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Existing debate on effective organisational strategy for enhancement of performance is divided between arguments on the effectiveness of best fit, best practice and RBV perspectives with advocates of each perspective arguing that they have greater impact on organisational…
esearch for best practice and RBV perspectives especially when there are examples of firms such as Google that have successful employed these perspectives. However, it is concluded that the greater success of best-fit perspective does not mean best practices and RBV perspectives should be discarded as the two have important contribution to management efforts to improve organisational performance.
According to Barney (1991), firms establish competitive advantage over the rest within a particular industry when they control heterogeneous resources including human resources. Further, such resources of the firm must not be perfectly mobile or transferable across the rest of competing firms in order to establish a long-lasting heterogeneity. Therefore, the RBV of a firm model argues that a firm that successfully creates sustainable competitive advantage over the rest in an industry is one that has unique resources and capabilities within the environment. To establish how a firm controls its resources, Barney (1991) established the VRIN model to account for valuable, rare, imperfectly imitable, non-Substitutable features of resources that a firm must control to establish its competitive advantage in an industry. Therefore, establishing competitive advantage based on these features of resources is perceived as the best approach for firms to enhance their performance and be ahead of others in the industry.
While applying RBV of a firm to HRM Boxall and Purcell (2003) argues that firms adopting this framework will establish human resource advantage over the rest in the industry. For firms adopting this framework in their practices, the goal according to the authors is develop strategic capability in terms of strategic fit between resources and opportunities. Additionally, such firms must endeavour to ensure deployed resources generate benefit while recruitment and employment policies result in developing people with knowledge and skills essential in strategic thinking and ...
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