Global Competitiveness and Strategic Human Resource Management - Term Paper Example

Global Competitiveness and Strategic Human Resource Management Businesses have strategies in various departments to achieve specific missions. One mission may be to improve in performance, or to beat a competitor in the market. One strategy can be; developing a consumer focused culture. One specific strategy within a business department should be compatible with the overall business strategy that will help it achieve its aim. The process of connecting a strategy to business management considers that specific management as strategic. Such is the case with strategic human resource management. It is all about the creation of a connection between human resources strategy and implementation, and the overall strategic aims of the business (Çalişkan 101). The paper discusses global competitiveness and strategic human resource management. As described above, strategic human resource management is a choice of management that uses a strategy compatible with overall business strategy to achieve organizational aims. In this case, global competitiveness can be one of the aims of an organization that strategic human resource can help achieve. Global competitiveness is the ability of a company to perform according to the standards of the market in relation to the competitors, on the basis of quality, or lower cost of production, among other measurement features (Ajitabh 2). The following is an explanation of the connection between strategic human resource management and global competitiveness, and its role in Global competitiveness. Global Competitiveness Competitiveness is all about involvement in a business rivalry for markets. It is the ability of a firm to produce and sell products that exceed or matches the competitor's product. This is usually on the basis of superior service, higher quality, lower cost or a combination of these features (Ajitabh 2). To compete in today’s global environment, firms need specific capabilities. They must constantly anticipate frequent changes in customers’ preferences; wisely use their resources to maintain the lowest possible cost, and remain responsive to new technology changes by adopting the new ones that emerge from time to time. The firms must also identify and put a lot of emphasis on what makes it do better than competitors; recognize the importance of diversity in the global market and develop a culture that appreciates it, and structure their operations to achieve efficiency (Ajitabh 2). Competitiveness can be perceived from different levels, for example, it can be considered on industry, firm, national, or global basis. It is from this perspective that global competitiveness arises. Global competitiveness involves competition between firms that sell similar or related products internationally. It is very important to remain competitive, or else the business may lose market and fall. Strategic Human resource Management Strategic human resource is a collection of phenomena; models, critiques, prescriptions, and theories. These are approaches to the management of human resource, giving a strategic framework used to achieve the goals. The approaches are concerned with issues about quality, structure, values, culture, matching sources to future needs, and commitment; of macro-concerns and longer-term people issues. For example, if a human resource manager wants to ensure quality of service provision, he will identify a theory, or a model of management through which he can achieve quality. This will be a strategy, but that which is concerned with the human resource. Strategic human resource is a complex process because of the changing models, prescriptions, and theories, which in turn influence the strategies. Business strategies change due to pressure from a competitive business environment (Salaman, Storey & Billsberry 3). Strategic human resource management for an internationally operating firm requires a competent human resource manager, but employment of such a skill could also be regarded as a strategic management of the human resource. By only employing competent skills, a firm could achieve a competitive advantage in various areas of competition (Salaman, Storey & Billsberry 3). Relationship between Global Competitiveness and Strategic Human Resource Management Global competitiveness and strategic human resource are linked to each other in this manner. Global competitiveness drives the choice of strategies that a firm selects for its operations, and strategic human resource contributes to the global competitiveness of a firm. Global competition is becoming the custom of the business world. This is because a lot of firms in countries now operate globally, making the rate of trading internationally higher than the rate of operating domestically (Kiessling & Harvey). In most industries, it is impossible to survive in the global market without scrutinizing the world for customers, competitors, technology, suppliers, and human resource. Because of the global nature of the business environment, firms can get the right skills at lower costs hence reducing the overall operational cost. This gives the firm an advantage and may contribute to its competitiveness. In such a business environment, global human resource management becomes the key to achieving success in the firm (Kiessling & Harvey). The Role of Human Resource Management in Global Competitiveness Today in a turbulent and complex business environment, when firms analyze their competitive factors, the result is an understanding that the people and their position are the basis from which everything depends, and everything begins. The culture of an organization, for example, depends on the human resource. If a manager thinks of adopting a consumer focused culture for the organization to perform, it will be the employees that will be trained on how to develop and nurture that culture. In the end, the culture affects consumer’s response to the organization, and even internal performance of duties in the workplace (Đurković 60). Productivity of a firm also depends on the human resource. In the current knowledge economy, it is the employee that is given knowledge for use in various situations for the success of the organization. Take the example of a marketer. In the current business world, characterized by new technology, and especially social media, there may be new forms of reaching a target market. Without the marketer's knowledge of the market characteristics, new technological changes, and competitiveness of the business environment, it will not be possible for his company to be at the same level with its competitors, or even exceed them. The same applies to other positions (Đurković 60). Additionally, the starting point of competitiveness comes from the interaction between strategy and the resources. In this relationship, for a resource to be a source of competitiveness, it must be rare; it must create value for the firm; it must be non-substitutable, and it must be inimitable. A resource with the highest probability of creating a competitive advantage is human resource. Human resource is more likely to be inimitable, especially after one is trained on special skills and has unique talents; it is rare, and non-substitutable (Abagail, David & Patrick). The competitive position of a firm that operates globally is dependent on its inventiveness, flexibility, and focus on the employees' quality. Microsoft Corporation, for example, was recently employing foreign workers, yet according to Americans; there were enough qualified skill that could take up such positions. Microsoft Corporation insisted that the skills the company required was lacking in America, this shows the focus of Microsoft on the quality of employees needed (McDougall). Strategic human resource management can help a company, develop a competitive advantage. Đurković indicates that knowledge is becoming a strategic resource in the business world. In order to respond to the external changes, companies have to change internally. Contemporary organizations do this through development of employees, and looking for instruments and methods that help in changing the employees’ skill structure and knowledge, as the foundation for organizational development. This means that employees’ capabilities are improved, and also made unique through knowledge (Đurković 60). Harvey and Novicevic also note that the key to global competitiveness is strategic knowledge. Strategic knowledge is knowledge about the industry in which a firm operates, that is, what it can utilize to achieve international growth. It is about market knowledge which entails the opportunities available, characteristics of overseas customers, and the competitors there. It is also about self knowledge that entails knowledge of the company's ability to effectively compete in the global business environment (Harvey & Novicevic). Strategic knowledge can be used as a strategy in human resource management. The Relationship between Knowledge Economy and Human Resource Nowadays, it is not the managerial knowledge, basic assets, or even the raw materials that create new and successful businesses. It is the intellectual capital, which is composed of innovation, knowledge, and cooperation. These elements are the most important in creating prosperity in the knowledge economy. In order to remain competitive, this includes even at global levels; companies need to be able to constantly create new knowledge. This is because developmental dynamics are complex and keep on changing, making knowledge to become obsolete very quickly. For a company to be up to date with the competitive environment, it, therefore, has to create new and higher quality knowledge. The firm creates new knowledge and of higher quality depends on the human resource and their development. Knowledge is exclusively a human product (Choi & Roh 19). Strategic human resource can make use of the above three elements to improve the performance of an organization. Consider the innovation; it is a human resource that can be managed strategically to produce specific results that will ensure the company's improvement. Innovation can be a source of the company's competitive advantage, for example, Samsung. It has a creative and innovation department, from which the company’s unique and competitive iPhones are generated (Choi & Roh 19). Consider knowledge, its management can also lead to a competitive advantage of the firm. Cooperation is necessary for efficiency in the firm that improves it overall performance. Strategic human resource management can lead to the development of employees to enable them to have the capability of taking responsibilities; problem solving, thinking, and cooperation (Đurković 63-64). Conclusion Strategic human resource management is the management method through which global competitiveness can be achieved. As discussed above, strategic human resource management influences the overall performance of an organization, hence its competitiveness. Overall performance is influenced through its effects on culture, organization’s reputation, diversity implementation, and effect on other organizational operations. It has also been established that the current society is a knowledge society; therefore, knowledge forms the key to developing a competitive advantage. Implementation of knowledge does not happen without the human resource. Thus, it leads to the development of strategic human resource management. Works Cited Abagail, McWilliams., David. D. Van Fleet., and Patrick M. Wright. “Strategic management of human resources for global competitive advantage.” Journal of Business Strategies Source 18.1 (2001): Web. Retrieved from: http://www.freepatentsonline.com/article/Journal-Business-Strategies/75372918.html Ajitabh. Global Competitiveness. New Delhi: Excel Books India, 2008. Print. ÇALIŞKAN, Esra NEMLİ. “The impact of strategic human resource management on organizational performance.” Journal of Naval Science and Engineering 6. 2 (2010): 100-116. Print. Choi, Hyun-Jun & Roh, Su-Jin. “Building a Creative Corporate Culture.” Sustainability report (2009). Retrieved from: http://www.samsung.com/us/aboutsamsung/sustainability/integritymanagement/download/building_a_creative_corporate_culture.pdf Đurković, Jelena Vemić. “Development of human resources as strategic factors of the companies' competitive advantage.” Facta Universitatis Series: Economics and Organization 6. 1 (2009): 59 – 67. Print. Harvey, Michael G & Novicevic, Milorad M. “Strategic global human resource management: The role of inpatriate managers.” Human Resource Management Review 10. 2 (2000): 153-175. Print. Kiessling, Timothy & Harvey, Michael. “Strategic global human resource management research in the twenty-first century: an endorsement of the mixed-method research methodology.” International Journal of Human Resource Management 16.1 (2005): 22–45. Print. McDougall, Paul. “Microsoft Defends Hiring Foreign Workers.” InformationWeek 11/30/2012. Web. Retrieved from: http://www.informationweek.com/team-building-and-staffing/microsoft-defends-hiring-foreign-workers/d/d-id/1107611? Salaman, Graeme., Storey, John., and Billsberry, Jon. Strategic Human Resource Management: Theory and Practice. London: SAGE, 2005. Print. Read More