Build Resources and Valuable Skills

Enhancing a firm's ability to cope with environmental circumstances, such a resource improves
organizational efficiency and/or effectiveness.
ITC has long understood the value of human resources as a means of increasing productivity, as well as
the costs associated with the poor management of human resources. Over the years, personnel
managers have been involved in every stage of the HR process. As a result, the organization can operate
more effectively than its competitors.
General Managers have the responsibility to make things happen. Personnel managers, on the other
hand, traditionally have defined their role more passively: they study, analyze, understand, and
recommend; seldom do they act.
This approach to integrate HRM concerns into decision making at the executive level has helped ITC to
respond rapidly and effectively to changes in the business. Access to the top office tells the whole
organization that HRM concerns are considered critical in practice, not only in word.
In practical terms, the value of ITC's approach to HRM concerns in top-level decision making expressed
itself by allowing itself to overcome a potential threat from the regulatory environment. The threat
came in the form of cost measures, central taxes etc. Cutting operational as well as employee wages
became an immediate measure to cater the rising tax levels.
The HRM policies and practices at ITC helped create and imbibe the trust among employees, and thus
demonstrated their value with respect to the wage adjustment efforts.

Developing Rare Skills and Resources

Valuable skills and resources cannot lead to the creation of sustainable competitive advantage if they
are shared by numerous firms within an industry. A firm will gain an advantage only when it implements
a value-creating strategy not simultaneously implemented by large numbers of competing.

Developing HRM Skills That Are Imperfectly Imitable

Aspects of ITC's HRM system can be viewed as valuable and rare--providing the organization with a
competitive advantage. These advantages cannot as sustained, though, unless they are difficult to
imitate.
The Absence of Close Substitutes
The final specification that must be met in order for a firm's resource to be a source of sustained
competitive advantage is that there must be no close substitutes for the resource which can be used to
conceive and implement the same strategies.