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As per Storeys point of view HRM is a strategic arrangement of highly dedicated, skillful workforce by adapting a chain of cultural, structural and personal techniques to get a sustainable competitive advantage (Storey, 1995). Also Prahalad stated Human resource is the main competencies which can give competitive advantage to a firm (Prahalad, Hamel 1990).
As per 21st century the normal definition of HRM which is recruiting, training, appraising and compensating the workforce and taking care of their health, safety and labour relation is outdated (Desseler, 2005). The competitive advantage of a firm refers to its inimitable, superior and non substitutable resources (Barney, 1991). So in these point of view human resources is the one which can give core competency to an organization.
Workforce helps the organization to gain sustainable competitive advantage by their skills, communication, meeting the deadlines, ability to self pace and work independently, accountability and decision making (hybridbusiness, 2001). So over all the purpose of workforce is to help the company to earn profit than its competitors.
Workforce Management and Competitive Advantage
As per Sheffield effectiveness program (on behalf of the Institute of P & D in the United Kingdom), workforce management is not only very important to the success of the organization but it is also more important than an emphasis on quality, technology, competitive strategy or Research and Development in terms of influence in the statement of accounts of the company. Ironically, HRM is the most important area which needs more concentration in an organization (Patterson et al., 1998). Because Human resource is the only factor which is inimitable by its competitors of similar background. Other factors of sustainable competitive advantage like Research and development, Price, Quality Technology etc are imitable. So workforce is the only one factor which is unique, efficient, fit (all internal parts has to be work together in order to achieve one goal) and profit booster in long run which gives sustainable competitive advantage (Creativeadvantage, no date).
So for achieving a sustainable competitive advantage the employer must recruit employees with high potential and skills. The relationship between the employee and employer must be strong so that the work force can be turn into the strategic achievement and advantage of the firm. Productive, innovative and dedicated employees can become the core competency of an organization. .
Starbucks is a company who gives more emphasis on care its employees because they considered them as an asset for the company. So Starbuck is using its Human resource policies and techniques as a strategy to achieve competitive advantage. The Human resources practices and culture of Starbucks has developed by the strong mission and values statement which created respectful and positive working atmosphere. Starbucks knows that the satisfied employees through all these practices can be turn in to a greater profit in long run (Workforce, 2005). The competitors can easily copy the products of Starbucks but they cannot replicate the people serving products to the customers (Brandautopsy, 2007).
Workforce and Competitive Advantage
Workforces are the real assets of each and every organization. Workforce help an organization for achieving sustainable competitive advantage by building its brand image, value creation, giving more focus on customers, by taking initiatives and by full engagement in their works.
The people are the main source of value creation. This value creation by the workforce can give sustainable competitive advantage to an organization. The main example of this kind of contribution is late CEO of Apple Steve Jobs; who came up with a new visionary strategy when they were good at selling computers and laptops by introducing the other forms of electronic devices like iPod, iPhone, iTunes which became a sustainable competitive advantage for the company (Chaston, 2012). The visionary approach of Steve Job helped Apple to get a sustainable competitive advantage.
Building Brand Value
Workforce plays an important role to build and increase the brand value of an organization. In fact they act as a bridge between customers and a company through tier communication. And another factor is the quality service provided by the employees. It helps the customers to know more about the brand (Bowers et al. 1990). All sorts of communication by work force through different forms like trade fairs, telephone hot lines and email contact helps to build the brand image (Baumagrath,Schmdit, 2009). Workforce can create customer loyalty by their dedication and ability towards their work. The long term relationship and customer loyalty are directly linked to brand image (wordpress, 2010).
In order to gain competitive advantage workforce have to be more customer oriented and customer focused. The best example of this is Starbucks employee culture. The Starbucks employees play an important role for the growth of the company. "The Starbucks doesn't sell a coffee it sells an experience" it happens only because of the great attitude and abilities of its employees so called partners who greet (by calling their name) and serve more than 30 million customer per week (Workforce, 2005).
Take Responsibility, Initiative and Accept Accountability
Workforce can give competitive advantage by taking responsibilities and accepting accountability in their organization. The former CEO of Apple Corporation took responsibility when they made technical failure in iPhone 4 and replaced the products So it made it customers to believe more and more in a brand called Apple and it helped to increase the sale of iPhone.
When employees work in a good atmosphere they are turned out to be more productive and profitable to that organization. Workforces make utilize of their most of time on work and stop wasting on unnecessary activities by making use of resources effectively. Over all it help the employee to get engage in their work so it help the company to gain a good amount of profit. If customer walks in to store and the sales person is uncooperative and absent minded they will just walk out of the store (Richard, no date). So workforce engagement can give sustainable competitive advantage to the organization.
Importance of Workforce
The characteristics of human resources in firm including skills, knowledge, experience and commitment can give sustainable competitive advantage (Wright et al, 1994). So achieve such kind of sustainable competitive advantage one has to concentrate on four questions which is known as VRIO (Value, Rareness, Imitable, and Organization) (Barney, 1995).
Workforce must create something valuable to the market place so that the customers do not hesitate to spend the money on that product. Firms create value through either decreasing product/service costs or differentiating the product/service in a way that allows the firm to charge a premium price. Fedex explains it by its corporate strategy statement which says "People Service Profit". Which means customer satisfaction comes from the satisfaction of employees (Barney, Wright, 1997) which gradually leads to a profitable business.
Even though the value of Human resource is important it is not enough for gaining competitiveness. Because the same characteristics of workforce can be seen in different competitors, Rareness Human resource acquired when an organization able to explore and develop the rare characteristics of their Human resource which can give sustainable competitive advantage. Nordstrom's is well known company in retail industry. Nordstrom's culture helps the employees to become heroes in what they do; the sales people of this company are even ready to change the flat tyres of their customers in the parking area. So this dedicated approach and rare characteristics of workforce helps the company to maintain the highest sales per square foot in US (Barney, Wright, 1997). Another example of this is the '15 minutes' Pizza delivery of Domino's this is quickest delivery time which shows the rareness of workforce.
Another example of this is Starbucks employees who can address their customers by calling their name which makes a personal attachment for the customers towards the company. So once a customer comes to any of the Starbucks outlet he/she will turn into a regular customer.
Value and Rareness of Human resources can give profit only for a period of short run. Because these characteristics of Human resources can be easily imitable so thus it cannot give a sustainable competitive advantage. For avoid this each and every organization has to be nurture and develop the certain characteristics of its workforce that cannot be easily copied by others. Organization can make use of its unique history or culture to create an inimitable human resource practices to achieve sustainable competitiveness Southwest airlines got its title of 'Fun airlines' from their employees by their fun (humour sense, spend more time with guests to entertain them) attitude towards the customers. It makes their customers each journey enjoyable and memorable ones. This shows the inimitability of Southwest airlines workforce (Barney, Wright, 1997).
In order to achieve a sustainable competitive advantage firms Human resources has to be organized and exploit properly. Organization requires to arrange its practices to get the best outcome from its employees which is Valuable, Rare and inimitable to competitors (Barney, Wright, 1997). Ford Motors and General Motors are hiring the assembly workers from same labour market. But the Ford's workforce is more competitive than that of GM because they are allowed to participate in the decision making and utilizing cognitive skills (Templin, 1992).
Managing workforce efficiently can lead to improve and attract retain skilled and qualified employees who are motivated and dedicated towards their work, and motivating the right staff is considered as an act of intelligent. They include major profitability, low volume employee turnover rate, high quality product, low cost of production, and speedier acceptance and implementing the corporate strategy (Schuler, MacMillan, 2006). If a company is taking care of its human resource efficiently it will give sustainable competitive advantage with good profit margin. It is proven that mostly all cost advantages come from company's productive, motivated and innovated and skilled employees. Workforce's valuable, rare and inimitable contributions can give sustainable competitive advantage to a firm.
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