Implementation of Resource-based View by Human Resource Management

This paper discusses the implementation of the Resource-based view (RBV) by Human Resource Management (HRM) and its usefulness in delivering organizational success and sustainable competitive advantage. It also focuses on the challenges faced by organizations in the UK labor market and provides recommendations. The adoption of RBV by HRM, its impact on organizational success, and the role of HR in gaining competitive advantage are explored. Additionally, two major threats facing organizations in the UK labor market, namely increased competition for talent and the impact of technological advancements, are analyzed.

Managing Human Resource
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Introduction
The primary purpose of the paper is to demonstrate the implementation of the Resource-based
view (RBV) by Human Resource Management (HRM). It will discuss the usefulness of RBV
that helps deliver organizational success and sustainable competitive advantage. RBV is
determined to be a tool that is utilized to consider the strategic resources available to a firm. The
value and significance of RBV depend upon strategic managers. With the help of relevant
examples, it will discuss the adoption and use of RBV by HRM.
Moreover, the paper will also focus upon the two major threats that are facing by the
organizations within the UK labor market. Based on these threats it will discuss the challenges
facing by the organizations that put a negative impact on their economic condition and
performance. Therefore, the examples will help identify the threats or challenges and based on
that it will provide appropriate recommendations.
Adoption of Resource-Based View to Human Resource Management
The resource-based view (RBV), is determined to be a managerial framework that is used to
consider the strategic resources with an ability to deliver a competitive advantage to an
organization. To gain a sustainable competitive advantage, these resources are utilized by the
organizations. In an effort to recognize the competencies, capabilities, and assets to deliver
competitive advantage and the organizational success it focuses upon the managerial aspects of
the internal resources of the organizations. However, Human Resource Management (HRM),
adopts RBV as it helps in understanding the situations under which human resources became
strategic assets, organization-specific, and valuable and scarce (Bromiley and Rau, 2016). Most
of the researchers argue that it is the manipulation and range of an organization resources that
includes human resources that provides an organization its source of sustainable competitive
advantage and uniqueness. It also helps in developing and building extraordinary bundles of
technical and human resources that result in sustainable competitive advantage and improved
organizational performance. HRM implements RBV as it helps identify the HR function as a
significant strategic player in enhancing the organization's human resources and sustainable
competitive advantage (Tempest and Coupland, 2017). It also helps in recognizing the
performance and productivity that can be improved by receiving more result from given
resources and similar results from a few resources.

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Moreover, 65% of the organizations adopt RBV as it concentrates on building and defining core
capabilities and competencies that are extraordinary as compared to their competitors. This
clearly states that RBV helps organizations to differentiate itself and stay ahead of their
competitors. It anticipates the future of an organization by competing for opportunity share along
with market share, regenerating strategies as well as focusing on organizational transformation.
RBV possess four dimensions such as values and norms, managerial systems, technical systems
along with knowledge and employee skills (Marler and Boudreau, 2017). All these dimensions
focus upon incentive systems and employee development that becomes a major driving force in
gaining organizational success and sustainable competitive advantage with the help of core
capability. The RBV of HRM has identified that both organizational processes and human capital
may add value to an organization’s success. However, when they mutually support and reinforce
each other, they become more powerful. In assisting organizations in gaining competitive
advantage and ensuring that exceptional value is attained the role of HR lies within the capability
to adopt a mutually and integrated reinforcing HR system (Zhao, 2015). Such HR system makes
sure that talent, when recruited is managed, rewarded and developed to meet their full potential.
Moreover, when the external environment of an organization is less predictable RBV approach
serves more added value. For instance, Block and Quayle (B&Q) in the UK, is determined to be
a good example of how a firm could differentiate themselves partially from their rivals by
focusing upon the added value through skills and knowledge of their HR (Rubery, Keizer and
Grimshaw, 2016). The company employs more talented and mature individuals as both their
peripheral and core workforce is highly engaged in making efficient use of RBV. As a result,
leverage is achieved as the knowledge of HR of B&Q add value to the provided customer service
level that in turn theoretically enhances shareholder value and consumer retention.
It is essential to adopt the RBV approach as in the highly competitive context organizations deals
with increasing product-market competition, changing demands of the customers and
globalization of markets. All these factors put a significant impact on the appropriate
management of the business operations to gain competitive advantage. RBV enables the
organizations to consider human capital or HR as a major source of competitive advantage
instead of the cost that allows organizations to invest a considerable amount of asset to generate
superior performance (Krishnan and Scullion, 2017). As per the researchers the organization’s
resources are considered to be the stocks of available factors that are controlled or owned by the

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form. For example, the resources of Unilever are transformed into final services or products by
making use of a huge range of bonding mechanism (Stiglitz, 2017). The products or services are
also converted by using other assets of the organization like trust between labor and
management, incentive systems, management information systems, and technology. This clearly
states that the organization possesses the ability to make efficient use of organizational processes
such as intangible and tangible along with information-based processes (Bénabou and Tirole,
2016). Therefore, adoption of RBV helps HR of Unilever to exchange, carry and develop
information within the organization’s human capital.
However, the organizations that possess various capabilities and resources are not sufficient to
gain success. The emergence of competitive advantage from distinctive capabilities or resources
that are controlled by the firm especially does well as compared to the rivals (Makridakis, 2017).
RBV theory suggests that the traditional sources of competitive advantage like economies of
scale, technology, and natural resources generate value as compared to a complex social
structure like an employment system. Thus, accurately developed HR systems could be a major
source to gain a sustainable competitive advantage for most of the organizations (Bondarouk,
Parry and Furtmueller, 2017). This particular RBV model also states that the organizations that
know how to develop an HR system that integrates HR practices and policies to maintain and
create the strategic human capital may receive a sustainable competitive advantage. It also states
that the organizations that develop attractive HR programs an appropriate selection system such
as, various development opportunities and greater than compensation packages can maintain,
select and attract the highest quality pool of resources. Therefore, with the adoption of RBV, the
HR system could be developed accurately that is embedded within the operating system of a firm
that enhances an organization's capabilities. For instance, HRM of Tesco in the UK implements
RBV that helps in developing significant resources that include its customers and suppliers
(Pucciarelli and Kaplan, 2016). This helps Tesco to sustain and gain competitive advantage by
evaluating its major resources that span the boundaries of the organization. Tesco extraordinarily
uses combine resources and makes relation-specific investments to achieve competitive
advantage and create relational rents in comparison with its competitors. Hence, with the help of
this example, it has been observed that RBV advances the significance of the specific resources
of an organization that helps in maintaining other resources and market share of a firm

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(Nadtochy et al., 2016). Such resources involve tacit knowledge, brand reputation, customer
relationships and managerial ability based on a particular manufacturing process.
Furthermore, the RBV model tries to gain sustained competitive advantage by selecting and
establishing resources that are costly, rare and valuable as well as exploitable by a firm. As a
result, this model improves workplace design and ergonomics job to maximize the utilization of
costly, rare and valuable human resources. This helps in enhancing the economic performance of
a firm and increasing its competitive advantage. For example, Toyota Motor Manufacturing
Limited in the UK uses its capabilities and resources to increase its product quality (Acharya,
Pagano and Volpin, 2016). It implemented a lean production system and just-in-time
manufacturing to reduce its setup time. It also adopted lasting efficiency and lowered pricing
model to gain customer loyalty. Therefore, an RBV perspective focuses inwardly on the firm's
resources and capabilities to enhance its competitive advantage (Ko and Ma, 2017).
Analysis of two major threats facing organizations within United Kingdom labor market
The organizations within the United Kingdom labor market faces the threat of increased
competition for talent where half of the UK workforce are dealing with insecure employment
that puts the impact of family and health. As the condition of the labor market in the UK
improves and the requirement of educated and skilled employees increases, firms are facing
difficulties in hiring the best employees (Peters, 2017). However, it becomes essential for HR
professionals to develop a strong employer brand. The strong competition for talent is also
creating a negative impact on benefits and compensation strategies, international relocations and
immigration policies. The UK labor market experiences a decline in the workforce that not only
creates risk for the businesses but also for the economy (Renkema, Meijerink and Bondarouk,
2017). On the other hand, the UK labor market is already experiencing a lack of accountancy,
seasonal agriculture, care work, IT and engineering. Most of the organizations in the UK have
reported difficulty in the retention of old staff and recruiting new staff that puts an impact on
HRM of an organization. Due to such intense competition, the organizations face difficulty in
hiring employees that leads to an increased rate of inflation and economic uncertainty. It has
been observed that low employment and strong labor demand had a 95% fall in European Union
nationals who had joined the UK workforce between 2016 and 2018 (Grote and Guest, 2017).
This created significant pressure on the recruitment policies of HRM. It has been noted that 34%

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of organizations in the UK experienced greater difficulty in retaining staff, whereas 44% faced
challenges in recruitment. For example, Vodafone in the UK experienced an increased restraint
in potential applicants due to a referendum vote. The organization faced difficulty in recruiting
technical or skilled and senior employees along with recruiting operational employees. As a
result, for high-skilled vacancies, the number of candidates fell from 8 to 6, for medium-skilled
vacancies from 19 to 10 and low-skilled vacancies from 24 to 20 in 2018 (Coad, Jack and
Kholeif, 2015). Thus, it negatively affects the work tasks and skills of HRM that in turn affects
organizational activities.
Another significant threat facing by the organizations within the UK labor market is the new
development in technology. The innovation of Artificial Intelligence (AI) and more capable
machines puts a negative impact on the workers, especially on the low-skilled workers. This
creates the chances of reducing job opportunities for low middle and low-skilled workers in the
UK labor market. However, the development of automation such as AI-powered robots may
displace highly skilled and educated professionals such as programmers, architects and many
more. For example, in 2017, Amazon has introduced more than 50,000 new robots. However,
20% of its workforce is made up of robots (Gallardo-Gallardo and Thunnissen, 2016). Such
development of technological inventions creates a threat for the HRM and employees within the
organization. As a result, the use of such automation service by Amazon creates job insecurity
for the employees. The introduction of new robots by Amazon resulted in a reduction in wages
by 1.2% and 1.6%. Therefore, it clearly states the facts that several employees are facing the
threat of losing their jobs even though they are highly educated and skilled. Moreover, new and
innovative tools like, internal social networks, crowdsourcing and talent networks hold the
promise of increased productivity and flexibility. But their usage in helping a virtual workforce
will create various challenges in terms of team building and employee management for the HR
department (Bezzina et al., 2017). It directly puts an impact on HRM policies and practices
within an organization. Moreover, the new technological innovations significantly put an impact
on productivity and demand of the organizational resources that results in a reduction in the
production costs of a product. It creates a negative impact on the wages and employment level.
However, the reactions of rivals to the price reduction, the reaction of demand on price change
and size of the price reduction becomes difficult for HRM to manage the HR functions
effectively. For example, British Petroleum faces the threat of an increase in the cost of energy

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services and supplying energy as well as increased environmental damage due to the use of
energy (David, 2015).
However, all these factors put a negative impact on the economy of an organization as well as
influences the HR decisions and strategies. Technological advances create a long-lasting decline
in occupations that includes routine activities both cognitive and manual (Hanushek et al., 2017).
As a result, robotization is also resulting in a new aspect of labor alteration. It has been estimated
that approximately 9% of jobs may be lost due to automated processes that create an impact on
HRM. For example, 12% of UK jobs are likely to be affected due to such technological
inventions where it becomes difficult to manage the HR functions (Gil-Garcia, Zhang and Puron-
Cid, 2016). The innovation of new technologies changes the way HR departments analyze
employee performance, store files, and contract employees. Such innovations create various
challenges for HR in order to manage the organizational activities. For example, in AVIVA
Company in the UK, security cameras are installed for monitoring the performance of the
employees. The HR makes use of data analysis and collection to detect if someone is drinking on
the job or to find the facts behind a harassment charge (Wang et al., 2016). However, while
doing so, the employees feel that their privacy is shrinking as HR constantly monitors the
activities of the employees. Based on this context it can be said that it becomes difficult for HR
to monitor the employee activities along with understanding the needs of the employees.
Therefore, this difference between organizational and employees need creates a challenging
situation for HR within an organization.
Recommendations
It is strongly recommended that in order to gain a competitive advantage with the adoption of
RBV, the managers within the organizations must make efficient use of HR practices like
compensation system, training, appraisal and development of selection. This could be done in
order to retain, recognize and attract highly talented employees. The organizations may also
develop socialization systems, training programs, communications systems, and reward systems
to motivate the employees. It is also recommended that with the adoption of RBV the HR
systems may achieve competitive sustainability by enhancing the development of other
capabilities of a firm. It helps in creating complex social relationships by the organization's
culture and history that provides appropriate knowledge related to the organization. The

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organizations must possess relevant HR systems that help to facilitate the exploitation and
development of output-based, transformational, input-based and managerial capabilities. It
becomes significant for organizations to receive explicit and tacit knowledge regarding the firm.
On the other hand, the organizations must analyze their internal environment to increase their
value added to the consumer chain. In order to differentiate itself from its competitors, the firms
must adopt lowered pricing model and lean production system that will help retain consumer
loyalty by offering high-quality products. Therefore, in order to gain competitive advantage, the
organizations must focus upon its activities to create, manufacture, market and supply its
products within the market.
It is highly recommended that the UK must increase its tax base by appointing more employees
to overcome the retiring and aging workers to make sure that they possess enough taxes. In order
to overcome the issue of increased competition for talent, the UK government must negotiate an
immigration policy for British organizations. It is also recommended that the retailers must
communicate with the employees and begin with a staff audit to understand the concerns and
views regarding Brexit. The smart HR professionals must focus upon the cultures that integrate
the fundamental of a great place to work that includes security measures, strong employee safety,
and corporate social responsibility. The business leaders and the policymakers must work
together to resolve the issues that generate from the development of technological innovations.
HR professionals must use in-depth analysis and metrics to make relevant decisions regarding
the creation of new technologies within the organization. It is significant for the UK labor market
to understand the embrace of technological innovation that puts an impact on educational
attainment level and occupational groups. However, the introduction of new policies and
institutions may enhance technologies for the UK labor market. Government plays a significant
role in enhancing the use and development of new technologies. Thus, the government must
ensure that displaced employees could find high-quality and new jobs that help in managing
human resources appropriately.
Conclusion
The paper provided an understanding of the various benefits of adopting a resource-based view
to human resource management that helps in delivering organizational success and competitive
advantage along with relevant examples. It has been observed that the adoption of RBV helps

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organizations to make efficient use of the capabilities and resources that supports HRM to
manage the organizational activities. It helps the organizations to differentiate themselves in
order to compete with their competitors within the market. The model or theory states that the
efficient and effective use of strategic resources results in a competitive advantage for a firm.
On the other hand, the paper also provided an analysis of the two significant threats that are
facing by organizations that operate within the UK labor market. Moreover, it can be seen that
the organizations within the UK are facing threats due to increased competition of talents and
new development of technology. These threats facing by the organizations put a negative impact
on the productivity and performance of the organization along with its employees. As a result,
these factors create various challenges for the HRM to manage the HR functions effectively.
Furthermore, the paper also provided various recommendations on how to manage HR functions
within an organization.

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