January 10th, 2018
The Increasing Importance of Human Resource Management to Business Success in Current Business Environment
Increasing competitiveness and dynamism in the business environment has necessitated transformation of business practices to keep up with the dynamic environment. For instance, globalization and technological advancements have eliminated some of the factors that served as sources of competitive advantage for entities. One of the perspectives that has come up in recent years as a way to manage such dynamism and increased competitiveness is resource-based view, which focuses on an entity’s internal environment as resources and capabilities (Andersen 2010). Accordingly, to remain competitive, an entity is necessitated to embark on continuous development of such resources, to avoid them becoming obsolete (Andersen 2010). With such development, it is suggested that subsequent development of a product or service that can compete effectively with those of competitors would not be a hard feat to achieve (Andersen 2010).
A perspective developed in respect to such a resource-based approach, has been that of strategic human resource management (SHRM). According to this perspective, human resource practices that are aligned to the business strategy and continually developed to meet changing business environment, provide the entity with a source of competitive advantage that competitors find hard to imitate (Kim & Gray 2005). In this respect, in this paper, I critically assess the assertion that the importance of HRM function has been enhanced following increased competition and with the current economic environment. Firstly, I will review the function of the HR department from an historical perspective transitioning into current clamour for the incorporation of HR into business strategy. Secondly, I will address the issues suggested to necessitate such incorporation, specifically, those relating to current economic climate and enhanced competition. Thirdly, I will assess the link between HR and business performance, and how HR can add value to a business, highlighting the importance of HRM policies. Lastly, I will revisit the core points discussed throughout the paper in the conclusion. Go to part 2 here.