Abstract

The global outsourcing industry, including the Human Resources (HR) Systems outsourcing industry is growing at a phenomenal rate. The proponents of the resource-based view (RBV) have long argued that a firm gains sustainable competitive advantage from those resources and capabilities it controls and which are valuable, rare, imperfectly imitable, and not substitutable. The RBV also indicates that HR systems can be a source of sustained competitive advantage. What happens when such HR systems are outsourced? Does HR systems outsourcing itself become a source of sustained competitive advantage for a firm? Is there any relation between whether a firm perceives its HR systems to be a source of sustained competitive advantage or not and its decision to outsource its HR systems? These are the questions that this study seeks to address.

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