Strategic Human Resources - a New Source for Competitive Advantage in the Global Arena - Case Study Example

Running Header: Training and Development Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Training and Development Organizations have realized the increasing importance of people and their management as the major player in competitive advantage. Boxall, John and Patrick have suggested that globalization, rapid technology changes, increasing competition and other factors have made business to find out how their only human resource can be developed for competitive advantage (88). It has been understood that firm human resource can participate as strategic role in the accomplishment of the organization. This has resulted to the creation of a section of strategic human resource management (SHRM) which is the intersection of human resource management and strategic management (Hamish 44). Strategic human resource management is defined as the pattern of planned activities and deployment of human resource meant to allow the organization to attain its goals. The area of strategy is directed on how organizations can establish themselves to compete effectively. The resource based view of the firm focuses strategic management on internal factors. Firms adopt different value chain consisting of distinctive activities that allow services and products to be beneficial to customers (Anonymous 3). Value chain analysis is vital instrument for those who undertake training and development. The quality training and development practices combined with other human resource elements maintain the business primary activities. Training is the planned endeavor by the organization to aid employees studies work-related skills, knowledge and attitudes. The employees undergo planned experiences that make them to attain something they can utilize to elevate their performance at workplaces. Training and development improves organizational effectiveness. The early strategic management analysis concentrated on external factors that decided on profitability of the company. However, in the dawn of the resource based view of the firm, the strategic management transferred to focus more internally (Boxall, John and Patrick 93). In stead of developing competitive management that focuses on the environment, the resource based view proposes that organizations should concentrate on their inner resources, both intellectually and physically, for foundations of advantage of competition. Stroh and Caligiuri argue that resources that are non-sustainable, inimitable, rare and valuable lead to competitive advantage (5). This is how resources of the firm add to the sustained competitive advantage. Value is resources that is either neutralizing threats or utilizing opportunities for the firm while rarity is a resource that is currently unavailable to a huge number of the available firms or competitors of the future. The impossibility of other firms to either reproduce or copy the resource for their own gain is articulated through inimitability. Non-sustainability allows other resources not to be utilized by other firms for their own benefits. According to Robert the resource based strategy has become a distinct in strategic management (5). It has been the basis of theoretical establishment from which various present strategic management research associated with knowledge based views of the firm, dynamic capabilities and human capital are obtained from. For the human resources to be an origin of maintained competitive advantage, they must give value to the firm. On a theory based on economy, the supply and demand of labor are heterogeneous such that organizations need different jobs that need varied skills, and that people vary in both level and types of skills. Therefore, there is variation in contribution of person to the organization and hence, the capability of human capital to give value (Mark et al 71). Skills of the employees are improved through training and development strategy. A training that is well developed and designed can elevate the overall organization effectiveness in various ways (Jeffrey 112). Firstly, it can boost motivation and commitment of the employees. Chances to study new skills are vital in economy of today, so employees value opportunity of learning offered by training. Consequently, firms that give more training promote employee commitment (David and Johnny 8). Additionally, firms that give employees chances to study and grow are viewed as having workers’ best interest at heart resulting to employees feel more committed to the firms. Commitment of employees will benefit the firm by improving retention of well-performing employees (Truss 1132). Also, training allows employees undertake their work more efficiently and effectively, such that the firm is able to perform even better everyday. If a customer goes to a grocery store where the cashier is not well trained on how to use cash register effectively, then customer is a casualty of poor training. Employees who get training know more and are capable of doing more than workers who don’t get any form of training. Training enables firm to attain it strategic objectives by giving employees particular attitudes, skills and knowledge (Tichy, Forbrun and Devanna 54). This aids in making strategic efforts feasible. In making appropriate decision regarding training, firms make sure that the correct people have the correct skills for attaining the competitive advantage hunted by the strategy. Rockwell Collins is an example of a firm that was faced with internal problems of delays caused by electromagnetic interferences (EMI) which mostly resulted to destruction of its electronic products and hence losses. The investigation revealed that engineers had no knowledge concerning EMI and this was resulting to loss of $1 million a year. The company developed a CD-ROM course of 12 hours that was distributed to the employees to do training on their own time. This resulted to rapid training and the effect of the project was worth the cost. Training can also be oriented with strategy to aid firm to gain competitive advantage over other organizations. Training resources and needs differ across organizations depending on the business strategy being used (David and Edward 67). Rockwell Collins firm utilized cost effective leadership strategy that needs employs to have attitudes, skills and knowledge in order to lower cost and elevate efficiency. In the Airline Case study 2 of Ryanair firm, it is clear that the firm is still stuck with strategic management that concentrated on external factors that decided on profitability of the company. Instead the firm should focus on the resource based view that proposes organizations to concentrate on their inner resources, both intellectually and physically, as foundations of competitor advantage. Although the firm is making huge profits, it doesn’t have rare and valuable resources making it at less advantaged position to it competitors. It will take a matter of time before the firm start failing because they have not invested in human resource. This will result from poorly trained human resource capital where customer will value safety and quality services more than just low prices. It will be worse because of low morale and loss of high-performing employees. Cost leadership strategy provides an employee with attitude, skills and knowledge that allow efficiency improvement and costs reduction and this opposes the CEO suggestion that low cost keeps customers coming back. Comments that it is a matter of time before a major accident happen with the firm will keep customer away contrary to his suggestion. Conclusion The resource based view of the firm gives an organization the advantage over its competitor because it’s within resources including intellectual and physical are non-sustainable, inimitable, rare and valuable. Human resource must add value to the organization in order to maintain its competitive advantage over other firms. Training and development is important to firm because there is variation in contribution of human resources. A well developed training strategy raises the overall effectiveness of a company. This is achieved through boosting motivation and morale of the employees which in turn increases their performance. Winning employees’ commitment will help the firm to retain its highly performing employees. Cost effective leadership strategy will allow firm to have high performing employees while reducing cost and increasing effectiveness. Ryanair firm employs a strategic management that is focusing more on company profitability. This model makes the firm to be at a lesser advantaged position compared to it competitors. Customer values quality services and products that match cost and this is contrary to the Ryanair CEO that low price keeps customers coming back. The value of services and products is attained through properly trained employees. Works Cited. Anonymous, Tying training and development to competitive strategy, Workforce Management. 88. 6 (2009): 3. David, N. A. and Johnny, S. How Competitive Strategy Matters? Understanding the Drivers of Training, Learning and Performance at the Firm Level. (2006): 1-27. David, V. A. and Edward, A. T. Running Training Like a Business: Delivering Unmistakable values. San Francisco, Berret-Koehler, 1999. Hamish G. H. SHRM best-practices & sustainable competitive advantage: A resource-based view, The Graduate Management Review. 5. 2 (2000): 43-57. Jeffrey, Pfeffer, Seven practices of successful organizations. California Management Review.; 40. 2 (1998): 96-24. Mark L. L. et al. Strategic human resource management: The evolution of the field. Human Resource Management Review. 19. 1 (2009): 64–85. Peter, Boxall, John, Purcell and Patrick Wright. Human Resource Management. Oxford, Oxford University Press, 2007. Robert, M. G. Contemporary Strategy Analysis. 7th ed. (2009): 3-30. Stroh, L. K. and Caligiuri, P. M. Strategic human resources: A new source for competitive advantage in the global arena. The International Journal of Human Resource Management. 9. 1 (1998): 1-17. Tichy, N. Forbrun, C. and Devanna, M. Strategic human resource management. Sloan Management Review(Winter). (1982). 47-61. Truss, C. Complexities and controversies in linking HRM with organizational outcomes. Journal of Management Studies. 38. 8 (2001): 1121-1149. Read More