The Shrm Can Support The Competitiveness Management Essay

Published Date: 23 Mar 2015

In 20th century, globalization as a set of belief or ideologies becomes infectious. An ideologies -concerned primary with maximization economics that give prominence to the roles of market forces along with the deregulation and privatization would lead the sustain economic growth, it defines as "the process has speeded up dramatically in the last two decade as technological advance make it easier for people for people travel communicate and do business internationality. (Investor word, 2005) The issue generate some change to the world, first, The globalization has is increase the competitive rivalry from the domestic to the global, as over past 25 year the number of MNC(multinational Company) has increase eight fold and the foreign direct investment stock has increase twelve fold. The economic indicator reflects the reshuffling of the total business investment away from domestic to foreign largely through merger and acquisition (Cooke, 2005, p.283). Second, the firm are increasingly seek to leverage the HRM to compete in global market, academic and practitioner alike has increasingly to explore international potential of SHRM (Bratton and Gold, 2007).

Therefore, HR today is playing a lead role along with business function in creating necessary momentum and internal capability. This is arguing by the resources based theory of (Barney, 1991) it hold that "as a firm resources are key determinant of its competitive advantage". The resources must be creating value and competitor difficult to imitate.

(Refer appendix A) A model of related to the resources and competence, it shown that the capability for the competitive advantage requires Core competence and unique resources. It identify resource has 4 type, physical, financial, human resources, and intellectual capital and define the core competence as the ability of management to deploy their resources effectively which cannot be imitate by competitor. (Johnson, Scholes, Whittington, 2008). In order to manage employee for competitive advantage human resource management must possess competence relevant for effective implementing SHRM practise (Barney & Wright, 1988). Is that so human resources policies and practices may be an especially important sources of sustaining the competitive advantage (Jackson & Schuler,1995).

The Emergent SHRM Strategy

From the introduction, we already explain HRM can be identify as a tool to sustain competitive advantage But, how to it sustain the competitiveness, it can be explain by the Strategy Human resource Management, it is a process of linking the human resources function with the strategic objective of the organization in order to improve performance (Bratton and Gold, 2007). Snell et al (1996, p.62) defined it as an outcome as organization design to achieve sustainable competitive advantage through people .The growing interest in SHRM has develop primarily because many of the traditional sources of competitive strategy have been rely on, such as patent, economic of scale, access to capital and market expansion are being eroded by the market based competition (Nolan, 2002). Is that so, the Human resources approaches, how to recruit, sustain, motivate and integrate the staff toward the organization objective and how it adopt change environment has become an important issue on generating the competitive advantage of the company.

It has been argue by the Guest (1997) model of HRM (refer Appendix B), there is a close link between HR strategy and general business strategy, Cost leadership, Focus, Cost reduction, through implement the suitable Human resources practise, which may generate the HRM outcome, Commitment, Quality, And Flexibility to the staff, and he believe after achieving the following policy goal, superior performance outcome will be provided (Bratton & Gold, 2007).

Harvard model (Beer et al,1984) also argue that the Human resources practise must keep in view on the stakeholder and business environment concerns, and achieve the employee Commitment, competence, congruence and cost effectiveness, which may generate the long term consequences result , individual will being afford, organization effectiveness.

There are 2 approaches on developing the human resources strategy.

Best fit approach, which argue that HR strategy will be more proficient when it is integrated properly with its specific organization and environment contract (Boxall & Purcell, 2000), Baird and Meshoulam (1988) argue that the HR practise must fit the organization stage of development they describe as external fit or vertical fit. However, the most significant 'best-fit' model has been one in which external fit is determined by the organization's competitive strategy, rather than its stage of development (Boxall and Purcell, 2000).

Best practise approach, which is based on the belief that is a set of superior human resources practices which, If adopted will lead better organization (). Definitions of best practice are always drawn from research on the four preferred sub functions of undergraduate personnel psychology: selection, training, appraisal and pay (Boxall and Purcell, 2000).

This means the Human resources strategy must involve the whole management structure or process, instead on just HR approaches

Ideal Types Human resource strategy

Bamberger and Meshoulam (2000), integrate the two main models of HR strategy, one is approaches focusing on the strategy's underlying logic of Managerial control, the other one focusing on reward -effort exchange, arguing that neither of the two dichotomous approaches (Control and resources based) provide a framework able to encompass the ebb and flow of the intensity and direction of HR strategy. (refer Appendix C)

The implication of globalization in Tourism industry, and the role of SHRM in Sustainable tourism development.

As globalization also means increase in international division of labour, achieve through the international fragmentation of production as well as the political trend toward a more liberal economic order (Vesna,1999). Many company going to global, as company can gain competitive advantages by focusing on marketing and distributing while turning to foreign producer for manufacturing of their product. (Bourgeois et al ,1999). Tourism industries are not an exception, tourism is a phenomena base on travel pattern of people, technology and cultural value is a major vehicle or operative in effecting globalization process. (E,Wanda,Georges, 2002). But it face some challenge as development of foreign country may affect the local community and local business, Clark and Arbel (1993) cite several challenge such as communication difficulty, little control over regulatory legal, political decision ,political instability, different labour pattern cost ,product supplier ,religion custom work ,ethnic, language ,lack of code and standard. Rapid growths of tourism possess a threat to environment social and international relation. (Klancnik, 2003). Many of the NGO has aware of this issue, so they come out with global tourism development theory, Sustainable tourism development.

UNWTO (2012) define it as tourism that take full account of its current and future economic, social and environment impact, addressing the need of visitor, the industry, the environment and the host community. UNEP and UNWTO (2005) encourage all country make sure their policy and action for its development and management fully embrace the principle of sustainability.

Government also play an important role on it, it has many tools that can use for make a different such as the power to make regulation and offer economic incentive and the resources and institution to promote decimate goal practise. (UNEP & UNWTO, 2005). Furthermore, The sustainable tourism is not just focus on the environment conservation issue, UNEP &UNWTO (2005) define that are three element, economic sustainability, social sustainability, economic sustainability, where social sustainability is focus on respecting human right and equal opportunity recognizes and respecting different cultural and avoiding any form of exploitation. Therefore ,the global policy like human right, fairness in the work environment are become vital issue that organization need to pay attention, in the other hand David Ulrich and Brockbank (2005) argue that the role of employee champion in SHRM, "we has to see the word through employee eye and all of their representation while the same time looking customer, shareholder and manager eye and communicate to employee what is require for through them to be success and creating value. Guest also argue that High employee commitment as a critical HR outcome, concern with the goals of binding employees to the organization and obtaining the behavioural outcome increase effort, cooperation and organization citizenship.(Bratton & Gold, 2007) This shown that sustainable development require coordination of SHRM.

In national level

In 1995, international labour market conference state that tourism industry facing or acute shortage of skilled manpower and there are many obstacles' as far as HR resources in tourism industry (Srivastave, 2008).In Malaysia, Ministry of Tourism and Ministry of Human resource are in charge of sustainable tourism development , where MOTOUR focusing on eco-tourism and ensuring the quality and sustainability product (NEAC, 2011), MOHR in charge of social sustainability where they promote equal opportunity in work place (MOHR, 2001).

Tourism industry is the important contributor to Economy which generating RM 360 Billion in GNI (ETP, 2010). The government face a lot of difficulty when implementing the sustainable tourism development. First, the constrains on man power shortage of training opportunity and inadequate opportunity to learn and the appreciate the specific requirement for tourist (NEAC, 2011). Second ,high turnover, Globally the turnover rate is estimated range 60-300% annually which is far away than the 34.7% annual turn overrate in manufacturing industry.(Walker & Miller, 2010).Third, the replacement of foreign worker and the confusing of Y generation to enter the industry, a survey of MOHR show that the gap for hotel are especially for worker in food and beverage segment front line as well as housekeeping staff are filled with foreign worker, (ETP, 2010) local graduate from Bachelors of degree in hotel management hardly guarantee the attainment of management position ,and some more they need to compete with the local SPM low skill labour, this is different from other country. This situation has demotivate the local employee to enter the industry as Pendergast (2009) state that mentoring model that focus on individual development use the time span of 5 year career planning are one of the suggest strategy in Y generation value and motivator. Fourth low salary, average salary for tourism industry is RM 1084 per month, which is relative lower compare with other large industry in Malaysia (ETP, 2010), in result the local choose to enter the hospitality industry enticed by income prospect in market such as Singapore Macau or Hong Kong. (ETP, 2010).

From the analyst above, I give out a hypothesis, how to enhance the sustainable tourism planning and sustain the competitive advantage of the Tourism and Hospitality industry, it fall back to, how the company or country adopt the Strategy human resource management by implement best human resources practises.

The human resources practises

Recruitment and selection, is a process where the organization attract and selected the right staff to the organization, an effective approach of recruitment and selection can help organization maximize the competitive advantage by choosing the best pool of candidate quickly and cost efficiency. (Kleiman, 2005).

Training and development, in SHRM it is not just a process to develop the skill capability of the staff, but also provide learning environment and the employee own career and future development. There is a growing emphasis on viewing organization as a total learning system and finding its "core competence" which reveal its collective learning (Prahalad & Hamel, 1990).

Performance appraisal, it is a process to measuring and evaluate the performance and contribution of the staff, Tznier, et. al., (2000) suggest that organizations generally use performance appraisal for two broad purposes. First performance appraisals are used in administrative decisions such as promotions, salary allocations, and assignments. And second, performance appraisals are used as a tool for employee development processes such as offering feedback, critiquing performance, and setting goals for improvement. Effective human resources development may enhance the company competitive advantages.

Employee involvement and relations are the complex set of human resources practices and organization culture that seek to secure commitment and compliance with organization goals and standard through effective communications employee involvement, employee right and managerial disciplinary action (Bratton & Gold, 2007).

Reward, it is the process to recognize the contribution of the staff, proper reward strategy may motivate and retain the employee, eventually enhance the performance of the employee to the organization. Motivation is an important HRM function to join and stay talented worker and performance better and do extra to the organization, is one of the most important part for organization to focus on develop and sustaining competitive advantage.(Ahmad & Khalaf, 2009).

How company adopt SHRM by implement human resources practise are shown below.

In tourism Industry

The recruitment and selection play an important role on an organization, especially in the human based tourism and hospitality industry, and it place an important role on SHRM strategy planning as well as the best practise and best fit approaches, as employee replacement cost are high, make finding the right person to an organization imperative form both cultural and financial standpoint (Credit union Management, 2012). Therefore it is important for an organization to take full attention in the need of generate interest to employee apply the job, and the people who apply are capable to fulfilling the role in the employment (Bratton and Gold, 2007), as bad hiring practise can hurt your business (Lawson, 2012). evidence are shown in the tourism industry Malaysia, Small travel agency in Malaysia didn't provide the proper job specification, and fail on applying the best practise on Recruitment and selection policy, from the detail above, their employee are feel threatened by the entry of low qualification foreigner worker, low salary, and no clear career pathway provided, therefore they are unwillingness to enter the local market, in result cause high turn-over, lack of professionalism, High turn-over rate may lead to erosion of the company implicit knowledge base (Coff, 1997) affect company competitive advantage. (Delery & Dotty, 1996). Unlike the Tourism Industry in US, Walt Disney, their SHRM practice pursue Commitment HRM strategy Bamberger and Meshoulam (2000) they not just provide attractive salary, they also care about the employee future career, until they retired .The salary provided is negotiable based on where employee stay, they introduce save for 2 morrow programmes to secure when retired employee, they provide more than 10,000 online reference materials and resources, instructor-led classes, performance support systems, and education reimbursement for job-related degree programs to develop employee future, the reward are based on performance recognize employee contribution, (Disney, 2012), the purpose of organization is to generate a innovated and creative learning culture of the organization which the employee may share the knowledge in meeting (Bratton & Gold, 2007), it may enhance the organization competitive advantage ,as knowledge is intangible and difficult to imitate, Grant (1996) suggested that knowledge is the significant competitive asset that the firms possess . Barney (1991) also argue that it hold that "as a firm resources are key determinant of its competitive advantage", and the resources must be creating value and competitor difficult to imitate.

In Airlines,

Multinational company Air-Asia pursue commitment HR strategy with locus control by outcome of the staff and focus on the internal development of the staff(Bamberger & Meshoulam, 2000) to support its "no frills" strategy ,although it average salary is low for the reason of cost redundancy , but the staff may be retained , whereby it conduct pilot training programme for the Cabin crew to train as the first class officer (AirAsia, 2006), it set up an one stop Airasia academy to train the multitask staff(AirAsia, 2006), it promote knowledge environment , and everyone is in the same height regardless of your position , they adopt fresh new ideas (Airasia, 2012).it promote, The Next Generation Leaders programme looking for intelligent, young professionals, who lead active lifestyles and who breathes passion into all endeavours (Airasia, 2012). it provide performances related bonus ,recognize the contribution of the staff, and it provide work-life balance, where the staff only need to work 5 days a week (Airasia, 2012), as result commitment, quality and flexible staff may improve the productivity of the organization, and which fix the leanest cost structure business level strategy of Air-Asia (Airasia, 2012b), it has been prove by Guest (1989,1997), only when a coherent strategy directed toward the 4 policy goals fully integrated into business strategy and fully sponsored by the line management at all level is applied will high productivity and related outcomes sought by industry be achieved (1990, p.378).There is why now Air-Asia develop so rapidly and can become a leader of Low cost carrier Airline in the world .

In Food and beverage industry

Marry brown in Malaysia make use of traditional SHRM strategy as it mission was to improve the standard growth of the organization and maximize the sale and profit through its structured franchise system. (Marrybrown,2007a),The training they provide are focus on service quality, improve productivity (Marrybrown, 2007b),in India they tend to recruit external staff to maintain their service quality, the minimum requirement for a customer service crew is diploma, by using the attractive based salary and benefit reward examples, meals allowance, to attract and retain employee(Marybrown, 2012), in control system, the franchisor will make a regular visit on business review, market development and general business coordination (Marry brown 2007b).The purpose of this strategy was aim to process based control , in which close monitoring by supervisor and efficiency wages ensure adequate work effort. (MacDuffie, 1995).The traditional HR strategy or Best fit strategy has enhance the company growth rapidly, Marrybrown is now the largest home-grown QSR chain with over 300 restaurants in Malaysia, Azerbaijan, China, Bahrain, India, Indonesia, Iran, Kuwait, Maldives, Qatar, Saudi Arabia, Sri Lanka, Syria, Tanzania and the United Arab Emirate(Zazali Musa, 2012).

Macdonald make use of resourced based model HRM strategy to sustain it mission customers' favourite place and way to eat, which focus on 5 area, product prices, place "people" and promotion .(Macdonald, 2012a). The Manager had seen Human resources as an asset rather than a cost (Bratton & Gold, 2007). In recruitment and selection process, the company make use of Macdonald Green Select, which consist of proven psychological profiling and behavioural assessment , which is Myes Briggs type indicator, Emotional intelligence prevue and the work personal index, aim to meet the candidate with enough competence to fix organization objective. (Mcdonald Green Human Resources, 2010), in employee involvement and relation, it promote manager mobility programme where the manager has the opportunity to work in any outlet of the world .(Mcdonald, 2012), Lashley(1994) commence with a survey of various claims made for employee empowerment as a means of winning commitment of frontline staff to "delight customer " with excellent and hence maximizing the profit of the business. In training and development the company promote lifelong learning , where the employee may has the opportunity to join the leadership programme, even-though has the opportunity to train in Hamburger university to enhance their career development, in the internal development programme mentoring are provided, program incorporates the latest technology features of both informal and formal mentoring approaches, providing a virtual environment to encourage Career Engagements. (Mcdonald, 2012), Payne and Huffman (2005) suggest that mentoring can enhance positive commitment and reduce labour turnover. in result the afford of SHRM approaches has successful benefit the company on reaching their business objective. According to the report, 20 % of the franchiser is start as a crew, 70 % of the work proud to work at the company (Hand, 2008).

From the detail above, we may aware, different industry and different organization may use different SHRM practise, and it is varies on their business objective, like Airasia, because of the no fills strategy, the company choose to pursue the commitment strategy to improve productivity and reduce turn over, Walt Disney tend to achieve their innovative and creative business objective develop immitigable competitive advantage, so its focus on knowledge management, all of them has successful develop their own competitive advantages, so it prove that , my hypothesis is correct, where the SHRM play an important role in sustain the company competitive advantage , and sustainable tourism development, as they care of employee future development.

The limitation of SHRM

Since we know the SHRM can enhance and sustain the company competitive advantages but it meets some limitation, first lack of consideration of Culture in global market. As Strategic international human resource management has increasingly consider a key differencing factor between loser and winner in the Multinational Company (MNC) since 1990. (Schuler et al , 1993). Strategic international human resources management is a step further than SHRM, recognize that is a need to differentiate HRM across country culture ,an area there is increasingly being recognize as a course of business success or failure (Deresky,2008).

Second, the SHRM may focus on the competitive strategy implementing, disregard the internal development, example like Traditional HR strategy may be adopted by management when there is certainty over how inputs are transformed into outcomes and/or when employee performance can be closely monitored or appraised(Bamberger & Meshoulam, 2000), it is argue that at contingency analysis relies on external marketing strategy , and disregard the internal operation strategy that influence HR practise and performance. (Purcell, 1999).

Third ,lack of HR expertise, David Ulrich (2005a) the HR guru once argue there are key role require in HR, business partnership, administrative expert, change agents , employee champion. According to the CIPD HR survey report (2003), among 1200 HR survey respondent, third of practitioners see their primary role as business partner ,slight fewer see themselves as change agent, 4 per cent seen them as the administrative expert, finally is the employee champion. this situation may pollute the SHRM strength on sustain the competitive advantage, as the employee champion seen to take grant one of the central nostrums of normative models of HRM, that employee well-being and organization goal can always be align (Tyson, 1995).

Fourth the optimistic of HR manager, we can't avoid that that is a potential due to the personnel role of the decision maker, may affect the effectively of the SHRM strategy implementation. it is argue by Legge (1978) identify 2 strategy , the conformist innovator and the deviant innovator, the conformist manager attempts to fulfil the requirement of the senior management , the deviant innovator subscribe to a quit different set of norms, gaining credibility ,and support the ideas driven by social value rather than strict economic criteria (Marchington & Wilkinson, 2005).

Conclusion

Although there are some limitation, but I conclude that, the SHRM still remain as the important tools for generating the competitive advantage , as we may aware ,that the traditional competitive strategy by Porter(1980) cost leadership , differentiation , and Focus has become common and being eroded by the competitive market(Nolan, 2002), and the unique characteristic of SHRM are effectively for sustaining the competitive advantage nowadays, it can be explain by the resources based approach (Appendix D) , where there are 4 element to sustain competitive advantage, rare, value, inimitability, non-substitutability.

The human resources can create value to the organization , where specific skill and capability each employee held will provide more and less value depend on the market in which the organization operate (Johnson,2009).

The human resources can be rare, like the management style, the leadership and close relationship, and the unique human resources practice. An organization that employed people with higher cognitive ability compared to their competitor will be more likely to gain competitive advantage through their rare resources (Wright et al, 1994).

The human resource can be immitigability, and non-substitutability, example like the knowledge and the know-how skill develop, the competitor may find difficult to imitate. Amit and Shoesmake (1993) emphasis the strategic important of managers identify, ex ante and marshalling "a set of complementary and specialized resources and capability which are scare, durable, not easily trade and difficult to imitate.

Furthermore I suggest, if a company are tend to extract the global market, they should more concern about the international strategic human resources management , when implementing the human resources practise, as culture and the legal perspective of country may be varies. Schuler et al (1993) once argue that, there four component we has to consider when apply the SIHRM, the exogenous factor, the endogenous factors SIHRM practices, the goals of the multinational company, the exogenous are related to the industry and the domestic characteristic (culture ), the endogenous is regarding the MNC internal own capability and culture, SIHRM issue, is regarding the issue of tendency of coordination, local or global responsiveness, and the goal of the MNC is regarding the profitability and the shareholder interest, as last I reemphasis, the SHRM is the essential tools for sustain the competitive advantage, therefore the manager must integrating the SHRM on the business level or corporate level strategy planning as we has proved that SHRM are the driver for the sustainable and developing of the competitive advantage.

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Appendix A the relationship between resources and competitive advantage

Source (Johnson, Scholes, Whittington, 2008)

Appendix B Guest model of HRM sources from (Bratton and Gold, 2007)

Appendix C Integrative model of HRM sources from ( Bamberger & Meshoulam, 2000)

Commitment

HR strategy

Collaborative

HR strategy

Paternalistic

HR Strategy

Traditional

HR strategyOutcomes

Locus of control

Process

Internal………………….Acquisition of employees …………………..External

commitment HR strategy: is characterized as focusing on the internal development

of employees' competencies and outcome control.

collaborative HR strategy, which parallels Bamberger and

Meshoulam's 'free agent' HR strategy, involves the organization subcontracting work

to external independent experts (for example consultants or contractors), giving

extensive autonomy and evaluating their performance primarily in terms of the end

results

paternalistic HR strategy offers learning opportunities and internal promotion

to employees for their compliance with process-based control mechanisms.

traditional HR strategy is most

likely to be adopted by management when there is certainty over how inputs are

transformed into outcomes and/or when employee performance can be closely monitored

or appraised.

Appendix D

Firm's resources and capability

Value

Rarity

Inimitability

Non-substitutability

Sustained competitive

Advantage

Strategy

Sources from Barney(1991)