The Quest towards Obtaining a Competitive Advantage in Organizations through Managing the Human Capital

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Nikaela Wilson
Iva Vuksanović Herceg


The aim of this paper was to shed light on how managing human capital can contribute to obtaining a competitive advantage in organizations. This was done by conducting a literature review by examining and synthesizing the available literature from various research and scholars. Moreover, it included research into the different perspectives pertaining to the elements and approaches of human capital as it relates to competitive advantage in organizations. The literature reveals that Human capital plays a significant role as a contributor to obtaining a competitive advantage in organizations, which ensures high quality in the selection and recruitment of employees. Based on the literature, certain challenges may be encountered regarding human capital, and these challenges may inhibit the attainment of competitive advantages. Furthermore, the paper brings to light the approaches to utilizing human capital to achieve a competitive advantage. The Resource base view and the Human capital theory were the approaches discussed and considered relevant in navigating human capital towards a competitive stance. The distinctive character of the organization could be realized through the human capital concept; investing in employees bring about new ideas and solutions to the organization. While other resources are owned by the organization, such as technology and equipment, the human capital emanates from the employment relationship and could not be regarded as organizational-owned property but is also privy to its success. Human capital is viewed as an essential component of intellectual capital. Industry 4.0 was also seen as an important contributor to competitive advantage as the advanced technology seems to employ more modern ways of getting the job done. Even though advanced technology is necessary, among other factors, the quest towards the achievement of competitive advantage lies in the role of adequately managing human capital because human capital neutralizes threats, exploits opportunities, and enhances organizational efficiency that has the potential to lead to a competitive advantage.

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