to deal with the problems
of the existing businesses. Human resources with extensive knowledge is very
difficult to find and that is why it is important to develop their knowledge and
thus motivate them to stay.
Education in contemporary conditions must have permanent in character,
because what you learn in youth, may not be enough in adulthood. It cannot be
expected to have specialized staff which will be required in the future economy.
Therefore it is necessary to continue their education through practice at work.
There is no longer any age for that level of education. At any place and at any age
it is possible to receive more education, which should facilitate the professional
activity to takes place in the best possible way.
Globalization affects the development process, in general, it may be said
to increase the importance of international trade in economic development,
as well as national economic competitiveness. Hence national income has
increasingly begun to rely on success in an ever-growing global market for
goods and services. The increasing mobility of factors of production, including
capital, labor, materials, technologies and know-how, globalization changes the
economic conditions of comparative advantage.
The role of education in development is also significant changes in
the process of globalization as it is associated with the trends above. As is
usually claimed, knowledge and skills are becoming important for economic
185
development and education and skills have become important for attracting
foreign direct investment, which is one of the main drivers of growth in many
countries1, 2. Equally important, the education and skills determine the extent
to which knowledge and technology can be transferred and absorbed and thus
the ability of the state to build its indigenous industry and to compete in the
global market with their goods and services. That would of course respond to
the new demands of globalization and created a world of intercultural dialogue;
education must include knowledge of interculturalism.
New directions in human resources management: respect for
culture
In modern business conditions in the realization of the work outside the
home country socio-demographic, economic and cultural factors should be
considered. Staff training is an important issue because continuing education
in the field of intercultural diversity is essential. Education on cultural
diversity is necessary in order to staff able to deal with current and future
problems in the country because properly trained personnel is essential for
the success of a system.
Empirical research conducted by Hofstede on national and corporate
cultures contributed to the development of intercultural management in the
field of management. Intercultural management differs from international
management as intercultural management focuses on the behavior of
organizational and human resources3. Intercultural management attempts
to assess the impact of culture (national and organizational) on perceptions,
interpretations and actions of managers. Culture can be defined by the
collective programming of the mind which distinguishes the members of one
community in relation to the other. This collective behavior is a system that is
acquired during the socialization process. National culture, which is reflected
in the values, thoughts and behavior in society, continues to play the role of
primordial despite the process of globalization. In the area of governance,
cultural system gives individuals cognitive abilities and specific approach to
solving problems. Consequently, colleagues from other countries will probably
find different solutions when faced with the same problems. Research
conducted in intercultural management tends to focus on the study of the
interaction of managers from different systems. Intercultural management
plays an important role in international business activities, where business
partners from several countries put in the situation of teamwork. However,
  M. Carnoy, Globalisation and Educational Reforms: What Planners need to Know, UNESCO
International Institute for Educational Planning, Paris, 1999.
2
  Educational Restructuring in the Context of Globalisation and National Policy, (ed.) H. Daun,
Routledge/ Falmer, London, 2002.
3
  G. Hofstede, G.J. Hofstede, Cultures and organizations. Software of the mind, McGraw-Hill, New
York 2005.
1
186
today the expected team approach in the implementation of business activity,
regardless of cultural background of managers, where due to incorrect
interpretations of verbal and non-verbal communication may be conflicts
and misunderstandings. This underestimation of the cultural factors are still
present in the global business scene, even though the merger of companies,
first of all, connect the different human beings. On the other hand, strategic
approach based on the concept of divergence takes into account the cultural
plurality and the stability of certain systems.
In a multicultural and dynamic environment challenge comes from the
question of how to prioritize and how to adapt in order to respond to the
specific values and needs of employees from different cultures, with different
expectations. Despite the fact that most of the incentives is repeated in the
results of the countries which have conducted research, there is still a significant
difference in their importance for managers of different nationalities, which
is a clear signal to international companies (or companies with international
staff) that a fixed management policy human resources, which is not adapted
to cultural specificities will not allow managers to successfully motivate each
employee individually.
This indicates that in accordance with the new requirements of the
environment needs to change the education system and involvement of
intercultural learning that will create the adequate manpower and fairer society
to “learn to live together”. The result of changes in the environment that is
increasingly seeking workers who are multiqualified, flexible and educated with
the new knowledge necessary for new business requirements regarding the
use of new technologies and as a result of globalization and the knowledge of
cultural diversity.
New directions in human resorces management in process of
integration company – opportunity for competitive success
The process of integrating the company on a global level is a sensitive
process, especially when taking into account the different cultural background
of the involved companies. The factor of culture is sometimes seen as an
obstacle to the success of mergers and acquisitions, should start from the idea
that cultural distance may also improve performance of business systems and
the detection of new standards of value. Connecting business systems based
on the existence of a joint project and then it is necessary to effectively manage
human resources. It is therefore essential that companies realize the benefits
in connection with the merger, so they can concentrate on achieving the
goals that are set together. When it comes to human resources management,
provision should be made and define the necessary changes that will lead
to successful transactions on the other hand take into account the new
requirements of business environment. When merging two business systems
it is required the formation of mixed working teams. Given the different
187
188
interests of managers, communication plays a significant role. Finally, it
is advisable to provide for cultural change within the company, defines the
method of work tools and management style. Creating a new corporate
culture that integrates the positive aspects i.e. understanding and appreciation
of cultural diversity helps to avoid conflict and creating a creative atmosphere
for the realization of business activities.
Respect for the balance of nationality and jurisdiction led to a significant
transfer of employees. Faced with corporate cultures that are not significantly
different, managers new companies recommended human resource policy
which aims to build a common business spirit. English should be adopted as
an official language and corporate culture is based on the spirit of teamwork.
It is recommended to separate the large number of people who need to work
on the harmonization and integration of human resources. Recruitment of new
labor force contributes to building a new corporate culture. Managers who have
experience of working in these companies, mergers and acquisitions of different
cultures “consider cultural diversity” as a special advantage of the new merged
company. As a result, several work teams are employees of different nationalities.
Cultural diversity is a source of: creativity, original ideas. Otherwise, it should
be noted that in order to facilitate the integration process, it is recommended
to change the structure of the organization, with several “mono-cultural” teams
“bi-or tri-cultural” teams.
In accordance with these changes in the course of realization of business
activity, it is assumed that it is possible that members of multicultural teams
deal with some problems that must be solved quickly. Only systematic
explanations of cultural differences to overcome these obstacles that will
inevitably cause friction between the different management concepts due
to cultural differences. Thus formed teams unite individuals with diverse
interests individually contribute to the activities of the team. In this way
we achieve greater effectiveness in the implementation of business activity
because the members of this team formed in discussing and negotiating
that is share their knowledge and diverse experiences. In the realization of
business tasks with teams whose individuals from different cultures big role
in the manager. The main task of managers in these cases is that binds all
members of the group into one entity and to strive towards the goals set.
In fact, this manager has no hierarchical role, but the role of coordinator
of interest. In such conditions, the manager focuses on working conditions
for the team, supports cooperation among members and seeks to harmonize
the differences that exist between them. In order to successfully carry out
his task manager or team leader, with members from different cultures,
must be aware that cultural factors may cause misunderstanding. For these
reasons, it is important knowledge, understanding and respect for cultural
differences in the management of human resources in the modern business
environment.
Multinational corporations and human resource
management
Intensifying the international trend of linking companies worldwide
represents a significant challenge for human resource management function
in terms of creating a balance between the need to keep a unique strategy and
human resources management at the level of the continent and the need to
adapt to local regulations and customs. That is why in recent times international
human resource management is more important for a growing number of
companies around the world.
Human resource management in multinational companies means defining
questions the extent to which branches should act and behave like local firms
versus the extent to which their practices resemble practices corporate parent
or another international standard. In the paper on this topic4 described three
types of multinationals: ethnocentric, polycentric and global. According to this
typology, current management practices in foreign affiliates of multinational
companies could resemble practices in the home country (ethnocentric), or
could be in accordance with local practices of the host country (polycentric),
or to adhere to international standards (global). The typology of management
practices in multinational corporations in terms of overall orientation. In
recent years, some scholars have argued that the observation of multinational
companies in terms of general orientation obscures the internal differentiation
of management practices within the multinational corporation5. Instead,
they claim that multinational company is properly viewed as a link between
differentiated practice.
When implementing the business activities of multinational companies
in defining ways of managing human resources to solve two dilemmas i.e.
trying to make a balance towards achieving internal consistency or to achieve
local adaptation? If passed that the pressure to achieve internal consistency
stronger explanation follows as follows: since the employee can move between
subunits, multinational companies are trying to develop a consistent approach
to remuneration and benefits, as well as to maintain consistent policies and
procedures. Sometimes in the absence of broad employee mobility across
borders, multinational companies may wish, for reasons of internal equity, to
adopt a consistent set of practices in human resources management worldwide.
Accordingly, it should be expected that the practices of human resource
management in the branches are formed mainly with the desire to achieve
internal consistency. Adverse pressure to internal consistency, the pressure to
achieve those practices of human resource management in the branches that
resemble the practices of countries where the branches. Some practices will
  H. Perlmutter, The Tortuous Evolution of the Multinational Corporation, “Columbia Journal of
World Business”, No. 5(1), 1969.
5
  G. Hedlund, The Hypermodern MNC – A Hetetarchy, “Human Resource Management”, No.
25(1), 1986, p. 9-25.
4
189
perhaps have to comply with local laws and regulations i.e. will be forced to
resemble local practices. In other cases, the branches can be no coercion strive
to look like a local company that may compete more effectively in local labor
markets, or to better “fit” imitating local practices.
If the human resources management seeks to be closer to the local practice,
the reason may be that the practice of human resource management is often
decorated with local regulations and with the other branches of multinational
corporations in most cases, there is little choice but to hire people with
competitive local labor market, so it could be too difficult to depart from the
local norms. In multinational companies in human resources management
adapting to local practices may be a few essential items:
• Leisure most like local practices, because this factor is determined by
local laws or collective agreements;
• Composition of employees by gender, in most situations branches of
multinational companies are trying to conform to local standards. Yet
in practice the parent company will continue to serve as an important
influence, because the parent company may be embarrassed to put
women in positions of responsibility, especially if they are not used to it
in their environment;
• The training needs of employees can vary depending on local conditions.
Also, in order to increase competition, subsidiaries of multinational
companies will need to provide training for their employees to improve
their skills and knowledge that are comparable to those offered by local
competitors.
It is less likely that the affiliates of multinational companies comply with the
practices of their local competitor when it comes to:
• Bonuses in compensation for executive directors although we should
draw attention to branches of multinational companies may face
pressure to comply with local practices, especially if they want to hire
talented managers in the highly competitive local labor market;
• The level of employee participation in executive decision-making,
the pressure to adapt to the local branch of the practice is the weakest,
but the executive decision-making is not an area where multinational
companies significantly deviate from the practice of the parent company
as it relates to important processes of strategic choices and allocation
of resources, which the parent company gives a great importance, and
which retains a direct influence.
190
In short, managed human resources for which there are well-defined
local norms are usually closely coordinated with the practices of local
competitors. In practice, for which there are diverse and poorly defined
local norms, or which are considered essential to the maintenance of
internal consistency or making key decisions, it is less likely to adapt to local
standards but keep the internal consistency of human resources management
of the parent company.
Conclusions
The central setting of contemporary philosophy of human resource
management, the human resources are the most dynamic segment of each
corporation. People and their ideas, productivity, ability to change and capacity
to learn at all levels of the organization are a crucial competitive advantage of
the organization.
Globalization is a phenomenon that not only changes the appearance
of the world but also the world-view of the transition from obsreving the
multicultural world based on intercultural foundations. This means respecting
the environment, possesing an intercultural understanding and developing
cultural awareness and knowledge of new skills.
The new environment requires a change of the education system regarding
the involvement of intercultural knowledge in order to create adequate
manpower and fairer society which is able to “learn to live together”. The
results of changes in the environment require employees who are qualified
with multiple skills, flexible and trained with new knowledge necessary for
new business ventures, as well as being able to master new technologies for the
purpose of globalization, knowledge and cultural diversity.
Literature:
1. Carnoy M., Globalisation and Educational Reforms: What Planners need to
Know, UNESCO International Institute for Educational Planning, Paris,
1999.
2. Educational Restructuring in the Context of Globalisation and National
Policy, (ed.) H. Daun, Routledge/ Falmer, London, 2002.
3. Hedlund G., The Hypermodern MNC – A Hetetarchy, Human Resource
Management”, No. 25(1), 1986.
4. Hofstede G., Hofstede G.J., Cultures and organizations. Software of the mind,
McGraw-Hill, New York 2005.
5. Perlmutter H., The Tortuous Evolution of the Multinational Corporation,
“Columbia Journal of World Business”, No. 5(1), 1969.
191
PhD, Assistant Professor, Cracow University of Economics
THE APPLICATION OF BALANCED
SCORECARD IN THE HUMAN RESOURCE
MANAGEMENT IN THE ENTERPRISE1
Keywords:
balanced scorecard (BSC), changes in human resources management
(HRM), BSC in HRM, procedure for development of BSC
Summary
Balanced Scorecard is a recognized modern management tool that provides
balancing of the elements to measure implementation of the strategy in the different
business areas. One of the areas of application of this instrument is the human
resource management. If it has to be effective, should be supported IT systems.
This article aims to show the general assumptions the construction of the
BSC and the tasks related to its implementation to the area of human resources
management (HRM), present the most important reasons and directions of
changes in HRM, presentation of preparation procedure Scorecard in the area
of HRM and exemplification of the implementation of the BSC in the area of
HRM in the enterprise.
Introduction
The balanced scorecard (BSC) is considered as a form of a modern
organization management, it constitutes a programming tool for the
organization’s activities and a system of measurement and assessment of its
efficiency2. The BSC protects against an unjustified investing in new and risky
types of activities. The balanced scorecard not only clearly indicates directions
of development but also describes in the form of a strategic plan what and when
  The publication was financed from the resources allocated to the Management Faculty of Cracow
University of Economics, under the grant for the maintenance of the research potential in 2015.
2
  K. Cholewicka-Goździk, Strategiczna karta wyników – instrument oceny efektywności organizacji,
„Problemy Jakości”, No. 2, 2002, p. 6-9.
1
it should be achieved3. Using properly constructed card allows to stimulate
the improvement of efficiency of business processes. It is also important that
the BSC provides a balance of measurement elements of a strategy realized in
different areas of activity. One area of application of this tool is human resource
management. The BSC concept has undergone some evolution despite its young
age and nowadays, it is developing very rapidly. It is evidenced by the fact that
in the last five years appeared new applications associated with experience of
a growing number of organizations that have implemented it.
Therefore, the aim of this article is to present:
• the overall assumptions of the construction of the balanced scorecard and
purposes of its implementation to the area of human capital management,
• procedures of development of the balanced scorecard in the area of
human resource management,
• practical solutions in the range of formulating the balanced scorecard in
the area of human resource management.
General assumptions of the balanced scorecard construction
The balanced scorecard (BSC) is a tool which allows to translate strategy
into specific tasks and measurements of its implementation for particular
organizational units of an enterprise. It was constructed by R.S. Kaplan and D.P.
Norton in 19924. In their approach, the authors have taken into account four
perspectives: financial, customer, internal processes, and innovation and growth
opportunities5. The BSC is based on the assumption that an enterprise has
obligations to shareholders which are expressed in ensuring the future potential
of the enterprise, not only focusing on the implementation of the short-term
tasks in the range of gained profit. That is why, monitored factors in the card go
far beyond the financial sphere. The essence of the method consists in creating
and using in a control a coordinated set of measures of multi-faceted assessment
of the functioning of the enterprise. For every organization many measures
and indicators for particular processes from different areas can be offered, not
only within the enterprise, but also connected with external processes of the
enterprise. The BSC allows to answer to four basic questions: how customers see
the enterprise, how efficient are internal processes in the value chain, whether
the developed solutions are innovative and enable further growth and create
value in the future, as well as how owners perceive the enterprise6. It is important
  A. Brzozowski, Balanced Scorecard w polskich przedsiębiorstwach średniej wielkości, „Controlling
i Rachunkowość Zarządcza”, No. 8, 2004, p. 16.
4
  R.S. Kaplan, D.P. Norton, The Balanced Scorecard – measures that drive performance, “Harvard
Business Review”, Vol. 70, No. 1, 1992, p. 71-79.
5
  BSC may also be expanded according to different perspectives, e.g. partner relationship
management, quality management, etc.
6
  R. Tarasiewicz, Jak mierzyć efektywność łańcuchów dostaw, Oficyna Wydawnicza SGH, Warszawa
2014, p. 97-98.
3
194
THE APPLICATION OF BALANCED SCORECARD IN THE HUMAN RESOURCE MANAGEMENT IN THE ENTERPRISE
to link the designated measures and indicators with specific goals and tasks in
different areas and at different levels of the enterprise, what allows to organize
cause-effect relations between strategic objectives. It is a tool that should be
perceived as an integrated assessment system of the organization management.
The application of the BSC gives the possibility to look at the value chain from
a broad perspective taking into account financial and non-financial aspects as
well as from strategic and operational level7.
Achieving goals and tasks of the four main areas allows to realize the
strategy of the enterprise. Within each perspective should be defined: strategic
objectives, the way of measuring purposes, the desired size of the target and
initiatives, that must be realized in order to achieve objectives by the enterprise.
Reasons and directions of changes in human resource
management
Every modern enterprise, regardless of size, location or industry, has to face
many challenges. The most important are: globalization, achieving profitability
through growth, using opportunities created by technologies, generating
intellectual capital as a source of competitive advantage, the necessity of
functioning in constantly changing conditions. To meet these challenges, factors
such as: speed, flexibility, the ability to learn quickly, and high competencies
of employees must be constantly developed. Intentions to compete through
traditional factors such as costs, new technologies, production and distribution
systems, or the characteristics of products, most likely will be very shortsighted and insufficient. This situation creates need to define a new role of the
personnel function and thereby increase its rank in the organization. In figure 1,
there are characterized typical changes apparent in the modern economy which
should not only initiate a new organizational order of enterprises but also a new
approach to place and role of their employees.
Figure 1. New directions for the human resource management
Source: A. Pocztowski, Zarządzanie zasobami ludzkimi, Strategie-procesy-metody, PWE,
  J. Brzóska, A. Karbownik, M. Kruczek, A. Szmal, Z. Żebrucki, Strategiczna karta wyników
w teorii i praktyce, Wydawnictwo Politechniki Śląskiej, Gliwice 2012, p. 147-148.
7
195
196
There also can be noticed an increasing impact of customer-oriented
process on human resource management. In terms of practice, it means not
only taking actions aimed at closer link between the organization’s activities to
the situation on the internal and external labour market but also identifying
customers of personal services and professionally satisfying their needs. In
turn, the level of satisfaction of these needs should constitute the indicator of
the efficiency assessment in the field of human resource management (HRM).
More and more often, a major problem in the human resource management
is work efficiency understood as the effectiveness of achieving objectives
at various levels of the organization. Opportunities which contribute to
success of the organization by improving productivity and quality of work are
becoming another challenge in the field of HRM. Therefore, all the activities
constituting the process, such as planning employment, acquiring employees,
assessment, remuneration and training should be carried out, as well as
judged by the criterion of efficiency. The basic condition for improving work
efficiency is to have competent employees on almost all workplaces, and that
is why the ability to determine the competencies and then to develop them,
is becoming one of the most important challenges facing contemporary
human resource managers. Competency-based human resource management
determines an interesting direction of developing this field of management.
Competencies can be a starting point for both the selection of employees on
worksite and shaping assessment systems, remuneration and development.
Challenges in the field of HRM are also related to the increasing incidence
of technological and organizational changes, observed in many enterprises.
It can be seen, inter alia, in various forms of restructuring, flattening
hierarchical structures, reengineering business processes and introducing new
forms of work, such as teleworking or virtual organization. These processes
have an impact on the condition and structure of employment but also on the
way of leadership in the organization. Continuous changes in the structure
of employment has led to a situation in which the most numerous group of
the professionally active population are knowledge workers with a high level
of theoretical knowledge, not resulting directly from practical experience.
Therefore, one of the biggest challenges facing management is the change
of philosophy and the modification of the methods being used. HRM can
and should play the most important role in the recognition of a particular
organization’s ability to learn and to develop five disciplines that make up the
model of learning organization: system thinking, building common visions,
exploring and opening own mental models, boosting collaborative learning
and developing personal mastery.
Increasing globalization and areas of activity of many organizations going
beyond the territorial boundaries of individual countries, represent new
challenges in the field of human resource management. They are primarily
related to increasing cultural diversity, which can be seen not only in terms of
traditional features differentiating employees, such as gender, age, education.
More and more important are becoming new diversity dimensions, for
instance, skin colour, ethnic origin, nationality, level of mental and physical
aptitude, sexual orientation, or ethics.
Considering the above observations, there can be expressed the view that
the modern concepts of HRM should evolve gradually in the direction of
human capital management. The specificity of human capital is characterized
by, inter alia, individual elements which are unique, virtually impossible to
imitate by competitors. Due to dispersion and qualitative nature of these
elements, equally complicated are their evidence and measurability. This
forces the need for changes in the approach to perform personnel function,
in particular its regulatory aspects. The direction of these changes seems to
be clearly defined and it is moving away from functionalism towards value
creation networks. Future human capital management in lower extent should
be a sequential process of recruitment and employment reduction, assessment,
remuneration and development, and in greater extent an interactive, nonlinear configuration of the individual elements consisting on human resource
management system, which consequently consist on value creation network.
There can be identified three main interpenetrating areas of this management:
the area of human capital formation, the area of human capital usage and the
area of human capital transformation into structural capital8.
Human capital (resource) management has a fundamental meaning in the
process of generating intellectual capital of the organization. Although, it does
not create value directly, it creates it indirectly – by employing people with
a high potential of knowledge, creating conditions for its dissemination within
the organization, and its perpetuation and continuous renewal, which in turn
lead to value creation for employees, as well as for customers and shareholders.
The characteristics of human resources treated as the most important success
creating factor requires a differentiated approach: static (recording the size of
human resources and identifying their most important features) and dynamic
(investigating and characterizing means of “use”, transforming human
resources into capital, considered as a main factor which creates success)9.
The Twenty-First-Century organizations are expected to be innovative, be
able to rapid changes and to adapt quickly. Their aim is to achieve success in the
market. It becomes possible by using the potential of employee qualification, i.e.
knowledge, experience, skills and engagement of employees10.
  A. Pocztowski, Zarządzanie zasobami ludzkimi, Strategie-procesy-metody, PWE, Warszawa 2008,
p. 41-43.
9
  L. Gilejko, Zarządzanie zasobami ludzkimi a partycypacja pracownicza, [in:] W kierunku jakości
kapitału ludzkiego, (ed.) A. Pocztowski, IPiSS, Warszawa 2007, p. 83.
10
  Z. Janowska, Zarządzanie zasobami ludzkimi. Wyzwanie XXI wieku, PWE, Warszawa 2001, p.
179.
8
197
Objectives of creating BSC in the area of human resource
management
The measure of HRM effectiveness is used to assess the degree of
implementation of tasks resulting from the strategy of the enterprise, creating
the desired attitudes of employees towards realized tasks. Properly constructed
measurement system should have the following features: should allow to assess
the essence of personal activity of a particular enterprise from the point of
view of the enterprise’s strategy, contain the most important measures from the
point of view of the enterprise’s strategic objectives, identify occurring causeeffective relations and suggest types of undertaken repair actions in selected
areas of personnel policy of the enterprise, inform about the enterprise’s
future achievements in the range of implementation of personal tasks. HRM
assessment system, having indicated characteristics, should progress on three
levels: the enterprise (to determine the effects of performed personal tasks on
the enterprise’s success as a whole), functional areas (branches) of the enterprise
(to determine the effects of personnel policy for the implementation of other
internal processes in the enterprise), and behaviour of employees (in order to
assess the various functions of HRM, the effectiveness of methods which are
used, however, provided that begins and depends on the behaviour and talents
of employees in the organization)11. The use of the BSC should allow to indicate
mutual cause-effect relations occurring between personal actions undertaken
at the three levels of assessment of HRM efficiency in the enterprise. For the
whole enterprise in elaborated cards can be found, in the different perspectives,
indicators relevant to measure the efficiency of HRM carried out through the
prism of assessment of the enterprise’s strategy and supporting it, the personal
strategy.
Table 1. Balanced Scorecard of HRM: juxtaposition of objectives,
assessment measures of activities’ efficiency
The prospects for
the development of
the enterprise/ the
enterprise’s objectives
Assessment measures of
activities’ efficiency
The comment
Financial perspective:
• the value added of
• increase in the
human capital,
enterprise’s profitability • the economic value
added of human capital,
  J. Fitz-enz, Rentowność inwestycji w kapitał ludzki, Dom Wydawniczy ABC, Kraków 2001, p. 33,
p. 45-50, p. 117, p. 181; A. Lipka, W stronę kwalitologii zasobów ludzkich, Difin, Warszawa 2005,
p. 31.
11
198
• assessment of human
resource management
from the financial
perspective.
• the rate of return on
investment in human
capital (profitability of
human capital),
• financial indicator of
human capital,
• percent of total labour costs.
Customer perspective:
• rate of employee
engagement,
• the cost of customer
service,
• assessment concerns
• number of loyal
the way how customers
customers,
perceive the enterprise
• quality improvement of
• percentage of new
through attitude of
customer service
customers acquired
employees to customers,
during a particular year, • assessment of customer
• the value of sold
satisfaction.
products/ services,
• comparative analysis with
other enterprises.
Internal processes perspective:
• improvement of
realization of internal
processes
• % of remuneration
programs tailored to the
strategy and development
time of programs,
• the cost and % of
conducted trainings,
• cost of services provided • assessment of the level of
by the personnel
labour productivity is the
department,
result of increasing skills
• the level of labour
and morale of employees,
productivity,
innovation and process
• the indicator of paying
improvement within the
growth of productivity
enterprise.
by growth of unit labour
cost,
• indicator of nominal
using of working time,
• overtime rate,
• indicator of lost time,
199
• the percentage of
employees with flexible
working hours,
• the percentage of
employees employed in
flexible (untypical) forms
of employment,
• unit labour costs,
• profitability of labour
costs,
• share of labour costs in
the value of sales.
Development perspective:
• acquisition of
employees
• maintenance of
employees
• remuneration of
employees
• development of
competencies
200
• the number of new
employees, the rate of
employing, the time
required to fill a vacant
worksite, the level of
qualification of new
employees, the cost
per newly employed,
• assessment of employee
the number of newly
satisfaction – as
employed,
a condition of increase in
• indicator of employment
labour productivity and
stability, the average
stability of employment,
length of employment,
• assessment of the
adaptation rate, the rate
enterprise’s ability to
of exemptions, the rate of
retain key employees
layoffs at the request of
in the long-term time
the employee, indicator
period,
of employees mobility,
• assessment refers to
indicator of internal
expenses (costs) related
mobility, fluctuations
to human resource
cost,
management and
• the degree of adjustment
their compliance with
of the remuneration
enterprise’s strategy.
system to the enterprise’s
strategy, the amount of
average wage, share of
fringe benefits in the
value of wage bill, the
cost of developing and
introducing new
remuneration system,
share of total labour
costs in operating costs,
• the average level of
employees’ education,
the percentage of
specialists and experts,
the percentage of
employees with higher
education, the total cost
of training, the total
number of hours devoted
to training, the average
number of hours of
training per employee,
the number of hours
of training divided into
professional groups, the
profitability of investment
in training, internal rate
of promotion.
Source: M. Tyrańska, J. Walas-Trębacz, Możliwości wykorzystania strategicznej karty wyników
w zarządzaniu zasobami ludzkimi na przykładzie przedsiębiorstwa ciepłowniczego, Zeszyty
Naukowe PTE, No. 4, Kraków 2006, p. 181-183.
The catalogue of assessment measures of HRM efficiency presented in table 1
is wide, but not definitive. The choice of measures should always be determined
by the strategic objectives of the enterprise, which also indicate mutual
relationships with objectives set for the area of human resource management. The
implementation of this rule will improve internal processes and more effective
realization of the enterprise’s strategy, and in the long-term perspective will
improve acceptance of such assessment system through the enterprise’s employees.
The procedure for the development of BSC in the area of
human resource management
Changing conditions of functioning of today’s organizations lead to
determine new roles and tasks of the Department of Human Resource
Management (HRM). Generally, these activities take place towards
strengthening responsibility of department for the results of the enterprise and
creating values which meet the needs of main shareholders12. In particular, the
main challenges faced by today’s HRM departments in enterprises, include:
  A. Pocztowski, Organizacja zarządzania zasobami ludzkimi, [in:] Zarządzanie zasobami
ludzkimi. Tworzenie kapitału organizacji, (eds.) H. Król, A. Ludwiczyński, Wydawnictwo Naukowe
PWN, Warszawa 2006, p. 502-503.
12
201
introduction of new technologies (tools) of human resource management,
development of competencies of all employed, concentration on internal
customers, increase in measurable value of activities related to human
resource management. HRM department should perform the following role
in the organization:
• strategic business partner,
• change agent,
• organizational expert,
• a wizard of employee engagement13.
The new approach to the role of HRM department causes simultaneously
the need to apply a new criterion for the evaluation of its work, namely the
assessment of the impact of human resource management on the performance
of the entire enterprise. A helpful tool in determining this relationship is,
inter alia, balanced scorecard which serves to emphasize cause-effect relations
between the work of the HRM department and good results of the enterprise14.
In order to elaborate the BSC in the field of HRM, there is a need to proceed
as follows, namely:
• Appointing the team responsible for the progress of work (employees
from the Department of Human Resources should majorly participate).
• Analysing and developing sets of objectives and measures for the
entire enterprise paying special attention to individualise targets for
key processes located in the area of HRM, namely: hiring employees,
periodic assessment, motivation, professional development of
employees, relations in the enterprise;
• Describing and presenting in graphic form each process separately to
determine whether it is effective and consistent with the strategy, to
match measures to it (gathering opinions on personnel processes of
employees involved in IT, finance, sales, production, to identify areas
for improvement and find ways to reduce costs and make better use of
resources);
• Setting goals and measures in the area of HRM in perspectives: process,
finance, customer and development;
• Introducing changes in the organizational structure – the appointment
of persons responsible for each process of HRM15 (indication of the
relationship between positions, employees responsible for receipt,
  J. Marciniak, Standaryzacja procesów zarządzania personelem, Oficyna Ekonomiczna, Kraków
2006, p. 16.
14
  B. Wiernek, Nowe metody oceny realizacji funkcji personalnych, [in:] Nowe tendencje i wyzwania
w zarządzaniu personelem, (ed.) L. Zbiegień-Maciąg, Oficyna Ekonomiczna, Kraków 2006, p. 201.
15
  While implementing BSC, multiple barriers and difficulties should be expected: S. Cyfert,
R. Muszyńska, Bariery w implementacji systemu strategicznej karty wyników, “Controlling
i Rachunkowość Zarządcza”, No. 2, 2004, p. 18-20; H.R. Friedag, W. Schmidt, My Balanced
Scorecard, C.H. Beck, Warszawa 2003, p. 58.
13
202
processing and transmission of information), and proposing changes in
the range of objectives and measures of their achievement, and updating
job descriptions;
• Monitoring and modifying objectives and measures – introducing
changes in individual perspectives in compliance with established
enterprise’s strategy in order to evaluate their effectiveness and impact
on other organizational processes of the enterprise, as well as changes in
the behaviour of employees16.
The efficiency assessment of HRM causes that broad access to current
and relevant information becomes more important, which is easier and
more efficient thanks to use of information and IT systems by organizations.
Information systems should play controlling and steering role in the field of
HRM and in particular include specific conducting procedures of employees
organizational units in the area of performing personnel function and should
include data describing staff of the organization17.
It should be emphasized that during the growing complexity of the
environment and the personnel function, information system is a tool allowing
not only the construction of the BSC for this area of the enterprise, but also
efficient HRM in the organization. The information system supported by IT
systems through the ability to collect, store and process a large number of
varied personal data provides more rational and effective personnel decisionmaking, and also makes it possible to diagnose HRM system in a particular
enterprise.
The example of the application of the BSC in the area of
human resource management in the researched enterprise
Changes that have occurred in recent years in the researched enterprise
occurred also in the area of long-term planning, as well as in the control of
realized strategy. The management board of the enterprise has introduced one
of the tools that allows to measure the strategy, namely the Balanced Scorecard
(BSC). The enterprise started to design scorecard at the end of 2008 and in 2010
structure of this document for the enterprise was developed. An important step
in building the BSC was to define the vision, mission and goals of the enterprise.
To presented and approved plans, by the Board of Directors, were set concrete
activities to achieve them. The indicators were defined to particular activities in
  M. Tyrańska, J. Walas-Trębacz, Możliwości wykorzystania strategicznej karty wyników
w zarządzaniu zasobami ludzkimi na przykładzie przedsiębiorstwa ciepłowniczego, Zeszyty
Naukowe PTE, No. 4, Kraków 2006, p. 185-186.
17
  Basically, these systems are divided into three groups: information and recording systems,
information and searching systems, information-decision-making systems: A. Suchodolski, System
informacji personalnej, Prace Naukowe Akademii Ekonomicznej we Wrocławiu, No. 871, Wrocław
2000, p. 203-204.
16
203
order to control achieving objectives18.
In the enterprise there has been developed a map of strategic objectives
which constitutes a perfect picture of goals of that enterprise. Objectives defined
in the map have been associated with measures, and then ordered according
to the four perspectives of the Balanced Scorecard. In elaborating scorecard
for the enterprise was used grouping of existing processes and measures in
accordance to the four perspectives indicated by Kaplan and Norton. The layout
of objectives and measures (measures to achieve them) mentioned in the four
perspectives for the researched enterprise, served as a basis to build a scorecard
for individual organizational units, inter alia, Human Resource Department, as
well as for individual employees of the enterprise.
The personnel policy in the researched enterprise is carried out in four
basic activities: employment (analysis of employment and changes concerning
job positions); trainings (in terms of introducing more advanced technologies
in the production and distribution of thermal energy, as well as in terms of
completing education); wage policy (increase in wages and the development of
a new project of bonus system); social activity (conducted according to Act of
04.03.1994 about enterprise social benefit fund in agreement with trade unions
functioning in the enterprise).
An example of balanced scorecard for Human Resource Department in the
researched enterprise is presented in table 2.
The management board of analysed enterprise introduced a mechanism that
allows to present objectives of the enterprise and units, and allows to translate them
into activities of particular teams and members. The introduction of personal
scorecards caused that measures and activities at all levels are understandable
and achievable for employees and are implemented in daily work. It was enough
to link system of management by objectives existing in the enterprise with cards
of teams and employees in such a way that they are consistent with the strategic
objectives and facilitate the implementation of the strategy.
Table 2. Balanced Scorecard for Human Resource Department in the
researched enterprise
Financial perspective
1. Increse in the
value of the
enterprise
• the value added 1. Fast and good
of human capital.
service
• the percent of
problems handled
by “one phone”,
• operating costs
and benchmark.
  The researched enterprise performs a strategy based on Sustainable Development combining
care about nearest environment where it operates with technological progress and financial
rationality. Directional objectives of researched enterprise include functioning of Poland within
the structure of the European Union, as well as development plans of city’s infrastructure.
18
204
Customer perspective
2. Minimization
of costs of
human resource
management
• the percent of the
total labour costs,
2. Reduce the level
• indicator of
of complaints
competitiveness
potential.
3. Worldwide
standard
Internal process perspective
• the average time
to solve the
problem.
• assessment
of the way of
human resource
management in
relation to other
enterprises.
Development perspective
1. Compatibility of
• the percent
plans concerning
of completed
1. Systematic
human resource
strategic plans
improvement
management
concerning
of employees’
with the
human resource
qualifications
enterprise’s
management.
strategy
• improving
executed
commands and
2. Improvement of
2. Improving the
functioning of
traceability of
communication
department,
employee with
process
• the availability
the enterprise
of information
needed for
decision-making.
• comparison to
the achievements
3. Creating an
of other
atmosphere of
personnel
innovation
departments
• atmosphere based
on the results.
• acquiring
important skills,
• internal path of
promotion.
• maintenance of
managerial staff
in the enterprise.
Source: own elaboration based on data from the enterprise.
The BSC defined at all levels of the organization, is an effective way to raise
awareness of strategy among employees. All levels of the elaborated BSC have
been made available to employees. The way to achieve this goal was to use
functioning internal IT network, called Intranet, in the enterprise. The databases
and information including reports, elaborations, and other documents and
records of the previous measure of achievements operate in the researched
205
enterprise. Information collected in a synthetic way constituted an excellent
material for building the BSC and its continuous updating. All cards of the BSC
are updated on the latest measurements of metrics by using for this purpose
Excel program and programs in Visual Basic supporting visualization of trends
phenomena and making predictions. During introducing and updating the BSC
have been used many different mass media in the enterprise, inter alia: notice
board, video cassettes, meetings, periodic brochures and newsletters, strategic
dialogue, detailed monthly reports, meetings with leaders of implementing
the BSC. Although, open informing employees about the priorities of the
organization is a condition for effective implementation of the strategy, it is
necessary to take into account the need to maintain confidentiality and secrecy
of certain information.
Conclusions
The Polish enterprises have to look for new sources of advantage, such as
better understanding of the needs of customers, the highest quality, the best
adjusted offer, innovative brand up against changes in market and functioning
Poland in the structures of the European Union. Traditional management
systems cannot describe the process of value creation from intangible assets, it
is possible because of, inter alia, using the Balanced Scorecard which becomes
a very useful tool of strategic management for the enterprise. The card acts as
an early warning system, discrediting genuineness of cause-effect relation is
a signal to identify unobserved changes and start the process of adaptation even
before changes will give the effect of reducing profits of the enterprise.
The article presents the reasons for introducing the BSC in the enterprise
with particular emphasis on the area of HRM. Moreover, there was indicated
an important, supportive role of information systems in its construction. On
the basis of the researched enterprise has been presented in a synthetic way the
scope of work related to the implementation of the Balanced Scorecard, and
in particular activities concerning its formulating for the need of HRM. The
analysed enterprise assumed that rapid and effective implementation of the BSC
will be possible by integrating it with existing systems, i.e. quality management
system, environmental management system, IT system and motivation system.
Introducing the BSC to management system has allowed the researched
enterprise to join to organizations managed in a manner appropriate to the
current world standards and characterized by innovative solutions.
Literature:
206
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Gliwice 2012.
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efektywności organizacji, „Problemy Jakości”, No. 2, 2002.
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wyników, “Controlling i Rachunkowość Zarządcza”, No. 2, 2004.
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2007.
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Warszawa 2001.
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Ekonomiczna, Kraków 2006.
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Zarządzanie zasobami ludzkimi. Tworzenie kapitału organizacji, (eds.)
H. Król, A. Ludwiczyński, Wydawnictwo Naukowe PWN, Warszawa 2006.
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PWE, Warszawa 2008.
14. Suchodolski A., System informacji personalnej, Prace Naukowe Akademii
Ekonomicznej we Wrocławiu, No. 871, Wrocław 2000.
15. Tarasiewicz R., Jak mierzyć efektywność łańcuchów dostaw, Oficyna
Wydawnicza SGH, Warszawa 2014.
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wyników w zarządzaniu zasobami ludzkimi na przykładzie przedsiębiorstwa
ciepłowniczego, Zeszyty Naukowe PTE, No. 4, Kraków 2006.
17. Walas-Trębacz J., Możliwości wykorzystania strategicznej karty wyników
w zarządzaniu zasobami ludzkimi na przykładzie przedsiębiorstwa
ciepłowniczego, Zeszyty Naukowe PTE, No. 4, Kraków 2006.
18. Wiernek B., Nowe metody oceny realizacji funkcji personalnych, [in:] Nowe
tendencje i wyzwania w zarządzaniu personelem, (ed.) L. Zbiegień-Maciąg,
Oficyna Ekonomiczna, Kraków 2006.
207
Piotr Zając
PhD, Assistant Professor, Department of Labor Resources Management,
SITUATIONAL LEADERSHIP IN HUMAN
CAPITAL MANAGEMENT
Keywords:
personnel management, human resource management, human capital
management, management, leadership, situational leadership
Summary
Modern companies, operating under the knowledge economy in an
international dimension, wanting to meet the requirements dictated by the
market, are forced to offer more modern and more perfect products and services.
They can do so only through the work of a highly skilled, committed, easily
adaptive to changes, highly motivated, ready to learn, loyal and productive staff.
An important issue is also a proper management of the human capital, which
may be facilitated by the situational leadership. With the situational leadership
and using the leadership styles in accordance with the rules there are involved
three skills that a leader must possess: flexibility, diagnosis and partnership. The
second thing is flexibility.
At this point, the leader must simply learn to use different management
styles, depending on the situation and the employee. Training is the best option
here. The third issue is partnership, sometimes referred to as a partnership for
results. Common high results of the manager and the subordinate become in
this case a target to be achieved in a given timeframe. It is an element linked to
a specific agreement on what kind of leadership the coworkers expect and need
at given time in order to succeed.
From human resources management to human capital
management
The issues within the range of the HR function of an enterprise are variously
described by the authors analyzing these issues both at home and abroad. While
describing personal activities, the following terms can be found in the literature:
“personnel management”, “human resource management”, “management of
labor resources” or “human resource management”. This state of affairs can be
Piotr Zając
explained by the evolution of the approach to the people in an organization,
their place and their role. It can be observed even by more and more frequent
highlighting of the strategic dimension of a man and his/ her capital in an
organization; hence “human capital management”.
The survival and development of a company in the market economic system
is conditioned by the efficiency and harmony of the realization of the following
(among others) functions such as: a production, a technical, a financial,
a marketing as well as a personal one. A personnel function is defined as duties
and responsibilities that the company should realize towards their staff, which
determines the requirements that can be demanded from their employees.
The personnel function of the company, as well as other functions, undergo
systematic modifications. They refer both to the changes within the HR
function, to the changes in the approach to the staff and to the changes in the
relations between the personnel function and other functions of an enterprise1.
The evolution of the company personnel function got revealed in, inter
alia, the real processes of the company management, as well as in the model
human resource2 management of economic organizations. The tendency of
these changes can be defined as mastering of the management integration
features. These features relate both to the effective ways of welding employees
with the company, which is an internal problem of the company, as well as to
its integration with the environment. The following can be regarded as the
basis of the modern human resource management and – at the same time –
as management components interpreted in the category of the process of
coordinating and integrating its people with the objectives of the organization3:
• defining mutual employees’ expectations and their
employing
organizations,
• concluding numerous contracts describing the mutual expectations of
the organization and employees,
• creating conditions that would ensure meeting the mutual expectations.
The listed components imply a certain way of approaching the labor relations
within an organization, which connects them with a personnel management.
The term “human resource management” is a strategic and coherent approach
to the management of the most valuable assets of an organization, which are the
people working in it, contributing to the achievement of its objectives. Human
resource management is a method of managing the employment, aiming to gain
a competitive advantage through a strategic distribution of highly dedicated and
  A. Szałkowski, Personel w systemie zarządzania przedsiębiorstwem, [in:] Podstawy zarządzania
personelem, (ed.) A. Szałkowski, Wydawnictwo Akademii Ekonomicznej w Krakowie, Kraków
2006, p. 21.
2
  You can read more on the model human resources management in: Podstawy zarządzania
personelem, (ed.) A. Szałkowski, Wydawnictwo Akademii Ekonomicznej w Krakowie, Kraków
2006, p. 28.
3
1
210
skilled workers, using a variety of cultural, structural and personnel techniques4.
This definition was formed in the 80’s of the 20th century in the United States; it
was an attempt to seek a new term in the management of people, different from
the practices used in American companies at that time.
Human resource management can be regarded as a set of interrelated
activities possessing ideological and philosophical justification. It includes
employment, development, rewarding people in organizations and
a development of proper relations between the management and the workers.
These problems are dealt with by all line managers, team leaders and human
resource management specialists.
The philosophy of human resource management is to recognize employees
as one of the most valuable elements of the company. The strategy of human
resources and the global strategy of each organization should be in tune, and
shaping of the corporation culture should be compatible with the requirements
of the corporate strategy. This raises a philosophical assumption of human
resource management here; namely – that it is a pursuit to build rules for
identifying the employees with the organization. This commitment is not so
much about the bureaucratic commitment to the organization, but more about
the fact that employees represent certain attitudes, are attached to their own
values and to the values associated with belonging to a family, a professional
group or trade unions.
The interest in human resources management in recent years has
led to different approaches to this concept, taking into account specific
circumstances of the countries from which individual authors analyzing the
issues of managing people in organizations derive. However, considering the
common concepts, one can indicate some typical characteristics of human
resource management5:
• The first feature is the perception of human resources of a company as
a source of its competitive advantage. This confirms an assumption,
formed in the first models of human resource management, of
perceiving people employed in a given organization as a valuable asset of
the company. The activities in the sphere of the management of people
employed in an organization should be aimed at creating and effective
utilization of the potential embedded in the human resources;
• The consequence of treating people as a source of competitive advantage
is the second feature of human resource management strategy, namely
the demand for the integration of human resources strategy with the
overall strategy of the company. Emphasizing the need for practicing
people management not only on the operational level, but also in
a strategic dimension refers to the original models of management.
  M. Armstrong, Zarządzanie zasobami ludzkimi, Oficyna Ekonomiczna, Kraków 2005, p. 29.
  A. Pocztowski, Zarządzanie zasobami ludzkimi, Strategie – procesy – metody, PWE, Warszawa
2008, p. 31.
4
5
211
Piotr Zając
This means a need for the company management to engage in solving
complex personnel issues and to treat personnel decisions as strategic
ones;
• The third feature of human resource management is highlighting
the need for active involvement of line managers in the processes of
planning, organizing, directing and controlling the personnel issues,
which is associated with a certain decentralization of the responsibility
for employment matters. It stems directly from an assumption of the
priority significance of human resources in business processes;
• Other features of human resource management, serving as a specific base for
exercising a personnel function, may include highlighting the importance
of organizational culture as the basis for an action in the field of business
management, individualization of labor relations, a development of direct
forms of employee participation in the life of the organization, a change in
the employees’ management style towards transformational leadership and
orientation at a customer in the relations between individual workers and
their various groups present in the organization.
Human resource management has a functional, institutional and
instrumental dimension. The functional dimension concerns the organization
of individual tasks and activities in the process of creating value; in terms of
the institutional dimension it refers to defining the roles and responsibilities
of entities authorized to make personnel decisions and the interrelationships
between them; the instrumental dimension relates to the selection of appropriate
methods and techniques for dealing with personnel issues6.
Within the realization of HR processes there are used many tools of various
complexity that make up the instrumentation of a manager/ consultant. Due
to the interdisciplinary nature of human resource management, there are
also used methods and techniques that derive from allied disciplines such as
work sociology, work psychology, work physiology, ergonomics and economic
analysis. Within the range of human resource management tools one can
mention, among others:
• work analysis,
• employment planning techniques,
• employee recruitment techniques,
• assessment systems,
• coaching, mentoring,
• job evaluation,
• personnel controlling,
• personnel audit7.
  You can read more on the topic of tools for human resources management in: A. Pocztowski,
Zarządzanie zasobami ludzkimi, strategie procesy metody, PWE, Warszawa 2008, p. 36.
6
212
7
The aforementioned examples do not exhaust a set of common features and
tools attributed to the concept of human resource management described by
different authors.
Modern companies, regardless of their size, location or industry affiliation,
have to face many new challenges in the context of which the following can be
mentioned: globalization, taking advantage of opportunities created by new
technologies, achieving profitability through growth, creating of intellectual
capital as a source of a competitive advantage and the need for action in
a changing environment. Organizations which want to meet these challenges,
cannot compete using traditional factors such as costs, modern technologies,
production and distribution systems and product characteristics, but should
reach for factors of an organizational nature, such as an operating speed,
flexibility to change, an ability to learn quickly and high competences of
employees.
For the professionals dealing with the world economy, late twentieth century
and the beginning of the twenty-first century is, most of all, a period of the
implementation of economic changes (the expansion of the European Union
with further member states, opening of the borders, etc.).
In this economy, especially in highly developed countries, the existence of
a new economic order is highlighted, in which the main factor of production
is the knowledge used, increasingly, on all levels in the society. This knowledge
is inseparably connected with the people who create and distribute it within
the company – these are the employees. While the collection, processing and
storage of knowledge can take place without the participation of employees –
mainly through information systems – it is difficult to imagine creating the
knowledge without the human participation. Therefore, we conclude that welleducated, experienced and motivated personnel in an organization functioning
in the new economy is a major factor thanks to which the organization becomes
highly competitive.
In the light of the discussed conditionings of enterprise performance
in the twenty-first century, one can say that the concept of “human resource
management is evolving towards the management of human capital”8. The
human capital includes the totality of features and characteristics gathered in
humans (knowledge, skills, abilities, health, motivation, values) which have
a certain value and provide a secure source of potential revenue for both the
employee as the owner of this human capital, as well as for the organization
using the services of that capital holder, on conditions previously determined.
With the development of the knowledge-based economy, the human capital
is more and more often recognized, at the microeconomic level, as the main
(strategic, the most important) resource that an organization has9.
  G. Łukasiewicz, Kapitał ludzki w przedsiębiorstwie, [w:] Zarządzanie personelem, materiały do
ćwiczeń, (ed.) A. Szałkowski, Wydawnictwo Akademii Ekonomicznej w Krakowie, Kraków 2006,
p. 83.
8
9
213
Piotr Zając
One can point to the enormous influence of the size and structure of
the human capital on the development of societies, nations and even the
humanity; in this case we talk about the macroeconomic level. In particular, it is
emphasized that the human capital10:
• has a serious impact on the innovation of economies and societies,
their absorption abilities in terms of grasping and the implementation
of the world’s scientific, technical, organizational, mind-set and other
achievements’,
• has an impact on institutional changes and on modernizing structures
of a different kind,
• encourages promoting and popularizing modern patterns of
consumption and life quality,
• shapes a modern technical and organizational, information and social
infrastructure and so on.
In contrast, the threats caused by under-investment in the human capital
contribute to the existence of a civilization and education gap, to the processes
of manufacturer and socio-political alienation, pose a threat of an economic
stagnation and accelerate the emigration, harmful for the economy of a given
country, of the qualifying capital (a loss of a pension in respect of education;
apart from other effects – biological and social ones).
The specifics of the human capital is expressed by the fact that individual
components of that capital are unique and very difficult to imitate by
competitors; as are their measurability and registering due to the dispersion and
their quality character; it causes a necessity to change the approach to exercising
the personnel function and in particular to its regulatory aspect. The direction
of these changes seems to be fairly well-defined and means moving away from
the functionalism towards the network of creating the value. This means that
the future management of the human resource (capital) will be a less and less
sequential process of recruitment, evaluation, remuneration, development and
de-recruitment and more and more an interactive and non-linear configuration
of individual elements comprising the human resource management system,
which elements will constitute the network of creating the value. One can
identify three major and overlapping areas of this management11:
• an area of creating the human capital,
• an area of using the human capital,
• an area of transforming the human capital into the structural one.
The human capital formation in the context of company personnel function
takes a form of a net of activities of the human capital planning, sourcing,
  Cited from: Zarządzanie Zasobami Ludzkimi, Tworzenie kapitału ludzkiego organizacji, (eds.)
H. Król, A. Ludwiczyński, Wydawnictwo Naukowe PWN, Warszawa 2006, p. 111.
11
  A. Pocztowski, Zarządzanie zasobami ludzkimi, Strategie – procesy – metody, PWE, Warszawa
2008, p. 41.
10
214
their evaluation, development, remuneration, relocation, communicating and
shaping human relationships nature.
The main elements of a value creation in the area of human capital are:
organizing the work, directing teams, motivating, performance management,
assessment and communication.
By contrast, the transformation of the area of human capital into the structural
capital includes activities connected with capturing the human knowledge in
procedures, databases, manuals, formal methods and intellectual property.
Situational leadership in management
Leadership, as written by Peter Drucker12, who in my opinion is one of
the people who laid the foundations for the modern management methods, is
applicable mainly to people. Particularly, the leadership related to the issue of
managing an organization is focused on its employees. It should be remembered
that in a general notion, a leadership as such is a completely voluntary act of
cooperation to achieve a defined together purpose. Communities, cultures,
groups and individuals are supporters of a person who leads them and they do
it without any coercion. Also the task that remains to be done is not strictly
enforced on them, but has become a work of joint efforts. Psychology as well as
later sociology consider the leadership or the leaders themselves in a number
of broader and deeper aspects, however at the level of the organization
management itself, I believe it is not necessary.
The concepts of leadership, just like the very definition of leadership, pose
in their extent and variety quite a challenge. Over the years many experts in this
subject have created very elaborate models of leadership styles that have been
linked to the power, a situation or managing.
A qualifying approach is one of the oldest perspectives of the leadership. The
basic assumption of this concept is that a leader or a figurehead has certain inborn qualities which allow them to be a leader or not. It was assumed that certain
personality traits that are possessed by the best leaders are not even available to
other people. For the research needs, there were prepared lists of attributes, which
may arise at the leaders and which should appear in true figureheads. Looking
back at the characteristics which a leader should have, as presented at those
times, such as assertiveness, communication skills, stress resistance, a tendency
to dominate and the need to develop or wholeheartedness, we can say that this is
now a standard “wish list” for candidates for managerial positions.
In turn, the main thesis of the behavioral concept is as follows: “a leader can be
trained by reinforcing the desired or by suppressing the inappropriate behavior”13.
A situational approach to the leadership appeared after failed or unsuccessful
  Peter Ferdynand Drucker, born on 19.11.1909, died on 11.11.2005. He was an expert in
management issues. He is called a father/ founder of management or the “pope of management”.
13
  A.K. Koźmiński, W. Piotrowski, Zarządzanie teoria i praktyka, PWN, Warszawa, 2005, p. 340.
12
215
Piotr Zając
research related to the behavioral concept. The researchers concluded that
different leadership styles are more or less effective depending on a given
situation. It turned out that there is no single best leadership style, which would
prove itself anytime, anywhere and against any person or activity. The situation
approach focuses on the following aspects:
• Requirements arising from tasks;
• Expectations and behaviors of colleagues;
• Features, expectations and behaviors of subordinates;
• Culture and the principles of the organization policy14.
According to James A.F. Stoner, Fiedler15 is the author of one of most
thoroughly researched situational models16. Fiedler writes that group
performance depends on the correct “aligning” of the leadership style and the
extent to which the existing situation allows you for control and social impact.
Eventually Fiedler has defined the following situational factors:
• Leader/ participant relations;
• Sentence structure;
• The power of a leader.
In the further course, he assumed two situational states – a good and a bad
one, and then he introduced a typology of managerial situations (table 1). Table
1 shows the connections between the emotional contacts occurring in the
relations between a leader and a subordinate, a type of a task and what is, in an
appropriate situation, a degree of authority of the manager.
Table 1. Typology of managerial situations according to F.E. Fiedler
Situation
I
II
III
IV
V
VI
VII
VIII
Emotional relationships
between the manager
and a group
good
good
good
good
bad
bad
bad
bad
Task type
easy
easy
complex
complex
easy
easy
complex
complex
The range of
manager’s
authority
wide
narrow
wide
narrow
wide
narrow
wide
narrow
Source: A.K. Koźmiński, W. Piotrowski, Zarządzanie teoria i praktyka, PWN, Warszawa, 2005,
p. 343.
  J.A.F. Stoner, R.E. Freeman, D.R. Gilbert, Kierowanie, PWE, Warszawa, 1999, p. 463.
  Fred Edward Fiedler, born in Vienna in 1922, the author of a theory of an unwanted employee.
He worked on factors influencing the management models.
16
  J.A.F. Stoner, R.E. Freeman, D.R. Gilbert, Kierowanie, PWE, Warszawa, 1999, p. 465.
14
15
216
The model presented by Fiedler shows how the leader reaches the highest
efficiency in changing conditions, or what conditions would be the most
appropriate for the leader of an established style of action (figure 1).
Figure 1. The relationship between a management style and the
management situation
Source: D. Hellriegel, J.W. Slocum, as given by: A.K. Koźmiński, W. Piotrowski, Zarządzanie
teoria i praktyka, PWN, Warszawa, 2005, p. 344.
Figure 1 illustrates the relationship that exists between eight situations
described in table 1 which a leader may encounter, and the style which
a manager using the Fiedler’s model should use. We can observe that situations
I, II, III as well as VIII require strong authoritarian leadership style while the
democratic style has been assigned to the events IV, V, VI and VII.
According to what Fiedler presents, each leader has only one leadership
style, which is a big difference between the Blanchard’s theory; additionally,
according to Fiedler, a manager cannot change it if the situation changes. What
is possible is a scenery change so as to match the leader.
In my opinion leaders have more than one style of management. One
thing is certain – namely that the concept of situational leadership, which was
examined by Fiedler has been widely adopted and accepted by many managers
around the world.
P. Hersey’s and K. Blanchard’s evolutionary model has a significant
influence on the concept of a situational leadership. “Situational Leadership is
not something you do to people, it is something that you do with people”17. This
Blanchard’s phrase captures the entire essence of a situational management,
defined in this case as an evolutionary one. People, their commitment and
  K. Blanchard, Jednominutowy menedżer i przywództwo, MT Biznes, Warszawa, 2008, p. 83.
17
217
Piotr Zając
motivation on one hand and skills and competencies on the other became the
cornerstone of the theory presented by Hersey and Blanchard. Assumptions
talking about the fact that people really want to be the best, want to achieve
the highest results, want to improve and train and want to be appreciated are
not empty slogans proclaimed by the creators of the theory of the situational
leadership. Universal and flexible approach to the management – besides,
flexibility is an element that is mentioned in almost all publications of the authors
mentioned above – gives many solutions and possibilities for a leader, but they
also pose challenges for him/ her. This challenge is an ability to apply a few and
precisely four – leadership styles. The research conducted by Blanchard Training
and Development company showed how inflexible are the managers who stick to
what in their opinion is the best management style or to what they just learned
earlier. It should be noted though that the use of all four styles simultaneously
during a normal working day in relation to different people is understandably
not easy and requires experience and training. If we add to it that even one
subordinate may require, depending on a task, a different approach, then we end
up with a lot of solutions and opportunities. Generally speaking, a situational
management demands from the manager to change the leadership style
depending on certain employee characteristics. These features are commitment,
motivation, skills and knowledge. Blanchard and Hersey, after many studies,
observations and experiences identified four stages of the employee development
(figure 2). These stages describe how in subsequent periods of work the above –
mentioned commitment and skills of individual employees change.
Figure 2. Stages of employee development according to Blanchard
Source: developed on the basis of: K. Blanchard, Jednominutowy menedżer i przywództwo,
MT Biznes, Warszawa 2008; K. Blanchard, Jednominutowy menedżer spotyka małpę, MT
Biznes, Warszawa 2009; K. Blanchard, M. Blanchard, D. Edington, Jednominutowy menedżer,
równowaga życia i pracy, MT Biznes, Warszawa 2010.
218
In figure 2 we can see that in the initial stage an employee has a strong
internal motivation to work, but his skills are usually low. The next stage is
learning and gaining confidence as well as commitment in order to become an
employee of the fourth stage. The various stages of an employee development
describe how strong their internal motivation they have to complete the task
(involvement) and what are their skills and knowledge to perform the entrusted
task (competencies).
Terminology used for naming the development stages:
• Stage 1 – R1 – „Enthusiastic beginner”;
• Stage 2 – R2 – „Employee without illusions”;
• Stage 3 – R3 – „Employee with changeable commitment”;
• Stage 4 – R4 – „Perfect executor”.
The development of an employee as described above also applies to entire
groups. Similarly to individuals, also groups go through the four stages of
development. These stages are called differently as these are recognition,
dissatisfaction, production and integration, yet the same mechanism of the
operation is very similar; namely – the transition from the initial euphoria
and curiosity through a difficult stage of dissatisfaction to production and
integration. Due to that, managing groups is based on the same rules as
managing a single person. Ken Blanchard used an interesting phrase that is
associated with groups, which brilliantly captures their status and purpose:
“None of us is as smart as all of us”18.
Employee development stages have been directly connected with leadership
styles that should be used. Leadership styles in Blanchard’s situational
management is a combination of directive and supportive behaviors (figure 3).
In this case, directiveness is associated with a clear defining to a subordinate of
what, how and what time to perform, as well as with supervising and controlling
the entrusted task (instructions and control on figure 3). As for the supporting
elements, what I mean is listening to people, supporting them in activities and
encouraging to facilitate a task execution. In the situational management, the
leadership style depends on the stage of the employee development and contains
more or less directive behaviors (instructions and control) and support for the
employee.
  K. Blanchard, Jednominutowy menedżer buduje wydajny zespół, MT Biznes, Warszawa, 2010, p.
28.
18
219
Piotr Zając
Figure 3. Management styles according to Blanchard
Source: developed on the basis of: K. Blanchard, Jednominutowy menedżer i przywództwo,
The graphical presentation of management styles informs that consecutive
leadership styles contain a different number of supportive behaviors which
must be provided to a subordinate by the manager; and a changing number of
instructions and controls given which depend on, or otherwise, are associated
with them.
Terminology used in figure 3:
• Style 1 – S1 – directive style;
• Style 2 – S2 – coaching style;
• Style 3 – S3 – supportive style;
• Style 4 – S4 – delegating style.
The further stages of the employee development were connected by Hersey
and Blanchard with particular leadership styles (figure 4). Figure 4 presents
a summary and comparison of employee development stages to the leadership
style.
220
Figure 4. Management style according to Blanchard, a collation with the
stages of the employee development.
Source : developed on the basis of: K. Blanchard, Jednominutowy menedżer i przywództwo,
Hersey and Blanchard clearly specified at what stage of the employee
development what style of the leadership should be used.
With the situational leadership and using the leadership styles in accordance
with Blanchard’s rules there are involved three skills that a leader must possess:
flexibility, diagnosis and partnership. Firstly, one should diagnose the needs of
their subordinates or colleagues. In other words, one should write down the
activities and tasks they carry out and then determine at what development
stage they are when it comes to a specific task. The second thing is flexibility.
At this point, the leader must simply learn to use different management
styles, depending on the situation and the employee. Training is the best option
here. The third issue is partnership, sometimes referred to as a partnership for
results. Common high results of the manager and the subordinate become in
this case a target to be achieved in a given timeframe. It is an element linked to
a specific agreement on what kind of leadership the coworkers expect and need
at given time in order to succeed. “Some with the hair, the others against the
grain”19. I think this quote sums up the considerations described.
Conclusions
Modern companies, operating under the knowledge economy in an
international dimension, wanting to meet the requirements dictated by the
  K. Blanchard, Jednominutowy menedżer i przywództwo, MT Biznes, Warszawa, 2008, p. 19.
19
221
Piotr Zając
market, are forced to offer more modern and more perfect products and
services. They can do so only through the work of a highly skilled, committed,
easily adaptive to changes, highly motivated, ready to learn, loyal and productive
staff. An important issue is also a proper management of the human capital,
which may be facilitated by the situational leadership. Therefore, with such
requirements dictated by new economic conditions it is impossible to forget
about the tools of human resources management, which allow to control the
processes in specific areas of human capital management, bringing results for
the company and thus for all employees. Treating the controlling and personnel
audit as a kind of a tool for human resource management, one can contribute
to the optimal use of the employed personnel, by improving the effectiveness of
leadership.
Literature:
1. Armstrong M., Zarządzanie zasobami ludzkimi, Oficyna Ekonomiczna,
Kraków 2005.
2. Blanchard K., Blanchard M., Edington D., Jednominutowy menedżer,
3. Blanchard K., Jednominutowy menedżer buduje wydajny zespół, MT Biznes,
Warszawa, 2010.
4. Blanchard K., Jednominutowy menedżer i przywództwo, MT Biznes,
Warszawa, 2008.
5. Blanchard K., Jednominutowy menedżer spotyka małpę, MT Biznes,
Warszawa 2009.
6. Koźmiński A.K., Piotrowski W., Zarządzanie teoria i praktyka, PWN,
Warszawa, 2005.
7. Łukasiewicz G., Kapitał ludzki w przedsiębiorstwie, [w:] Zarządzanie
personelem, materiały do ćwiczeń, (ed.) A. Szałkowski, Wydawnictwo
Akademii Ekonomicznej w Krakowie, Kraków 2006.
8. Pocztowski A., Zarządzanie zasobami ludzkimi, Strategie – procesy – metody,
PWE, Warszawa 2008.
9. Podstawy zarządzania personelem, (ed.) A. Szałkowski, Wydawnictwo
10. Stoner J.A.F., Freeman R.E., Gilbert D.R., Kierowanie, PWE, Warszawa,
1999.
11. Szałkowski A., Personel w systemie zarządzania przedsiębiorstwem, [in:]
Podstawy zarządzania personelem, (ed.) A. Szałkowski, Wydawnictwo
12. Zarządzanie Zasobami Ludzkimi, Tworzenie kapitału ludzkiego organizacji,
(eds.) H. Król, A. Ludwiczyński, Wydawnictwo Naukowe PWN, Warszawa
2006.
222
ISBN: 978-83-941580-6-4 (printed version),
ISBN: 978-83-941580-7-1 (PDF, online)
This book presents part of the results of PERSPECTIVE project. PERSPECTIVE is a European
Union educational project dedicated to improve the way of teaching in the context of building
the entrepreneurial spirit. The school is seen as a natural learning environment in which it is
possible to develop the entrepreneurial mindset. […] In fact, human resources are becoming
the most important factor in the job, where teamwork and cooperation take on increasing
importance. […] The leadership situation in human capital management and the relations
between organization’s intangible resources and company’s intellectual capital are described
in order to identify their connections focus on the role of social capital in shaping the level of an
organization’s intellectual capital. There has been introduced a helpful tool in determining the
assessment of the impact of human resources management on the performance of the entire
enterprise. […]
(Fragment of the review)
Professor María Segovia-Vargas,
Professor Teresa Blanco-Hernández

management of entrepreneurship in a knowledge based economy

Transcription

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Warszawa, Mokotffiw, Marifla Mokotffiw