Contemporary Issues in HR Management Chapter 2

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Questions and Answers

What is essential for a resource to contribute to sustained competitive advantage?

It must be expensive to acquire

It must be quickly imitable

It must be valuable, rare, and imperfectly imitable (correct)

It must be widely available in the market

Which aspect does the resource-based view highlight as crucial for an organization’s competitiveness?

Financial investments only

Technological advancements primarily

Human resources (correct)

Outsourcing practices

What does strategic flexibility enable an organization to do?

Focus solely on internal processes

Increase profit margins in the short-term

Maintain a static operational approach

Adjust to changes in the environment (correct)

Which of the following best defines the term 'strategic fit'?

Alignment between an organization and its environment Signup and view all the answers

What is a significant element for diversity to lead to sustained competitive advantage in organizations?

Prioritization of employees' context and removal of barriers Signup and view all the answers

What is indicated by the term 'dynamic capabilities'?

How an organization uses its processes and skills to shape its environment Signup and view all the answers

Organizational strategies for achieving sustained competitive advantage can include exploitation and what other strategy?

Exploration Signup and view all the answers

Which of the following groups is NOT considered a main category of organizational resources?

Collective capital resources Signup and view all the answers

What is meant by sustained competitive advantage (SCA)?

A range of factors that set an organization apart from its competitors. Signup and view all the answers

What role does human resources (HR) play in achieving sustained competitive advantage?

HR shapes the culture and responsiveness of the organization. Signup and view all the answers

Which theory suggests that HRM practices should align with the unique environment of an organization?

Contingency theory Signup and view all the answers

What does the ability-motivation-opportunity (AMO) framework help achieve?

High performance through HRM bundles. Signup and view all the answers

What does horizontal fit refer to in human resource management?

The extent to which HRM practices are aligned with each other. Signup and view all the answers

Which of these concepts relates to the motivation of employees according to expectancy theory?

Humans are motivated when they believe their efforts will lead to valuable rewards. Signup and view all the answers

What does competitive advantage allow an organization to do?

Leverage unique value-creating strategies that competitors do not use. Signup and view all the answers

Which factor is NOT associated with sustained competitive advantage?

Uniform HR practices across all organizations. Signup and view all the answers

Study Notes

Contemporary Issues in Human Resource Management

This book/course discusses contemporary issues in human resource management.
The editor is Nicole Dodd.
Several contributors are listed, including Bothma, Brewster, Chinyamurindi, Cox, De Villiers, Holland, Kougiannou, Mazingi, Paulet, Robinson, and Steynberg.
The book is published by Oxford University Press South Africa (Pty) Ltd.

Chapter 2: Human Resources, Dynamic Capabilities, and Sustained Competitive Advantage

The chapter examines human resources in achieving sustained competitive advantage.
Learning outcomes include explaining sustained competitive advantage, discussing exploitation and exploration strategies, explaining the role of human resources in achieving sustained competitive advantage, distinguishing between sources of sustained competitive advantage, and discussing paradigms covering human resource contributions to organizational performance.

Sustained Competitive Advantage (SCA)

SCA is the range of factors that distinguish an organization from its competitors, allowing for market share maintenance and profit increase.
SCA sources can be organization-specific advantages.
Human Resources (HR) plays a crucial role in unlocking employee potential, boosting profits through effective organizational design, and shaping organizational culture and responsiveness.
HR must have the opportunity to assist in strategic management.

HRM and Organizational Performance

Research explores how HRM influences organizational outcomes.
Initially, researchers believed best practices would universally improve performance.
However, contingency theory argues that each organization operates in a unique environment, necessitating HRM practices tailored to its specific identity and strategy.

Ability-Motivation-Opportunity Framework

Vertical fit describes the alignment between an organization's strategy and its business strategy.
Horizontal fit focuses on the alignment of HRM practices within the organization.
Expectancy theory posits that motivation stems from the belief that effort leads to valuable rewards.
The AMO framework combines ability, motivation, and opportunity to achieve high performance and avoid negative combinations.

Competitive Advantage and SCA

Competitive advantage refers to unique value-creating strategies not employed by competitors.
Sustained competitive advantage refers to rare, easily un-imitated sources of competitive advantage.
Organizations often leverage internal strengths to respond to external possibilities.
SWOT analysis (strengths, weaknesses, opportunities, and threats) is useful in identifying sources of competitive advantage and SCA.

Resource-Based View of SCA

The resource-based view of SCA utilizes the VRIO framework (Value, Rarity, Imitability, Organization) to assess resources.
Internal strengths (resources) enable organizations to exploit opportunities and neutralize threats.
Human resources are crucial for organizational competitiveness.

Organizational Strategy

SCA can be achieved through exploitation or exploration strategies.
Exploitation strategies involve leveraging existing capabilities to improve product, service, and process delivery.
Exploration strategies involve risk-taking to discover new prospects and opportunities through product/service innovation.
Business functions must align to support these strategies.
Tensions may arise between short-term and long-term perspectives.

Organizational Resources

Organizational resources include financial capital, physical capital, human capital, and organizational capital.
Resources contributing to SCA must be valuable, rare, imperfectly imitable, and non-substitutable.
Organizations need the capacity to fully utilize these resources.
Strategic fit refers to an organization's alignment with its environment.
Strategic flexibility refers to an organization's ability to adapt to changes in the environment.

Capabilities versus Dynamic Capabilities

Capabilities are the functions and operations of a business.
Dynamic capabilities involve utilizing processes and managerial skills to respond to and shape the business environment.

Diversity in the Workplace

For diversity to contribute to SCA, HR managers must prioritize employees, their thriving environments, and removal of barriers to workplace functioning.
Transformation requires deliberate inclusivity and giving voice to marginalized groups.

Criteria for HRM Practices and Human Capital to Contribute to SCA

Questions to evaluate resources include whether they are valuable, rare, inimitable, and substitutable to determine their SCA potential.

The Role of HRM and Human Capital in SCA

HRM practices form the system for attracting, developing, motivating, and retaining employees.
Effective HRM practices and exceptional human capital contribute to SCA.
Organizations can achieve SCA by giving special treatment to employees with core competencies or strategic strengths.
This leads to better products, service, innovation, and problem-solving capabilities.
Deliberate efforts to build internal dynamic capabilities support the attainment of SCA.

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Description

Explore Chapter 2 of 'Contemporary Issues in Human Resource Management' which delves into the role of human resources in achieving sustained competitive advantage. This chapter discusses key concepts including exploitation and exploration strategies, and the contribution of human resource practices to organizational performance.