People and Organizations Assignment Sample

People and Organizations

QUESTION 1

With reference to reliable academic sources and key authors, discuss these threes concepts from an HRM perspective only:

a) The Resource Based View of the Firm.

b) ‘Best Practice’ HRM (the universalist approach)

c) ‘Best Fit’ HRM (the contingency approach).

You must ensure that your answer specifically addresses Human Resource Management, rather than generic best practices in accounting, marketing, operations etc or the management of non-human resources. (50 marks)

QUESTION 2

a) With reference to key academic sources throughout your answer, explain how HR practitioners seek to build ‘unique bundles’ of HR practices as a source of sustainable competitive advantage for their organization.

Give specific examples of different types of ‘bundles’ of HRM practice to illustrate your answer.

b) Then, using relevant academic and examples from case studies in academic journals, explain the evidence which suggests High Performance Working Practices are considered to have a more positive impact on business performance.

Solution

Question-1

a) The Resource Based View of the Firm

The Resource Based View of the Firm (RBV) is a management theory that was initially created by Wernerfelt and then improved by Barney (Barney et al. 2021). Chigara (2021) suggests that a company's resources can be divided into two groups: tangible resources, such as material possessions and financial resources, and intangible resources, such as knowledge, skill, and reputation. These assets form the foundation of a company's competitive advantage, and a company can set itself apart from rivals by utilising its distinctive assets and skills (Chigara, 2021).

The firm's resources are seen as the determinant of its performance according to the Strategic Human Resource Management (SHRM) approach known as the Resource Based View (RBV) (Uppal 2020). Resources are any intangible asset that a firm owns and can be used to generate competitive advantage. According to the MBA Assignment expert, the resource-based view implies that the acquisition, development and deployment of valuable, rare and inimitable resources constitute the basis of a firm’s superior long-term performance (Barney et al. 2021; Gupta 2020). This view suggests that firms should strive to identify resources that will allow them to out-compete other firms in the marketplace.

The RBV has recently surged in popularity as it has been seen to explain the success of many ‘high performance organisations’ (Uppal 2020; Gupta 2020). It has also been used to help explain how an organisation may achieve its goals by using its human resources effectively (Srivastava and Yadav 2019). According to the view, an organisation can gain a competitive advantage if it is able to identify resources which are valuable, rare and hard to imitate (Barney et al. 2021). Valuable resources are those which enable organisations to create value by taking advantage of market opportunities or by competing more effectively. Rare resources are those which few competitors also possess. And, inimitable resources are those which are difficult to copy or imitate (Srivastava and Yadav 2019).

The core of the resource-based perspective of the firm is the ability of resources to provide capabilities that are valued from a competitive standpoint (Freeman et al. 2021). For SHRM professionals, being able to link resources and skills is crucial because it helps them choose which human resources to hire and use. This view also helps practitioners to think of human resources as inventions rather than inputs (Srivastava and Yadav 2019). This means that practitioners must focus on understanding the dynamics of how a particular resource is used, and how it interacts with other resources.

The RBV implies that strategic human resource management is a method of creating, developing and managing resources so that they form a set of resources which are valuable and relatively rare in the marketplace (Mohanasundram 2022). Therefore, practitioners must pay close attention to the skills, competencies and knowledge of their employees so that they can leverage them to greater competitive advantage. By doing so, they can ensure that their organisation’s resources are appropriately managed and deployed in order to gain a competitive edge (Assensoh-Kodua 2019).

b) ‘Best Practice’ HRM (the universalist approach)

'Best Practice' HRM, also known as the universalist approach, is a management theory that suggests that there are certain HRM practices that are universally effective and can be applied to any organization, regardless of its industry, size, or location. This viewpoint contends that specific HRM procedures, including performance evaluation, training and development, and employee interaction, have been shown to be successful in enhancing organisational performance and ought to be adopted by all businesses.

LI (2019), who believed that practises in HRM including training and development and employee involvement had a favourable impact on organisational performance, was the first to propose the universalist approach to HRM. Other proponents of the universalist approach include Uppal (2020), who identified a set of ‘high-performance work practices’ that they believed were effective in improving organizational performance. These practices include employee training, employee involvement, and high levels of communication between management and employees.

The ‘best practice’ HRM approach suggests that certain human resource practices are universal, and that these practices should be adopted by all organisations regardless of their context (Mohanasundram 2022). This approach is based on the assumption that the organisation’s human resources can be managed in a way which is consistent with ‘best practice’ irrespective of internal or external variables such as industry structure, organisation size, or organisational culture (Brewster & Haak-Saheem 2020).

The ‘best practice’ approach suggests that a particular set of practices, such as high-commitment HR strategy, should be adopted in all organisations in all times ((Mohanasundram 2022). This set of practices is viewed as the ‘best’ way to manage human resources and is thought to be based upon universal principles that are applicable to all organisations in all contexts (Brewster & Haak-Saheem 2020).

The ‘best practice’ approach was developed in response to the ‘traditional’ HRM model which focused upon a passive approach to managing personnel (Mohanasundram 2022). The ‘best practice’ approach emphasises the importance of an explicit and systematic utilisation of human resources (Aburumman et al. 2020). It also suggests that there is a favourable outcome which can be achieved through adhering to the ‘best practice’ approach. Specifically, it suggests that organisations will be able to achieve a higher performance through their commitment to ‘best practice’ HRM than would have been possible if they pursued any other approach (Brewster & Haak-Saheem 2020).

The ‘best practice’ approach has undergone considerable criticism. For example, it has been criticised for having too narrow a focus on ‘best practice’ HRM principles, which may not be relevant to all organisations in all contexts. This criticism is further supported by the fact that ‘best practice’ HRM may be advantageous only in certain conditions and could be ineffective in others (Brewster & Haak-Saheem 2020).

c) ‘Best Fit’ HRM (the contingency approach)

'Best Fit' HRM, also known as the contingency approach, is a management philosophy that contends that the best HRM procedures are those that are adapted to the unique requirements and conditions of the business. This viewpoint holds that there is no one-size-fits-all approach to HRM and that the best practises will vary depending on the sector, size, culture, and other specifics of the organisation.

Opatha (2021) argues, the most effective HRM practices were those that were aligned with the organization's strategic goals and fit with its culture and business environment. Other proponents of the contingency approach include Shun (2021), who argued that HRM practices should be customized to fit the specific needs of the organization and its employees.

From an HRM perspective, the contingency approach emphasizes the importance of considering the specific needs and circumstances of the organization when implementing HRM practices. This approach recognizes that different organizations may require different HRM practices in order to achieve success, and that a ‘one-size-fits-all’ approach to HRM is unlikely to be effective.

The ‘best fit’ HRM approach is a viewpoint in SHRM that contends that HR procedures should be adapted to the organisational context (Opatha 2021). This strategy is predicated on the notion that, in order to help an organisation gain competitive advantage, HR practises should be ‘suited’ to the specific organisation.
The ‘best fit’ strategy was created in response to the ‘best practise’ strategy, which received criticism for failing to take into account how contextual factors may affect the efficacy of HRM policies and practises (Shun 2021). This approach suggests that the success of an organisation’s strategy depends on the degree to which its HR practices are tailored to the context of the organisation.

The ‘best fit’ HRM approach emphasises the importance of considering the internal and external environment in which HR practices are to be implemented. This approach is therefore highly contextualised and requires an understanding of the unique features of the organisation’s industry and management system (Collins 2020).

The ‘best fit’ approach also suggests that organisations should make careful consideration of strategy and environment when forming their HR policies. This implies that the conditions under which a particular HR practice is used are often as important, if not more important, than the practice itself (Malik 2022). For example, a reward system which works effectively in one organisation may be ineffective in another. This highlights the importance of the ‘best fit’ HRM approach in ensuring that HR policies and practices are tailored to the context of the organisation. 

Question-2

a) How HR practitioners seek to build ‘unique bundles’ of HR practices as a source of sustainable competitive advantage for their organisation.

Due to their capacity to cultivate and maximise a workforce capable of delivering better organisational performance, human resource (HR) management strategies can play a significant part in helping an organisation gain a competitive edge (Chigara 2021). In order to gain and keep customers, achieve high organisational performance, and establish a competitive advantage different from their rivals, HR practitioners aim to create ‘unique bundles’ of HR practises as a source of long-term competitive advantage for their organisation (Veth 2019). The idea of ‘unique bundles’ of HR practises will be examined in this essay along with how they might be used to provide a source of long-term competitive advantage.

The term ‘unique bundles’ is used to describe the combination of different HR practices that, when combined, will produce an advantage distinct from what other organisations are doing in their HR management. The idea behind this concept is that organisations should be aiming to create and implement HR practices that are tailored to the specific needs and goals of the organisation, and are not necessarily taking the same approach as their competitors. For example, a company may focus on particular recruitment and rewards strategies, or particular ‘people strategies’, to attract and retain valuable human resources and gain a competitive advantage.

Research backs up the notion that combining several HR practises may give organisations a long-lasting competitive advantage. For example, Zirar (2020) suggests that ‘bundles of practices’ have the potential to enhance organisational performance, as they can form a mutually reinforcing system that strengthens relationships between HR practices, employees and other stakeholders. Zirar (2020) further suggests that this process involves not only the selection of appropriate HR practices, but also their ‘effective integration’. This requires HR practitioners to be aware of the wider context of their organisation, and to understand how different HR practices should interact with one another to create a cohesive whole (Zirar 2020).

This process of creating ‘unique bundles’ of HR practices begins with gaining insight into the organisation. It is important for HR practitioners to understand the strategic goals of the organisation and its competitive environment, so that they can choose HR practices that will help the organisation to reach those goals and give it an edge over its competitors. Once these objectives have been identified, HR practitioners can select appropriate HR practices and develop a ‘bundle’ that will address the particular needs of the organisation (Veth 2019).

There are a variety of different bundles of HR practice that organisations can create. For example, organisations may focus on a particular area of HR, such as recruitment, in order to attract and retain high quality employees that can drive organisational performance (Dhanpat et al. 2020). They may also focus on reward and motivation strategies, such as offering competitive compensation and benefits packages, or developing programmes to motivate and retain employees (Dhanpat et al. 2020). Additionally, some organisations may focus on ‘people strategies’, such as building a culture of open communication and trust, and developing ‘strategic HR plans’ that focus on developing the skills and capabilities of their workforce (Dhanpat et al. 2020).

Alternatively, an organisation may focus on creating an ‘integrated bundle’ of HR practices, which is an approach that combines a variety of different HR practices in order to create a ‘complete’ HR system. Veth (2019), who supports this strategy, claims that organisations in the service sector or those that place a high value on their ‘human capital’ are most equipped to use this type of bundle. According to their recommendations, this kind of bundle should include ‘core HR processes’ like hiring and firing, development and training, performance management, and reward and recognition, as well as ‘non-core HR practises’ like employee engagement and motivation (Veth, 2019).

Finally, an organisation may focus on a ‘systemic approach’ to HR bundles. This approach focuses on creating a ‘whole system’ that links different HR practices to the strategic goals of the organisation. This links in to Zirar ’s (2020) earlier suggestion that effective integration of HR practices is essential to their effectiveness, as well as Chigara’s (2021) idea that HR ‘strategies’ should be seen as a ‘unified system’ rather than disparate activities.

b) Analysis of high-performance working practices having positive impact on business performance

As observed in the ‘High performance work systems and corporate performance: the influence of entrepreneurial orientation and organizational learning.’ research paper, this research study on the High-performance working practices involves focuses onto the mechanics behind how HPWS (high performance work systems) boosts productivity in a company. The research suggests that high performance work environments (HPWS) may boost organisational performance because to the mediating effect of an entrepreneurial mindset. A high degree of organisational learning may boost the efficiency of a company's high-performance work processes. High-performance work practises (HPWPs) play a crucial role in the organisation not only in terms of a better organizational growth but also in enhances and elevates the employee credibility and performance. To better recruit, select, employ, train, as well as retain high-performing individuals, organisations may use high-performance work practises (HPWPs), which are defined as activities which have been proved to enhance these areas. A high-performance work system is a group of related HPWPs implemented by an organisation (Anwar and Abdullah 2021).

As observed in the longitudinal organizational case study, the goal of high-performance working (HPW) is to foster an environment where everyone feels safe sharing ideas and opinions openly. It necessitates dismantling the traditional organisational hierarchy that many organisations currently use. Instead, it suggests a more horizontal organisational structure in which everyone is motivated to accomplish the company's objectives in the same way and is invested in its success.

High-performance work is nothing more than a set of behaviours, rules, and procedures that, when harmonised, may boost productivity in the workplace. The goal of these initiatives is to improve the efficiency and effectiveness of the company as a whole via the use of novel methods of human resource management. Furthermore, HPWPs may be considered as a collection of human resource practises that provide the firm with a competitive edge, influencing employee satisfaction and the feeling of success among its workers (Zhu et al. 2018).

Benefits of High-performance working practices

• Better attitude of the employees towards work and company - employees that have a more positive outlook on their work and who are more invested in making the company's goods, services, and procedures better. They show greater initiative, leading to a higher rate of invention. It takes less time and effort to bring innovative goods and services to market. Both optimism and participation have increased.

• Improved collaboration among the employees - Increased and improved collaboration between employees and their interdepartmental peers, as well as between workers and also the company's vendors & end users, is one sign of an organizational commitment refers to its employees' professional growth and advancement. Individuals are more receptive to outside input and recognise that they are a piece in an organisational value chain that relies on the efficiency of each of its parts. Managers and workers, as well as departments within the same company, are now having more fruitful and regular conversations (HPO Center 2019).

• A better organization- In other words, a more efficient structure. The company's approach is different from that of its competitors. Both the strategy's substance and its implementation may contribute to its distinctiveness. This distinguishes the company from its rivals and makes it more appealing to prospective clients and staff. Discipline and concentration are higher. There is a strong sense of corporate social responsibility among the staff as well. Since this has occurred, the company's standing in the business world and the public at large has improved.

• Improved and enhanced financial results - If the same individuals are able to do more, and do so well, productivity rises. As expenses decline and revenue rises, profits improve as well. This means that the company's market share will increase as it advances to the forefront of its industry. After much effort, the organization's financial condition has stabilised as expenses and budgets have been brought under control.

• Competitive advantage - A company receives the finest investment returns relative to its competitors, who frequently have lower HPO ratings, when it achieves the highest average HPO score in its industry. Comparing organisational units reveals a similar pattern: those with the greatest HPO averages also have the best financial results overall, and vice versa (HPO Center 2019).

REFERENCES

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