MIDLANDAS STATE UNIVERSITY

FACULTY OF SOCIAL SCIENCES

Name : Tatenda Amanda

Surname : Mudinzwa

Reg no : R153769p

Level : 2.2

Mode of entry : Parallel

Module code : PSY

Module Title : organizational Psychology

Lecturer : Mr M M Maseko

Industrial organizational psychology should expand its forces studying

individual and small group behavior to also study how psychology

contributes to organizations business strategies to sustain

competitive advantage .Discuss with reference to the resource based

theory Barney 1991.

Competitive advantage is gained when a firm acquires attributes that allow it to perform at a
higher level than others in the same industry .The strategic advantage of one business entity
has over its rival entities within its competitive industry is what enables it to achieve
competitive advantage over others .Achieving competitive advantage strengthens and positions
a business better within the business environment .A competitive advantage is an advantage
over competitors gained by offering consumers greater value, either by means of lower prices
or by providing greater benefits and service that justifies higher prices. This essay seeks to
explain how organizations can acquire this using psychology paying attention to (Barney 1991)

Organizations can use psychology to sustain competitive advantage over other organizations
when an organization acquires or develops an attribute or combination of attributes that allows
it to outperform its competitors. These attributes can include access to natural resources or
access to highly trained and skilled personnel human resources. It is an advantage (over the
competition), and must have some life; the competition must not be able to do it right away, or
it is not sustainable. It is an advantage that is not easily copied and, thus, can be maintained
over a long period of time. Competitive advantage is a key determinant of superior
performance, and ensures survival and prominent placing in the market. Superior performance
is the ultimate, desired goal of a firm; competitive advantage becomes the foundation. It gives
firms the ability to stay ahead of present or potential competition and ensure market
leadership. (Boundless, 20 Sep. 2016)

An organization can achieve competitive advantage over organizations by making sure that
their goods and services provided are unique and that they are valuable .when goods and
services are valuable it means that they can make an organization conceive of or implement for
self-efficiency or effectiveness. An organization can achieve this by managing performance by
the worker in the organization to enable then to produce valuable products. In relation to
human capital, the ability to develop .Human capital is contingent on the ability to accurately
measure, value, and manage current human capital performance. Consequently, it is odd that
more research has not examined the performance management process as a source of firm-
level heterogeneity and a potential source of competitive advantage. In addition to the
performance management process, actual employee performance is another talents are rare,
quite valuable, and a potential source of competitive advantage for organizations. Therefore,
the ability to identify, develop, and maintain high performers may play a significant role in the
strategy and competitive advantage of organizations.

Of the many ways that may connect to strategy and competitive advantage, is the most
accessible point of entry which is on human capital resources (Ployhart 2012c). In contrast to
the individual-focused economic tradition of human capital theory (Becker 1964), research in
the past 20 years has emphasized human capital as a strategically valuable firm-level resource
(Wright et al. 1994, 2001). Human capital resources have been recognized as an intangible
resource, meaning (among other things) that a firm cannot own intangible resources as it would
tangible resources such as land. This fact attracted the attention of strategy scholars because,
even though human capital resources may be important for a firm, the management of such
resources raises a number of complex issues, such as value capture and appropriation (Coff
1997, 1999).psychology can play a role by making sure that the organization is able to choose
those that poses qualities that can help the organization function effectively and come up
different strategies.

The ability to provide rare resources is also important in sustaining competitive advantage
through understanding the needs and wants of the customer and cliental. With the use of long
term contracts and incentives an organization can build strong relations with their cliental they
could provide rare incentives that will force the clients to remain loyal to their products. This
step has to be executed carefully, as it can backfire. If you can establish a long term contract
with your cliental, then clearly they are less likely to switch to a competitor (Bono J, Judge T.
2003). If you only offer long terms contracts, however, and your competitors are offering short
terms contracts this could help earn more cliental that are willing to stay loyal to one partner
because most people psychologically prefer to go to the product or brand or even organization
that they are confident in .Ideally you want to incentivize your customers to enter into a long
term contract with you, possibly by providing a slight reduction in cost or a bonus. Equally,
customers are more likely to be willing to enter into a long terms contract if they have just
completed a successful short term contract with you. Thus an organization would have
sustained competitive advantage in an industry.
Organization can also sustain competitive advantage by producing or employing imperfectly
and imitable products and employees. This is basically when an organization is able to use its
rare resource into products that cannot be imitated or that are not available on the market .this
can only sustain competitive advantage if the resource can only be produced by that
organization and others cannot produce the same product. (Barney 1986).An organization can
acquire this through selection during employment. Some selection research has begun to link
unit-level selection practices to unit-level performance. For example, Van Iddekinge et al.
(2009) examined the relationship between selection and organizational performance over time.
Ployhart et al. (2009) linked changes in employee selection to changes in unit-level internal
(productivity) and external performance over time. Kim& Ployhart (2014) found that firms that
use more selective staffing show greater productivity and, hence, greater financial growth
before, during, and after the Great Recession. Therefore psychologist in an organization can
help the organization select people that will be able to make products that are rare making
themselves even more valuable to the organization as the imperfect able and imitable assets
thus sustain a competitive advantage.

More over an organization to ensure that their product is of sustainable competitive advantage
it should be able to substitute a product that is already there and be able to make use of it in
another way that is not the one that every other organization is using. Another form is through
the systematic management whereby the organization strategically plans its moves through the
year and whereby the manager s very own personality plays a pivotal role in the management
and running of the organization. Motivation of employees is an important psychological aspect
of sustainability to achieving competitive advantage. The link between job attitudes,
specifically, job satisfaction, and job performance has been called the Holy Grail of applied
psychology (Landy 1989). For example, positive job attitudes have been linked to service
performance behaviors and a willingness to work with other employees to achieve customer
outcomes (Schneider et al. 2005). Therefore, in an organisation, employee satisfaction and
attitudes have been positively linked to improved operational and organizational (customer
satisfaction, loyalty, profits) performance (Harter ET al.2002, 2010), although the causal
direction is sometimes ambiguous (Ryan et al. 1996, Schneideret al. 2003).
All of the above are aspect that can contribute to the sustainable competitive advantage of an
organization .Another than those reasons and products available is the historical background of
the organization. The homogeneity and mobility of an organization can be understood
independent of particular history and other idiosyncratic of the organization. (Portar
1981).Culture is a deep-rooted set of shared values and beliefs that are communicated visibly
by the myths, stories, and policies of an organization (Schneider et al. 2013). Although culture
may develop via the interaction of individual employees (Schneider 1987), culture is an
aggregate-level construct. Therefore, a majority of the research on organizational culture
includes. This basically means that clients are more inclined and attracted to organization with a
historical back ground that strong that has managed to be around for long that share the same
sentiments as those of the thus people will be attracted to the organization and have faith in its
delivery system. Thus a competitive advantage over other organizations.

In conclusion organizations can attain competitive advantage by paying attention to

psychological factors and Barney s resource based theory for better results in the organizations.
Organization use psychology in acquiring, accumulating, and divesting resources to bundle
them in a way that implements strategies that lead to competitive advantage. The elements
and dynamics that govern the psychological micro foundations of strategy and competitive
advantage are different individuals interacting within dyads, groups, teams, and their
contextual environments to produce better services and goods to sustain competitive
advantage. Those elements and dynamics are called organizational psychology and
organizational behavior.
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Source: Boundless. “Sustainable Competitive Advantage.” Boundless Marketing. Boundless, 20

Sep. 2016. Retrieved 05 Oct. 2016 from
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