Business Strategy

Business Strategy

Distinctive human resources are firms' core competencies.
Peter Cappelli; Anne Crocker-Hefter, Organizational Dynamics

Question pertaining to reading:
Examine each f the pairs of organizations the authors discussed. Determine whether their strategies are based on the Industrial/Orgaization or Resource Based Value assumption. What does this imply about strategic planning in general?

Resource-based view vs. industrial organization (adopted from Wernerfelt, 1984)

Factor Resouce-based view
Industrial organization
Resouce-based view
Competitive Advantage Industry positioning Ownership of unique
resources or capabilies

Determinants Of profitability Industry characteristics
Corporate market position Type, amount and nature
of Corporate resources

Level of Analysis
External Internal

Major Concern Competition Competencies

What the article states:
1. Find a firm with a reputation for excellence in some function, copy its practices, and your company, too, will excel, according to the article seems to be the recipe for success most recommend. However, it is hardly the case that that competition drives out firms that do not adopt the most efficient techniques - and that the intractable companies will ultimately fail?
Rather than following the crowd in human resource practices, firms should think about how being different can help them create the distinctiveness needed to succeed. Thus, we examine the notion of core competencies, which translates into the firms differentiating products and services and, in turn, drive competitiveness. Product differentiation is noted as one of the essential functions of strategic management, and distinctive human resource practices shape the core competencies that determine how firms compete.
2. The argument that there should be a "fit" between human resource practices and business strategies is examined. The point is made that people management practices are the drivers - the genesis...

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