Question

In your opinion, is the human resource function, or the management accounting function, more important to the competitive advantage of the contemporary firm? You should use evidence and examples to justify your arguments.

Answer 1

Today's competitive landscape is facing many disruptions due to rapidly changing technology, changing consumer preference and increased influence of social media and internet in all domains.

Thus the role played by Human Resource (HR) function in building competitive advantage is extremely crucial.

The HR plays a key role in establishing the culture of the company. Google has 80:20 rule where employees can work on their passion 20% of their time. This is an example of revolutionary HR function. Google also encourages innovation and has culture of encouraging innovative ideas and funding the innovative ideas. HR has played a key role in making Google hub of innovation. Google company HR has encouraged entrepreneurial innovation through data access and open development environment in the company. All mergers and acquisitions need cultural amalgamation spearheaded by HR.

The role played by Finance function in building competitive advantage is extremely crucial as well.

Finance plays crucial role in determining the location of the head office to reduce tax liability legally for Multi National Corporations (MNC). Finance also highlights ways to get low cost of capital which can become source of competitive advantage.

Flipkart was earlier headquartered in India but has moved its head office to Singapore to reduce tax outlay. Olam International has moved its head office to Singapore to get low cost of capital.