Hrm as a Competitive Advantage

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3. Imitability

If the competitors in the business can easily imitate what you offer, then you are at loss! The HR executives must attempt to develop and nurture characteristics of the firm’s human resources that cannot easily be imitated by competitors. This essentially means leveraging on organization’s unique history or culture that helps in gaining competitive advantage. In any organization, the culture is nurtured and developed via the HR Department. Hence, by restricting and developing unique culture, executives can help firms in gaining competitive advantage.

4. Organization

In order for any characteristic of a firm’s human resources to provide a source of sustained competitive advantage, the firm must be organized to exploit the resource. Organization requires developing the systems and practices that allow human resources characteristics to bear the fruit of their competitive advantages (Ahluwalia, 2012).

The Human Resource Management as a Source of Competitive Advantage

Nowadays, the business world has shifted its focus from physical assets to knowledge and information i.e. human capital. This is the most valuable asset as it guides the organization into a correct path, to be on time and to meet the right person, at a right place (Saha, Jircikova, & Bialic-Davendra, 2011). According to various management experts, there are different HR strategies such as:

- Building and guiding coalition,

- Imaging the future,

- Understanding current capabilities and identifying the gap between business strategy and corporate strategy,

- Creating a map of the whole management system,

- Modelling the dynamic of the vision,

- Developing network into action (Saha, Jircikova, & Bialic-Davendra, 2011).

Regarding this new challenge of the HRM seeks to identify whether the HRM can really enhance the competitive advantage of a firm. Human assets are a key source of sustainable advantage due to their usual efforts and systematic information, which are making them inimitable. Fitz-Enz highlighted that ‘people’ are the lifeblood of any business enterprise, which cannot be compared with material things like: cash, buildings, or equipment. According to resource (Saha, Jircikova, & Bialic-Davendra, 2011) a firm strives for superior financial performance by enabling its resources to capture a position of a competitive advantage in a certain market or a market segment. This position is captured if two conditions are satisfied including:

(1) If the firm can create more customer value than competitors do, and

(2) If the firm has lower investment costs than competitors (Saha, Jircikova, & Bialic-Davendra, 2011).

Challenges for HR

1) The challenge for HR managers is to clarify the competencies required to deliver the company's strategy, as well as to cope with changing competitive circumstances. Success will depend on identifying the most effective means of building these competencies, whether through formal training programs, mentoring, peer-to-peer learning, or involvement in community programs.

2) Employees are motivated by a complex mix of rewards. These range from financial security and bonuses to promotion and peer recognition and from taking on new challenges to making a difference to the things they care about. The challenge for HR managers is to create the opportunities and incentives that maximize employee contributions to corporate performance - to help the company make the most of its people's talents.

3) A sustainable development perspective encourages employees to make a productive contribution to their company. Companies can only succeed in the long-term if they recruit and motivate people who are able to respond to and shape the challenges of the future. These are the individuals with the capacity to create competitive advantage from the opportunities presented by changing markets, with the desire to learn from customers, consumers, suppliers and colleagues, and who possess the ability to build and influence long-lasting and effective partnerships (Gupta, 2014).

References

Ahluwalia, R. (2012). Academia's role in the total quality management movement. International Conference on Engineering Management, Gaining the Competitive Advantage.

App, S., Merk, J., & Büttgen, M. (2012). Employer branding: Sustainable HRM as a competitive advantage in the market for high-quality employees**. (). Mering: Rainer Hampp Verlag. Retrieved from http://search.proquest.com/docview/1080801476?accountid=167104

Dessler, G. (2014). Human resource management (14th Ed.). [Vital Source Bookshelf Online]. Retrieved from https://bookshelf.vitalsource.com/#/books/9781323016763/

Gupta, S. (2014). Sustainability as a competitive advantage: An outcome of strategic HRM. Review of HRM, 3, 129-139. Retrieved from http://search.proquest.com/docview/1655997702?accountid=167104

Ivanovic, S., Galicic, V., & Krstevska, G. (2010). Transformation of human resources into human capital – base for acquiring competitive advantage. Tourism & Hospitality Industry, 917-924. Retrieved from http://search.proquest.com/docview/763422398?accountid=167104

Saha, N., Jircíková, E., & Bialic-Davendra, M. (2011). The power of clustering and HRM as a source of competitive advantage: Evidence from clusters from poland, slovakia, the czech republic, india and developed countries. Journal of Competitiveness, 3(4) Retrieved from http://search.proquest.com/docview/1315219074?accountid=167104