Viability of SHRM in Today?s Economic Environment

Viability of SHRM in Today?s Economic Environment
Part 1
Introduction
Managing human resources in an organization has become a principle concept in the present business society. People has become one of the most important and inflexible assets of the business firms to manage highly competitive and changing environment (Bratton & Gold, 2001). Strategic human resource management refers to the effective and efficient management of the available human resources for attaining the organizational goals and objectives in the competitive market place in an optimum manner (Armstrong, 2000).According to the views of D. Torrington, L. Hall and S. Taylor (2008) Human resource is the principle component of an organization. Human resource have been defined as a form of a national point of view, the knowledge skills, creative abilities, talents and aptitudes obtained in the population whereas from the viewpoint of the individual enterprises, they represent the total of the inherent abilities, acquired knowledge and skills exemplified in the talents and aptitudes of its employees.
Accoridng to the article given by Mark L. Lengnick-Hall, Cynthia A. Lengnick-Hall, Leticia S. Andrade and Brian Drake (2009), shrm involves the planning and implementation of the strategies in accordance with the organizational strategy. It is mainly focused on the development of an organizational culture and structure. The needs and requirements of the organization can be effectively identified and fulfilled regarding the workforce. The strategies are developed in an alignment with the organizational goals and objectives (Rodwell & Teo, 2004). Presently, various models of shrm are available in the society, which enable the organizations to attain equilibrium between the demand and supply of the labor force in the market (Wei, 2006).
This paper is based on evaluation of Resource Based View model of strategic human resource management and its viability in the changing economic climate. The paper cover discussion over the topic ?How far is the Resource Based View model of shrm viable in today?s economic climate?? The paper explains role of Resource Based View model of shrm in the Coca Cola Incorporation?s organizational as well as economic climate.
Resource Based View model of shrm
The resource based view model of shrm can be defined as the collection of practices and realistic experience of the human resource that are available in the organization. It is a channel that assists the management to identify the profitability of the company in term of tangible as well as intangible resources (Wright, Dunford & Snell, 2001). According to the view of Michael Armstrong, resource based view model of human resource management is essential because it mainly focuses on the internal human resources of the company and arises from factors which are socially and economically sound such as voluntary quits, discharges, marriage, promotions, motivation, appraisals, or factors such as seasonal and cyclical fluctuations in business which causes a constant ebb and flow in the workforce in many organizations (Armstrong, 2000).
In simple words, P.M. Wright, S.A. Snell and L. Dyer has explained that this resources based view model of shrm signify a linear view of HR management in a multidimensional business organization. The business organizations utilize the human resources management practices and policies to improve the performance and competitiveness of the firms (Wright, Snell & Dyer, 2005). If the organization is able to attain its goals and objective, it will represent the excellent performance of the company. The HR manager has to focus on the management of the work force effectively, so that the commitment and contribution of the employees towards the organization can be attained. Strategic hrm enables the firm to hire committed and qualified people that assist the company to getting competitive advantage from the market (Wei, 2006).
Numerous authors have been working on the Resource Based View model of strategic human resource management. In this resource based view model of shrm, human resource has been recognized as the key strengths of the business firm through which the business organizations can gain competitive advantage in the highly changing competitive and innovative environment (Lengnick-Hall, Lengnick-Hall , Andrade, Drake, 2009). This model of shrm is also beneficial for the business organizations to manage the economical climate.
Framework of Resource Based View shrm Model
The framework of Resource Based View shrm Model is mainly based on the four factors: Values, Rarity, Inimitability and Organization. Benjamin B. Dunford, Scott A. Snell and Patrick M. Wright has described in their article that in this vrio framework of shrm model all the elements are directly linked with each other and contributes in the success of the company.
Value: According to this element, all the resources of an organization have their own value to achieve the goals and targets of the company. According to A. Kazmi & F. Ahmad, in strategic human resource management value denotes the practices and efforts of Human resource to add value in the business firm in monetary as well as non-monetary terms (Kazmi & Ahmad, 2001). In addition, value of the HR also indicates that these resources are sustainable for the firm to develop competitive advantage. J. Barney has also stated in his article (1991), human resource of a company also enhances the customer added value, which ultimately increases the value of the firm in the market.
Rarity: This is the second element of the framework of this model. If the valuable resource is already owned by the other organization, the business firm cannot consider it as the source of creating competitive advantage (Armstrong, 2000). Wright and McMahan have explained the meaning of rarity as the critical resources of the firm that cannot be sustained by others (Wright & McMahan, 2001). These resources can be the mixture of intangible, tangible, capabilities and core competencies. By using the shrm process, the business firm can explore the rare characteristics of the human resources to accomplish the goals on time and create competitive advantage to lead the market.
Inimitability: It means distinctiveness, which is one of the most important elements to create value of the human resource of an organization. A. Appleby and S. Mavin, has explained in their article that inimitable or unique resources of the company assist the firm to generate long term profits. Achievement of value and rarity in the human resource of organization eventually differentiate the resources of the firm and put them into the lost of unique resources (Appleby & Mavin, 2000). This element is a good source to manage the changing climate of the economy. Due to the innovations and unpredictable business environment, development of inimitability is a complicated task for the business firms (Barney, 1991).
Organization (Sustainable Competitive Advantage): This element of the resource based viewed model is mainly dependent upon the achievement of the sustainable competitive advantage for the firms. It is very much difficult to inimitability in the organizations, but uses of high quality practices and knowledge of experts will help to achieve sustainable competitive advantage (Lengnick-Hall, Lengnick-Hall , Andrade, Drake, 2009).
It will also assist the organization in fulfilling the requirements of the work force and providing support to them for effectively performing in the work environment. This ensure that the HR system of the company is well organized and working in an appropriate manner (Wright, Dunford & Snell, 2001).
Viability of shrm in Economic Climate
Viability of resource based view model of shrm is an emerging theme. It is concerned with the utilization of human resource of an organization to manage the changing economic climate. Changes in the political, legal, social and technological environment lead variations in the economic environment also. Managing these ups and downs of the economic environment is highly dependent upon the profitability ratio of the company (Boxall & Purcell, 2000).
According to the article given by B.A. Colbert in 2004 describes that this resource based view model of shrm is hundred percent viable to manage economic climate. The framework of this model assist the business firm to utilize the maximum efficiency of it human resource to create competitive advantage and improve its tangible and intangible resources such as profitability ratio, good will and brand value, customer loyalty towards company, shareholders profit, etc. (Colbert, 2004; Wright, Snell & Dyer, 2005).
With the help of this model, it has become in existence that sustainable competitive advantage allow the firm to gain higher profit and compete in the economic crisis also. Moreover, these element value, rarity, inimitability, and sustainable competitive advantage allow the human resource of the company to improve their knowledge about innovation, market, technology, etc., to execute better strategies (Torrington, Hall & Taylor, 2008).
By executing this model of shrm, an organization can assess capability and skills of its resources to create value and rarity in the highly competitive and changing business environment. G.C. McMahan, M.P., Bell and M. Virick argue that, this model allows the management to focus on taking strategic decisions and establishing a collaborative work environment for the employees. It will assist in establishing constructive relationship between the top management and the employees and developing competitive advantage (McMahan, Bell, & Virick, 1998).
Resolving conflicts by identifying the strengths of the human resources has become easy for the HR managers, which leads motivation and team work in the company to manage its profitability in the economic climate (Bratton & Gold, 2001). The direct relations among all the elements of the Resource based view model ensure development of competitive advantage in the firm, which increases viability of the firm in the highly changing and unpredictable economic climate.
Part 2
Evaluation of Resource Based View shrm Model in Coca Cola
Currently, Coco Cola is one of the leading beverage companies of the industry. It runs its business campaigns all across the world. It deals with different types of products such as soft drinks, bottled water, teas, sport juice, etc. Strategic human resource management in Coca Cola is very effective. Company is enjoying good profitability due to the implementation of innovative HR practices. Presently, Coca Cola is operating in more than 200 countries all over the world and managing a wide range of employees is a very critical task (Coca Cola Incorporation: About Us, 2010). Thus, Coca Cola has implemented shrm practices in the company to utilize the maximum strength and skills of each employee.
The main objective of shrm practices at Coca Cola is to provide well-motivated and well-trained employees to utilize the goals of the firm and use the resources in an optimum manner. The objective also include enhancement of job satisfaction, self- actualization of the employees and to maintain high morale and good human relations within the organization (Coca Cola: About Us, 2010).
Resource Based View Model of shrm in Coca Cola
The hrm strategies of coca cola specify the acquisition and retention of highly skilled and knowledgeable employees so that it can maintain its top position in the market (Wright, Dunford & Snell, 2001). It treats this resource as an asset. The policies of the corporation are to provide such conditions of employment and procedures that will enable all employees to develop a sincere sense of unity with the enterprise and to carry out their duties in the most willing and effective manner (Lengnick-Hall, Lengnick-Hall , Andrade, Drake, 2009).
The programs specify polices for the organization to carry out the main objectives, which have been laid down as the desirable minima of general employment policy. It also provides for the security of employment to the workers so that they may not be distracted by the uncertainties of their futures. These objectives, strategies, policies, and programs are pre-specified by the company, which guide the management and unions in taking decisions (Kazmi & Ahmad, 2001). Also they are in consistent with the organization?s mission, objectives, strategies, policies and with internal external environments.
Feasibility of Resource Based View shrm Model in Coca Cola Incorporation
Coco Cola has around 90,500 associates all over the world and company has developed many hrm policies to favor the human resources. After analysis, the trends show that the performance of HR department is quite good as it has taken many steps to match the personal objectives with that of the organization (Coca Cola: Our Progress, 2007). All these steps are based on the resource based review model. These steps include providing benefits that are better than those provided by other international companies, providing extensive support for employee training so that they can perform better (Treat-your-workers.org; international Coca-Cola protest October 17, 2002).
The success is also evident from the fact that Coke. It has very minimal turnover rate and there is no place for grievances and conflicts in the organization. The quality of work life is also emphasized by providing lunch, medical insurance and life insurance to the employees, a Christmas party for employees? children, and a family day at the plant.
According to the policies and procedures of the HR, it has emphasized that People are the most important resource in Coca Cola Incorporation, which has enabled to the firm to improve its financial position.
The analysis shows that the impact of these systematic and employee friendly HR policies has taken the company on top of the competitors and made it stand on the top position and are surely going to help the company in sustaining its position (Thompson & Strickland, 2003). Such hrm policies would also provide an edge to the organization over its competitors in attracting good human resource in future and building goodwill in the market, thus acting as a competitive advantage (Torrington, Hall & Taylor, 2008).
With the help of resource based model, the company has ensured secure job and motivational practices for the employees, which ultimately improves their morale and feeling of job satisfaction. This resources based review model allows the firm to develop a familiar environment in the organization. Its policy of promoting employees from within and seniority- based salary increases provide the key advantage of retaining the employees, thus proving the corporations hrm as the most effective and efficient in the industry. This is one of the main reasons behind the profitability of Coca Cola (Schuler & Jackson, 2007).
In addition, the company has effective technologies and appropriate concepts to utilize all the resources such as program appraisal system, training and development programs, job design programs, up-to-date job descriptions, attitude surveys, etc., which motivate the employees to work with zeal and enthusiasm and achieve the targets of the firm on time. This improves the position of the company in the market and allows the company to enjoy good financial returns (The Coca Cola Company 2007/2008 Sustainability Review, 2008).
The most important aspect to improve the financial position is the management of workforce diversity. Managing workforce diversity enables the firm to compete in the different geographical environments. The organization (Coca-Cola) believes that work is much more important than the place where you work (The Coca Cola Company 2007/2008 Sustainability Review, 2008).
Organization has recognized diversity as a vital component of its business strategy. The Coca-Cola Company has reached at No. 4 on ?The 2007 Diversity Inc. Top 50 Companies for Diversity? list and performed well in two Diversity Inc specialty categories ? Top 10 Companies for Recruitment & Retention (No. 5) and Top 10 Companies for Asian-Americans (No. 6). In addition, Coca Cola has also achieved 100% rating by the Human Rights Campaign (hrc) for the workplace policies for gay, lesbian, bisexual and transgender (glbt) associates for the second consecutive year (2007). It is the nation?s largest lesbian and gay rights organization (Coca Cola: Our Progress, 2007).
According to the resource based review model, all these policies and strategies enables the firm to create value and sustainable competitive advantage for the firm. For example ? Coca-Cola has a large training center in Moscow, which is used to supplement the training facility in St. Petersburg. The company also pays travel expenses and provides business travel insurance to employees so that large number of employees can attend training sessions, which develop rarity and inimitability in the organization (The Coca Cola: 2007 Annual Review, 2007).
Most of the company?s associates are working out of US. This shows that the organization is working in a geographically diverse environment. The company learns from each market and shares these leanings quickly. The company has set up codes of conduct for hrm in the developing as well as for all countries in which they are operating. The employees are given international assignments in which they get a good opportunity to develop managerial skills.
Coca Cola has also enabled to utilize the innovative information and communication systems. In addition, the company has also loyalty cards and rewards for the customers as well as employees. By using the resource based view model, Coca cola has evaluated both its social and the economic aspects (The Coca Cola Company 2007/2008 Sustainability Review, 2008).
By using this model of resource of based view, Coca Cola is able to guarantee delivery of the customer?s order within a time-frame with quality and taste. According to this model of shrm Coca Cola has realized that technology plays a large part in the success of the line operations of the company and develop a sustainable competitive advantage (Becker & Huselid, 2006).
To utilize the effectiveness and advantage of this model, the company makes volunteer programs for the employees, for the achievements of goals and improves their performances. Such programs are run by the assistance of the Human Resource Management of the company. All these resources are evaluated by HR managers of the firm according to the resources based view model, thus, this model is very good and feasible for the economic environment or the business organization as well as the nation.
Conclusion
Thus, on the basis of the above discussion it can be said that the resource based view model of Strategic Human Resource Management is the consolidation of both, the corporate goals and strategy and, human resource management. Once an employer or manager has used this framework with identifying the function of strategic human resource management, achievement of goals and objectives of the organization will not be very far from the management (Wright, Snell & Dyer, 2005).
Human Resource contributes to the strategic intent of the organization, through its various activities like, training, recruitment, performance pay rates, rewarding employees etc. It also helps, in the formulation, implementation and analysis of the strategic goals and policies and ads to the competitive advantage of the company (Boxall & Purcell, 2000).
The key success of Coca Cola is based on the effective utilization of its available resources. Coca Cola has a good image and strong brand reputation, due to the efforts of the experts who work in its physical network. The company has gained advantages of its e-business strategies and online stores (The Coca Cola: 2007 Annual Review, 2007).
This resource based model has allowed the firm to purchase large market shares in the existing as well as in the new segments without having to construct new stores and investing low capital. This will allow the firm to gain high profit and reduce operational expenses also (The Coca Cola Company 2007/2008 Sustainability Review, 2008).
This resource based view model of shrm is successful with low operating costs, thus, it can be said that the viability of this model in the economic environment is very effective and high. With the help of this model, the firm can evaluate the strength and weakness of its human resources and execute innovative strategies and tactics to gain sustainable competitive advantage and rarity, which enhances its strength in the industry and improves its profitability.

Viability of SHRM in Today?s Economic Environment 7.8 of 10 on the basis of 1569 Review.