relationship between HR system use for critical employees with more narrow
performance metrics than with organization-wide metrics that are inXuenced by
a variety of factors, many of which may have nothing to do with how employees are
managed.
A related issue emerges when we consider that diVerent skills sets within
organizations must often be combined to realize strategic priorities (Boxall 1996 ,
1998 ; Purcell et al. 2004 ) and these interactions may extend to employee groups
outside of organizations as well (Lepak and Snell 2003 ; Rubery et al. 2004 ). While
diVerent employee groups are likely to vary in how they add value, or the extent of
their value added, we have to also consider the technical and social interdepend-
encies that exist between employee groups (Baron and Kreps 1999 ). While the
independent contributions of some employee groups toward value-creating activ-
ities may admittedly be fairly low, it is conceivable that they serve an important
supportive role that facilitates valuable and unique contributions of other
employee groups or organizational processes that are vital to a company’s strategic
objectives. This possibility highlights the importance of managing both each
individual employment subsystem as well as the coordination of employee eVorts
across employee subsystems.
One of the underlying arguments for an architectural perspective is that com-
panies may adjust their level of investment in diVerent employee groups based on
their potential contribution toward competitive advantage. Conceptually, this
suggests that understanding the impact of HR onWrm performance requires
examination of appropriate performance metrics to reXect how employee groups
add value as well as how multiple employee groups are managed simultaneously—
rather than focusing on the use of a particular HR system across employees or
focusing solely on one employee group.
11.5 Knowledge Flows and
the HR Architecture
.........................................................................................................................................................................................
According to the resource-based view of theWrm, a sustained competitive advan-
tage is created ‘when implementing a value creating strategy not simultaneously
implemented by any current or potential competitorandwhen these otherWrms
are unable to duplicate the beneWts of this strategy’ (Barney 1991 : 102 ). This is
achieved by basing competition on internal resources that are valuable, rare,
inimitable, and non-substitutable. While there are many diVerent resources that
may serve as a source of competitive advantage, a frequently cited source is the
knowledge embedded in their people (Jackson et al. 2003 ). Such knowledge
222 david lepak and scott a. snell