Trace The Development Of Strategic Human Resource Management From The Resource Based View Of The Firm

Today, human resources are seen as "the available talents and energies of people who are available to an organization as potential contributors to the creation and realization of the organization's mission, vision, strategy and goals" (Jackson and Schuler, 2000, p. 37).There exist two models that seek to describe what strategy is and how an organization should develop such strategy. The first model known as the Industrial Organization (I/O) model is based on the assumption that firms competing in the same industries are homogenous and emphasizes the external environment as the basis for organizational decision making. The second model, called the Resource Based View contrasts the I/O model by assuming that individual firms are unique and composed of distinct bundle of resources. According to the resource based perspective, firms attempt to develop and exploit distinctive competencies based on the physical, organizational and human capital resources under their control. Eventually, these distinctive competencies may lead to sustainable competitive advantages and superior performance. The emphasis on human capital resources leads to understanding the role of strategic human resource management in gaining competitive advantage.

Wright and McMahan defined Strategic Human Resource Management (SHRM) as "the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals" (1992:298). This field moves away from traditional ‘personnel management' and heads toward the view that employees play an integral role in the development of an organization's competitive advantage and as such carefully planned HR initiatives should be implemented to increase their value to the firm. SHRM conceptualized with Walker's (1978) article, which highlighted the need for linkage between strategic planning and human resource planning. However, it originated with Devanna, Fombrum and Tichy's (1984) article which analyzed in great detail the link between business strategy and HR. The field of SHRM has enjoyed a remarkable ascendancy during the past two decades as both an academic literature and focus of management practice.

While RBV may not have contributed directly to this evolution of SHRM, it did play a major role in its development. The development of SHRM only initiated when HR researchers realized that RBV provided a compelling explanation as to why HR practices led to competitive advantage. RBV highlights the necessity of internal factors and resources as sources of competitive advantage and this conjecture catapulted the great importance of employees (human resource) to the forefront of HR theory. RBV has placed ‘people' on the HR map thereby justifying the concepts laid out by SHRM.