ABSTRACT
Theoretical support for the idea that HRM contributes towards the creation of sustainable competitive advantage has come from the ‘resourcebased’ view of the firm (Barney 1991; Wright and McMahan 1992). This perspective sees differences in organisational performance as being attributable to different resource portfolios. Sub-performers may, of course, improve their relative performance by acquiring superior resources. However, where there is imperfect imitability, competitors find it difficult or impossible to copy the resource portfolio of superior performers. The point is that only those resources which are imperfectly imitable provide a basis for sustainable competitive advantage. The usual argument is that HRM policies do provide such a basis, since the ‘causal ambiguity’ and ‘social complexity’ involved mean that the link between HRM policies and competitive advantage, whilst genuine, is difficult to understand and hence to imitate (Barney 1991). Furthermore, there are ‘time compression diseconomies’ involved in implementing HRM policies, in that it may take considerable time for HR practices to have the intended impact on employee attitudes and behaviour (Becker and Gerhart 1996). The TQM literature, for example, suggests that the process of building a culture of continuous improvement, including an open management style and employee empowerment, is a long-term process in which not all firms have been successful but which nevertheless provides the basis for sustainable competitive advantage (Powell 1995).
