APPLICATION OF VRIO FRAMEWORK FOR ANALYZING HUMAN RESOURCES’ ROLE IN PROVIDING COMPETITIVE ADVANTAGE*

Abstract

In modern economic theory, employees are treated as most significant resource and due to their attributes marked as human resources. Usually, significance of human resources has been explained through their role in creating sustainable competitive advantage. Successful realization of human resources role assumes fulfilment of conditions within so-called VRIO framework. VRIO framework means that human resources have the following characteristics: value, rarity, inimitability, and organization. If human resources are valuable they may provide competitive equality. If they are also rare, they may provide current competitive advantage. If they are hard to imitate, they may provide sustainable competitive advantage, but only within the context that supports their effective and efficient usage. This paper points out the significance of human resources for creating competitive advantage, viewed from VRIO framework elements and analyses the extent to which initiative for using human resources’ potentials for competitiveness improvement is present in the companies in Serbia.