The Relationship between Human Resources Practices and Sustainable Competitive Advantage of a Firm - Essay Example

THЕ RЕLАTIОNSHIР BЕTWЕЕN НR РRАСTIСЕS АND SUSTАINАBLЕ СОMРЕTITIVЕ АDVАNTАGЕ ОF А FIRM Name Course Instructor’s name Institution Date THЕ RЕLАTIОNSHIР BЕTWЕЕN НR РRАСTIСЕS АND SUSTАINАBLЕ СОMРЕTITIVЕ АDVАNTАGЕ ОF А FIRM A firm is associated to a cohesive organism which learns to find better ways of doing things through adapting to its current environment. However, the firm often has to answer the question, what it must do to optimize and maintain its situation within the environment. In this case, the firm has to choose whether to focus on its human resource, financial situation or technology. A good number of firms solely focus on their Human Resource arguing that through drawing their focus on Strategic Human Resources practice they create sustainable competitive environment within the firm. On the contrary other firms argue that a competitive environment within the firm can only be created through matching the organization’s Human Resource practices with the organizational or environmental factors. This paper therefore, seeks to draw a stand between these two arguments on the firm’s relationship between HR practices and sustainable competitive advantage. It’s evident that matching the Human Resource practices with other organizational/environmental factors ensures that the organization human capital is able to remain unique and valuable to the organization therefore, ensuring that the competitive advantage of this organization over its competitors still remains intact. The firm’s Human Resource is viewed as the roots of organizational economics which is also a major determinant for the organizations competitive success. In this case, Barley 2011, argues that the firm’s Human Resource practices is attributed to its assets, attributes, knowledge, information and organization processes. In his case, he further claims that Human Resource fosters the implementation of strategies improving the effectiveness and efficiency of the firm. In this case, Human Resource practices are defined as organizational an activity that entails the management of human capital which is drawn towards the effective employment of capital in order to fulfill the organization’s goals. Besides, Human Resource practices foster knowledge and skill adoption within the firms workforce through inherent these skills and knowledge to the individuals who make up the organization (Walkowiak 2012, pp.1-9). However, going beyond the Human Resource practices of organization it is recognizable that Human Resources practices is dependent on the employee behavior as opposed to their knowledge and skills. In this case, to ensure fostering of a competitive environment within the organization the firm’s employee behavior should be aligned with the firm’s goals. As evidently seen the employee behavior is the channel that Human Resource practices implement however, employee’s competencies also play a huge part in this. In this case, Human Resource is quite valuable in fostering competitive advantage within the organization through improving the skill and knowledge level of the employees which reciprocates to improvement in the organization workforce. In line with this, high quality human resource within the firm has in the recent years proven to be quite rare making organization with effective human resources in place have a significant competitive advantage over other organizations (Lubit 2001, p.34-46). Human Resource practices improve on the cognitive ability of the firm which is the measure of the quality of the firm’s human resource pool. Cognitive ability is claimed to have a positive relationship to individual’s job performance. Thus, the value of cognitive ability within the organizations is evident since it is used in demonstration of the organizations selection in utility examples (Romero 2008 pp.205-209). On the other hand, cognitive ability is quite important to firms due to its impact on the organization’s staffing considering that future organization challenges lie on workforce flexibility and adaptability. Human Resource practice could foster competitive advantage within an organization however this is not quite conclusive since these Human Resource practices could be easily imitated by other competitors. In this case social complexity is the only aspect which might make it difficult for the imitation of the Human Resource practices however, over time it could be imitated in regards to the organizations workforce ability level. In this case, the possibility of a firm developing cognitive ability within its workforce which is higher than that of the other firms is quite high which could take away the competitive advantage that this firms have over it. Economists on the other hand, argue that matching the Human Resource practices with other organizational/environmental factors by itself creates a competitive advantage within the firm. In this case, they claim that the relationship between the Human Resource practices and the other organizational/environmental factors is reactive. In line with this, economist argues that the Human Resource Practices are subservient to the logic in the product market therefore these Human Resource practices have to be linked with other organizational/environmental factors within this market (Narasimha 2013, 123-135). On the other hand, the fit perspective of the Human Resource practices and with other organizational/environmental factors fosters optimal Human Resource Management. Organization theorists such as Mesaulham and Baird, 2016 state that matching the Human Resource Practices with the internal and external factors in the firm ensures that it retains its competitive advantage in all its phases of growth (Kazlauskait and Bučiūnien 2008, p.56-79). On the other hand, this fit perspective also ensures that the firms is availed with all the techniques to control all aspects of work through its Human Resource Practices ensuring that the firm benefits from a high level of labor productivity as well as a corresponding profitability level as part of its competitive advantage. Also matching the Human Resource practices with the other organizational and environmental factors ensures that the firms is more hands-on in workplace control and more specifically in the organization’s workforce managerial behavior ensuring that it can be able to easily direct and monitor the organization workforce (Lubit, 2001, Pp34-46). Moreover, the variation in the Human Resource practices strategy which give organization competitive advantage are related to aligning good organization management, stabilizing the labour market an inter-play of the manager-subordinate relationship as well as fostering workforce resilience to organization challenges (Chênevert and Tremblay 2011, p.761). In this case, this perceived fit in the firms Human Resource practices with other organizational/environmental factors ensures that the organization workforce acquires all the essential competencies as well as ensures that the organization is able to retain its workforce therefore having a substantial competitive advantage in the quality of its workforce over its competitor firms. Matching the Human Resource practices with the other organizational and environmental factors ensures that these organizations have strategic value in regards to human capital. Thus, the organization’s core competence is a strategic value for the organisation which is determined by the organization’s workforce extent in enacting strategies to improve the firm’s effectiveness and efficiency as well as exploit the presented opportunities (Kazlauskait and Bučiūnien, 2008, Pp,56-79). On the other hand, the fit perspective of the Human Resource practices and the organizational and environmental factors ensures that uniqueness in human capital within the organization is created. This ensures that the skills of the organization workforce cannot be easily duplicated or imitated by their current or potential competitor. This is attributed to team-based production as well as operational procedures that are unique which foster the development of tactic knowledge and the development of social complexity. In this case, the firm’s human capital becomes the core due to the value that the organization workforce is able to contribute to the organization’s strategic objectives. Due to the organizations human capital becoming unique and valuable through matching of the Human Resource practices with the other organizational and environmental factors it becomes the organizations knowledge base where the firm is able to build it strategies around (Eriksen 2014, pp 185- 190). In this case, the firm is able to have a valuable workforce of people who not only use their hands and strength but also able to use their heads to think on their fit and come up with successful problem solving solution to problems within the organization. I tend to think that, matching the Human Resource practices with other organizational/environmental factors gives organization more competitive advantage as opposed to the Human Resource practices themselves giving the firm competitive advantage. In this case, matching the Human Resource practices with other organizational/environmental factors ensures that the strategic value and uniqueness of the organization human capital is attained which is an important determinant of Human Resource strategy (Chênevert and Tremblay 2011, pp.738-770). Additionally, the Human Resource practices themselves could easily be imitated by the organization competitors therefore, taking away the competitive advantage that it held over these competitors. However, for matching of the Human Resource practices with other organization/ environmental factors it is complex and organizations could adopt different methods in which they could carry out this alignment in the long end it is difficult for this organization’s competitors to imitate this particular Human Resource practice strategy therefore and organization is able to retain its competitive advantage in the market (Clardy 2012, pp.183-197). Also matching the Human Resource practices with other organizational/environmental factors ensures that the organization human capital is able to remain unique and valuable to the organization therefore, ensuring that the competitive advantage of this organization over its competitors still remains intact. Furthermore, matching the Human Resource practices with other organizational/environmental factors also ensures that an organization can adopt a variety of Human Resource strategies for the achievement of these goals (Baird and Meshoulam 2014 P.116). This ensures that these Human Resource strategies are not the mainstream Human Resource practices therefore, further making them difficult to imitate hence retaining the organization competitive advantage in the market. In conclusion, it is evident that the two strategies revolve around the organization workforce. However, for the Human Resources strategy on matching the Human Resource practices with other organizational/environmental factors, it could be applied through a variety of ways as opposed to the one the implementation of Human Resource practice which is quite ambiguous and mainstream. Moreover, the Human Resource strategy on matching the Human Resource practices with other organizational/environmental factors ensures that the uniqueness and value of the organization Human Capital is retained which ensures that it has a competitive advantage over its competitors. References Baird, L. and Meshoulam, I. 2014. Managing Two Fits of Strategic Human Resource Management. The Academy of Management Review, 13(1), p.116. Chênevert, D. and Tremblay, M. 2011. Fits in strategic human resource management and methodological challenge: empirical evidence of influence of empowerment and compensation practices on human resource performance in Canadian firms. The International Journal of Human Resource Management, 20(4), pp.738-770. Clardy, A. 2012. The strategic role of Human Resource Development in managing core competencies. Human Resource Development International, 11(2), pp.183-197. Eriksen, B. 2014. Rethinking Sustained Competitive Advantage from Human Capital Again. SSRN Electronic Journal.pp 185- 190 Kazlauskait, R. and Bučiūnien, I. 2008. The Role of Human Resources and Their Management in the Establishment of Sustainable Competitive Advantage. ENGINEERING ECONOMICS, [online] SSN 1392-2785(No 5. Pp,56-79 Lubit, R. 2001. Tactic Knowledge and Knowledge Mangement :The Key Sustainable Competitive Advantage. Organizational Dynamics, [online] Volume 29.Pp34-46 Narasimha, S. 2013. ORGANIZATIONAL KNOWLEDGE, HUMAN RESOURCE MANAGEMENT, AND SUSTAINED COMPETITIVE ADVANTAGE: TOWARD A FRAMEWORK. Competitiveness Review, 10(1), pp.123-135. Stone-Romero, E. 2008. Strategies for improving the validity and utility of research in human resource management and allied disciplines. Human Resource Management Review, 18(4), pp.205-209. Walkowiak, R. 2012. New Practices in Human Resource Management. Olsztyn Economic Journal, 3(1), pp.1-9. Read More