Competitive advantage as been described by Barney (1991) as “when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitor”. He adds that the competitive advantage only becomes sustained after all efforts to imitate that advantage as ceased. Thus, Barney’s RBV model argues that human resources must be value added, rare, non-substitutable and imperfectly immutable to have the potential to generate sustained competitive advantage.
2.1 Strategic Human Resource Management in Edexcel Foundation
Strategy as been defined as a “firm’s framework of critical ends and means or” as a strategic paradigm (Johnson and Scholes). This implies that competitive strategy, human resource strategy, structural strategy, organisational developmental strategy and all other choices are all systematically interlinked in a systemic manner should be seen as important in relation to business performance. (Boxall, 1999).
A key element of Edexcel human resource strategy is to ensure a consistent approach in the alignment of its vision, values, business objectives, core strategy and strategic intent. Edexcel’s strategic intent is to be known as a provider of educational solutions of the highest quality with the aim of creating a sustainable market position and a secure revenue stream at the same time managing cost base down to a level which allows for future investments; to become a customer centred organisation in terms of its people, products and process and building one Edexcel team through greater responsibility, accountability and leadership.
To achieve this intent, the HRS has to be owned and implemented by the whole organisation. This develops a spirit of partnership and co-determination. Deliberate incremental choices must be made concerning the way employees including temporary and seasonal staff as well as assessment associations and suppliers are managed in relation to Edexcel’s business needs besides developing the human capability of the company to meet the current and future needs of its external and internal environment. Legnick-Hall and Legnick-Hall have argued that ‘firms that have a strategy formulation process that systematically and reciprocally considers human resources and competitive strategy will perform better over the long term than firms that manage human resources primarily as a means to solve competitive strategic issues’. Supposedly it can be said that Edexcel recognises that the skills and motivation of its people and the way it is deployed is a major source of its competitive advantage. This leads to the point of directly examining this belief against the resource base view.
The RBV is based on the assumption that a firm is heterogeneous (Penrose, 1959) and that competitive advantage can be gained as a result of this distinct capabilities arising from the nature of an organisations relations with its customers, employees and suppliers.(Kay, 1993). This condition also requires for a diverse demand for labour. The firm has the jobs that require different skills as well as a heterogeneous supply of labour or individuals who differ in their skills and level of skills. As UK’s leading provider of examination qualifications, Edexcel has a high demand of labour that
*Developing people: Recruitment, Induction, training and development, calibre and succession.
*Managing people: Policies, performance management, employment relations and HR systems.
*Motivating People: Reward and recognition, teamwork and role clarity
* Involving people: Communication, business education and engagement
*Developing the organisation: structure, leadership, and organisational development and change management.
Source: Edexcels human resource intranet site
FIGURE 2.1.1 Summary of Edexcels Human Resource Strategy
requires different types and levels of skill. Edexcel provides a wide range of qualifications including GCSEs, GCE AS and A levels; GNVQs, BTEC First, National, and Higher National Certificates and Diplomas; NVQs, Key Skills and Entry Qualifications and specific programmes for employers.
By hiring and developing talented staff and maximising their contribution within the resource bundle of the firm, it is able to deliver its service. A large bulk of staff that actually provide the core services are outsourced leaving internal permanent staffs to provide coordination duties. The temporary and seasonal staff as well as assessment associations and suppliers though having the required talents and skills have to ties or commitment to Edexcel which brings us to the next condition for resource to be imperfect imitability and non-substitutable.
Barney ‘s model on the inimitability of resources according to Wright et al (1999) refers to particular historical events and situations that have shaped the firms practices, culture and policies into unidentifiable casual sources of competitive advantage and unique social relations that cannot be duplicated i.e. team production or working. Barney (1991) as suggested that true sustainable competitive advantage is more likely developed than planned. This makes it unlikely for well-developed human resources to be duplicated. There is the need to build a strategic management process of intelligent, proactive leadership in organisations, stimulating learning process and encouraging innovation. The aim is for both top management and other organisational levels to play roles, which increase strategic process capability.
Edexcel as a training and development commitment strategy to grow the human resources of the business through investments in financial and practical ways in order to gain a competitive advantage. Training and development of staff must tangibly align with business needs and is influenced by three key issues: Edexcels medium and long term goals which consist of its mission, vision, values and development of its core competence; Edxcel’s key objectives; and problems and issues that always need responding to. While principle focus is job related and aim to enhance individual contributions to Edexcel’s success, individuals are encouraged to take responsibility for their learning and self development. Staff are enabled to build their full potential in developing organisational core competence in the area of client focus, team work, judgement, individual responsibility, communication and results.
A large proportion of Edexcels staff is employed on contract basis. The application of a “one business-one team” approach of training, developing and maximising staff contributions exist as a paper policy. The soft HR policy of staff development only applies to permanent staffs, yet the core of the job that really distinguishes Edexcel is still outsourced. Finding and holding people and combining their talents present a major problem. The situation is such that when non-managerial and contractual staffs are employed and they soon find that Edexcel fails to offer them opportunity for developments, they become disillusioned and leave, those who stay usually perform below potential as they are only their until something better comes up. Yet the Edexcel’s ability to produce and strengthen a stock of capability is dependent on its long-term ability to retain key identifiable talented individuals. Appropriability refers to the capacity of the firm to retain the added value it creates for its own benefit (Kay, 1993 cited in Boxall, P. (1996). The way a firm manages and encourages collective learning, and the way employee cooperate and communicate as be argued by many contributors to the RBV approach to be a key to competitive organisational resource advantage. (Mabey et al.1998).
Resource must also be rear and positively value added. Resource mobility barriers are also necessary for limiting attempts at imitation. (Peteraf, 1993). This deals with the recruitment and selection process of the organisation and how it sets about recruiting individuals with high ability to meet its current and future needs. This process goes further to the ability of the firm to attract and retain those high calibre applicants.
Edexcel obtains employees through a combination of valid selection programs and reward system. Where possible, vacancies are filled by internal transfers or promotion of suitably qualified experienced and motivated contract or permanent staff. Edexcel uses a range of selection methods based on a competency framework. A panel interview supported by different times of assessment is the primary method. Line managers are responsible for producing job description and person specification. They have the overall responsibility, guided by human resource staff to ensure that the selection process meets Edxecel recruitment policy. The appointed candidate must meet the identified core competency requirements and be able to fit into Edexcels organisational culture.
There is a close relation between Edexcel’s organisation structure and its prevailing culture. Mabey et al. view organisational structure as “not only a pattern of relationships between roles and sub-units and as a means of co-ordination but may also be regarded as a framework for planning, organising, directing and controlling. Writers like Smircich (1985) have conceptualised culture as emerging from social interaction. It is a system of shared cognitive knowledge or beliefs, their shared values or basic assumptions and can only be altered through a process of social reproduction.
The merger that formed Edexcel resulted in a single business with series of culture and sub-culture, which are sometimes in conflict with each other. The three major cultures are BTEC, ULEAC and new joiners since 1996. (A group largely formed by contract and seasonal staffs that later became permanent staffs). In other to integrate the different subcultures into one that fits with the overall strategic needs of the organisation, Edexcel as identified its organisational values and vision.
Prahalad and Hamel have argued that competitive advantage emerges from historic and collective learning around key organisational activities from which organisational core competencies emerge which differentiate and make it superior to rivals. (Prahalad and Hamel, 1990). Edexcel has a flexible organisational structure. It is capable of quickly adapting to new demands and operates fluidly. Their exist core workers carrying out the primary and continuing activities with contract and temporal staff being employed as peripheral staff to carry out seasonal processing of examination results. Though having some bureaucratic features such as hierarchy, chain of command and span of responsibilities, work is carried in project teamwork.
Edexcel’s current HR strategy includes the operational review and devolution of task to line managers, encouragement of staff ownership, commitment and identification with organisational values of customer service, teamwork, entrepreneur, productivity, market and customer orientation etc and the use of effective communication and consultative mechanism to achieve business education in order to grow the business and generate good returns for all stakeholders.
Embedded in Edexcel’s cost control and enterprise culture strategy is the assumption that staff behavioural acts can be managed to become consistent with organisational values by using bureaucratic controls, such as appraisal, promotion systems, training and payment system, and the retention of potential temporary staff that conform to appropriate norms, values and attitudes that is relevant to the organisational culture. (Leggae,1995). According to the RBV, the potential to create a flexible firm that is organic, with a good communication system that exhibits superior coordination and corporation compared to their competitors will create competitive advantage.
3.0 CONCLUSION
The empirical linkage of Strategic HRM to organisation goals is still an ongoing debate. This essay as attempted to audit Edexcel foundations against the resourced based view of the firm. The RBV as its own limitation as Kamoche as so clearly put it, “the full value of this synthesis is realisable if human resource competencies are aligned with the firms core competencies, which requires the firm to identify unambiguously its core competencies and strategic business activities”. Moreover some writers have argued that human resource alone is not enough for a firm to achieve competitive advantage, other areas such as technology must be developed as well in an ever changing technology advancing environment. For Edexcel a move from a paper policy to a more practical and consistent strategic intent of ensuring that a value added approach to people management is achieved.
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REFERENCE
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Johnson, G. and Scholes, K. (1999). Exploring Corporate Strategy. Prentice Hall.
Legge, K. (1995) Human Resource Management. Macmillan
Mabey, C., Salamaan, G & Storey, J. (1998). Strategic Human Resource management. A strategic introduction. Blackwell
Prahalad, C.K. and Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review, 90.
Schuler, R.S and Jackson, S.E. (1999) Strategic Human Resource management. Blackwell
Smircich, L. (1983) Concepts of Culture and Organisational Analysis. Administration Science Quarterly, vol.28, 339-358.
