Human capital is increasingly considered a source of competitive advantage for organizations - Essay Example

First, the statement will be examined and then the role of human resource managers will be discussed within this context. The competition amongst the businesses around the globe is getting tougher and tougher (Dyer, 1993). Businesses are employing new techniques and adopting new strategies to reach the customer through developing a competitive edge over their customers. The reasons for this increased competition are global competition, knowledgeable customers, demanding stockholders and constant changes in technology (Dyer, 1993).

The businesses which reach the top have always been successful in finding the competitive advantage that proves to be sustainable over the time (Dyer, 1993). Financial resource of an organization or the use of technology has been the main source of competitive advantage of the organization in the past. These resources are essential for the success of the organization, but not sufficient. For this reason, the companies with large employee base have started viewing their human resource as the source of creating customer delight and rapid innovation which places the organization ahead of its competitors.

The performance of the organization will suffer if the human resource processes and policies are misaligned, failing to reinforce the business strategy. Since many years, many organizations have tried to shift their competitive advantage to the human resource by managing it more effectively (Dyer, 1993). At the end of the day, it is the human capital of the organization which formulates strategies, identify business opportunities, innovate new products and target the right market segments (Dyer, 1993).

The uniqueness in services and products is created and maintained by the human resource of an organization (Pilenzo, 2009). Therefore, if the human resource is managed well, the organization can develop a competitive advantage which cannot be duplicated over time (Pilenzo, 2009). Knowledge and