In business, we observe competitors having same technology, same infrastructure and same market. But, the performance is different. The question is what makes differences between similar companies. In other words should company develop technology first or Human Resource so as to get competitive advantage?
Beyond human resources and technology, many factors condition organizational performance. Weisbord's Six-Box Model, a relatively simple characterization of organizational life, identifies purposes, structure, relationships, rewards, leadership, and helpful mechanisms (but underestimates the external environment). Numerous other models of organizational change exist (and can be used in tandem) to throw (different) light on what can make a difference.
Organizational design makes difference.
For example, according to Galbraith Star Model, key elements that make an organization are: strategy, structure, processes, human resources, reward system.
According to McKinsey 7S model, key elements that make an organization are:
hard ones: strategy, structure, system
soft ones: staff, shared values, skills, style
There are more models of organizational design, but those two are the most frequently used.
As per my knowledge, I can tell that for the development of a company both technology and human resource is important but if we compare these two things, according to Indian business perspective Managing Human Resource will always go first because India is a labour based country where managing labour, fixing the cost is very much necessary before technology development.
The question: "What makes difference between similar tech and human resources firms?" has two limiting assumptions (1) it is firm centric and (2) resource based, so it needs to be challenged by different question/s.
The new questions are:
1/ How provider-beneficiaries interactions transform their value forming practices (that contain actions, tools and challengeable principles).
Here the classic is:
Vargo SL and Lusch RF (2015) Institutions and axioms: an extension and update of service-dominant logic. Journal of the Academy of Marketing Science 44(1): 5-23 - they clearly explain formation but poorly explain transformations mechanisms
2/ what is the transformation mechanism:
*here the Simon Sinek speech about why companies with the same technology and talents are more or less innovative, makes contribution
How great leaders inspire action | Simon Sinek https://www.youtube.com/watch?v=qp0HIF3SfI4 , look at Why is Apple so innovative, starting in 30se
*here the Social Practices Theory makes best contributions
* here the illustrative example of two AirBnB transformations of travelling practices are useful: (1) cheaper lodging (2007) (2) live like local (2014-15) makes the new question clear
If you combine the above items and study literature and solutions of last 5-10 years, you get new question/s and relevant frameworks.
My proposal is "How transformed repertoire of provider value forming practices inspire transformation of repertoire of beneficiaries value forming practices".
Richard Kleczek
PS
Please contributors to point the research that supports their contributions. it would help me to understand the content.
In the current hyper-competitive context for companies, I believe this is not a binary question: both critical resources need to be combined and act together to provide the company with a competitive edge. In the intelligence that human capital and the technology are set to be the most appropriate and updated for the given type of company, it is paramount that Human Resources adopt and learn to use the company's technology and systems to potentialise performance.
Technology is a broad term and and results will depend on industry sector and the stage of digitization the sector is at. A way to research is to look at less technology driven companies/industries/areas. e.g. social service, teaching, restaurant,....and yes one can make the argument, that even in those areas technologies will play a role.
I would also argue that when the infrastructure and market of a company are identical, it's important to take a look at the organizational culture of the company. Are the risks and the rewards the same at the two companies? McKinsey's 7S Model could be of interest to you if you'd like to do some reading on the matter, it boils down to: strategy, structure, systems, staff, style, skills, and shared values. The culture can substantially affect performance.
Even if the technology , infrastructure and market are same, the differentiation comes from quality of the products supplied and the culture of the organisation vis-a-vis customers. New technology need to be assimilated by the employees to have advantages. Currently technology can replace manpower in certain areas. In my opinion the answer for the question ;which is important- Technology or Human Resources for competitive advantage depends on the maturity of the industry and also treating both as complementary to each other.
When you have the same basis to work with, the key differentiators are how people in the company use that basis. These differentiators are related to a subtle interplay between people, process, systems and culture. Collectively they define the organizational capability, i.e. what the organization is capable of doing (and should be doing). You can use the 7S framework as suggested by Monica or several other frameworks but I'd argue that you first need to understand the drivers of these differentiators before selecting/designing your framework..
Broadly speaking there are 4 contributing parts:
1) people - do people have the skills and attitudes to do the "jobs to be done", do they want to do them (is it safe), do they feel empowered to do them (do they want to assume ownership/accountability), are people understanding and aligned (do they know what to do, with whom and how)
2) process - is the formal workflow designed in a manner that supports the jobs to be done (e.g. customer centric, project working, agile, easy handovers, encourage to take ownership etc.). Does the technology follow the desired workflow or does the workflow follow the technology (this is the case for most enterprise systems)
3) systems - is the capability structured logically, available in the right quantity and at the right place and time (i.e. systematically). An important part of this is about leadership enabling the environment (system) so that people can take the right amount of risk, feel safe in doing so and where accountability is exercised at the lowest possible point in the organization.
4) culture - this is by far the most complicated and important part. I like to say that culture is what people do when they don't know what to do. We often instantly recognize the best and worst features in culture (e.g. worst was for BP during deepwater horizon incidents, best can be Apple in customer service you receive compared to others). The previous 3 points have a major impact on the culture, so if you get those right you get most of the culture you want. The remaining part links to leadership, knowing people, driving diverse and inclusive discussion and decision making etc.
A lot more can be said but I hope these pointers are helpful for your project.
Technology changes the way HR departments contact employees, store files and analyze employee performance. Used well, technology makes HR practices more efficient. When used poorly, it can get in the way of managing the company's human resources. Good HR practices maximize the benefits and minimize the problems.
How Does Technology Impact HR Practices? | Chron.com
Human resource in my opinion makes a difference. This can be understood when one looks at both the product and service features of a product. Product features by large comprises of the technology i.e fixed tangible assets such as machinery , equipment, plants , computers just to mention a few. On the other hand , service features encompasses the intangible things offered by human resource such as customer service and customer care. Customer service therefore is the actual delivery in manner in which human resource delivers the product to the customer and whereas the customer care is the comfort the customer perceives to have received the service from the human resource while delivering the product. For example, if a customer receives a glass of wine from a gloomy faced human resource while standing and take it that is still customer service but if the same glass of wine is received by customer from a pleasant looking human resource who in first place who offered a seat to the customer before doing so then it makes a difference. Its therefore imperative as much as businesses invests in technology there must be equal concerted efforts in developing its human resource capital for this is the source of quality innovations, customer service and customer care.
The success of the company depends on how much attention it pays to the satisfaction, loyalty and involvement of all interested parties, i.e. metrics NPS, eNPS, SCI, etc.
Technology can have a large impact on human resources activities of an organization. It allows the company to improve its internal processes, core competencies, and relevant markets. This will lead to more effectiveness of the human resources activities and achievements.
I think let it also not lost that technology cant be the source of ideas or invocations its largely the human mental input or faculty that is the source of new ideas or innovations that makes the difference. Anybody can afford technology but not new ideas or innovations.
In short words: in my opinion, the key condition for the successful implementation of technology is to prepare human resources for it. Both processes should be seen as complementary and carried out simultaneously.
A combination of both. Competitors can copy technological infrastructure but then they can also hire competitors' employees. What really makes a difference? Culture of the companty.
Niyungeko Antoine
It depends on the stage in the life-cycle of the company. As a rule of thumb and for convenience, you could group companies into three (3) partitions.
Dear Niyungeko Antoine,
Your initial postulate is not correct -- there are no firms with totally identical technology and infrastructure, even in the same markets (for example, winter tires for cars that are necessary in Canada, Scandinavia, Poland, Russia, several states of the USA). The devil is in details -- different know-hows that lead to cost savings or (and) quality improvements, the small but very important differences in distribution methods, the nuances in managing product mix in the same market, flexibility of pricing strategies etc. Of course, development and implementation on all these largely 'invisible' competitive advantages depend on employees of all ranks, their motivation to creativity, mastering new ways of work and the ability to overcome the natural resistance to change.
Igor Gurkov has brought another not very easily seen angle to this discussion but oftenly illusive to many that l quite concur with . Technology and infrastructure can be manipulated in so easily so long as one has financial muscle to do so. However creativity and mastery way of doing things differently so as to overcome resistance to change is crucial. One has to find aproper mixture of doing it and that ' how' is what makes a difference . That can only be found in human resource and not infrastructure/technology which still by large rides on the ' how ' .
Thank you Igor and Amboka for your ideas. The Ideas of Igor highlight important thing about creativity, change resistance, motivation, new way of doing things, etc.
I can only share my viewpoints from a corporate global banking background. Where we often use similar technology, have similar infrastructure and the same market. However it's a tricky one because there are certain parts of the banking which is heavily automated or technology-driven, that you do not have any human interactions, in these case yes technology is important, on the other side there are human heavy interactions then the technology becomes a tool and having the right people becomes key. In this instance the company culture from the leadership to the front desk staff is key. Developing a robust, dynamic, inclusive, empowering culture, (HRM process) will attract the right people and will allow the workforce to take ownership and go the extra mile for the customers. The technology will then be the tool which will allow the workforce to service their customers.
As we all agree that HRM and technology are both important but in a very general note, I would say it is the people who are most important (This means the right culture, HRM process, Mission, Vission) and the technology becomes the tool which will allow the people to do their job and make a positive contribution to the success of the company. Hope this helps Niyungeko
Technology and skill must go together to compete in the race.
Yes.
All of the above-said helps, but for me, what makes or brakes a successful business are:
- the network of relations and connections everyone in a company has (and is willing to use) and the opportunities they get through these
- the degree of proficiency of interpersonal diplomacy aimed at effective marketing of a product/ service, lobbying at the right level, and influencing public and professional opinion
- the professional image of the company, created through tough times and rigorous testing
- having key geographical, production and transport location
- have the ability to think like your clients do; anticipate their needs
- seizing a business opportunity when the latter presents itself, not after others have spotted it (i.e. being the first in a field)
- and only then, remain being the best in a field through creativity, attracting ideas-people, management techniques, etc....
:)
The relationship between technology and human resources has become a central issue in Human Resource Management, especially now that we are facing a tremendous technological development and the rise of Big Data. For an approach to the subject, I recommend reading my article: Big data contributions to human resource management: a systematic review, published in The International Journal Of Human Resource Management, https://doi.org/10.1080/09585192.2019.1674357
The relationship between technology and people is direct . It is the people who use technology .
According to me what is important is the concern for people while adopting any technology and the vision to form strategies pertaining to its productive use. This would only lead to the intellectual resources for more innovative ideas and better relationship for long term survival
Dear Dr. Swati,
thank you for your contributions. I really appreciate them.
Best
Antoine
Technology and human resources should go together to the benefit of industry and society.
Dear Dr. Nelaturi V Raghavaiah , thank you for your comment.
Best
Antoine
Niyungeko, the extent to which companies survive and outperform their competitors is mainly based on a combination of capabilities (material, including technological and financial as well as non-material, including people or human capacity and their competencies). The work of successive scholars such as Teece (2009), Porter (1985) and Boyatzis and Boyatzis (2008) have researched extensively on such issues. Interesting stuff...
Dear John Mendy, thank you for your contribution.I appreciated it.
Human Resources and technology are very important to organizations. However, human resources remains on top of the ladder. Technology cannot function optimally in the absence of an effective human resources. In other words, for an organization to develop its technology, it must first develop its pool of human resources. This is because, no matter how highly advanced a technology is, it needs effective humans to function at its best.
Another example is this. Technology don't build or develop themselves. Humans are responsible for building them, using them effectively, and maintaining them efficiently.
Therefore, technology needs effective humans to deliver on its purpose. Otherwise, it becomes redundant and superfluous.