Analysis of Resource-Based View in HRM and UK Labour Market Challenges

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[HUMAN RESOURCE MANAGEMENT]
HRM AS A STRATEGIC ACTIVITY

INTRODUCTION
Human resource management involves the development of human capital and
administers a program for the purpose of increasing organizational effectiveness. The
HRM activities involve overseeing all the functions related to the management of human
capital. The purpose of the report is to explain the resource-based view that enables
human resource management in achieving the competitive advantages at the market
place. The report also analyses various threats faced by the external labour market in
the UK and provide evidence with respect to business operations. Moreover, it reflects
the good practices of HRM so as to achieve sustainable performance (Carberry and
Cross, 2015).

TASK 1 EXPLAIN HOW THE ‘RESOURCE-BASED VIEW' CAN BE ADAPTED
TO HUMAN RESOURCE MANAGEMENT TO HELP DELIVER COMPETITIVE
ADVANTAGE AND ORGANIZATIONAL SUCCESS
A resource-based view provides a managerial framework that helps in determining the
strategic framework and delivering a competitive advantage to the firm. A resource-based
view provides a strategy to analyze the firm's specific perspective and determine the
chances of success or failure at the market place (Mankin, 2009). It focuses on developing
the resources and capabilities so as to achieve a sustainable competitive advantage.
Human resource management can use resource-based view (RBV) for the purpose of
analyzing and interpreting the internal resources of the organization and emphasizing on
the development of human resources and their capabilities (Rees and Smith, 2014).
Moreover, it helps the organization to formulate the strategy that can help in achieving
sustainable competitive advantage at the market place.
Human resources are the most important input that can help the management to carry out
the business activities in a smooth and effective manner. It determines the strategic choices
of the firm after taking into consideration the external business environment. It also allows
the organization to add value to the customer value chain. The RBV strategy strengthens
the internal resources and capabilities so as to achieve competitive advantage by
developing a situation of resource immobility.
The purpose of the RBV strategy is to focus on the concept of difficult to imitate the
perspective and attitude of the firm. The application of this strategy can help an organization
to leverage a unique resource and capabilities (Brewster et al., 2011).
The sustainable performance and competitive advantage at the market place could be
achieved through VRIN criteria. The criteria require human resources must be valuable so
that it can help the firm in exploiting the opportunities in the external market and thereby
helping to reduce the market threats (Banfield and Kay, 2012). The introduction of flexible
work practices can help HR to reduce costs. The second criteria are rare that means the
resources must be unique so as to design a competitive business strategy. Furthermore,
HR executives need to consider the development of rare characteristics of human

resources that can subsequently reduce the labour turnover in the organization (Schein,
2004).
The third criteria for the VRIN framework are Imperfect Imitability. The firm’s resources must
not be feasible so that it can be imitated by the other competitors (Rees and Smith, 2014).
Moreover, the HR department needs to nurture the skills and capabilities of potential human
resources so that the characteristics cannot be imitated by other firms. Resources can give
sustainable advantage only if the competitive firm cannot acquire the resources if they do
not hold them. The last criteria of this framework are non-substitutability that is
competitive firm will not be able to substitute it through alternative resources (Mello, 2015).
According to Gillmore and Williams (2013), the use of integrated HR practices can enable
the organization to capitalize their value, rarity and imitability. This further requires the
alignment of HR practices and functional area in a coordinated manner.
According to Mello (2015), RBV strategy results in a strategic shift in the strategic
development of the HRM process. It helps to understand condition related to scarce,
valuable and organization-specific resources and help the organization to develop the key
strategic asset.
Many of the proponents also argued that resource-based view results in manipulating the
organizational resources as well as human resources. This further leads to an explosion of

interest. Thereby, adopting a resource-based view can help the organization in a unique
bundle of human and technical resources that will further improve organizational
performance.
The human resource manager in the organization can use both tacit and explicit knowledge
so as to enhance the learning faster than competitors and achieve sustainable completive
advantage based on human resource capabilities.
It is essential to adopt the human resource best practices that can help in achieving the
core competencies in the market. Thus, it is required by every organization to build its core
competencies and stay ahead of its competitors in the market.
HRM good practices refer to setting high-performance work standards and employing HR
methods and systems that can create a positive effect on organizational performance. The
incorporation of best HRM practices across the organization will enable the HR manager in
order to establish a velar link between the individual performance and organizational goal.
Matching Model of HRM focuses on the effective application of five major functions of
HRM through using appropriate techniques. The model focuses on incentive, rewards
and performance appraisal of the employees from time to time. This will further enable
the organization to derive best results by efficiently utilizing human resources (Gillmore
and Williams, 2013).
The Universalistic theory of HRM is counted as the best practice of HRM and thereby
setting the high-performance work practices. The theory is based on the assumption
that there exists a linear relationship between the adoption of best practices and
achieving the organizational performance (Handy, 1999).
Contingency theory establishes the relationship between the different HRM variables
and also expresses the performance indicators for the employees. The theory further
provides aims, policies and strategies so as to express the role of the human resource
department. Thereby, contingency theory helps the human resource manager in order
to achieve the best fit between the organization and its wants that includes technology,
structure, and people band other external environment factors (Deal and Kennedy,
1982)

The analytical framework for HRM considers the element like stakeholder interest, the
perspective of the internal and external environment as well as provides visions and
strategies so as to provide a soft view for the analytical framework. Hus, the organization
need to draw effective HRM policies by considering the situational factors with respect to
workforce characteristics, management philosophy, labour market union, technology and
social values.
Figure: Analytical Framework for HRM
Source: Mankin, 2009
The use of Maslow’s Hierarchical need theory helps to satisfy the various needs of
human. The theory is based on satisfying the various needs of individual so as to
motivate them towards achieving organizational goal. Maslow aims to satisfy five basic
levels of needs of Human that further help the organization to fulfil individual motives or
desires.

Figure: Maslow’s Hierarchy Theory
Source: Mello, 2015
As stated by Carberry and Cross (2015) HR manager is responsible to clearly define the
HR policies and strategies that must be properly aligned with the corporate goals of the
organization. This will enable the HR manager to boosts the morale of the employees
and thereby develop a sense of commitment among the employees. It further provides a
competitive and enormous benefit to the company.
Besides this, there are various models of HRM. Hard Model focuses on managing the
workforce by building an effective human resource strategy. This model enables the HR
manager to achieve the business objectives by recruiting talented and skilled
employees in the organization. This is a well-defined auto crated style where employees
are treated just like resources of the business (Carberry and Cross, 2015).
According to Brewster et al (2011), Soft Model of HRM focuses on providing proper
treatment to the employees and is being considered as the primary source of generating
potential revenue. Moreover, this model puts the responsibility on the HR manager so
as to fulfil individual desires and requirements. This is also known as a democratic style

where employees are motivated by paying a competitive pay structure along with
attractive incentives and reward system.
The human resource manager can apply wide theories and models of HRM so as to
critically analyze the alignment of HR strategies with the business objectives. Moreover,
it enables the manager to attract best and potential candidate so as to achieve the
competitive edge in the industry's Also, the use of Maslow theory can help to motivate
the workforce and instil a sense of commitment towards achieving the corporate goal
(Banfield and Kay, 2012).

TASK 2 PROVIDE CRITICAL ASSESSMENT OF TWO MAJOR THREATS
FACED BY ORGANIZATION WITH RESPECT TO UK LABOUR MARKET
The labour market scenario in the UK offers considerable opportunities for labour. On
the top, it can maximize the interest of the migrants and impact the demand for labour.
The UK labour force has put forward the size of the workers to around 33.8million.
However, it has been estimated by ONS that among 66.1 million of the total population,
32.48 totally are at work and 1.38 million are still unemployed by the year 2018.
The labour market, however, has significant inclusion of the supply of labour by
households and meet the objective of the firm (Wright, 2018). The wages that are
offered to the labour presents the prices which can help in supporting the household
with the income and firm with the cost. This is hypothetically free market economy
through which unregulated interactions of the demand and supply can be met. Thus, the
government and trade unions can also direct on the wage level in the mixed economies
(Mello, 2015).
Wage Rates
The demand of the labour market in the UK is highly concern as it is affected by many
factors. Among them, wage rates are considered to higher than the lower demand for
labour. The demand for labour curve slopes downwards (Noe et al., 2017). The demand
of the market is sloping downwards as the curve represents the substitution and income
effects. It can portray that at higher wages, the firms look to substitute capital for labour
and cheaper labour for relatively expensive labour.
At higher stages, the labour costs will rise and their income will fall. This affects the
quantity of the labour and for the reasons may also demand the labour as well as a rise
in wages.

Figure: Labor Wages
Source: Marlow and Dabbish, 2013
Demand for Product
The demand for labour is highly related to the product that labour makes. For example:
In case the consumers want more of a particular product than the goods or services that
are offered will increase the wants of the firms towards making of the product.
Productivity of Labor
The productivity of the labour directs on the output per worker. This can direct on the
skills and level of training and education along with the use of the technologies. The
demand will increase if the workers become more productive (Martin and Sunley, 2011).

Profitability of Firms
The firms can employ more workers if they are earning profits on a regular basis.
However, in contrast to this, profitability is likely to be reduced if the demand for labour
is high.
Substitutes
The substitutes may affect the demand the extent of the labour which is indispensable.
The substitute such as capital machinery becomes cheaper and more expensive in
case of the demand curve for the labour shift to the right or left (Morgan et al., 2013).
For example, The prices of the new technology remarkably meet with the reduction in
the demand of the labour.
In any organization, industrial relations refer to the system in which the employers,
workers and representatives can directly or indirect meet the demand. The government
of the UK interacts to set the ground rules for the organization and maintaining the work
relationships. This has also led to the emergence of the trade union to represent the
workers and to develop the collective labour relations (Wehrmeyer). The areas of
interest are at stake in any labour relations system in private and public organization.
According to CIPD (2018), the company based in the UK and other region has
unrealized the importance of the platforms for lawyers, consultants, programmers and
highly skilled professions. The vulnerable laws and venture capital funds have largely
met with the services.
The fact that explores the factors that the organization should consider while focusing
on the objectives of the company is rewarding expatriates. The expatriates and different
approaches of home versus host based may include the employees working overseas
must be provided with the housing, insurance and travel benefits and tax allowances.
This can help in overcoming the issues around taxation and costs of living. The dilemma
for the business is more complex compared to the demand of the labour. The
companies have long subcontracted work are utilizing the temporary employees which

can affect the deals with outside suppliers and so on. Therefore, it is necessary to turn
around some work platforms through which the digital age twist on long-standing
practices (Wehrmeyer, 2017). A portion of the subcontracting procedures and new
procurement services for shifting towards the labour sources are scaling up and down
with time. This can be managed by hiring new staff whose purview is to manage the
platform workers through invoicing, assigning tasks, apportioning projects,
communication and meeting the variety of the needs at even smaller jobs and cloud-
based services (Stone and stone, 2013). The efficiencies may be gained but are hectic.
This requires a severe concern towards liability and reputation of the organization. This
could include platforms such as for the collection of the taxes. The businesses are
handled efficiently as it comes with the degree of commercial risks and is highly
impediments towards the quality issues. The range of the information that can be sort of
the way can perhaps be difficult to trace the work which is done.
The labour working in the organization needs to be supported by providing them health
and safety at work and promoting the positive social climate and smooth operations
(Wright, 2018). This may direct on productivity and undertaking the safety culture. There
is a number of things that affect the demand in a given market. The single buyer in the
market may affect the common grounds of the labour market. For example, In London
Underground firm in the UK, the labours are employed to meet the underground tube
drivers. They can dominate the employer in the labour market by demanding for the
labour in fewer wages than any other employers. In addition, the tendency for wage
rates in a particular market tends to lower. This is one reason why trade union form and
exert pressure for the higher wages.
The tendency and fluency of the working population in the labour market has a
particular set of regulations such as the working population belongs to the age 16-65 on
an average. This is people who are willing and able to work after their retirement and
school leaving ages, migration and staying on at university for the number of population.
The significant threat from the migration can give rise to the general effect and
increasing the supply of the labour at all wages rates and especially supply at the lower
wages rates. The individual workers can head up with the relative prices of leisure and