Reference no: EM132100693

Strategic Human Resources

Understanding that " In contrasting the two approaches, the I/O model suggests that an organization's strategy is driven by external considerations; the RBV argues that strategy should be driven by internal considerations. "...how do you suppose two companies in the same "space" would use different approaches?...how does that happen? AS in you assignment...

Posting the passage below, the highlighted area question was presented. Can you write a good paragraph response?

There are two major models that outline the process of what strategy is and how it should be developed. The first is the industrial organization (I/O) model also known as the "traditional" model. The second major model is the resource-based model, sometimes referred to as the resource- based view (RBV) of the firm.

 The I/O model argues that the primary determinant of an organizations strategy should be the external environment in which the organization operates and that such considerations have a greater influence on performance than internal decisions made by managers, but assumes that the environment presents threats and opportunities to organizations, that organizations within an industry control or have equal access to resources, and that these resources are highly mobile between firms.

The resource-based model argues that the organizations resources and capabilities, rather than environmental conditions, should be the basis for organizational decisions. Included among these resources are an organizations HR (Mello, 2015).

Industrial organization focuses on the interrelation of big industries, which are normally markets that have few competitors. In the industrial organization model, one large firm's actions can have a direct effect on its market. Thus, firms participating in this model benefit from the fact that there are fewer competitors, so they can better control the market. For instance, few firms manufacture turbine jets; thus, they have more control over price, information, research and development of the industry. More competitors in the industry could drive the price down, which would change the way the few firms compete (bizfluent.com). In RBV model, resources are given the major role in helping companies to achieve higher organizational performance. There are two types of resources: tangible and intangible.

Tangible assets are physical things. Land, buildings, machinery, equipment and capital â€" all these assets are tangible. Intangible assets are everything else that has no physical presence but can still be owned by the company. Brand reputation, trademarks, intellectual property are all intangible assets. Unlike physical resources, brand reputation is built over a long time and is something that other companies cannot buy from the market. Intangible resources usually stay within a company and are the main source of sustainable competitive advantage (strategicmanagementinsight.com)
In contrasting the two approaches, the I/O model suggests that an organization's strategy is driven by external considerations; the RBV argues that strategy should be driven by internal considerations. The I/O model argues that strategy will drive resource acquisition; the RBV argues that strategy is determined by resources (Mello, 2015).

Mello, J. A. (2015). Strategic Human Resource Management, 4th Edition. [Vitalsource].

Attachment:- Strategic HR.rar