Today, human resources are seen as the available talents and energies of people who are
available to an organization as potential contributors to the creation and realization of the
organizations mission, vision, strategy and goals (Jackson and Schuler, 2000, p. 37).There
exist two models that seek to describe what strategy is and how an organization should
develop such strategy. The first model known as the Industrial Organization (I/O) model is
based on the assumption that firms competing in the same industries are homogenous and
emphasizes the external environment as the basis for organizational decision making. The
second model, called the Resource Based View contrasts the I/O model by assuming that
individual firms are unique and composed of distinct bundle of resources. According to the
resource based perspective, firms attempt to develop and exploit distinctive competencies
based on the physical, organizational and human capital resources under their control.
Eventually, these distinctive competencies may lead to sustainable competitive advantages
and superior performance. The emphasis on human capital resources leads to
understanding the role of strategic human resource management in gaining competitive
advantage.
Wright and McMahan defined Strategic Human Resource Management (SHRM) as the
pattern of planned human resource deployments and activities intended to enable an
organization to achieve its goals (1992:298). This field moves away from traditional
“œpersonnel management and heads toward the view that employees play an integral role
in the development of an organization competitive advantage and as such carefully
planned HR initiatives should be implemented to increase their value to the firm. SHRM
conceptualized with Walker (1978) article, which highlighted the need for linkage between
strategic planning and human resource planning. However, it originated with Devanna,
Fombrum and Tichy (1984) article which analyzed in great…