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Human Resource Is the Most Important Asset of an Organization. Essay

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Below is an essay on "Human Resource Is the Most Important Asset of an Organization." from Anti Essays, your source for research papers, essays, and term paper examples.

It is easy to understand why organizations talk about people as an asset, but
tend to manage them largely as a cost to be minimized. Aside from accounting principles
that encourage this perspective, HR costs are easy to observe, while HR value creation
is not. Largely because of the traditional perspective on HR, organizations have no way
to measure HR’s strategic performance. Nevertheless, we know that intangibles in the
aggregate are an increasingly important source of firm value, and that human capital
ought to be a part of that asset value. For example, Baruch Lev and his colleagues at
New York University have demonstrated that an increasing share of a firm’s market
value can be attributed to the value of its intangible assets. Lev identifies several
sources of intangibles including what he calls organizational assets and “sharp
execution”.1
Similarly, then-CFO James Chestnut, after transferring the bulk of its
tangible assets to its bottlers, observed that Coke’s $150 billion market value derived
largely from its brand and management systems.2
The implication is that intangible
assets are increasingly important as sources of value creation, and that both strategy
implementation and management systems are key dimensions of these intangible
assets.
4
HR is a strategic asset because it can play a critical role in both strategy
implementation and management systems. Namely, the ability to execute strategy well
is a source of competitive advantage, and “people” are the lynchpin of effective strategy
execution. Reports in the business press conclude that the inability to execute strategy
is the number one source of CEO failure3
. Our own research provides a systematic
demonstration of this same point. As part of a national survey of more than 400 firms,
we asked respondents to rate the “suitability” of their strategy and how well it had been
executed. Our analysis found that the ability to execute well had a 10 times greater
impact on...

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"Human Resource Is the Most Important Asset of an Organization.". Anti Essays. 14 Dec. 2018

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APA Citation

Human Resource Is the Most Important Asset of an Organization.. Anti Essays. Retrieved December 14, 2018, from the World Wide Web: http://trenmayamx.com/free-essays/Human-Resource-Is-The-Most-Important-761875.html