Strategic Human Resource Management Through Resource Based View

As per the observations of Bailey et al (2018), the characteristic features of the current globalised market scenario, for any corporate organisation, could be understood as hyper competitiveness, integration of the local and regional markets with those of the international market spheres, constantly changing market conditions in terms of the volatility of customer preferences and associated influences on demand of different products and services and the related impact on the process of resource management by the current business entities. In this context, Björkman and Welch (2015) states that the primary focus has to be concentrated on the methods through which such business entities could manage their human resources so as to obtain greater competitive leverage in the existing market conditions. The rationale of such an approach could be comprehended from the perspective of the relative less effectiveness of the other sources, such as the material resources, of any organisation, in terms of enabling the respective corporate entity to attain and sustain the coveted measure of competitive advantage in the targeted market segment. Another rationale could be observed from the research of Boon, Den Hartog and Lepak (2019), as the fact that the talent and experiences of working personnel of any organisation are difficult, if not abjectly impossible, for the competing business entities, to emulate, under any circumstance. Thus, human resources of any organisation could provide a sustainable source of consistent competitive advantage for that respective business entity. As per the observations of Boon et al (2018), this fact has been consistently realised by the managerial personnel of different and leading business organisations and the outcome has been the exploration of different methods of managing the functionalities associated with human resource management within the overall working architecture of the related corporate entities.

To this effect, Brewster, Mayrhofer and Farndale (2018), has outlined the significance of the Resource Based View (RBV) in human resource management concerning the far reaching and profound impact the application of this methodical approach based management has on the performance measure of the concerned business firms. As has been propounded by Bromiley and Rau (2016), the resource based view emphasises on the notions that business organisations could only develop competitive advantage and could sustain the same through the creation of value in the practices of business process operational management. Such value creation is necessitated to be completely unique in a manner which could rare and thus, should prove to be extremely difficult for the competing business firms to emulate or imitate. In this context, Chauradia et al (2018), have specified the difference between the conventional sources of attaining competitive advantage with those of the resource based view related approaches in terms of the framework of value creation. This observation has particularised the factor that RBV emphasises on the resource bundle or a cluster of resources as the primary source from which the competitive advantage of any business organisation could be obtained. This is in marked contrast to the conventional notion of competitive advantage being obtained from the selected product market combination within the existing market scenario. Budhwar (2016) has further outlined the underscoring rationale of the RBV directed human resource management to be the application of a unique cluster of organisational resources which has to be intangible, dynamic as well as complex to meet the exigencies of the market conditions. This is a diverging perspective from the traditional notion of competitive advantage being obtained solitarily through the activities of organisation under consideration at the product market.

Furthermore, Delery and Gupta (2016) have averred that the RBV approach capitalises on the human capital of the concerned organisational resource inventory in which the business firms could identify the potential for superior performance achievement. This involves considerable changes in the perception of employment relationship management which further underscores the establishment of the organisational mechanisms through which working with the involved workforce personnel could be facilitated from a value formulation perspective. The RBV also propagates the approach of considering the Human Resource based multiplicity of services such as selection, recruitment, training, placement and provisioning of the lateral career progression opportunities as well as skill enhancement management as the central aspects of sustainable competitive advantage obtainment. In this context, the research of Guest (2017) has brought forth two specific human resource management related assumptions whenever the application of the RBV model could be considered. The first one is the predominant assumption that every form of business strategy is always premised upon a set of unique behavioural attitudes of the employees. The second one could be understood to be the generation of certain and unique responses by the employees of such organisations who could have been subjected to specific measures of human resource management policies, with often varying outcomes.

These two assumptions constitute the implicit perceptions, within the working architecture of corporate entities, that it is necessary to take recourse to rearrangement of the strategy from the perspective of human resource management regarding the choices of strategic methods to be applied for business operational purposes than, the rearrangement of complementary resources. However, Harney and Trehy (2016) have opined that the general trend for different organisations currently operating both within the internal market segments of the UK and beyond demonstrate the propensity to undertake the later, conventional rearrangement of resources from strategic perspectives rather than the process which is propounded under the RBV systems. The rationale of this could be outlined as the dearth of proper empirical research based evidence and this generally leads the business firms to imply incorrectly the necessary changes in the management of resources.

According to Hitt, Xu and Carnes (2016), the overall academic perspective regarding the influence of RBV on the HRM processes is comprehendible in the manner of the proposition that RBV could furnish a theoretic construct through which the HR functions could have strategic implications on the implementation of organisational operations policies within the concurrent market scenario. This could be better enumerated from the perspective that HRM performance, within the RBV framework for the purpose of sustainable competitive advantage achievement, has to be considerate upon the dual elements of workforce personnel and the structural implications of policies and practices of the concerned organisations. The outcome has been analysed by Huo, Han and Prajogo (2016) to be that of creation of greater and often inimitable value in terms of services delivered and incurred costs. Kellermanns et al (2016) have defined such an approach to be reflective of dual purposes. The initial one could be acknowledged as the possession of human capital which could have variegated as well as incrementally superior skills sets over the resources of the competing business organisations. The second one could be determined to be the necessity to possess the human resource management practices which could enable the concerned organisation to differentiate itself from the competing market rivals. In any case, the emphasis is always on the development of human resource management processes and policies which could create the coveted value in the entire working architecture of the organisations under consideration so that the business capabilities and performance scenarios could not be emulated with effortlessness by the competing organisations.

According to Li et al (2018), there are two significant benefits of proper human resource management which every business entity in the current market conditions strives for through the application of RBV model of organisational policy formulation. The first one is the ensuring of proper returns on the profitable investment in the human resources which are now perceived to be inextricable components of any company. The second one is the general objective of utilisation of the pool of skills and experiences associated with organisational human capital to fundamentally modify the existing business situations in favour of the organisations concerned. In this context, Lu et al (2015) has detailed that the application of the RBV model of management, which has been often termed as a “good practice” from the perspective of the qualitative competitive advantage obtainment, within a key commercial sector such as that of the shipping industry, could be significant from a specific standpoint. This could be better comprehended as the considerable reduction in cost, which could be achieved through the proper management of the crews of this industry. The method involves maintenance of high level of performance and knowledge, through hiring personnel on contractual basis so as to provide only minimal of wages and through nurturing the skilled and experienced personnel through payment of high wages and additional pleasantries to such personnel so as to foster their commitment further towards achievement of the business objectives of the employer. The outcomes are generally the increment of cost savings of shipping companies regarding reduction of the off hires of the shipping staff. The saved costs could then be channelized to enhance the maintenance and upgrading of existing shipping platforms. Molloy and Barney (2015) have observed that there are four primary tenets on which the entire RBV concept could be based and applied to the shipping industry. These tenets formulate the VRIO model of operations management involving the elements of Value, Rareness, Imitability and Organisational Support. To this effect, Papa et al (2018) have considered that any leading shipping service company could gain an effective competitive advantage if it could demonstrate the necessary measure of competitive superiority. This superiority could only be achieved through the utilisation of distinctive as well as inimitable capability or competence. The proper and RBV based management of skills and talents of the existing human resources of the company could become vital in this perspective. Often, as has been specified by Phillipson, Vickerstaff and Lain (2016), it requires time for the development of such capabilities and another variable in this context is the measure of team spirit which could exist amongst the human capital of such shipping companies. Furthermore, the practice of RBV based human resource management also depends on the efficacy of HRM practices within the policy framework of the shipping companies and the general strategic working approaches associated with such organisations. The research of Yuen et al (2019) has clarified that the shipping industry operators are also necessitated to put in effective mechanisms through which proper tracking and utilisation of the rare skills and valuable characteristics of the existing human resources could be exploited to gain sustainable competitive advantages. According to Vivares-Vergara, Sarache-Castro and Naranjo-Valencia (2016), for the UK shipping industry, this could be specifically achieved if the shipping companies could successfully align the organisational aims with the personal expectations and needs of the employees. This notion has been put into perspective by Wilton (2016) in the manner that not all of the working staff members of the shipping organisations at UK could be expected to have the equal and extensive measure of creativity, seamanship, technical expertise and initiative in the realm of their operational management. In case of the existence of such qualities in an equal manner amongst all of these personnel, it could be highly improbable for such characteristics to be manifested in a worthy manner unless, the shipping companies and the affiliated organisations such as dockyard operators and services could foster a working environment under which each individual employee could receive consistent and effective as well as persistent motivation.

One critical aspect which has to be taken into consideration regarding the utilisation of RBV, as has been stated by Tulung (2017), is the fact that rare and valuable characteristics could only contribute in the achievement of short term based competitive advantage. The underlying reason of this could be understood that in the longer term, the competitors could imitate such rare and valuable human resource characteristics through improvement and modification in hiring and recruitment as well as through rejuvenated processes of HRM within their own working architecture. To this effect, Trigeorgis and Reuer (2017) have observed that it is of utmost necessity to foster the development of rare and valuable characteristics within the human resource management processes and in the human capital which could be inimitable from any perspective. These qualities could be identified as loyalty, trust, adoption of the identity and mission of the shipping organisations. Furthermore, Sparrow and Makram (2015) have also suggested that RBV oriented HR management systems within the UK shipping industry could further nurture the sense of uniqueness within the existing employee structure since this could lead to the contribution to the development of a further sustained competitive advantage. This process would definitely involve the facilitation of the development of human resource capabilities which could be specific to the shipping and ship manufacturing companies, could product the most complex employer and employee relationships which could be further utilised to foster trust and loyalty on part of the human capital of the industry under consideration and finally, this facilitation could generate the organisational knowledge which could be tacit in nature.

Such observations have been further acknowledged by the research of Tate and Bals (2018) from a sequential perspective. This perspective has been instrumental in delineation of the proper and improper steps which the shipping companies of the UK could undertake either to facilitate or to inhibit the organisational capability utilisation under the purview of RBV based HRM processes. The steps comprise of the activities such as the managerial, transformational, input based and output based workforce management. The steps could be further comprehended in the manner of hiring the employees for multipurpose objectives within the shipping industry, the expansion and upgrading of the HR mechanisms, conducting regularised performance appraisal for developmental purposes, instituting the most effective and skill based strategy of compensation for invested efforts and ultimately, the utilisation of the most comprehensive training so as to nurture the existing knowledge base within the employees. Thompson and Smith (2017) have observed that there are two dimensions of the related employee behavioural and performance transformations. The first one is the effect on intermediate outcomes which generally takes place in a direct manner. This is related to the increment of the discretionary efforts of the employees through beneficial HR practices. The intermediate outcomes are generally comprised of productivity and turnover on which the shipping and ship construction staff could have direct implications. The second dimension could be outlined as the expansion of financial turnover rates by the shipping sector through lesser employee turnover rates and simultaneous enhancement in the productivity of the employees. This could take place when the returns on the investments of human resource management practices could exceed the actual costs which had been incurred.

Ultimately, the empirical utilisation of the RBV has brought forth the range of implications such as formulation of stocks of capability and talent and high performance working abilities through synergistic coordination between the skills of employees and organisational strategies. The underlying logic has been uniform in this respect. This has been noticed by Molloy and Barney (2015), as development of the most skilled working personnel which could transform the functional behavioural outcomes of the companies. This transformation heralds in the coveted business competitive advantage. The direct and long terms outcomes are the higher performance in terms of operational capabilities and increased productivity based enhancement of profitability. Another consequence is the higher rate of values of stock prices and other market determinants related to the associated companies. Continue your journey with our comprehensive guide to Background Explaining the Business Operations.

According to Chauradia et al (2018), the initial threat of organisations operating at the UK labour market is the scenario of UK having one of the lowest training rates in terms of improvement of the skills and capabilities of the existing labour force personnel within the OECD countries. This is a definite threat since this could preclude the ability of improvement of organisations to address the existing challenges and capitalise on the identified opportunities relating to emerging economic and technological solutions within the general market scenario. Thus, Guest (2017) has observed that productivity and related wages have generally stagnated during the previous decade. Apart from this, on the contrary to majority of the EU countries such as Germany, the UK does not have the system of cooperation in between the local authorities and business organisations concerning addressing of differential issues and staff development necessities. The extent of this threat could be considered to be inclusive of multiplicity of factors such as transformation of the relationship concerning wages and unemployment, consistently lowering of productivity in technology intensive sectors, increasing slack in the overall labour market, predominance of semi-skilled workers as a direct outcome of migration, older workers extending their terms of work more and the consistent changes in the shifts of the different sectors as well as the changing employment composition in the form of constant decline in the jobs which could pay higher salaries. Budhwar (2016) has determined that in spite of the rise in the proportion of the UK populace who have been seeking jobs, the overall scenario is bleak for the corporate organisations which have been operating within the UK labour market in terms of filling vacancies since the increment in the numbers of skilled and experienced personnel has been minimal. This has driven the corporate organisations mostly to rely on the existing workforce which has resulted in slower growth in employment opportunities since variations in the post designation have become impossible to be instituted. This has also contributed to insipid growth in productivity as well.

The second threat, according to Kellermanns et al (2016), is the regional variation of the impacts of adaptability to automated production and services for the corporate organisations at UK on part of the regional discrepancy of availability of technically sound labour force personnel. Such region and business sector wise variation in the impact of automation could be analysed from a definitive perspective regarding the contradictory effect of the same with the differences in the working populace profile based considerations. Lu et al (2015) have particularised the region of East Midlands where the majority of the working populace percentage are currently working at the Logistics and Warehousing business sector and this region has received the most profound impact in terms of the influence of automated work processes and this has led to emergence of risk of loss of employment for mostly the semi-skilled and technically unsound workers.

Furthermore, this could be contrasted with that of the Gloucestershire where the opposite scenario could be viewed. At this region, the automated innovative techniques of operation have not been introduced with time so as to completely fulfil the void employees which is setting in in terms of jobs such as healthcare and nursing. Furthermore, the dearth of properly trained personnel for the companies operating at the Golden Triangle region between London, Oxford and Cambridge has become another problem since the proper operations of automation requires utilisation of high tech tools of the trade. Staff retention has thus become another problem which has further affected the adaptation to these changes in productivity management. The problem of lag in terms of availability of suitable personnel could be further observed to have hampered the corporate operations of various companies which have been operating at the regions of North-East England and at various other regions of the South of the country. Harney and Trehy (2016) have stated that some of the existing employees at these regions could avail temporary work disciplines with better suitability, however, the number of existing working personnel at various industrial disciplines at regions such as East Midlands would have to be retrained and redirected in their respective work designations and towards the new and emerging sectors by their employers to compensate for the losses of their jobs due to automation related impacts. Overall, this threat perception could reduce the productivity scenario to a greater extent for the operating organisations.

Reference List

• Bailey, C., Mankin, D., Kelliher, C. and Garavan, T., 2018. Strategic human resource management. Oxford University Press.
• Björkman, I. and Welch, D., 2015. Framing the field of international human resource management research. The International Journal of Human Resource Management, 26(2), pp.136-150.
• Boon, C., Den Hartog, D.N. and Lepak, D.P., 2019. A Systematic Review of Human Resource Management Systems and Their Measurement. Journal of Management, p.1492
• Boon, C., Eckardt, R., Lepak, D.P. and Boselie, P., 2018. Integrating strategic human capital and strategic human resource management. The International Journal of Human Resource Management, 29(1), pp.34-67.
• Brewster, C., Mayrhofer, W. and Farndale, E. eds., 2018. Handbook of research on comparative human resource management. Edward Elgar Publishing.
• Bromiley, P. and Rau, D., 2016. Operations management and the resource based view: Another view. Journal of Operations Management, 41, pp.95-106.
• Budhwar, P.S., 2016. International human resource management. Edward Elgar Publishing Limited.
• Chauradia, A.J., Echambadi, R., Milewicz, C. and Ganesh, J., 2018, July. Advancing the Resource-Based View: Human Capital Investments and Consumer Satisfaction. In Academy of Management Proceedings (Vol. 2018, No. 1, p. 13131). Briarcliff Manor, NY 10510: Academy of Management.
• Delery, J. and Gupta, N., 2016. Human resource management practices and organizational effectiveness: internal fit matters. Journal of Organizational Effectiveness: People and Performance, 3(2), pp.139-163.
• Guest, D.E., 2017. Human resource management and employee well‐being: Towards a new analytic framework. Human Resource Management Journal, 27(1), pp.22-38.
• Harney, B. and Trehy, J., 2016. Resource-based view. In Encyclopedia of Human Resource Management. Edward Elgar Publishing Limited.
• Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management research. Journal of Operations Management, 41, pp.77-94.
• Huo, B., Han, Z. and Prajogo, D., 2016. Antecedents and consequences of supply chain information integration: a resource-based view. Supply Chain Management: An International Journal, 21(6), pp.661-677.
• Yuen, K.F., Wang, X., Ma, F., Lee, G. and Li, X., 2019. Critical success factors of supply chain integration in container shipping: an application of resource-based view theory. Maritime Policy & Management, pp.1-16.
• Wilton, N., 2016. An introduction to human resource management. Sage.
• Vivares-Vergara, J.A., Sarache-Castro, W.A. and Naranjo-Valencia, J.C., 2016. Impact of human resource management on performance in competitive priorities. International Journal of Operations & Production Management, 36(2), pp.114-134.
• Tulung, J.E., 2017. Resource Availability and Firm’s International Strategy as Key Determinants Of Entry Mode Choice. Jurnal Aplikasi Manajemen, 15(1), pp.160-168.
• Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic Management Journal, 38(1), pp.42-63.
• Thompson, P. and Smith, C. eds., 2017. Working life: renewing labour process analysis. Palgrave Macmillan.
• Tate, W.L. and Bals, L., 2018. Achieving shared triple bottom line (TBL) value creation: toward a social resource-based view (SRBV) of the firm. Journal of Business Ethics, 152(3), pp.803-826.
• Sparrow, P.R. and Makram, H., 2015. What is the value of talent management? Building value-driven processes within a talent management architecture. Human resource management review, 25(3), pp.249-263.
• Rothenberg, S., Hull, C.E. and Tang, Z., 2017. The impact of human resource management on corporate social performance strengths and concerns. Business & Society, 56(3), pp.391-418.
• Phillipson, C., Vickerstaff, S. and Lain, D., 2016. Achieving fuller working lives: Labour market and policy issues in the United Kingdom. Australian Journal of Social Issues, 51(2), pp.187-203.
• Papa, A., Dezi, L., Gregori, G.L., Mueller, J. and Miglietta, N., 2018. Improving innovation performance through knowledge acquisition: the moderating role of employee retention and human resource management practices. Journal of Knowledge Management.
• Özçelik, G., Aybas, M. and Uyargil, C., 2016. High performance work systems and organizational values: Resource-based view considerations. Procedia-Social and Behavioral Sciences, 235, pp.332-341.
• Molloy, J.C. and Barney, J.B., 2015. Who captures the value created with human capital? A market-based view. Academy of Management Perspectives, 29(3), pp.309-325.
• Meyer, D. and Dunphy, S., 2016. The role of knowledge-based psychological climates in human resource management systems. Management Decision, 54(5), pp.1222-1246.
• Lu, C.M., Chen, S.J., Huang, P.C. and Chien, J.C., 2015. Effect of diversity on human resource management and organizational performance. Journal of Business Research, 68(4), pp.857-861.
• Li, Y., Wang, M., Van Jaarsveld, D.D., Lee, G.K. and Ma, D.G., 2018. From employee-experienced high-involvement work system to innovation: An emergence-based human resource management framework. Academy of Management Journal, 61(5), pp.2000-2019.
• Kellermanns, F., Walter, J., Crook, T.R., Kemmerer, B. and Narayanan, V., 2016. The resource‐based view in entrepreneurship: A content‐analytical comparison of researchers' and entrepreneurs' views. Journal of Small Business Management, 54(1), pp.26-48.