Academic journal article Journal of Management Information and Decision Sciences

The Changing Role of Human Resource Management in an Era of Digital Transformation

Academic journal article Journal of Management Information and Decision Sciences

The Changing Role of Human Resource Management in an Era of Digital Transformation

Article excerpt

INTRODUCTION

It is important to understand the importance of digital transformation in the context of the United Arab Emirates. The United Arab Emirates are leaders in using innovation to drive technology to new heights and companies in the UAE are claimed to be amongst the most prepared companies for the digital transformation era in the world. Between 2017 and 2021, digital transformation is expected to generate $16.9 billion in extra revenue annually for companies in the Middle East (Cabral, 2017).

Digital technologies play an increasingly influential role in both the working lives of employees and human resource management (HRM), which is to be affected in multiple ways (Parry & Strohmeier, 2014). The purpose of this study is to discover the changing role of human resource management as a result of digital transformation. The research question is: what do HR professionals perceive to be the changing role of Human Resource Management in times of digital transformation? It is a study that is based in the UAE and taps into the perspectives of professionals in HR.

Digital transformation strategies can best be understood in a business centric perspective. These strategies have as their focus the transformation of products, processes and all organizational aspects as a result of new technology. Digital transformation strategies bring about changes to and have implications for business models as a whole (Matt et al., 2015). Similarly human resource management is also business centric and brings about change by adding value to organizations as a strategic partner, administrative expert and employee champion (Ulrich, 1997).

Bengtsson & Bloom (2017) claim that whilst it is clear that digitalization is effecting organizations and human capital there has been little research about how digitalization is experienced by HR managers in practice. This research tries to address this gap in literature by studying the perspectives of HR managers. Another contribution of this research study is that it addresses critical factors for making a successful digital transformation. This area of study is still underexplored (Liu et al., 2011).

Resource Based View

The theoretical framework of this study is the Resource Based View (RBV). The resource-based view (RBV) is a model that sees resources as key to superior company performance. The RBV suggests that the resources owned by a company such as human capital and technological resources are the main determinants of its value, performance, and sustained competitive advantage (Hoffer & Schendel, 1978; Wenerfelt, 1984). According to Barney (1991), resources are controlled by a company and enable the company to conceive of and implement strategies that improve its efficiency and effectiveness. Resources result in capabilities that then are a source of competitive advantage (Grant, 1991). Different sets of resources such as technology and human capital have a synergistic effect that results in sustained competitive advantage (Black & Boal, 1994; Broadbent, Weill & Neo, 1999). According to the RBV, the impact of technology resources on company performance and competitiveness should be understood in the light of other resources (Clemons, 1991) which for the purpose of this study are human capital.

Digital transformation and Human Resource Management

Digital transformation has revolutionized the way companies relate to their customers, how companies run their operations, how they conceive of their business model and how they organize themselves (Westerman & Bonnet, 2015).It is about integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how businesses work (Kane et al., 2015). The integration of digital technology into business processes has become very important for the survival and competitive advantage of contemporary organizations (Bharadwaj, 2000).

Human Resource Management has as its main focus the performance of the organisation emphasizing the role of human resource management as a solution to business problems (Becker & Huselid, 2006). …

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