An intellectual capital perspective of competitive advantage in nonprofit organisations

• Very little systematic research has focused on applying the concept of intellectual capital (IC) within the nonprofit context; particularly in the highly competitive nonprofit environment. Based on a review of the existing literature, this paper firstly contributes to filling this gap by building an argument that IC can be utilised as a competitive tool in nonprofit organisations (NPOs). Secondly, an IC conceptual framework is proposed that explicitly links the attainment of competitive advantage with positive outcomes for NPOs. Finally, the paper discusses how the IC conceptual framework can be effectively utilised to foster competitive advantage in the nonprofit sector.

Copyright © 2007 John Wiley & Sons, Ltd.     

Learning capabilities,human resource management innovation and competitive advantage

The growing literature on innovation pays limited attention to the role of human resource management (HRM) innovation in creating competitive advantage. This paper adopts a knowledge-based approach to examine how firms design and implement HRM innovations (HRMIs) and how such innovations support competitive advantage. Drawing from multiple streams of literature and qualitative evidence from Australian manufacturing and service firms, our findings reveal that human resource (HR) functional-level learning capabilities, through which HR professionals build and nurture new knowledge configurations, facilitate the design and implementation of HRMIs. The findings also reveal that HRMIs, when coupled with top management support, can play a vital role in firm competitive advantage. Addressing the limitations of the term radical innovations to fully capture HRMIs and based on our findings and extant literature we propose a new classification that will capture the unique nature of HRMIs. In addition to contributing to theory, our paper provides valuable insights to practitioners for building and nurturing learning capabilities for HRMI-related competitive advantage.     

Networks,capabilities, and competitive advantage

This conceptual paper joins network theories of firm interaction with the recent resource-based perspective in strategic management. This suggests a more satisfactory underpinning for the analysis of competitive advantage within the network approach. In other words, application of the resource-based approach suggests one way to uncover the sources of competitive advantage of the network firm. The paper also makes the related point that network theorists stand to benefit from the Marshallian tradition in industrial economics, a point that has sometimes been made by network theorists, but has never or seldom been elaborated.     

Gaining competitive advantage through human resource management practices

Critical to a corporation's growth and prosperity is gaining and retaining competitive advantage. Although corporations may pursue many paths to this end, one that is frequently not recognized is capitalizing on superior human resource management. Currently, many companies recognize the growing importance of their human resources, but few are conceptualizing them in strategic terms—in ways to gain a competitive advantage. As a result, many companies forego the opportunity to seize competitive advantage through human resource practice initiatives. However, there are a few companies that do not forego the opportunity. We use them as examples to show how to systematically develop such advantages via a “target/thrust matrix.” The end results of this matrix have significant implications for both corporate strategy and personnel and human resource management.     

Direct and indirect effects of SEWi,family human capital and social capital on organizational social capital in small family firms

International Entrepreneurship and Management Journal - Given the importance of social capital in organizations, this research answers the question of how socioemotional wealth importance (SEWi),...     

HR,ERP, and knowledge for competitive advantage

Enterprise resource planning (ERP) systems are a strong fit with organizations dominated by routine, highly programmed technologies, and tightly regulated operations. However, while these settings are best suited for ERP implementation, they also have the greatest difficulty making use of the knowledge ERP systems generate because of their inherent rigidity, inertia, and resistance to change. This article examines how human resource management practices can help a firm overcome the problems and capitalize on the opportunities that ERP technology presents by facilitating an effective dual‐core structure through an emphasis on knowledge management, human capital stewardship, and relationship building. © 2006 Wiley Periodicals, Inc.     

Human capital and sustainable competitive advantage: an analysis of the relationship between training and performance

This article analyses the importance of training as a creator of human capital, which enables a company to obtain competitive advantages that are sustainable in the long-term that result in greater profitability. The study is based on the general theoretical framework of resource and capacity theory. The study not only analyses the impact of the influence of training on performance; it also attempts to analyse the nature of such a relationship in greater depth. This being the case, an attempt has been made to measure explanatory capacity from two different perspectives: the universalistic approach and the contingent approach. At the outset, two hypotheses are formulated that attempt to quantify the relationship from a universalistic perspective to later, in two more hypotheses, incorporate the potential moderating effect of the strategy into the model, in order to verify whether or not this strategy improves the explanatory power of our model of analysis.

Social Context,Management, and Organizational Performance: When human capital and social capital serve as substitutes

Do internal (administrative human capital) and external (social capital) resources work to reinforce the effects of each other? Work from multiple disciplines has approached this question, and we advance this literature with a theory of social and administrative resources as potential substitutes for each other in the production of public education outcomes. We argue that social capital benefits some groups more than others and that it interacts with management to improve performance. We therefore expect the benefits associated with social capital to be non-uniform across community groups. Using education as our area of study, we find that social capital offers the most direct and unconditional benefits to white students but that management can use human capital resources to compensate disadvantaged students who may lack support and resources outside of the classroom. We do not find support for the expectation that social capital and human administrative capital reinforce the benefits of each other, but we find evidence that the two resource types are substitutable. This implies that management may substitute human capital resources when social capital is low to benefit public program performance.     

Impact of policy distortions on firm-level innovation,productivity dynamics and TFP

A large literature emphasizes that distortions misallocate resources across firms and are a key source of productivity losses. This paper examines the dynamic effects of distortions when they affect not only the allocation of resources but also firm-level incentives to improve productivity. I consider a setting where firms spend on innovation and thereby influence the evolution of productivity. When distortions are tied to productivity, firm-level innovation falls and the distribution over productivity becomes right-skewed. Quantitatively, TFP and average output falls and is amplified through the innovation channel. When distortions are uniform across firms, instead of correlated with productivity, the effects on TFP and average output are dampened.     

Total quality management and sustainable competitive advantage

Although it is generally accepted that Total Quality Management (TQM) can generate a sustainable competitive advantage, there is, surprisingly, little or no theory to underpin that belief. Therefore, the primary purpose of this paper is to explore the validity of the claim. By drawing on the market-based theory of competitive advantage, resource-based theory of the firm, and systems theory, we are able to conclude that the belief is warranted. We deduce that the content of TQM is capable of producing a cost- or differentiation-based advantage, and that the tacitness and complexity that are inherent in the process of TQM have the potential to generate the barriers to imitation that are necessary for sustainability.     

Convergence or divergence: human resource practices and policies for competitive advantage worldwide

A the overall level of union membership has fallen in a number of advanced industrialized economies from the 1980s, researchers have become increasingly interested in the potential role of management actions in bringing about such reductions in union organization. Management opposition to union organization may take a number of different forms, with union de–recognition being the individual manifestation most frequently discussed and examined in Britain at the present time. The present paper, however, examines another possible manifestation of management opposition to union organization, namely the practice of multi–establishment organizations operating individual establishments on both a union and a non–union basis. This examination involves the analysis of two sets of survey data which contain evidence on the related phenomena of recognition by extension arrangements and non–uniform recognition arrangements. The basic picture which emerges is that recognition by extension arrangements has historically been of some considerable importance in Britain, although their future strength and influence may well decline as the extent of non–uniform recognition arrangements is now quite considerable and quite likely to increase over time.     

Human capital,social capital,and innovation: a multi-country study

The authors examine the effects of two forms of capital, i.e. human capital and social capital, on innovation at the country level. We use secondary data from the World Development Report on a country's overall human development to test for a relationship between human capital and innovation. We also use previous conceptualizations of social capital as comprising trust, associational activity, and norms of civic behaviour to test for relationships between these indicators of social capital and innovation using data from the World Values Survey. Unlike most previous studies that examined human and social capital within a given country, we develop and empirically test a theoretically grounded model that relates human and social capital to innovation at the societal level across 59 different countries, thus providing a more global view of the role of these two forms of capital in generating value. We find strong support for the positive relationship between human capital and innovation and partial support for the positive effect of trust and associational activity on innovation. However, contrary to our prediction, we find a negative relationship between norms of civic behaviour and one of our innovation measures.     

In search of sustained competitive advantage: the impact of organizational culture,competitive strategy and human resource management practices on firm performance

We develop and test a dynamic model of co-specialized resources for competitive advantage. Using matched data from senior executives and human resource managers, we test the direct and interactive effects of high-performance human resource (HPHR) practices and organizational culture on firm performance. Although the HPHR practices were not an important influence on performance, our findings indicate that organizational culture can be a valuable resource for companies.     

Increasing human and social capital by applying job embeddedness theory

Most modern lives are complicated. When employees feel that their organization values the complexity of their entire lives and tries to do something about making it a little easier for them to balance all the conflicting demands, the employees tend to be more productive and stay with those organizations longer. Job embeddedness captures some of this complexity by measuring both the on-the-job and off-the-job components that most contribute to a person's staying. Research evidence as well as ample anecdotal evidence (discussed here and other places) supports the value of using the job embeddedness framework for developing a world-class retention strategy based on corporate strengths and employee preferences.To execute effectively their corporate strategy, different organizations require different knowledge, skills and abilities from their people. And because of occupational, geographic, demographic or other differences, these people will have needs that are different from other organizations. For that reason, the retention program of the week from international consultants won’t always work. Instead, organizations need to carefully assess the needs/desires of their unique employee base. Then, these organizations need to determine which of these needs/desires they can address in a cost effective fashion (confer more benefits than the cost of the program). Many times this requires an investment that will pay off over a longer term – not just a quarter or even year. Put differently, executives will need to carefully understand the fully loaded costs of turnover (loss of tacit knowledge, reduced customer service, slowed production, lost contracts, lack of internal candidates to lead the organization in the future, etc., in addition to the obvious costs like recruiting, selecting and training new people). Then, these executives need to recognize the expected benefits of various retention practices. Only then can leaders make informed decisions about strategic investments in human and social capital.

Selected bibliography

A number of articles have influenced our thinking about the importance of connecting employee retention strategies to business strategies:

• R. W. Beatty, M. A. Huselid, and C. E. Schneier. “New HR Metrics: Scoring on the Business Scorecard,” Organizational Dynamics, 2003, 32 (2), 107–121.

• Bradach. “Organizational Alignment: The 7-S Model,” Harvard Business Review, 1998.

• J. Pfeffer. “Producing Sustainable Competitive Advantage Through the Effective Management of People,” Academy of Management Executive, 1995 (9), 1–13.

• C. J. Collins, and K. D. Clark. “Strategic Human Resources Practices and Top Management Team Social Networks: An Examination of the Role of HR Practices in Creating Organizational Competitive Advantage,” Academy of Management Journal, 2003, 46, 740–752.

The theoretical development and empirical support for the Unfolding Model of turnover are captured in the following articles:

• T. Lee, and T. Mitchell. “An Alternative Approach: The Unfolding Model of Voluntary Employee Turnover,” Academy of Management Review, 1994, 19, 57–89.

• B. Holtom, T. Mitchell, T. Lee, and E.Inderrieden. “Shocks as Causes of Turnover: What They Are and How Organizations Can Manage Them,” Human Resource Management, 2005, 44(3), 337–352.

The development of job embeddedness theory is captured in the following articles:

• T. Mitchell, B. Holtom, T. Lee, C. Sablynski, and M. Erez. “Why People Stay: Using Job Embeddedness to Predict Voluntary Turnover,” Academy of Management Journal, 2001, 44, 1102–1121.

• T. Mitchell, B. Holtom, and T. Lee. “How To Keep Your Best employees: The Development Of An Effective Retention Policy,” Academy of Management Executive, 2001, 15(4), 96–108.

• B. Holtom, and E. Inderrieden. “Integrating the Unfolding Model and Job Embeddedness To Better Understand Voluntary Turnover,” Journal of Managerial Issues, in press.

• D.G. Allen. “Do Organizational Socialization Tactics Influence Newcomer Embeddedness and Turnover?” Journal of Management, 2006, 32, 237–257.

Executive SummaryEmployee turnover is costly to organizations. Some of the costs are obvious (e.g., recruiting, selecting, and training expenses) and others are not so obvious (e.g., diminished customer service ability, lack of continuity on key projects, and loss of future leadership talent). Understanding the value inherent in attracting and keeping excellent employees is the first step toward investing systematically to build the human and social capital in an organization. The second step is to identify retention practices that align with the organization's strategy and culture. Through extensive research, we have developed a framework for creating this alignment. We call this theory job embeddedness. Across multiple industries, we have found that job embeddedness is a stronger predictor of important organizational outcomes, such as employee attendance, retention and performance than the best, well-known and accepted psychological explanations (e.g., job satisfaction and organizational commitment). The third step is to implement the ideas. Throughout this article we discuss examples from the Fortune 100 Best Companies to Work For and many others to demonstrate how job embeddedness theory can be used to build human and social capital by increasing employee retention.     

Strategic alliances,organizational learning,and competitive advantage: The HRM agenda

In the context of strategic alliances that involve competitive collaboration, the competitive advantage of a firm can be protected only through its capability to accumulate invisible assets by a carefully planned and executed process of organizational learning. As this process is embedded in people, many of the necessary capabilities are closely linked to HRM strategies and practice. The article advocates that the transformation of the HR system to support the process of organizational learning is the key strategic task facing the HR function in firms engaged in international cooperative ventures.     

比较优势也是竞争力--营造企业比较优势之策

企业比较优势,是一种个性化的优势,它是指企业以客观上具有很强市场适应性的独特商业模式介入一定时空的市场竞争,掌握市场竞争的主动机,从而形成较强的业务和利润增长态势.企业比较优势有三个基本特征:客观性、差异性、经济性(低成本).     

Managing human resource for competitive advantage: a study of companies in Singapore

We see two major streams of research in the strategic human resource management literature: (1) the link between strategy and human resource (HR) practices and (2) the link between HR practices and firm performance. There is a plethora of theoretical perspectives on the first link. Unfortunately, there is not much empirical work. The second link has seen a spate of empirical studies. However, most of them embrace the universal perspective and the role of strategy as a contingency has not been adequately addressed. This could potentially result in the underestimation of the impact of HR practices on organizational performance. This study addressed the above two weaknesses in previous research in the strategic HR management field. Using a sample of about 200 of the largest companies representing all major industries in Singapore, we found that organizational strategy affects HR practices. Moreover, findings suggest that the strategy-HR interaction accounts for more variation in firm performance than the main effect of HR. Implications of the findings are discussed.