Your PDF has successfully downloaded.

You may be interested in finding more content on these topics:


You are not currently logged in.

Access JSTOR through your library or other institution:


Log in through your institution.

Human Resource Systems and Sustained Competitive Advantage: A Competency-Based Perspective

Augustine A. Lado and Mary C. Wilson
The Academy of Management Review
Vol. 19, No. 4 (Oct., 1994), pp. 699-727
Published by: Academy of Management
Stable URL:
Page Count: 29
  • Download PDF
  • Add to My Lists
  • Cite this Item
We're having trouble loading this content. Download PDF instead.


Drawing on the theoretical insights from the resource-based view of strategic management, this article explores the potential of human resource systems to facilitate or inhibit the development and utilization of organizational competencies. These competencies-managerial, input-based, transformational, and output-based-are presumed to yield sustained competitive advantage for a firm. The competency-based perspective, by focusing attention on the HR activities, functions, and processes that enhance or impede competency accumulation and exploitation, complements the behavioral perspective (Schuler & Jackson, 1987) and, thus, potentially enhances the understanding of strategic human resource management.

Notes and References

This item contains 157 references.

  • Abelson, M. A., & Baysinger, B. D. 1984. Optimal and dysfunctional turnover: Toward an organizational level model. Academy of Management Review, 9: 331-341.
  • Akerlof, G. A.1970. The market for "lemons": Quality uncertainty and the market mecha- nism. Quarterly Journal of Economics, 84: 488-500.
  • Alchian, A. A., & Demsetz, H. 1972. Production, information costs, and economic organiza- tion. American Economic Review, 62: 777-795.
  • Amit, R., & Schoemaker, P. J. H. 1993. Strategic assets and organizational rent. Strategic Management Journal, 14: 33-46.
  • Argyris, C.1957. The individual and organization: Some problems of mutual adjustment. Administrative Science Quarterly, 2: 1-24.
  • Argyris, C.1986. Reinforcing organizational defensive routines: An unintended human re- sources activity. Human Resource Management, 25: 541-555.
  • Argyris, C., & Schon, D. A. 1978. Organizational learning. Reading, MA: Addison-Wesley.
  • Barney, J. B.1986a. Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review, 11: 656-665.
  • Barney, J. B.1986b. Strategic factor markets, expectations, luck, and business strategy. Management Science, 42: 1231-1241.
  • Barney, J. B.1986c. Types of competition and the theory of strategy: Toward an integrative framework. Academy of Management Review, 11: 791-800.
  • Barney, J.1991. Firm resources and sustained competitive advantage. Journal of Manage- ment, 17: 99-120.
  • Barney, J. B.1992. Integrating organizational behavior and strategy formulation research: A resource-based analysis. In P. Shrivastava, A. Huff, & J. Dutton (Eds.), Advances in strategic management, vol. 8: 39-61. Greenwich, CT: JAI Press.
  • Bateman, T. S., & Organ, D. W. 1983. Job satisfaction and the good soldier: The relationship between affect and employee "citizenship." Academy of Management Journal, 26: 587- 595.
  • Becker, G.1975. Human capital. New York: National Bureau of Research.
  • Bies, R. J., & Tyler, T. R. 1993. The "litigation mentality" in organizations. Organization Science, 4: 352-366.
  • Boudreau, J., & Berger, C. 1985. Decision-theoretic utility analysis applied to employee separations and acquisitions. Journal of Applied Psychology, 70: 581-612.
  • Bounds, G. M., & Pace, L. A. 1991. Human resource management for competitive capability. In M. Stahl & G. Bounds (Eds.), Competing globally through customer value: 648-682. New York: Quorum Books.
  • Bowen, D. E., Ledford, G. E., Jr., & Nathan, B. R. 1991. Hiring for the organization, not the job. Academy of Management Executive, 5(4): 35-51.
  • Bower, G. H., & Hilgard, E. R. 1981. Theories of learning (5th ed.). Englewood Cliffs, NJ: Prentice Hall.
  • Camerer, C., & Vepsalainen, A. 1988. The economic efficiency of corporate culture. Strategic Management Journal, 9: 115-125.
  • Cangolesi, V. E., & Dill, W. R. 1965. Organizational learning: Observations toward a theory. Administrative Science Quarterly, 10: 175-203.
  • Cascio, W. F.1982. Costing human resources: The financial impact of behavior in organi- zations. Boston: PWS-Kent.
  • Cascio, W. F.1987. Applied psychology in personnel management (3rd ed.). Englewood Cliffs, NJ: Prentice Hall.
  • Cascio, W. F., & Ramos, R. A. 1986. Development and applications of a new method for assessing job performance in behavioral/economic terms. Journal of Applied Psychol- ogy, 64: 107-118.
  • Castanias, R. P., & Helfat, C. E. 1991. Managerial resources and rents. Journal of Manage- ment, 17: 155-171.
  • Chatman, J. A.1989. Improving interactional organizational research: A model of person- organization fit. Academy of Management Review, 14: 333-349.
  • Chatman, J. A.1991. Matching people and organizations: Selection and socialization in public accounting firms. Administrative Science Quarterly, 36: 459-484.
  • Conner, K. R.1991. A historical comparison of resource-based theory and five schools of thought within industrial organization economics: Do we have a new theory of the firm? Journal of Management, 17: 121-154.
  • Daft, R. L., & Weick, K. E. 1984. Toward a model of organizations as interpretation systems. Academy of Management Review, 9: 284-296.
  • Deming, W. E.1986. Out of the crisis. Cambridge: Massachusetts Institute of Technology, Center for Advanced Engineering Study.
  • Dierickx, I., & Cool, K. 1989. Asset stock accumulation and sustainability of competitive advantage. Management Science, 35: 1504-1511.
  • Dobbins, G. H., Cardy, R. L., & Carson, K. 1991. Examining fundamental assumptions: A contrast of person and system approaches to human resource management. Research in Personnel and Human Resource Management, 9: 1-38.
  • Doeringer, P., & Piore, M. 1971. Internal labor markets and manpower analysis. Lexington, MA: Heath.
  • Drucker, P. F.1974. Management. New York: Harper.
  • Duncan, R. B.1974. Modifications in decision structure in adapting to the environment: Some implications for organizational learning. Decision Sciences, 5: 705-724.
  • Dutton, J. E., & Ashford, S. J. 1993. Selling issues to top management. Academy of Manage- ment Review, 18: 397-428.
  • Dutton, J. E., & Jackson, S. E. 1987. Categorizing strategic issues: Links to organizational action. Academy of Management Review, 12: 76-90.
  • Dyer, L., & Holder, J. 1988. A strategic perspective of human resource management. In L. Dyer (Ed.), Human resource management: Evolving roles and responsibilities: 1-35. Washington, DC: American Society for Personnel Administration/Bureau of National Affairs.
  • Evans, P. A. L.1986. The strategic outcomes of human resource management. Human Re- source Management, 25: 149-167.
  • Fiol, C. M.1991. Managing culture as a competitive resource: An identity-based view of sustainable competitive advantage. Journal of Management, 17: 191-211.
  • Fiol, C. M., & Lyles, M. A. 1985. Organizational learning. Academy of Management Review, 10: 803-813.
  • Floyd, S. W., & Woodridge, B. 1992. Managing strategic consensus: The foundation of ef- fective implementation. Academy of Management Executive, 6(4): 27-39.
  • Foa, E. B., & Foa, U. G. 1980. Resource theory: Interpersonal behavior as exchange. In K. J. Gergen, M. S. Greenberg, & R. H. Willis (Eds.), Social exchange: 77-94. New York: Plenum Press.
  • Gerstein, M., & Reisman, H. 1983. Strategic selection: Matching executives to business conditions. Sloan Management Review, 24(2): 1-18.
  • Golden, K., & Ramanujam, V. 1985. Between a dream and a nightmare: On the integration of the human resource management and strategic business planning processes. Human Resource Management, 24: 429-452.
  • Gouldner, A. W.1954. Patterns of industrial bureaucracy. New York: Free Press.
  • Grant, R. M.1991. The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33(3): 114- 135.
  • Greer, C. R., & Ireland, T. C. 1992. Organizational and financial correlates of a "Contrarian" human resource investment strategy. Academy of Management Journal, 35: 956-984.
  • Griesinger, D. W.1990. The human side of economic organization. Academy of Management Review, 15: 478-499.
  • Gupta, A., & Govindarajan, V. 1986. Resource sharing among SBUs: Strategic antecedents and administrative implications. Academy of Management Journal, 29: 695-714.
  • Hackman, R., & Oldham, G. R. 1976. Motivation through the design of work: Test of a theory. Organizational Behavior and Human Performance, 16: 250-279.
  • Hambrick, D. C., & Mason, P. A. 1984. Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9: 193-206.
  • Hamel, G., & Prahalad, C. K. 1989. Strategic intent. Harvard Business Review, 67(3): 63-76.
  • Hansen, G. S., & Wernerfelt, B. 1989. Determinants of firm performance: The relative impor- tance of economic and organizational factors. Strategic Management Journal, 10: 399- 411.
  • Jackson, S. E., Schuler, R. S., & Rivero, J. C. 1989. Organizational characteristics as predic- tors of personnel practices. Personnel Psychology, 42: 727-786.
  • Jansen, E., & Von Glinow, M. A. 1985. Ethical ambivalence and organizational reward sys- tems. Academy of Management Review, 10: 814-822.
  • Joll, C., McKenna, C., McNabb, R., & Shorey, J. 1983. Developments in labor market analysis. London: Allen & Unwin.
  • Jones, G. R.1983. Transaction costs, property rights, and organizational culture: An ex- change perspective. Administrative Science Quarterly, 28: 454-467.
  • Jovanovic, B.1979a. Job matching and the theory of turnover. Journal of Political Economy, 87: 972-990.
  • Jovanovic, B.1979b. Firm-specific capital and turnover. Journal of Political Economy, 87: 1246-1260.
  • Kanter, R. M.1986. The new workforce meets the changing workplace: Strains, dilemmas, and contradictions in attempts to implement participative and entrepreneurial manage- ment. Human Resource Management, 25: 515-537.
  • Kazanjian, R. K., & Drazin, R. 1986. Implementing manufacturing innovations: Critical choices of structure and staffing roles. Human Resource Management, 25: 385-403.
  • Kerr, S.1975. On the folly of rewarding A while hoping for B. Academy of Management Journal, 18: 769-783.
  • Kidwell, R. E., Jr., & Bennett, N. 1993. Employee propensity to withhold effort: A conceptual model to intersect three avenues of research. Academy of Management Review, 18: 429-456.
  • Lado, A. A., Boyd, N. G., & Wright, P. 1992. A competency-based model of sustainable competitive advantage: Toward a conceptual integration. Journal of Management, 18: 77-91.
  • Landy, F. J., & Farr, J. L. 1983. The measurement of work performance: Methods, theory, and applications. New York: Academic Press.
  • Landy, F. J., Farr, J. L., & Jacobs, R. R. 1982. Utility concepts in performance measurement. Organizational Behavior and Human Performance, 30: 15-40.
  • Latham, G., & Wexley, K. N. 1991. Increasing productivity through performance appraisal. Reading, MA: Addison-Wesley.
  • Lawler, E. E., III. 1992. Pay the person, not the job. Industry Week. December 7: 19-24.
  • Leibenstein, H.1987. Entrepreneurship, entrepreneurial training, and X-efficiency theory. Journal of Economic Behavior and Organizations. 8: 191-205.
  • Leonard-Barton, D.1992. Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13: 111-125.
  • Lengnick-Hall, C. A., & Lengnick-Hall, M. L. 1988. Strategic human resource management: A review of the literature and proposed typology. Academy of Management Review, 13: 454-470.
  • Lippman S. A., & Rumelt, R. P. 1982. Uncertain imitability: An analysis of interfirm differ- ences in efficiency under competition. Bell Journal of Economics, 13: 418-438.
  • MacDuffie, J. P., & Kochan, T. A. 1991. Does the U.S. underinvest in training? Determinants of training in the world economy. Paper presented at the annual meeting of the Acad- emy of Management, Miami.
  • Macneil, I. R.1986. Exchange revisited: Individual utility and social solidarity. Ethics, 96: 567-593.
  • Mahoney, J. T., & Pandian, J. R. 1992. The resource-based view within the conversation of strategic management. Strategic Management Journal, 13: 363-380.
  • Mahoney, T. A., & Deckop, J. R. 1986. Evolution of concept and practice in personnel admin- istration/human resource management (PA/HRM). Journal of Management, 12: 223-241.
  • March, J. G.1991. Exploration and exploitation in organizational learning. Organization Science, 2: 71-87.
  • March, J. G., & Simon, H. A. 1958. Organizations. New York: Wiley.
  • Martinko, M. J., & Gardner, W. L. 1982. Learned helplessness: An alternative explanation for performance deficits. Academy of Management Review, 7: 195-204.
  • Maruyama, M.1963. The second cybernetics: Deviation amplifying mutual causal processes. American Scientist, 51: 164-179.
  • Meyer, H. H.1991. A solution to the performance feedback enigma. Academy of Manage- ment Executive, 5(1): 68-76.
  • Miller, D.1993. The architecture of simplicity. Academy of Management Review, 18: 116-138.
  • Miner, A.1987. Idiosyncratic jobs in formal organizations. Administrative Science Quarterly, 32: 327-351.
  • Mitroff, I. I., & Emshoff, J. 1979. On strategic assumption-making: A methodology for stra- tegic problem solving. Academy of Management Review, 4: 1-12.
  • Moore, D. P., & Haas, M. 1993. When affirmative action cloaks management bias. Academy of Management Executive, 4(1): 84-90.
  • Morgan, G.1986. Images of organization. Beverly Hills, CA: Sage.
  • Murphy, K., & Cleveland, J. N. 1991. Performance appraisal: An organizational perspective. Needham Heights, MA: Allyn & Bacon.
  • Nayyar, P.1990. Information asymmetries: A source of competitive advantage for diversified service firms. Strategic Management Journal, 11: 513-519.
  • Nelson, R. R.1991. Why do firms differ and how does it matter? [Special issue]. Strategic Management Journal, 12: 61-74.
  • Nelson, R. R., & Winter, S. 1982. An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.
  • Nonaka, I.1988. Self-renewal of the Japanese firm and the human resource strategy. Human Resource Management, 27: 45-62.
  • Nonaka, I.1991. The knowledge-creating company. Harvard Business Review, 69(6): 96-104.
  • Nord, W. R.1969. Beyond the teaching machine. The neglected area of operant conditioning in the theory and practice of management. Organizational Behavior and Human Per- formance, 4: 375-401.
  • Odiorne, G. S.1984. Strategic management of human resources: A portfolio approach. San Francisco: Jossey-Bass.
  • Olian, J. D., & Rynes, S. L. 1984. Organizational staffing: Integrating practice with strategy. Industrial Relations, 23: 170-183.
  • O'Toole, J.1985. Employee practices at the best managed companies. California Manage- ment Review, 28(1): 35-66.
  • Parnes, H. S.1984. People power. Beverly Hills, CA: Sage.
  • Pavitt, K.1991. Key characteristics of the large innovating firm. British Journal of Manage- ment, 2: 208-230.
  • Penrose, E. T.1959. The theory of the growth of the firm. New York: Wiley.
  • Peters, T. J., & Waterman, R. H., Jr. 1982. In search of excellence. New York: Harper & Row.
  • Polanyi, M.1967. The tacit dimension. Garden City, NY: Anchor.
  • Porter, M. E.1985. Competitive advantage. New York: Free Press.
  • Prahalad, C. K., & Bettis, R. A. 1986. The dominant logic: A new linkage between diversity and performance. Strategic Management Journal, 7: 485-501.
  • Prahalad, C. K., & Hamel, G. 1990. The core competence of the corporation. Harvard Busi- ness Review, 68(3): 79-91.
  • Prescott, E. C., & Visscher, M. 1980. Organizational capital. Journal of Political Economy, 88: 446-461.
  • Ranson, B.1987. The institutionalist theory of capital formation. Journal of Economic Issues, 21: 1265-1278.
  • Reed, R., & DeFillippi, R. 1990. Causal ambiguity, barriers to imitation, and sustainable competitive advantage. Academy of Management Review, 15: 88-102.
  • Rumelt, R. P.1984. Toward a strategic theory of the firm. In R. Lamb (Ed.), Competitive strategic management: 556-570. Englewood Cliffs, NJ: Prentice Hall.
  • Rumelt, R. P.1987. Theory, strategy, and entrepreneurship. In D. J. Teece (Ed.), The com- petitive challenge137-158. Cambridge, MA: Ballinger.
  • Rumelt, R. P.1991. How much does industry matter? Strategic Management Journal, 12: 167-185.
  • Schein, E. H.1983. The role of the founder in creating organizational culture. Organizational Dynamics, 12(1): 13-28.
  • Schein, E. H.1985. Organizational culture and leadership. San Francisco: Jossey-Bass.
  • Schilit, W. K., & Locke, E. A. 1982. A study of upward influence in organizations. Adminis- trative Science Quarterly, 27: 304-316.
  • Schoemaker, P. J. H.1990. Strategy, complexity, and economic rent. Management Science, 36: 1178-1192.
  • Schuler, R. S., 1986. Fostering and facilitating entrepreneurship in organizations: Implica- tions for organization structure and human resource practices. Human Resource Man- agement, 25: 607-629.
  • Schuler, R. S.1990. Repositioning the human resource function: Transformation or demise? Academy of Management Executive, 4(3): 49-60.
  • Schuler, R. S., & Jackson, S. E. 1987. Linking competitive strategies with human resource management practices. Academy of Management Executive, 1(3): 207-219.
  • Schuler, R. S., & MacMillan, I. C. 1984. Gaining competitive advantage through human resource management practices. Human Resource Management, 23: 241-255.
  • Schultz, A., & Luckman, T. 1985. The structures of the life-world. Evanston, IL: Northwestern University Press.
  • Schumpeter, J. A.1934. The theory of economic development. Cambridge, MA: Harvard Uni- versity Press.
  • Schumpeter, J. A.1942. Capitalism, socialism, and democracy. New York: Harper & Brothers.
  • Selznick, P.1957. Leadership in administration. New York: Harper & Row.
  • Shapiro, C.1982. Consumer information, product quality, and seller reputation. Bell Journal of Economics, 13: 20-35.
  • Shapiro, C.1983. Premiums for high quality as returns to reputation. Quarterly Journal of Economics, 97: 659-686.
  • Sitkin, S. B., & Bies, R. J. 1993. The legalistic organization: Definitions, dimensions and dilemmas. Organization Science, 4: 345-351.
  • Sitkin, S. B., & Roth, N. L. 1993. Explaining the limited effectiveness of legalistic "remedies" for trust/distrust. Organization Science, 4: 367-392.
  • Skinner, B. F.1971. Beyond freedom and dignity. New York: Appleton-Century-Crofts.
  • Smircich, L., & Stubbart, C. 1985. Strategic management in an enacted world. Academy of Management Review, 10: 724-736.
  • Snell, S. A.1992. Control theory in strategic human resource management: The mediating effect of administrative information. Academy of Management Journal, 35: 292-327.
  • Snell, S. A., & Dean, J. W. 1992. Integrated manufacturing and human resource manage- ment: A human capital perspective. Academy of Management Journal.35: 467-504.
  • Stalk, G., Evans, P., & Shulman, L. E. 1992. Competing on capabilities: The new rules of corporate strategy. Harvard Business Review.70(2): 57-69.
  • Starbuck, W. H.1983. Organizations as action generators. American Sociological Review, 48: 91-102.
  • Steffy, B. D., & Maurer, S. D. 1988. Conceptualizing and measuring the economic effective- ness of human resource activities. Academy of Management Review, 13: 271-286.
  • Teece, D. J.1987. The competitive challenge: Strategies for industrial innovation and re- newal. Cambridge, MA: Ballinger.
  • Teece, D. J., Pisano, G., & Shuen, A. 1990. Firm capabilities, resources, and the concept of strategy. Working paper, University of California at Berkeley.
  • Thompson, J. D.1967. Organizations in action. New York: McGraw-Hill.
  • Tomer, J. F.1987. Organizational capital. New York: Praeger.
  • Tushman, M. L., & Romanelli, E. 1985. Organizational evolution: A metamorphosis model of convergence and reorientation. In L. L. Cummings & B. M. Staw (Eds.), Research in organizational behavior, vol. 7: 171-222. Greenwich, CT: JAI Press.
  • Ulrich, D., & Lake, D. 1990. Organizational capability. New York: Wiley.
  • Ulrich, D., & Lake, D. 1991. Organizational capability: Creating competitive advantage, Academy of Management Executive, 5(1): 77-92.
  • Walton, R. E.1985. From control to commitment in the workplace. Harvard Business Review, 63(2): 1985.
  • Wanous, J. P.1992. Organizational entry: Recruitment, selection, orientation and socializa- tion of newcomers (2nd ed.). Reading, MA: Addison-Wesley.
  • Weick, K.1979. The social psychology of organizing. Reading, MA: Addison-Wesley.
  • Weick, K. E.1991. The nontraditional quality of organizational learning. Organization Sci- ence, 2: 116-124.
  • Weigelt, K., & Camerer, C. 1988. Reputation and corporate strategy: A review of recent theory and applications. Strategic Management Journal, 9: 443-454.
  • Wernerfelt, B.1984. A resource-based view of the firm. Strategic Management Journal, 5: 171-180.
  • Westley, F. R.1990. Middle managers and strategy: Microdynamics of inclusion. Strategic Management Journal, 11: 337-351.
  • Westley, F., & Mintzberg, H. 1989. Visionary leadership and strategic management. Strate- gic Management Journal, 10: 17-32.
  • Wexley, K. N., & Latham, G. P. 1991. Developing and training human resources in organi- zations. New York: Harper Collins.
  • Wiener, Y.1988. Forms of value systems: A focus on organizational effectiveness and cul- tural change and maintenance. Academy of Management Review, 13: 534-545.
  • Wilkins, A., & Ouchi, W. 1983. Efficient cultures: Exploring the relationships between culture and organizational performance. Administrative Science Quarterly, 42: 726-743.
  • Williamson, 0. E.1981. The economics of organization: The transaction cost approach. American Journal of Sociology, 87: 548-577.
  • Williamson, 0. E.1985. The economic institutions of capitalism. New York: Free Press.
  • Williamson, 0. E., Wachter, M. L., & Harris, J. E. 1975. Understanding the employment re- lation: The analysis of idiosyncratic exchange. Bell Journal of Economics, 6: 250-277.
  • Wright, P. M., & McMahan, G. C. 1992. Theoretical perspectives for strategic human re- source management. Journal of Management, 18: 295-320.
  • Wright, P. M., & Snell, S. A. 1991. Toward an integrative view of strategic human resource management. Human Resource Management Review, 1: 203-225.