A system is a set of interrelated but separate elements or parts working towards a common goal. A university for example, is made up of students, teachers administrative and laboratory staff who relate to one another in an orderly manner. What one group does have serious implications for others? So they are communicating with each other in order to achieve the overall goal for imparting education. The enterprise operations similarly must be viewed in terms of interacting and interdependent elements. The enterprises procure and transform inputs such as physical, financial and human resources into outputs such as products services and satisfactions offered to people at large. To carry out its operations each enterprise has certain departments known as subsystems such as production subsystem, finance subsystems, marketing subsystem, and HR subsystem etc .Each consists of a number of other subsystems. For example the HR subsystem may have parts such as procurement, training compensation appraisal rewards etc If we were to view HR subsystem a crucial to organizational performance an organizations performance an organization presents itself thus:
The various internal subsystems it should be noted here, of an organizational operate within the frame work of external environment consisting of potential social economic and technological forces operating within and outside a nation.
HRM and Competitive Advantage
Competitive advantages refers to the ability of an organization formulate strategies to exploit rewarding opportunities thereby maximizing its return on investment. Competitive advantages occur if customers perceive that they receive value from their transaction with an organization. This requires single minded focus on customers’ needs and expectations. To achieve this, the organizations need to tune its policies in line with changing customer’s requirements. The second principle of competitive advantage derives from offering a product or services that your competitor cannot easily imitate or copy. An organization should always try to be unique in its industry along dimensions that are widely valued by customers. For example Apple stresses its computers usability. Mercedes Benz stresses reliability and quality; Maruti emphasizes affordability of its lower end car Maruti 800. In order to enjoy the competitive advantage the firm should be a cost leader delivering value of money. It must have a committed and competent workforce. Workers are most productive if (1) they are loyal to the company, informed about its mission, strategic and current levels of success, (2) involved in teams which collectively decide how things are to be done and (3) are trusted to take the right decisions rather tan be controlled at every stage by managers above them (Thompson). A good team of competent and c committed employees will deliver the goals if they are involved in all important activities and are encouraged to develop goals that they are supposed to achieve. In recent years, a new line of thinking ha emerged to support this view known as strategic human resources management (SHRM).
Competitive advantage through people:
Organizations have come to realize over the years that improving technology and cutting costs enhance performance only up to a point. To move beyond that point, the organization’s people are its most important resources. In the end everything an organization does depends on people. Low cost and high quality cars like Toyota and Saturns are not just a product of sophisticated automated machines. Instead they are the result of committed employees all working hard to produce the best cars that they can at the lowest possible cost (Dessler). To get the best out of people the organization must offer a healthy work climate where they can us their knowledge skills and abilities fully while organizational goals. There is where HR managers play a crucial role – that of bridging gaps between employee and organizational requirements by adopting appropriate Hr policies strategies and practices.