Much has been written on the ways in which firms may accomplish their strategic objectives. Many scholars have emphasized the importance of environmental forces that may influence and shape a firm’s strategic position, while others have stressed the roles of a firm’s internal structures and coordinating mechanisms that may be used to execute the chosen strategies. What is clear is that there must be an alignment between the forces outside the firm—many of which are beyond the firm’s control—and the policies, programs, and systems that are used to manage the firm’s day-to-day operations1.
(1 It is important to note that firms really do not behave—people do. However, for the sake of convenience and convention, we will refer to firm actions in a manner that is similar to those of the people who are associated with it.)
To achieve this alignment, firm leaders make choices about identity, values, and goals as a means for reacting to and anticipating market conditions that affect their firm’s competitiveness. These choices can have a significant impact on operational quality, customer satisfaction and loyalty, and profitability. So rather than accept the fates of the environment, it is critically important that executives and managers take considered, purposeful, and sometimes bold actions that not only respond to competitive forces, but anticipate market influences in order to create value, gain the upper-hand in competitive position, and achieve long-term strategic objectives.
One of the key considerations for creating alignment is an understanding of the role that human capital plays in delivering value and sustaining competitiveness. Managing people is arguably one of the most vexing challenges in the hospitality industry. Indeed, human resource concerns top the list of the most critical managerial challenges in our industry. Tight labor markets, increasing and rapidly changing labor legislation, and high turnover are among the numerous problems that pose serious threats to maintaining a strong competitive position. Therefore, rigorous efforts must be taken to make sure that the policies, procedures, and systems for attracting, selecting, developing, and retaining the best employees are consistent with the firm’s business strategies and account for the dynamic conditions within the firm’s competitive markets—in other words, support strategic and functional alignment (cf. Wright & Snell, 1998; Way, 2006; Way & Johnson, 2005).
The outline of this article is as follows. We will begin by presenting some of the realities (at least a sampling thereof) about HR in the hospitality industry, followed by an overview of the resource-based view (RVB), one of the most predominant frameworks that has been developed for explaining how HR can enhance firm performance and sustainability. We will then extend this framework and present a discussion on flexible HR systems and the associated policies and practices that support such systems which may enhance the capacity of hospitality firms to achieve their strategic objectives and gain sustainable competitive advantage.