International Human Resource Management
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International Human Resource Management

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For many years, human resource management was seen as the "poor relation" of the business functions. Limited to a low-key administrative role, concerned with employee welfare and payroll administration, or at best a trouble-shooting role concerned with resolving labour-management conflicts, human resource professionals were rarely seen as having any significant role to play in determining the organisation's overall strategy. In the words of Peter Drucker, personnel was the "trash can".

 How things have changed. Increasingly, managers are now realising that the key resource determining the effectiveness of an organisation is its human resources: its people. As long ago as the late 1970s and early 1980s, North American and European managers were beginning to realise that what made Japanese businesses so different, so superbly competitive, was their approach to managing people.

The American management consultants, Peters and Waterman, searching for examples of business excellence in the US, decided that the key lay in the distinctive cultures of their "excellent" businesses.

Current debates in strategic management focus on the conditions for the creation of sustainable competitive advantage. It is becoming clear that many of the traditional marketing and product development bases of competitive strategy can be imitated by competitors relatively easily - the advantage gained through such strategies is often simply not sustainable.

This is less the case with human resource management. The way an organisation treats its staff, an organisation's culture and its approach to teamwork and innovation are all potentially distinctive and value-creating characteristics that have the potential to create competitive advantage.

Furthermore, the very idiosyncrasy and social complexity of such characteristics means that once created any advantage is likely to be sustainable simply because competitors will find it difficult to imitate.