PAMANTASAN NG LUNGSOD NG MAYNILA
UNIVERSITY OF THE CITY OF MANILA
INTRAMUROS, MANILA, PHILIPPINES
Network-building Practices: A Strategic Human Resource Practices in Sustaining Competitive Advantage in Pharmaceutical Industries
Vanessa Joyce V. Sunga
Pamantasan ng Lungsod ng Maynila
Master of Arts in Industrial Psychology
Dr. Bernie Ofalia
The growth in Pharmaceutical industry in the Philippines has started to slow down to a crawl. The pharmaceutical industry has been quite radically reshaped for the past years, and now struggling with the challenges made by Maximum Drug Retail Price (MDRP) scheme or the Cheaper Medicines Law. Reinier Gloor (2010), president and executive director of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), points out that the MDRP scheme, with the recognition of the Department of Health (DOH), has taken out PHP 12 billion or approximately USD 270 million of the pharmaceutical market. In the report presented by IMS Philippines, the total Philippine pharmaceutical market is now growing at only 2.87% annually as of the first quarter of 2010 compared to 6% to 9% growth between 2007 and 2009. As a solution to deal with this unpredictable scenario, creating the best strategic HR practices can be the key drivers to the success and growth of an organization. The purpose of this study is to create a different approach in strategic HR practices which focuses on the Network-building HR practice that could sustain organizations’ competitive advantage during this fast changing environment.
The foundation of any successful organization is having good sets of relationships with other people in their own company as well as with people outside of their organization. Identifying the people who has potential value to the company is essential. The structure and strength of ties to the people needed by the company to increase its performance is also important. Research on strategic human resource management suggests that firms can create and support employee-based competencies through HR practices (Wright et al., 2001). Similarly, research on SHRM also suggests that HR practices can enhance firm performance when they are internally aligned with one another to manage employees in a manner that leads to competitive advantage (Delery & Doty, 1996). Further, the appropriateness of a set of HR practices may depend on the competency that a firm is trying to develop (Snell et al., 1996). Thus, the researcher wants to develop a system of strategic human resource practices that support the sustainability of the competitive advantage by means of network-building HR Practice.
In this study, network-building HR practice refers to a system of expanding personal connections and sets of relationships with individuals within and outside the organization. Networks can vary on the strength of ties between individuals. If social networks are idiosyncratic because they are created through firm-specific-practices, then they can lead to sustainable competitive advantage (Barney, 1991).
In general, networking has three distinct types of key players, each of which plays a big role in the society. In the book, The Tipping Point by Malcolm Gladwell (2000), it shows how dissemination of information can be easily spread out, not with large numbers of people randomly interacting with one another, rather, information can spread by a very few key people with exactly three roles -- the connector, the maven, and the salesman. The Connectors are people who are well connected. They know a lot of people within and beyond their industry. Mavens are individuals who have an expansive knowledge base about their particular industry. Salesmen are individuals with good persuasion skills.
In this study, the researcher would want to determine and further enhance the use of...
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