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Strategic human resource management

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Running Head: SHRM 1
Strategic Human Resource Management
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SHRM 2
Strategic Human Resource Management
Conceptual Basis of SHRM
The modern theory of strategic management is influenced by the resource concept
(Prahalad & Hamel, 1994; Teece & Rumelt, 2007; Collis & Montgomery, 1997; Grant,
2016). Prahalad and Hamel (1994) note that companies accumulating and realizing human
capital have a competitive advantage, which provides faster training and effective application
of the knowledge and skills of employees that meet the needs of the business compared to
competitors. A similar result can be achieved by the efforts of both parties, particularly
highly motivated, trained personnel, and creating an enabling environment for training and
the exchange of knowledge and experience of the employer. The basis of this approach is the
idea of the company as a set of unique resources and potential, which are reflected in the
strategy and serve as the primary source of business profitability (Barney, 1991).
Competitiveness in a particular segment of the market is associated with a thorough
inventory of internal resources, an assessment of the company's potential, and the choice of
an appropriate strategy. Human resources are seen as the source of an organization's
competitive advantage.
The resource theory of strategic management is an explanatory mechanism for the
development of strategic HRM. Strategic HRM is interpreted as a complex and multi-level
process of implementing a business strategy through the functional strategy of HRM. It is
implemented in the principles of personnel policy and HRM practices that determine the
working behavior of personnel. Thus, strategic HRM involves a systematic approach to
employee management, including the development and implementation of HRM strategies,
personnel policies, and HRM practices. The organization's staff is considered as an
investment object, attracted to a highly competitive labor market, and it is focused on
establishing long-term relationships with each employee on the basis of a partnership
interaction model. Achieving the long-term goals of the organization in HRM is realized
through the influence of integrated HRM practices on human capital. The main objective of
strategic HRM is to improve the indicators of organizational effectiveness and efficiency.
Special attention is paid to the impact of the HRM strategy on quantitative indicators
(financial and non-financial).
SHRM at Micro and Macro Level
The formation of high-quality human capital and investments in its development are
considered as a source of strategic competitive advantages both at the macro (society) and at
the micro-level (companies). At the micro-level, the main tool for the effective use of human
capital is a management system that includes a set of specific strategies and practices. Under
the human capital of the company are understood human abilities, which determine
professional achievements, variety of acquired knowledge and skills, and motivation to
realize their abilities, knowledge, and skills in the interests of the employer. Moreover, it is
possible to convert this capital into an increase in labor productivity, and accordingly, the
company's income. The objectives of the business are to formulate requirements for
employees, search, evaluate, and invest in their development and training, meet basic needs,
and stimulate them to achieve their goals and maximize performance.
At the macro level, Barney (1991) connects competitive advantage with the
acquisition and efficient use of unique resources that are not available for copying by
competitors. Human capital covers education, professional experience, attitudes, intelligence,
relationships, understanding by managers and employees of operational processes.
Companies accumulating and realizing human capital have a competitive advantage, which
provides faster training and effective application of the knowledge and skills of employees
that meet the needs of the business compared to competitors. Companies with a higher level

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Running Head: SHRM 1 Strategic Human Resource Management Name University SHRM Strategic Human Resource Management Conceptual Basis of SHRM The modern theory of strategic management is influenced by the resource concept (Prahalad & Hamel, 1994; Teece & Rumelt, 2007; Collis & Montgomery, 1997; Grant, 2016). Prahalad and Hamel (1994) note that companies accumulating and realizing human capital have a competitive advantage, which provides faster training and effective application of the knowledge and skills of employees that meet the needs of the business compared to competitors. A similar result can be achieved by the efforts of both parties, particularly highly motivated, trained personnel, and creating an enabling environment for training and the exchange of knowledge and experience of the employer. The basis of this approach is the idea of the company as a set of unique resources and potential, which are reflected in the strategy and serve as the primary source of business profitability (Barney, 1991). Competitiveness in a particular segment of the market is associated with a thorough inventory of internal resources, an assessment of the company's potential, and the choice of an appropriate strategy. Human resources are seen as the source of an organization's competitive advantage. The resource theory of strategic management is an explanatory mechanism for the development of strategic HRM. Strategic HRM is interpreted as a complex and multi-level process of implementing a ...
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