Rbv View of the Firm

2017 Words9 Pages
Introduction The resource based view (RBV) of the firm is the dominant theory in strategic Human Resource Management (HRM) due to the significance of a firm’s internal resources and the role that a firm’s strengths and weaknesses play in determining the most effective and efficient way to manage the Human Resource component of an organisation. The RBV contrasts with the traditional structure-conduct-performance model of industrial organisation theory, which focuses on the external environment of the firm in order to explain its behaviour (Johnson, 2006).The emergence of the resource-based view of the firm (Barney and Grant, 1991) has since made common the analysis of an organisation’s internal characteristics, namely its strengths and weaknesses. In addition, the manner in which the RBV of the firm has contributed toward the explanation of the proposed link between HRM strategy design and organisational performance will be discussed and analysed. Background and Definitions In recent years, human resource management (HRM) has been integrated as the process of strategic management, through the development of a new discipline denominated strategic HRM (Wright and McMahan, 1992). Linking HRM to organizational strategy was accentuated with the rise of resource-based view of the firm (Amit and Schoemaker, 1993; Barney, 1995; Grant, 1991; Peteraf, 1993). The RBV of the firm states that the individual firm’s unique combination of strategic resources is the primary influence on the firm’s performance. The RBV of the firm is defined as all assets, capabilities, organisational processes, firm attributes, information and knowledge controlled by a firm (Rattanaphaphthagm and Ussahawanitchakit, 2010). The RBV view has been presented as a perspective which provides a foundation for how a firm’s human resources could provide a potential source of sustainable competitive
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