Sustainable competitive advantage

Sustainable competitive advantage 1. Introduction to the Topic: Over the years, the understanding of how a firm can attain and maintain sustainable competitive advantage is major area of research in the field of management. Sustainable competitive advantage is an edge a firm enjoy over its competitors by offering superior values to customer that result in superior profit and growth. Building on these underlined assumption this dissertation the link between a firms success and the competitive advantage. The paper examine the role human resource strategies that leads an organization to enjoy competitive advantage that are sustainable, non-imitable, substantial and that adds superior values to the organization by providing opportunities to the organization to reap the benefits of super profit and market growth. An organisation is regarded as a unified organism that constantly learns and adopts to find better ways of doing its business processes in response to the dynamic environment it faces. Human resource management is a critical area of concern in today dynamic business environment, due to increased competition. It now more difficult to hire and retain highly qualified associates as the growth and profitability of the organization depends on how well the organization managed it human resources. According to Newman and Hodgetts, â€Å"human resource management is the process by which organization ensure the effective use of their associates in the pursuit of both organizational and individual goals† (Newman Hodgetts, 2005). In this paper efforts are made to analyze the varied human resource functions that an organization perform in pursuits of its goals and missions, and how these efforts might lead an organization to competitive advantage, as the success or failure of the organi sation depends on how best the organisation performs its functions as compared to a competitor (Competitive Advantage). In fact the long-term survival of the organisation depends on how best the HR department of the organisation performs its various functions that leads towards creating a competitive advantage over its rivals and how it sustains it. 2. Literature Review: Coff argues that human capital is the key to sustainable advantage because of causal ambiguity and systematic information creating them incomparable (Coff, 1994). According to Boselie and Paauwe (2004), top performing firms has HR professionals who have the main input in the strategic planning. These professionals make possible the change management, shape and manage organisation wide culture, contribute to strategic level decisions, and create market led connectivity of the business process (Boselie Paauwe, 2004). Researchers in the field of strategic HR have emphasised that human resource practices result in superior organisational performance and create sources for continued competitive advantages (Wright, Dunford, Snell, 2001). As the world has become a global village, competing in todays confused environment have posed additional challenges to the HR function in creating the anticipated value to shape and uphold competitive advantages. For effective functioning, HR executives must possess the necessary competencies. That is the possession of HR knowhow which comes from knowing the concepts, communication skills, judgment, research, and practices ofHR (Brockbank, Ulrich, Beatty, 1999) Du Plessis states that HR can play a vital role in the future of an organisation by enacting organisational change to get competitive advantage (Plessis, 2007). He is also of the opinion that resistance to change can serve as an obstacle for successful execution of planned changes, as it encompasses behaviours that may slow down or even terminate a planned organisational change. If the organisation uses an appropriate HR strategy during the period of change, an employee may feel that he is being treated and looked after by the organisation. If such sort of feelings arouse in employees it can change the employees attitude and their resistance towards the planned change. Peters and Waterman in their book â€Å"In search of excellence† says that all the excellent organisations that they have surveyed made efficient use of their HR, by employing sound HR strategies (Peter Waterman, 1982). According to Losey technology is advancing so rapidly that it is forcing organisations to c hange their strategies, in respect to product mix and the way HR is organized and delivered (Losey, 2005). 3. Overview of the Organization: Crossroads Inc. has been formed as a result of merger between Tradco and Hardpharm is a pharmaceutical company that is dedicated to the productions and marketing of quality pharmaceutical products. The merger that we have just is the largest transformation in the history of the organization and provides us with a platform, in terms of capital and other resources, to compete at a higher level. Crossroads Inc. is a medium-sized organisation, with 1,500 workers employed at three sites: one in Scotland, County Durham, and Kent. Crossroads Inc. develops and produces medicines for the global market in competition with industry giants such as Bosch, Pfizer, Lilly, gsk etc. 4. HR Planning Forecasting Planning forecasting in the modern age is a matter of life death for organizations of modern age. The same is true for pharmaceuticals industry. Each every consecutive day new research product is developed, deployed for trails testing. All these effort require skilful, trained and experienced workforce. It is for this reason organization plan and forecast for human resource so as to remain competitive. The HR manager of Crossroads Inc should use the planning forecasting procedures to cope with human resource requirement. The propose HR planning process for Crossroads Inco has been depicted Crossroad Inc can use the process for both short-term as well as long-term basis. Crossroad Inc should continuously monitor the availability of skill workers. For this purpose Crossroad Inc should scan internal environment to find out suitable employee and promote to fill the vacancy, if there are no such employees available, then HR Department should scan external environment for skilled and experienced employees. Once the internal environment along with external environment is scanned, a draft forecast should be prepared. 5. Recruitment and Selection: Once the forecast is developed and approved by the top management, the HR department of Crossroads Inc should start recruitment and selection process to fill the vacancies. Like all good plans, HR Manager of Crossroad Inc should builds employment plans on premises basic assumptions for employment requirement by forecasting three things: The supply of inside candidates; Personnel needs; The supply of outside candidates according to their company requirements. The HR department should first check that either there is any job placement or company is expanding their business so that new jobs are open for new candidates. These issues should be tackled by the HR Manger. If staff is required then the company should try to find them inside the company by upgrading their employees if it not possible then new jobs are created and fill by the outside market. The overall aims of the recruitment and selection process in Crossroad Inc should be to obtain, at minimum cost, the number and quality of employees required to satisfy the needs of staff requirement. The three stages of recruitment and selection in Crossroad Inc should be: Defining requirements: Preparing job descriptions and specifications; deciding terms and conditions of employment; Attracting candidates: Reviewing and evaluating alternative sources of applicants, inside and outside the company, advertising; Selecting candidates: Sifting applications, interviewing, testing, assessing candidates, offering employment, obtaining references; preparing contracts of employment. 6. Training and Development: Training is one of the most important tool any organization using to cope with the rapid change in technology and way of doing business. According to Newman and Hodgetts, â€Å"training is the process of providing associates with specific skills or helping them correct deficiencies in their current performance (Newman Hodgets, 2005). HR department of Crossroads Inc should be responsible for the training and development of existing as well as new coming employees. When a new employee is selected, an orientation of the new employees should be conducted Orientation is basically a one to two hour activity in which the new employees should be informed about the organizational structure, term conditions of employment, the duties of incumbent, the ethical behavioural requirement for the new employee and the so. New or existing employees are trained in HR department via three methods. Employees Handbook Training by concerned department Manager. Training visits to other pharmaceuticals. Tradco tends to largely focus on the needs of the technicians and scientists, and give them right to make decision of employ. However the training programs that HARDPHARM has traditionally used have some problems. In order to reduce the cost, employers are trying to hire labour in with low wage, and then what they have got is low quality staff. Ignoring the development of technology is the main problem. All these people will get together in the future, for the sake of the new company. The period of training should not be specified and should depend on individual circumstances. In some cases it should cover a week and sometimes it should be extended up to 6 months. The process of training should be initiated by first going through the process of training need assessments. The training needs assessment find out the deficiency in the current level of skills the employee possessed and the skills that a job required. For filling up the gape an organization designed its training and development programmes. A planning process is being implemented in which Crossroads Inc can ensure the proper training, awareness and competence development of people. The objective is to provide people with knowledge and skill, which, together with experience, improve their competence and capabilities. Crossroads should establish and maintains a procedure to ensure proper capabilities of personnel working. This includes: Identification of competency needs for personnel performing activities affecting quality. Providing training or take other actions to address identified needs. Evaluating effectiveness of the training provided. Ensuring that employees are aware of the relevance and importance of their activities and how they contribute to the achievement of the quality objectives. Maintaining appropriate records of education, experience, training and qualification. Training needs for Crossroads Inc should be based on the following different methods: Performance Analysis: What tasks the analyst is currently performing? how can the current performance be improved? Is training the best method? Job Task Analysis: What is the best way to do analysis? How can analysis process are broken down into small steps? According to Newman and Hodgetts development is the process of â€Å"providing associates with the experience and attitudes needed for success in the future† (Newman Hodgetts, 2005). The management of Crossroads Inc should constantly monitor the latest development in the field of pharmaceuticals and should design its various development programs accordingly. By this was the HR department will not only transmit the needed knowledge and skills to various employees but will also pave the way for the change management process. Training and development should serve as an investment in the form of human capital for Crossroads Inc. The process will not only facilitate the goal achievement but will also serves as potential source of loyalty across the organization. The new company should understand that the training and development program should be designed by utilizing the latest available methods that has proved its efficiency in the pharmaceutical firm. 7. The Pay and Reward: The pay and reward system of Tradco that was a family-owned business by MacHutton, was largely focus to meet the needs of staff, so the workforce regard as main stakeholders in the company, and to be an important role in the company as well. However, HaedPharm is a company that established as a facility of a group of venture capitalists. This firm put more attention to its various stakeholders including employee and management. They are trying to get maximum return and lowest cost. It is clear that these two organizations are stand on the different side of the point of view of benefit of staff. In the interest of the new company, all of these two should change their pay and reward system. The Crossroads Inc should use the proper remuneration system that is fair to both the company and employee. The organization should variety of remuneration system including monthly salaries, straight commission, combination of salary and commission coupled with monthly, quarterly and annual bonuses. When the organization will have a fair remuneration system it will ensure the proper motivation across the organization and the organization will be able to achieve its goals and objectives effectively and efficiently. 8. Union Relation: Unions serve important purpose by working as a link between the labour and the organization. Generally, trade unions are recognized for collective bargaining purpose, and communication between employer and employee. In Tradco, unions playing a good role between employer and employee, more than 50% workers are members of labour union. In the past 15 years, only one sympathy walk-out happened. On the contrary, unions in HardPharm are not as popular as Tradco. A very small number of employees are members of the unions as the company discourage unionization. After merger the unions will serve an important role in the new firm. Like what happens in former companies, if managers want corporation to manage the affairs of the company in appropriate manner, they have to adjust the relationship between unions and staff. The top management of the newly merged company must admit that union is a necessary and vital component of the organization process, they should talk with unions. If the organization failed to admire the role and relationship between the organization and union, the hostile relationship will serve as impediment for the company development. Contemporary, if there are no unions, or company does not recognize unions, then leaders would not know the needs of staff, they could not adjust the management detail. It will affect the development of company in the long run and the company will not be able to achieve its goals and objectives effectively and efficiently. 9. Career Management: Crossroads Inc should consistently monitor its employees and should proper strategic plan through which it increases the skill level of its employees. To achieve this objectives the company should arrange workshops, seminars, visit of key employees to other pharmaceutical industries training courses which will focus on injecting skills and professionalism into employees. These courses will help Crossroads Inc to improve the skills of their employees so that not only company can get maximum out of them but also employees can enrich their nature of job and life standard as well. Along with these training programs, Crossroads Inc should make their employees fully aware of their job requirements by mean of job descriptions so that they can develop a clear picture about at what are necessary requirement of their job and want are not. Indirectly the promotions, transfer to other department also plays a key role in employees job satisfaction. 10. Performance Appraisal: Employees job performance is an important issue for all employers. A performance management system consists of the processes used to identify, encourage, measure, evaluate, improve, and reward employee performance at work. Every functional department of Crossroads Inc should be responsible for carrying out and preparing its performance appraisal report. However these reports must be submitted to HR Department. The performance appraisal system in the company will help the organization to better focus its efforts on the attainment of the organizational goals and objectives by giving timely feedback regarding an individual employee that how best he is going to achieve his objectives. This will also help him to rectify his shortcoming. Moreover the use of appropriate performance appraisal system that is just, equitable and timely serve as a motivating factors and one of the vital component of the successful organization. 11. Conclusion: The Crossroad Inc is taking turning point towards a bright future in which a lot of opportunities might be available for the organization; however the organization still faces a lot of challenges. Crossroads Inc should focus on finding incremental change in its organizing process. The incremental change is change that the Crossroad Inc will undergo through in the natural evolution process. For Crossroad Inc the incremental change process may take the form of introducing new HR system and process (as proposed above) that will augment the organization performance further and help the organization to get competitive advantage over its competitors. But in order to experience this incremental change the organization must be able to constantly monitor and evaluate the environmental forces and take actions in response to change that will provide opportunities to the organization and minimizes its threats. The organization must possessed the needed intellectual capital (Human Resources), who should be able adapt the organization policies according to the demand of the environment. These manager and leaders are known as change agent. According to Robbins Judge, â€Å"change agents are individuals and groups who lead and support the change process by taking responsibility for changing the existing behavior patterns of other people or the social system (Robbins Judge, 2005)†. Furthermore Crossroad Inc should established fair paying and reward system that best on justice and efforts. The organization should also facilitate the creation and execution the labour union approach that will serve as joining link between the organization and its workers. Moreover the Crossroad Inc should invest in its corporate cultures that are going to be form through the merger of two opposite culture. The organization should see this as opportunity to form a strong culture by initiating the proper change. Though training and development could be in progress in short term, the purpose is difficult to achieve at once. Therefore Crossroad Inc should adapt the medium or long-term training and development program for various functional department of the organization. Crossroad Inc can create a positive impact due to the fact that formation of the organization is the result of merger between two different companies who have two different management styles, corporate culture, traditions and workforce management system. Hence, the HR department assume a leading role in shaping the values of employees by creating an organization-wide culture that is based on shared values that will help the organization to realize its mission in the most coherent way. Works Cited Boselie, P., Paauwe, J. (2004). Human Resource Function Competencies in European Companies. Journal of Management , 120-122. Brockbank, W., Ulrich, D., Beatty, R. (1999). 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