RESOURCE-BASED VIEW (RBV)

Resource-based view (RBV) of the organisation has influenced the field of strategic human resource management in a number of different ways, scholars argued that sustainable competitive advantage derives from the resources and capabilities of a firm controls that are valuable, rare, imperfectly imitable and not sustainable, thus these resources can be viewed as bundles of tangible and intangible assets, including management skills, its organisational processes and routines, and the information and knowledge it controls.

In the intervening decade, the diffusion of the RBV in strategic management has been both theatrical and controversial and has involved significant theoretical development. RBV represents a paradigm shift in strategic human resource thinking by focusing on the internal resources of the organisation and this fundamental concept of strategic management is linked to the management of people in firms. Strategic management is a human process, dependent on human strengths, but also affected by cognitive weakness and political agenda.

The resource-based view to strategic human resources emphases on the costly to copy attributes of the firm as the fundamental drivers of performance and competitive advantage. The resource-based view focuses on the promotion of sustained competitive advantage through the development of the human capital rather than merely aligning human resources to current strategic goals. This essay will explore the relationship between strategic management and human resource management in relation to RBV and various ways on how the RBV of strategic human resource in an organisation can contribute enhance performance and maintain sustained competitive advantage (SCA).

A resource must be rare if it is to be a source of sustained competitive advantage and the HR executive needs to consider how to develop rare characteristics of an organisation’s human resources to gain competitive advantage. Rarity means there must be a shortage of these particular resources in the market to the extent that there are insufficient to go around all organisations.

If the HR strategy has value but no form of rarity, other organisations may develop an identical strategy or even something more unique, thereby displacing the first mover of sustained competitive advantage. If a valuable organisational resource is possessed by large numbers of firms, then each of these firms have the capacity of exploiting that resource in the same way, thereby implementing a common strategy that gives no one firm a competitive advantage.

In the resource-based perspective, for a resource to be considered a sustained competitive advantage and enhance organisation performance, human resources must be inimitable. The inability of competitors to duplicate resource endowments is a central element of the resource-based view.

Lastly, HR function can provide sustainable competitive advantage, the organisation must be organised so that they can develop valuable resources that are rare and inimitable. The organisation requires having in position the systems and practices that allow human resource characteristics to bear the fruit of their potential advantages.

The question of organisation focuses attention on systems, as opposed to single HR practices; this means a focus on horizontal integration of HR practices, rather than viewing each in isolation and the organisation ensuring that their policies and practices in the HR functional areas are harmonized and rational, and not contradictory.