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Human systems reflect the dynamism of the human beings that serve as their fundamental components. They can be as rigid as the tightly monitored assembly line system producing manufactured goods, or as flexible as the virtual organization whose decentralized nature leaves production performance outside the strict control of management. The challenge for organizations is to create a human resource system that harnesses the dynamism of its human components to best complement the nonhuman subsystems, thereby maximizing the ability of the organization to efficiently achieve its strategic objectives. Across increasingly competitive industries, the efficiencies gained by human systems of the organization are crucial in generating competitive advantage. In order to be successful, business leaders must understand three key concepts related to the human system of their organization. First, that strategic human resource management can result in a sustainable competitive advantage. Second, that the design of organizational structures will either help or hinder an organization's ability to achieve its strategic objectives. And finally, leaders must understand that the distribution of power and influence impacts all levels of the workforce and its ability to function in pursuit of common goals.
The resource theory of a firm recognizes that because firms within a strategic group are mostly similar, resource differences are the source of sustainable competitive advantage. Across firms, process improvements, successful marketing approaches, and creative financial tools are often emulated by ones competitors. It is differences generated by successful human systems that are most difficult to imitate, and thus, firms whose strategic management of human resources generate maximum ...