HRM is an essential and vital function for organizational success.While HRM focuses on the potential and actual productive value of HR to an organizations’ success, strategic HRM takes a more long term focus by emphasizing the need of HR plans and strategies of overall organization. The emphasis of strategic HRM is on strategic integration which is matching HRM strategies to business strategies. In this paper, we will discuss two models of Strategic HRM: The matching model and the resource-based model. Comparing these models, while listing their similarities and differences, will help us understand Strategic HRM on a better level. In the second part of this paper, I will address which ...view middle of the document...
In reality, strategies are often determined on a more intuitive, political and subjective level. Certainly, the decision-making is more complex than the model allows. It is also both prescriptive and normative, implying that the fit to business strategy should determine HR strategy.
There are many similarities with the resource-based model but the matching model has a harder, less humanistic edge, holding that employees are resources in the same way as any other business resource. People have to be managed in a similar manner to equipment and raw materials. That must be obtained as cheaply as possible, used sparingly, and developed and exploited as much as possible.
The resource based view also known as the soft approach, is the variety of different resources that makes each organization unique which leads to differences in competitive performance across an industry. This model appears to mean different things to different authors as this view is very broad. The RBV states that "companies can sustain competitive advantage by implementing strategies that exploit their internal strengths, through responding to environmental opportunities, while neutralizing external threats and avoiding internal weaknesses" (Marchington and Wilkinson 2002). According to Boxall and Purcell:
Looking at internal sources of viability and advantage, emphasis is placed on resources which are critical to organizational success yet are rare, or not commonly available, are not substitutable and are combined together to form organizational capabilities or processes which are imperfectly imitable, or hard for others to copy; namely value, rarity and a lack of substitutes (Boxall and Purcell, 2003)
It is the combination of these resources that will allow companies to gain sustained competitive advantage.
The Resource-based view focuses on how firms can become competitive through differentiation, some firms which are too different from the rest of the industry face challenges since they do not necessarily represent what customers want.
An attractive organization and one that will represent customer wants, is one that is different from other firms' niches yet similar enough to be rational and understandable. (Marchington and Wilkinson 2002).
Differences/similarities between both models
The matching model focuses on the company's external competitive environment. This model does not attempt to look inside the company. In contrast, the resource-based perspective highlights the need for a fit between the external market context in which a company operates and its internal capabilities. The resource-based view also differs from the matching model in that it is company focused, rather than environment focused.
The incorporation of both soft and hard elements within one theory or model is highly problematic because each rests on a different set of assumptions in the two key areas of human nature and managerial...