Perspectives of Strategic Human Resource Management - Essay Example

Resource based view of Human Resource Management Introduction Human resource management refers to the supervision of workforce in an organization through identifying, training, selecting, maintaining and rewarding employees. The main aim of human resource management is to utilize workforce to attain company objectives and goals (Gratton et al, 1999, p. 26). The objectives of a business are strategic and administrative, and both of them lead to the success of the business hence their respective definition is necessary for the competitiveness of a firm. Strategic management of human resource refers to a linkage between the purpose of human resources to the strategic objectives in an organization aiming to improve and sustain the organization’s performance (Gratton et al 1999, p. 28). Strategic human resource management works on an ideology that management of human resource of an organization depends on the organization developing a unique culture of its own, distinct from other cultures present in the industry under its jurisdiction. To this essence, it requires an organization to develop consistent policies and programs or strategies aligned well for the achievement of its strategic objectives. The chief aim of every organization is to position itself as the best among other firms – building a competitive advantage. Among the several perspectives of building a competitive advantage in business environment, resource-based view of human resource management looks promising to many organizations perhaps due to its centralization on the internal strength of the organization (Radcliffe, 2005, p. 51). The objective of this essay is to evaluate how the adoption of resource-based view (RBV) model of strategic management can lead to achievement of competitive advantage of a business and the shortcomings of this model to a business organization. Perspectives of strategic human resource management To improve an organization’s performance strategic human resource management (SHRM) acts as a supervision practice that connects the organizational role of human resource to the managerial predetermined objectives. The improved performance of an organization will bring its competitive advantage in the line of business operation. There are different perspectives of strategic human resource management (Radcliffe, 2005, p. 52). . For example, universalistic perspective, contingency perspective and the resource based perspective. All of these perspectives describe how merging the strategic objectives of a business to the administrative functions can lead to organizations competitive advantage. The proponents of universalistic perspective of strategic human resource management argue based on practice approach (Pfeffer, 1998, p. 46). They argue that there is some interrelated set of human resource practices that if chosen over some can lead to organizational competitiveness. They aid in attaining high productivity in a company despite the stratagem employed for administration. These practices are better performers than others are and enhance the organization’s effectiveness regardless of the objectives, the context or the system of approach (Pfeffer, 1998, p.51). The contingency perspective of human resource management bases on incorporation of the procedures and guidelines of human resource to the goals of the business with the objective of augmenting the firm’s productivity (Ahmed et al, 2006, p. 71). It links the human resource functions to the organization’s strategic objectives for a progressive and better performance. This integration begins from planning and policy making in an organization to the execution of business activities considering the alignment of goals and objectives organization (Pfeffer & Veiga, 1999, p. 39-41). Human resource management’s resource-based view looks at human resource management based on its function. It brings about the increased competitive aspect of using human resource for organizations high performances (Pfeffer, 1994, p. 16). It bases its argument on the notion that organizations develop competitive advantage through efficient use of their internal resources. The resources of a firm range from the tangible assets to the intangible resource stocks (Barney, 1991, p. 48). Firms can use their internal resource base to improve and sustain their competitiveness. It focuses on how a firm can utilize its internal strengths to improve and sustain its competitiveness. In addition, it argues that as a source for improving and sustaining the competitive advantage of an organization, the objective of strategic human resource management is to use high management skills (Barney, 1991, p. 48). This is achievable through attracting, training, developing and retaining the highest quality caliber of employees. People contribute to the success of an organization hence the resource-based view ensures that an organization utilizes full potential and skills of an employee (Pfeffer & Veiga, 1999, p. 39-41). The resource-based view functions under four elements, that is, value of the resource, rarity, imitability and non-substitutability. The resource must fulfill all these conditions to achieve competitive advantage (Barney, 1991, p. 52). The value of the resource puts it at the top achieving competitive advantage. It should be of high value to the firm and with pleasurable value results. The resource must be rare in that not any other firm is able to access it easily. In any chance that a firm has access to the ides of the resource, the firm should have a disadvantage of imitating it either financially or structurally (Baird & Meshoulam, 1998, p. 76). How resource-based view of human resource management helps to achieve competitive advantage. Competitive advantage is the ability of a firm to perform over and above others in business competition (Barney, 1991, p. 56). The competitive advantage may be temporary or sustainable depending on the intensification of resource use to maintain the competitiveness. Resource-based observation of human resource management relies on the effective use of the internal resources at a firm’s disposal to achieve and maintain its competitiveness and imitate or substitute these resources needs considerable effort (Barney, 1991, p. 81). It points out that, through organizational resources, an organization can achieve and sustain its own competitive advantage (Barney, 1991, p. 52). Resource based view have two key assumptions for competitive advantage: the variation of resources across an organization and that the firm cannot easily acquire the resources that it does not possess. Therefore, the firm must maximize the variety of resources under its current possession to achieve and maintain competitive advantage or to outperform others. It also assumes that competitors may not be in a good position to challenge the firm’s competitiveness because they may not be having similar resources. The resource-base view operates under four elements; value, rarity, inimitability and non-substitutability. The value relates competitive advantage to the importance of the resources in relation to their performance, for instance, for a resource to be valuable it must contribute to the competitiveness of the organization (Barney, 2010, p. 81). The second element of resources is their ability to be rare. The resources should be rare for the organization to use it as a competitive tool. In essence, they must be out of reach of the competing firms. Hence, the organization should control the rare resource that they have for success in competitive advantage achievement and sustenance. If the other firms have an idea about the resource at disposal then two of the remaining elements are applicable; the imitability and non-substitutability elements. Firms that do not possess the resource should neither have access to it nor be able to imitate it at all costs. The imitation should possess a costly disadvantage to firms in case of an attempt (Barney, 2010, p. 86). To make the resource imitation to be costly the organization can decide to develop it into unique conditions, ambiguous, complex and have a patent over it. Finally, the resource should not be subject to replacement by any substitute or any technological advancement. It should possess a specific and distinct function for the organization that other organizations do not have to ensure that the organization outperforms others competitively. Case study of the competitive advantage of resource-based view (Gonzaga university program of men’s basketball) A good example of application of resource-based view for creating a sustainable competitive advantage is the Gonzaga University program for men’s basketball. The Gonzaga university program for men’s basketball growth from its nondescript performance to a performing club is based on their effective utilization of the resources at their disposal. They used the resources to achieve and maintain a competitive advantage in Division one basketball. Their recursion method of players, the continuity of their couches and the location of the university itself forms a little bunch of resources at the disposal of Gonzaga program. The Gonzaga men’s basketball program enjoys a sustainable competitive advantage based on their resource utilization. The Gonzaga team formed a skill that marched their style of play. The couch recruited players with extremely distinct intangible personal characteristics that met and married the program and style of play. The skills of the athletes that the coach recruited in the team were specifically rare, intangible, personal and inimitable that ensured that the players continued their success. However, it may not be reasonable to base the success of competitive advantage on only these players. What element certainly attracted top college athletes and the attention of the national media to the university beyond the program’s previous success? Identifiably among the key resources to Gonzaga’s competitive advantage is the three times appearance on the Sweet Sixteen from 1999-2001. This exposed the program to the media and enabled the whole Gonzaga fraternity to capture the attention of a large number wide range of potential athletes, students and donors to the university. The sweet sixteen resource forms the basis of the value, rarity, imitability and organization (VRIO) framework of the Gonzaga men’s basketball program. Its value relies on how it increasingly at tracts key athletes, students and donors a fact that makes Gonzaga benefit from an extensive financial support and national recognition. There is an increased university enrolment by over 4000 from 1997 to 2007 and their televised games have an upward increase from 1 to 31 (Sims, 2002, p. 78). The rareness element also depicts a reasonable contribution in Gonzaga’s competitive advantage. The success of Gonzaga’s program is a rare occurrence that not many programs achieve. What Gonzaga achieved in the three consecutive sweet sixteen appearances and its recent form of activities is rare. However, even though it is not easy to stay for long Gonzaga came from the midlevel into the national limelight and has stayed put thereafter (Barney, 1991, p. 67). This has earned them a strong winning tradition, continuity of couches and a mind-blowing nationwide support. Gonzaga bases its competitive advantage in a combination of rare and valuable recursion of players. This separates the Gonzaga program from other midlevel competitors. However, its resource utilization does not end in that. The sweet sixteen resources also outline an imitable characteristic. The imitability of the sweet sixteen depicts in its ambiguous, complex and historical nature. Different couches and sports pundits have tried to analyze the sweet sixteen successes with an aim of imitating it for their success but without success. Nobody has been successful in answering the question of how to achieve similar Gonzaga’s success. Their effort is almost impossible to duplicate since it lacks an evident blue print. Organization as the fourth VRIO (values, rarity, imitability and organization) element of Gonzaga’s basketball program has enabled it to take advantage of its rare and not easily imitated valuable resources. It has created ad sustained the competitive advantage by adopting the “complementary resource capabilities” model of resource view (Barney, 2010, p. 56). This complementary role is achieved by variables like decision-making, leadership, organizational culture and structure (Wright & McMahan, 1992, p. 301) which is evident in the is the real case of the Gonzaga men’s basketball program. In the Gonzaga program, the organizational culture, structure and leadership have seen the success in its program. Their culture is improvement focused, and their leadership gets university administrative support. The Gonzaga organization made tough decisions like retention of the coaching staff (Gratton et al 1999, p. 156), generation of financial support from donors and using the sweet sixteen resources and promotion of televised matches. Substituting these elements to achieve competitive advantage is not easy; hence, their competitors remain unaware of what to do hence making the Zag’s competitive advantage a stake higher than the other competitors do. Gonzaga’s resource of sweet sixteen is valuable, rare, not easily imitable and non-substitutable resource to achieve a competitive advantage over other universities. Shortcomings of the resource-based strategic human resource management The strategic human resource management’s perspective of resource-based view revolves around resource utilization for outperforming competitors. It ensures that the resource utilization leads to full achievement and sustenance of competitive advantage (Prahalad & Hamel, G. 1990, p. 82). However, the model has several shortcomings and challenges in an application that can impede its usage for better business performance (Buyens & De Vos, 1999, p. 138). It is easier said than done. The model is easy to state and describe, but, immensely difficult to apply. Because it is theoretical, relies on both tangible and intangible asset and more of a culture and history than real practice, it application in human resource management is rather difficult (Butler, 2001, p. 129). Self-verifying and tautological adventure is exceedingly difficult to apply. Relying on the resource-based view may lead to inefficiency. Different resources in the firm can generate same value and other elements of resource based view (Butler, 2001, p. 132). In case of such conflict of interest, the firm may not achieve its aim of competitive advantage because different resources will be generating the same value towards its performance. The resourced-based model of human resource management also puts much emphasis on the internal resources of the organization. It believes on only internal strengths for success in competitive advantage of business organization (Peteraf, 1993, p. 174). This neglects the external factors of business positioning and competitive advantage achievement. Competition in business does not only rely on the charitable organization of internal strengths of the firm hence the model may be porous if the external resources have much value and strengths than the internal resources (Burke & Cooper, 2004, p. 142). The human resource structure is multifaceted and immensely complex due to its resource-based nature. It exists as a vibrant assortment of diverse cultures, processes, indentures, executive order and policies. These complexities make the process competitively advantageous but are difficult to substantiate and characterize in a comprehensive manner (Radcliffe, 2005, p. 55). It has a limited implication perceptively and underestimates the role of the product in marketing of an organization. It is, therefore, particularly difficult to find search resources that can have all the elements of rarity, value, imitability and non-substitutability. It is not also necessary to assume that an organization can attain and uphold a competitive advantage with taking advantage of the market using an internal resource advantage (Holman et al, 2005, p. 116). The performance of a firm relies on how effectively and efficiently its organization leans toward objective achievement. Although taking advantage of the market loophole is one way to achieve success, excessive reliance on that may not prove success. It requires success and complete update of the market condition to achieve better performance in such a circumstance (Wilkinson, 2009, p. 59). The rarity concept of a resource is obsolete. It is not necessary for a resource to be rare for it to function appropriately (Lengnick-Hall & Lengnick-Hall, 1990, p. 63). Even in such rare circumstances, if not well organized achieving better organizational performance under such circumstance is not an easy task. This is because for strategic resource management to be considered strategic, the merger between the strategic objectives and administrative objectives should be easy to point out (Holman et al, 2005, p. 128). Conclusion Human resource management is a procedure and a process of managing the employees and generally people in an organization properly and structurally. From staffing, hiring, retention, paying and parking the people involved in the better performance of the organization. The need for efficient management of the workforce in an organization leads to connecting the workforce to the resources to achieve the specifically predetermined objectives of the organization (Holman et al, 2005, p. 131). This dire need to achieve the objectives of the organization brings about the different perspectives of human resource management among which is the strategic human resource management. Because an organization has both administrative and strategic objectives there is need to drive the resources to the achievement of the strategic objectives set by the organization. Strategic human resource practices (SHRM) are the actions and decisions whose basic concern is management of employees at all business levels (Radcliffe, 2005, p. 58). All these activities lean towards achieving a sustainable competitive advantage. There are different perspectives of viewing strategic human resource management among which are the universalistic perspective, the resource-based view and the contingency perspective. The use of resource-based view should involve the four primary attributes of human resource management that include focus, organizational levels, the organizational framework and structure and the roles and responsibilities of the employees. This perspective views human resource management in terms of human resource and its connection to the internal strengths of the organization. With perfect blending of the resources to the required skills, resource based view of human resource management is a perfect standpoint for achieving a competitive advantage and maintaining it. References Wilkinson, A. 2009. The SAGE handbook of human resource management. Los Angeles, SAGE. Ahmed, F.. Ullah, M. H. and Uddin, M. K. 2006, Strategic Human Resources Management: Linking HR Practices with the Business Strategy. 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