A Resource-Based View - the Key to Strategic Success in Todays Global Market Place - Essay Example

Name- Instructor Name- Course- Year of Publication A Resource Based View is the key to strategic success in today’s global market place The purpose of any business or organization is to gain maximum profits and achieve long-term sustainability. A competitive advantage that an organisation can achieve over its competitors defines its success and long-term performance. If an organisation is using resources or strategies that are value –giving and not being used by any competitors, it is definitely achieving a competitive advantage over them. During the era of 1980’s the viewpoint that gained most acclaim and recognition as critical to an organisation’s success is resource based view (RBV). Coming of RBV model quickly replaced the existing models such as positioning based view or environmental model. According to many scholars and researchers, external environment is the most vital determinant of the RBV . This simply implies that RBV is used to develop a strategy that would help the organisation achieve advantageous position in the market. Resource based view is used to develop strategies that are completely focused on the market or customers that the organisation intend to serve. “However in times, where customer preferences and their identities are evolving and changing continuously, and the technologies for serving customer requirements are continually evolving, an externally focused orientation based on a long term strategy cannot be reliable “ (Grant, 1991: 116). Marketing scholars these days are enthusiastically embracing resource based view as one of the most substantial strategic management concept. In the volatile market environment where preferences change in span of seconds, it would not be a good idea to work on long term strategies. According to resource based view, an organisation is a combination of resources. Resources include its technology, attributes, processes, knowledge, capabilities that work together for organisation’s success and competitive advantage. According to Barner’s theory (1991), the overall resources of an organisation can be divided into two sub-sets. One set of resources help an organisation to grow, earn profitability, and achieve competitive advantage and the other set helps the organisation achieve long term sustainability. The various resources that help the organisation earn profits and achieve competitive advantage are most valuable to the organisation. To the extent organisation is able to nurture, develop, maintain these resources and protect them against imitation from the rivals help them sustain competitive advantage for a longer period. There might be changes in resources from time to time for example, with time technologies change for good, patent laws change, patents change, required skill set changes but how an organisation is able to maintain them is the key to its strategic success in today’s global market scenario. However, it is important to note that resources most of the time might be dependent on other resources for optimal performance therefore no resource in itself can be stated as more or less important for the growth of the organisation. In recent times, resource based view has been linked to the evolving capabilities. By continuously evolving capabilities, it becomes easier for any organisation to stay ahead of its competitors and sustain its performance. Resources are the biggest asset for any organisation. In today’s global market place, no organisation can succeed unless it has proper strategies in place for optimum utilisation of its resources. I have tried to demonstrate the strategic importance of developing and maintaining human resources with the aim of responding to human resources need for the overall growth and success of the organisation in global market place. Capital equipment, finance, human resources, and patents form the key resources that define the growth and profitability of any organisation. Various resources that drive any organisation are either tangible or non-tangible. As an organisation grows, its resources tend to become larger. The important part here is that these resources in themselves might not be of capable of yielding any profitability and it is only through a combination of various resources that an organisation’s competitive advantage comes into play. The role of the resources is directly proportional to their capabilities. A capability is the overall potential of a resource to perform a specified task. For optimum utilisation of resources they need to nurtured and developed efficiently.. This in turn make them stronger and complicated for your rival competitors to understand or copy. Keeping a resource-based view will invariably encourage employees to be motivated and committed to organisation’s success. In the global and fiercely competitive market place of today’s time, people, and the way they are managed by the organisations is vital. As a result organisations are focusing on more resource based views and adopting practices for supporting and creating highly qualified and motivated workforce. This clearly implies that the way that an organisation deals with its responsibility towards its employees will reflect in the employee’s work, attitude, and their level of loyalty towards the organisation. For example, a happy worker committed to the organisation’s success will project organisation’s best image in the society and a dis-satisfied or unhappy employee will do the reverse. Organisation’s that want to grow at the pace of their competitors are slowly drifting towards resource-based point of view for their organisation’s success. I would like to quote here the example of one the leading telecommunication provider company in Malaysia, I have worked for, and the way it operates to make sure that it has best human resource practices to develop and retain the best of talent available in the corporate world. Here is glance of some of the human resource practices followed by M-Tek Ltd to make sure that all its employees are happy and satisfied employees. Indeed the company has seen the lowest rate of attrition in last 10 years versus its competitors. Let me start with the infrastructure and in-house facilities provided to the employees by the organisation: 1- In-house swimming pool, gym, snooker, pool, golf course, and spa facilities available 24*7 for employees. Employees need not step out the office for any recreational or refreshment activities. They get everything in-house to keep themselves happy, relaxed and committed towards the organisation. 2- Special massage chairs at the workstations to make sure that by working and sitting for long, employees do not develop muscle or back problems. 3- 24*7 fully loaded cafeteria that comes at zero cost for employees. The cafeteria provides best of vegetarian and non-vegetarian cuisine to employees. 4- Home pick and drop facilities for all employees again at zero cost. Now let me give a glance of employee welfare provisions provided by the organisation: 1- Mediclaim, Medical insurance as well as life insurance policy not only for spouse but even the immediate family to take care of any emergency crisis 2- No late hours sitting in the office or working on weekends. The organisation believe in 8 hours, 5 day working policy 3- A family outing once in every quarter to rejuvenate employees spirits and help them relax from monotony of work 4- Flexi hours and work from home provision to ensure that employees are able to maintain a balance between professional and personal life as well as take care of any emergency personal situations Now let me talk about the most vital part of employee career development 1- The organisation allocate a separate budget only for trainings to ensure that employees are equipped with all necessary skills to thrive and survive in the competitive environment 2- Special yearly budget for each employee to go out and attend trainings and courses of their choice of course relevant to their profession 3- Defined career path and career moves even though the organisation believes in a flat structure. 4- Strict polices against any sort of exploitation or harassment 5- Regular inter-country exchange programmes to provide employees with an opportunity to visit other countries and learn new skills This is just a glimpse of what M-tek provides to all its employees. With this kind of infrastructure and facilities, M-tek is indeed a dream company to work for and it make sure that no employees leave the organisation for the monetary reasons of lack of opportunities. The organisation set a perfect example of adopting a resource-based view to survive in the scenario competitive and global market place. Undoubtedly, the organisation is steadily and continuously climbing the ladders of success and is now a world- famous brand. According to Grant (1991), a strategy that can make the best use of its core capabilities is the core of strategy formulation and the focus of resource based view is optimal use of resources for taking care of company strategies. Indeed all the organisations need to adopt a resource-based view because unless employees are happy with the work environment, they will keep searching for new opportunities and it would become very difficult for any organisation to retain their work force. In contrast to the Michael Porter’s five forces model, which focuses on leveraging organisation’s external competitive environment, resource, based view highlights the vitality of internal assets, that is employees, and on how tackling of external competitive forces depend largely on nurturing internal capabilities. The resource-based model is based on the assumption that an organisation’s internal resources and capabilities are more critical than the external environment for the purpose of determination of strategic success of the organisation. Resource based model simply implies that for any organisation that need to grow and earn profit should see its employees as a valued asset and not as a cost that should be reduced by some means. According to Pfeffer (1994), success and profitability for an organisation is directly linked to the development and maximum utilisation of resources that include infrastructure, hardware, software, human resources and much more. Employees are one of the key resources for any organisation and for a successful and profitable organisation taking caring of employee needs and not mere treating them as a commodity is very important. The adoption of resource-based viewpoint can be seen as a management initiative aiming to increase organisation performance and profitability by involving employees in contributing towards organisation’s success at all levels. In the increasingly salient discussion of work force management, resource based systems have become a key element (Boxall 1992, 1996; Storey 1989). According to the resource-based viewpoint, any organisation’s profitability and competitive advantage is derived from its potential and strategies to utilise, exploit, and nurture its key resources. For any organisation to retain its competitive advantage the focus need to be on continuous development of existing resources and developing new resources as required to sustain in the competitive market. Human resources are increasing becoming one of most important asset of organisations these days. Successful and leading organisations in today’s time are recognising that people are their important asset. Through this paper, I have tried to show the vitality to develop the capability to streamline employee’s growth and development that In turn guarantees their collaboration to make the company distinctive. Resources and Capabilities An organisation is defined as a collection of uncommon capabilities and resources that work together to help an organisation grow and earn profitability. Thus, any difference in organisation’s development and performance during a period are driven primarily by their unique resources and capabilities and the measures an organisation adapt to nurture, develop and retain these resources rather than by an industry's structural characteristics. Therefore, organisation’s capabilities to nurture and its resources define its sustainability in the long term. To make sure that your workforce or employees are committed to the goals and mission of the organisation, your organisation need to follow an intelligent and integrated resource based strategy. It is easy to replace, buy or ape any corporate asset but no competitor can replicate or duplicate a motivated, well-trained and motivated workforce. It might be easier for your competitors to replicate or buy any organisation asset but they cannot buy or replicate your committed, loyal, motivated, and well-trained employee work force. And this is what resource based strategy is all about. According to Mark Stevens, the author of Extreme management, it is indeed impossible to create with a wave of wand exceptional cultures- one of the most vital infusion of the capital. Developing your core –competencies by following resource based model. The core competencies are the few expert domains of your organisation that your organisation and its work force can do better than your business rivals. If a competency is able to yield for your organisation, a long term advantage than it is definitely a sustainable competitive advantage for your organisation. As a manager, your prime focus should be on your organisation’s resources on what it does best and how can it create competitive advantage for your organisation. You can always address the short supply of any desired competency by adopting measures and approach to build that competency through your current resources or by acquiring some new ones. According to Aristotle ethics, Aristotelian ethics – your focus should be to create an organisation in which employees get a feeling of achieving some form of self-actualisation that contributes to overall social harmony. The resource based model states that it is most crucial to empower your workforce if you as an organisation aims to move up in the ladder of growth, profitability, and sustainability. Studies show that employees are your organisation most underutilised resource while they need to be the most empowered and developed resource. In the current scenario of global competitive advantage, the need for employees that can play the role of independent entrepreneurs and have the ability to take initiative is required throughout the ranks of your organisation. The involvement of your employees in the organisation’s success and growth is no longer a one-way road. In today's global market place environment a manager must ensure through its policies and programmes that all employees are working towards the single goal of organisation’s growth. The management of any given organisation need to assume more leadership and coaching tasks to make sure that employees are provided with all necessary resources and growth opportunities they need to accomplish the goals they have agreed to. In today’s scenario to combat the external forces, internal resources need to be tapped and nurtured. Empowerment is the oil that lubricates the exercise of employee learning leading to increase motivation and loyalty towards organisation’s growth. Talented and empowered is the most critical element for the organisation’s growth, success, and long-term survival. See the case of any rapidly growing and successful organisation, they all follow the measures and polices for empowering their employees and giving them the authority to take decisions independently. Focus has shifted from external capabilities to internal capabilities. Organisations that follow a resource-based model, empower, and develop their employees provide a wider scope for to engage in more fruitful, broad-based thinking, visioning, and nurturing. Conclusion The commitment toward employees should be a priority for any organisation simply because the trust, commitment, and loyalty of this group are vital for the growth and profitability of the organisation. We are in a new millennium and an era of competitive advantage. How well an organisation is able to develop and nurture its resources and core-competencies defines organisation’s competitive advantage and long-term performance.Paying attention to customer needs is the first step for a profitable and sustainable growth. Long term sustainability and strategic success is not only about the developing and nurturing of resources with the evolving times but also about the right strategies and combination of these resources including, patent, human resources, technologies, infrastructure, knowledge to be used strategically and evolved in a way that your competitors and rivals are unable to imitate them. It’s all about protecting your assets and resources strategically from the glare of rivals. References 1991. Grant RM. “The resource-based theory of competitive advantage: Implications for strategy formulation”. California Management Review, Spring: 114-135. 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