The purpose of this article is to e

The purpose of this article is to examine the role of human resource capability (HRC) in organisational performance and sustainable competitive advantage (SCA) in Indian global organisations. To carry out the present study, an empirical research on a random sample of 300 line or human resource managers from nine Indian and foreign global organisations, from New Delhi (the National capital region of India) is carried out. The principal research method employed included the sample and measurements tools, and data analysis concerning the human resource capabilities for organisational performance and sustainable competitive advantage by using SPSS package 12. The findings of the study reveal that human resource capabilities are positively correlated to organisational performance. Furthermore, human resource capability was found to be a significant predictor of sustainable competitive advantage. More samples from different Indian companies, especially middle and small scale industries, can enrich the current study. This study contributes to the existing theory about the strategic importance of human capital for organisational performance and sustainable competitive advantage from resource-based view of the firm in the Indian context. The study will contribute to the understanding of Indian human resource management (HRM) as an imperative for strategic HRM and international human resource management. Business organisations will get an insight into the Indian business scenario and can chalk out their strategic policies and human resource planning with this perspective.


Abstract

Purpose - The purpose of this article is to examine the role of human resource capability (HRC) in organisational performance and sustainable competitive advantage (SCA) in Indian global organisations.

Design/methodology/approach - To carry out the present study, an empirical research on a random sample of 300 line or human resource managers from nine Indian and foreign global organisations, from New Delhi (the National capital region of India) is carried out. The principal research method employed included the sample and measurements tools, and data analysis concerning the human resource capabilities for organisational performance and sustainable competitive advantage by using SPSS package 12.

Findings - The findings of the study reveal that human resource capabilities are positively correlated to organisational performance. Furthermore, human resource capability was found to be a significant predictor of sustainable competitive advantage.

Research limitations/implications - More samples from different Indian companies, especially middle and small scale industries, can enrich the current study.

Practical implications - This study contributes to the existing theory about the strategic importance of human capital for organisational performance and sustainable competitive advantage from resource-based view of the firm in the Indian context.

Originality/value - The study will contribute to the understanding of Indian human resource management (HRM) as an imperative for strategic HRM and international human resource management. Business organisations will get an insight into the Indian business scenario and can chalk out their strategic policies and human resource planning with this perspective.

Keywords Human resource management, Organizational performance, Competitive advantage, India

Paper type Research paper

Introduction

Recent liberalisation of economy and opening up of the market to global competition has forced Indian corporate world to have a serious relook at their management and human resource management (HRM) practices. There is a growing belief that if they have to survive and thrive in global economy, they require world-class human resource (HR) competencies and the processes for managing them. Developing a critical mass of employees who are knowledgeable or skilled in a particular technology may constitute a potential source of competitive advantage for them (Khandekar and Sharma, 2005). As a result, more and more domestic organisations are designing their HR systems in a way that enable employees to use the knowledge for competitive edge. This is more so in the case of Indian global firms. The performance of the global organisations depends on their ability to cope with heterogeneous culture, coordinating diverse resources, competitive environment and to leverage innovations across national boundaries (Bartlett and Ghosal, 1989; Carpenter and Gerrard Sanders, 1998; Hitt et al, 2001). Consequently, like many business corporations around the world, Indian multi-national companies (MNCs) and global firms have started shifting their emphasis to human resources with their knowledge and experience, as the central resource for organisational performance. Among a firm's intangible resources, HR is more likely to produce a competitive advantage because they often are truly rare and can be more difficult for competitors to imitate (quoted from Jackson et al, 2004). In line with resource-based view (RBV) of the firm, this paper empirically tests the relationship between HRM capabilities, organisational performance and sustainable competitive advantage in the Indian context. While much of the research is done in the western context, the purpose of this study is to gain an understanding about how Indian global organisations are managing their HRM capabilities as well as its relationship with organisational performance and sustainable competitive advantage. The following sections will address the theoretical framework and hypotheses. The principal research method employed included the sample and measurements tools, and data analysis concerning the HR capabilities for organisational performance and sustainable competitive advantage. Finally in a discussion based on the empirical analysis, relevant conclusions are reached.