Achieving competitive advantage through human resource strategy: Towards a theory of industry dynamics

Abstract This article uses the resource-based view of the firm, along with other theoretical sources, to outline the basic elements of a theory of ‘human resource advantage’. It asks the question: how can firms build and defend competitive superiority through HR strategy across the phases of the typical industry life cycle? Human resources capable of yielding sustained advantage are those which meet tests of (1) rare value and (2) relative immobility and superior appropriability. While we can identify certain broad principles associated with human resource advantage, cycles of establishment, maturity and renewal in industries add important complexities. The article identifies situations in which we can be reasonably confident we understand the requirements for HR advantage and others where much more research is needed.

[1]  R. Grant.  The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation , 1991 .

[2]  Cynthia A. Montgomery,et al.  Resource-Based and Evolutionary Theories of the Firm: Towards A Synthesis , 2012 .

[3]  Donald A. Schön,et al.  Organizational Learning: A Theory Of Action Perspective , 1978 .

[4]  H. Simon,et al.  Models of Man. , 1957 .

[5]  Charles Baden-Fuller,et al.  Strategic Innovation, Corporate Entrepreneurship and Matching Outside-in to Inside-out Approaches to Strategy Research1 , 1995 .

[6]  M. Porter.  Competitive Advantage: Creating and Sustaining Superior Performance , 1985 .

[7]  B. Gerhart,et al.  The Impact of Human Resource Management on Organizational Performance: Progress and Prospects , 1996 .

[8]  D. Hambrick.  Fragmentation and the other Problems CEOs Have with Their Top Management Teams , 1995 .

[9]  Glenn R. Carroll,et al.  Organizations in industry : strategy, structure, and selection , 1995 .

[10]  J. Schumpeter,et al.  Capitalism, Socialism and Democracy , 1943 .

[11]  Danny Miller,et al.  Momentum and Revolution in Organizational Adaptation , 1980 .

[12]  Casey Ichniowski,et al.  The Effects of Human Resource Management Practices on Productivity , 1995 .

[13]  C. Baden‐Fuller,et al.  Rejuvenating the Mature Business , 1996 .

[14]  R. Pascale.  Managing on the Edge , 1990 .

[15]  K. Eisenhardt,et al.  Organizational Growth: Linking Founding Team, Strategy, Environment, and Growth among U.S. Semiconductor Ventures, 1978-1988. , 1990 .

[16]  Warren Boeker,et al.  Strategic Change: The Effects Of Founding And History , 1989 .

[17]  Dennis C. Mueller,et al.  First-mover advantages and path dependence , 1997 .

[18]  R. Reed,et al.  Causal Ambiguity, Barriers to Imitation, and Sustainable Competitive Advantage , 1990 .

[19]  J. S. Adams,et al.  Inequity In Social Exchange , 1965 .

[20]  Birgit Benkhoff.  A test of the HRM model: good for employers and employees , 1997 .

[21]  M. C. Jensen,et al.  Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit , 1976 .

[22]  Donald C. Hambrick,et al.  The Top Management Team: Key to Strategic Success , 1987 .

[23]  Brian G. M. Main.  The New Economics of Personnel , 1990 .

[24]  Frank Mueller,et al.  HUMAN RESOURCES AS STRATEGIC ASSETS: AN EVOLUTIONARY RESOURCE‐BASED THEORY* , 1996 .

[25]  Karen Cartier.  The Transaction Costs and Benefits of the Incomplete Contract of Employment , 1994 .

[26]  R. Hyman.  Strategy or Structure? Capital, Labour and Control , 1987 .

[27]  P. Barr,et al.  Cognitive change, strategic action, and organizational renewal , 1992 .

[28]  E. Schoenberger.  The cultural crisis of the firm , 1997 .

[29]  James C. Collins,et al.  Built to Last: Successful Habits of Visionary Companies , 1994 .

[30]  Ken Kamoche,et al.  Strategic human resource management within a resource-capability view of the firm , 1996 .

[31]  Abagail McWilliams,et al.  Human resources and sustained competitive advantage: a resource-based perspective , 1994 .

[32]  P. Boxall.  Building the Theory of Comparative Hrm , 1995 .

[33]  Paul Osterman,et al.  Choice of Employment Systems in Internal Labor Markets , 1987 .

[34]  Margaret A. Peteraf.  The cornerstones of competitive advantage: A resource‐based view , 1993 .

[35]  B. Wernerfelt,et al.  A Resource-Based View of the Firm , 1984 .

[36]  J. Barney,et al.  On becoming a strategic partner: The role of human resources in gaining competitive advantage , 1998 .

[37]  Rita Gunther McGrath,et al.  IMPROVING LABOR PRODUCTIVITY: HUMAN RESOURCE MANAGEMENT POLICIES DO MATTER , 1996 .

[38]  C. Gersick.  REVOLUTIONARY CHANGE THEORIES: A MULTILEVEL EXPLORATION OF THE PUNCTUATED EQUILIBRIUM PARADIGM , 1991 .

[39]  P. Osterman.  How Common is Workplace Transformation and Who Adopts it? , 1994 .

[40]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[41]  T. Schopf.  Models in Paleobiology , 1972 .

[42]  John Paul Macduffie.  Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry , 1995 .

[43]  John Freeman,et al.  Business Strategy from the Population Level , 1995 .

[44]  Robert Lacey,et al.  Ford; The Men and the Machine , 1986 .

[45]  N. Lichtenstein,et al.  The Five Dollar Day: Labour Management and Social Control in the Ford Motor Company, 1908-1921 , 1982 .

[46]  John Freeman,et al.  The Ecological Analysis of Business Strategy , 1984 .

[47]  Philip Stiles,et al.  Human resource management on the line , 1997 .

[48]  P. Boxall.  The Strategic Hrm Debate and the Resource‐Based View of the Firm , 1996 .

[49]  Augustine A. Lado,et al.  Human Resource Systems and Sustained Competitive Advantage: A Competency-Based Perspective , 1994 .

[50]  John McMillan.  Games, Strategies, and Managers , 1992 .

[51]  S. Jackson,et al.  Understanding human resource management in the context of organizations and their environments. , 1995, Annual review of psychology.

[52]  R. T. Beaty,et al.  The competitive challenge , 1993 .

[53]  David Knights,et al.  Resistance and Power in Organizations , 1994 .

[54]  E. Morrison,et al.  WHEN EMPLOYEES FEEL BETRAYED: A MODEL OF HOW PSYCHOLOGICAL CONTRACT VIOLATION DEVELOPS , 1997 .

[55]  Denise M. Rousseau,et al.  Psychological contracts in organizations , 1995 .

[56]  Elaine Romanelli,et al.  Convergence and Upheaval: Managing the Unsteady Pace of Organizational Evolution , 1986 .

[57]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[58]  R. Coff.  Human Assets and Management Dilemmas: Coping With Hazards On the Road to Resource-Based Theory , 1997 .