Theories and Frameworks

How relevant is the RBV for explaining the HR strategies followed by the organisation you have chosen? Elaborate on your answer by reference to academic literature.

The relevancy of the resource-based view (RBV), the concept that an organisation's internal human resources are a sustainable competitive advantage, varies according to several organisational factors (Boselie & Paauwe, 2007). Factors may include 1) type of industry, 2) competitiveness of the marketplace, 3) workplace culture, and 4) organisational scale.

For example, Apple, a global technology company, operates in a highly dynamic and competitive marketplace. The technology industry is predicated on exponential customer demand and the rapid sophistication of technological processes. From an RBV perspective, Apple benefits from managing and developing highly skilled, uniquely knowledgeable human resources (employees) to maintain product and service competitiveness.

One HR strategy to achieve this would be a pronounced investment in recruitment and retaining highly skilled professionals (Groen, Kraaijenbrink, & Spender, 2010). This HR strategy could extend further to include 1) attractive training and development prospects, 2) incentivising culturally innovative workplace practices, and 3) extensive benefits packages (Groen, Kraaijenbrink, & Spender, 2010). Each approach circles back to the RBV perspective, wherein incentivising long-term association and aligning current and future human resource efforts to organisational objectives maintains the organisation’s competitiveness.

What are the main criticisms of RBV, and are they justified?

The resource-based view (RBV) in strategic human resource management (SHRM) refers to the perspective that an organisation’s internal human resources (employees) are a source of competitive advantage (Wright, Dunford, and Snell, 2001). The broad approach of RBV is to emphasise the identification and development of human capital (i.e., fundamental employee knowledge, skills, and abilities) in concord with organisational strategic goals. However, the RBV approach is not without criticism.

An essential criticism concerns concentrating on ‘key employees’ to achieve or maintain a competitive advantage. In the RBV context, a ‘key employee’ would refer to those possessed of skills or knowledge deemed valuable, rare, inimitable, and non-substitutable (Boselie & Paauwe, 2007). RBV relies on retaining and developing these ‘key employees’. This can lead to stagnating skills and knowledge of remaining employees, particularly those from marginalised groups. Intense focus on a few ‘key employees’ may also generate unrealistic expectations of delivery and inculcate tensions or issues of equity within the wider workforce. Another criticism may be the minimisation, or nonchalance, of broader external contexts of competitive advantage (Wright, Dunford, & Snell, 2001). This speaks to the disruptive impact of globalisation, technology, political change, and economic factors on the workforce.

These criticisms of RBV are warranted if it were the singular approach adopted by SHRM. However, criticism should not suggest the approach is inherently disadvantageous. Indeed, leveraging internal human resources within a knowledge economy can be a pronounced source of competitive advantage for organisations. Instead, criticism should serve to countenance the limitations of RBV when considering how to achieve organisational strategic goals (Boselie & Paauwe, 2007).