How to Manage Customer Involvement for Maximum Innovative Capability

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HRM FOR CUSTOMERS: HOW TO MANAGE CUSTOMER
INVOLVEMENT FOR MAXIMUM INNOVATIVE CAPABILITY
1JM06 – Essay
N.F.J. Hubbers
0752194
Eindhoven University of Technology
June 4, 2012

Abstract
The role of the customer is changing. Nowadays customers demand an even more sophisticated role in the production process. Organizations can benefit from this change in role by using user knowledge in the innovation process. However this change in role has influence on both the existing HRM activities directed at the employees as well on new HRM activities directed at the customers. This research shows most important changes within the HRM functions: Reqruitement, Performance appraisal and rewarding.

Key words: Lead user involvement, HRM, customer employee interaction

1JM06 – N.F.J. Hubbers – HRM FOR CUSTOMERS

Introduction
Within the technical innovation environment we see an up march of the involvement of the so called lead users, which are users of a product or service that currently experience needs still unknown to the public and who also benefit greatly if they obtain a solution to these needs (Von Hippel 1986). New perspectives within organizations have emerged over the past decades focusing on the co-creation of value as more leading companies acknowledge the potential benefits from attracting important stock holders (such as lead users)

into the innovation

process. Since this involvement results in mutual influence on both the employees within the organization as well on these lead users they should not be considered as isolated parts of the management process.

HRM can provide the solution to this management challenge as HRM has become the key department in developing and improving organizational effectiveness (Pfeffer, 1995; Ferris et al., 1999). However this topic regarding the involvement of lead users is usually investigated separately from HRM, as most HRM research still is concentrated within the boundaries of the company. Therefore, unfortunately, there is still little known about best practices and how to steer these lead users from within the HRM perspective. Should lead users be guided by the HRM department and to what extend? Do they need some form of leadership and should they be managed in a way the organization manages her own creative personnel? What kind of HRM stimuli for innovation work on lead users and which do not? These questions arise when putting lead users involvement under a human recourses management perspective. To improve the organizational effectiveness, the HRM department need to develop a broader orientation, crossing the borders of the organization. This movement towards developing and

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1JM06 – N.F.J. Hubbers – HRM FOR CUSTOMERS

integrating resource management activities for customers involved into the innovation process raises the critical issue: How can the HRM department effectively manage lead user involvement for innovation? We try to find which kind of HRM activities can play an important role in motivating innovating capabilities from these lead users. Therefore an analysis is made on the roles the lead users play within organization and their interaction with the organization. Finally knowledge on both main topics is combined and challenges and implication for HRM in practice is discussed.

Method
First a selection of top 10 journals was made using the articles provided during the lectures. Second a search using Jstor database and Science direct was used to search for articles with the stated keywords and comparative keywords like customer involvement, lead users in combination with HRM or management. A visual scan of the article title, abstract and the corresponding journal was used to find the initial articles. Thirdly, references where checked of the already selected articles to find additional relevant articles. In total about 15 articles where selected and reviewed. The literature was mainly divided in the subjects (1) Customer roles and (2) the...
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