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Rbv Notes

Economics and Management Notes > Employment Relations Notes

This is an extract of our Rbv document, which we sell as part of our Employment Relations Notes collection written by the top tier of Oxford University students.

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RBV RBV outline
? Barney: Internal attributes must be a source of CA because some companies have gained CA despite existing in unattractive, high threat, low opportunity environments. o Koch and McGrath: superior performance for those firms able to create more efficient/attractive outputs due to the way they use their resources, hence firms with superior HR utilization are likely to experience superior performance.
? Under the VRIO framework presented by Barney a firm can hope to achieve a competitive advantage by securing resources which create value, and are rare, inimitable and able to be organized to be exploited.
? Such skills cannot be easily imitated, due to isolating mechanisms (Lippman and Rumelt) such as causal ambiguity, social complexity and path dependency.
? Barney and Wright: apply this to human resources, implies that general skills and knowledge add value to all competitors, and assuming competitive labour markets, these will therefore lead to competitive parity. However firm specific skills, the use of teams rather than individuals, the constant development of HR practices and their integration into the system can lead to CA.
? HR policies can deliver these mechanisms so can be extremely valuable (Boxall). For example routines - repetitive patterns of behaviour, processes such as combining and allocating resources in a firm. Build upon one another in a path dependent way (Koch and McGrath).
? Eg teams are much harder to imitate than individuals, who can be lured away.
? Tautological?
Implications for managers (dynamic capabilities)
? HR planning - analyzing an org's HR needs under changing conditions and developing the activities necessary to satisfy these needs ? firms using this more likely to know what specific characteristics they are looking for in applicants, so can improve quality of hiring decisions (Koch and McGrath). Should also evaluate hiring practices. Positive link with labour productivity.
? Aim to reduce ex ante uncertainty about future potential of recruits, by searching at the extensive margin, and increasing information used to compare individuals. Found positive link with labour productivity. (Koch and McGrath).
? Employ company sponsored training to increase firm specificity of employee skills, use training and internal

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