Businesses across the globe are steadily crossing borders

INTRODUCTION

Businesses across the globe are steadily crossing borders. Firms no longer are dealing with customers in a local market. The entire global market has become integrated into a large globalized collection of consumers. With businesses from across the globe now standing face-to-face, it has become difficult for every business to reach a break-even point.

In an era of rising global competition and the dearth for efficiency, businesses find it extremely difficult to survive amongst big giants in the global suppliers market. Rising input prices, tough competition, managerial issues related to global marketing and employee motivation are some of the major issues and challenges posed to managers. While some firms work upon one factor and others on another, there is definitely no refuting upon the fact that it is the human resource which plays a key role in assisting the business what it wants to. Thus, given the current economic conditions of the world, it is important it understand the relationship of strategic human resource management to sustain competitive advantage.

STRATEGIC HUMAN RESOURCE MANAGEMENT

Where businesses are going global, their human resource composition also is no longer uniform. Businesses that are operating in a little more than two countries often have workforces that are composed of up to 40% foreign nationals. The effective management of this workforce is a key factor in gaining competitive advantage.  (Potterfield, 1999)

Strategic human resource management refers to the process of using the individuals in a business’ workforce intelligently by understanding their characteristics, backgrounds and placing them in a conducive environment. An example would be the posting of a French manager in an Australian neighborhood where there are predominantly French migrants while posting the Arab manager, who had previously held the position, to a new neighborhood. The constant evaluation of the human resource, clear goal setting, high level of networking amongst the workforce and compatible task allocation is referred to as strategic human resource management.

Constantly practicing strategic human resource management within an organization is like lubricating a car engine with grease oil. It is a corrective process that keeps on molding internal employee perceptions towards the organization. The business benefits from these perceptions as these views and attitudes held by employees are automatically reflected in their correspondences with customers. Ensuring constant management of human resources with strategic knowledge and hindsight means that business are focusing on addressing customer wants and desires by treating them with personalized and quality service by providing the right person at the right time to interact with them in a convincing and persuasive manner.

IMPORTANCE OF STRATEGIC HUMAN RESOURCE MANAGEMENT

It is understood and realized by most global businesses that their human resource is one of the most valuable assets they have. The recent trend amongst firms to work upon their human resource departments and manage their human resources in an effective way gives testimony to the fact that businesses are now looking to internal factors of management rather than external. Most global businesses realize that they cannot control external factors to a significant extent and given the considerable amount of mess global economies are in it would be difficult to try to control costs and prices and use it as a competitive advantage.

Therefore, businesses are learning to focus on strategic human resource management in a bid to gain competitive advantage. This is the advantage firms have over other competitors in the market due to certain differences in either managerial or technical assets of a business. The importance of strategic human resource management as a means to gaining competitive advantage cannot be undermined.  (Robbins, 2004)

It is wrong to assume that strategic human resource management is a static process. Rather strategic human resource management is a collection of evolving practices that ensure that businesses are not loosing out on their customers due to poor attention to their needs. Switching tasks amongst the workforce with quick speed in response to consumer reactions is what can be called strategic human resource management.

I would like to support my stance on the topic by referring to the common business practices around the globe. Business firms like Apple, Enron, HP, Procter and Gamble, Nike and Pepsi have been focusing on their human resource management for the past decade. The concept of strategic human resource management was proposed by several human resource researchers during a period of economic boom and considerable business success. These firms did not have the financial ‘need’ of implementing this process into their organizations at those times. However, all of these big names predicted troublesome financial eras ahead and had planned beforehand on how to manage such situations: the key was strategic human resource management.

Competitive advantage can be gained through internal or external practices. The correlation of strategic human resource management with successful competitive advantage has been significantly strong and positive over the years. Most businesses can see direct profit increases after effective strategic human resource management. Furthermore gaining competitive advantage is no longer easy in these highly competitive global markets. Competitive advantage comes from increasingly focused and determined processes and cutting-edge practices. Strategic human resource management is definitely one such process which allows businesses to save out on hiring and firing, improves employee morale, ensures the customer a personalized service and then benefits the business in brand equity, customer loyalty and thus provides competitive advantage. (Potterfield, 1999)

CONCLUSION

Strategic human resource management cannot be implemented in a day, week, month or year or even in several years. It is an ongoing process and the level of efficiency a business can reach depends on the amount of determination and effort its management puts in to change things around. The better the analysis and effort put in by the company analysts, the better the level of strategic management the business will be able to achieve. (Business Support: Small and Medium Enterprises)

Even though critics might argue that there are several other ways to gain competitive advantage, it should be noted that sustenance of competitive advantage is as different from gaining competitive advantage as is a cat from a dog. A business may be able to achieve competitive advantage but may loose it out owing to neglect or lack of change necessary to sustain competitive advantage. Strategic human resource management is an ongoing change process which ensures that businesses are able to retain their competitive advantage. Thus, I would like to end my paper with the conclusion that strategic human resource management is an important managerial practice that businesses should prefer to implement if they are to sustain competitive advantage in a closely knit competitive global market.

Works Cited
1.       Business Support: Small and Medium Enterprises. (n.d.). Retrieved July 25, 2008, from BusinessLink: www.businesslink.gov.uk/

2.       Potterfield, T. A. (1999). The Business of Employee Empowerment. Greenwood Publishing Group: Edinburgh.

3.       Robbins, S. P. (2004). Organizational Behavior. New York: Pearsons.