Introduction In a highly competitive economic environment, typified by such phenomena as the globalization of markets, shifting workforce demographics, changing customer preferences and increasing product-market differentiation, people and the way they are managed as a source of competitive advantage becomes of much significance to the organization, in part due to the fact that many other sources of competitive success are becoming exceedingly less powerful (Saa-Perez & Garcia-Falcon, 2002). To achieve competitive advantage through people, however, organizations need to embrace a paradigm shift from the traditional way of viewing employment relationships to a more synchronized way of successfully working with people and viewing them as a critical resource for the organization rather than as merely a cost (Colbert, 2004). This is where the relevancy of resource-based view to human resource management sets in as it provides the framework through which the human resource, or human capital, in which the organization invests, could be harnessed to generate superior performance and competitiveness (Boselie & Paauwe, 2009). In addition to demonstrating the relevancy of resource-based view to human resource management in a much wider scope, this paper will also purpose to demonstrate the internal and external factors that come into play to shape this relevance. Understanding the Concept of Resource-Based View The resource-based view (RBV) of the firm provides an imperative point of view on the ongoing debate about human resource management (HRM) and organizational success (Saa-Perez & Garcia-Falcon, 2002). According to Liu et al (2009), “…the RBV is a strategic theory for understanding why some firms outperform others” (p. 412). Research into the theory has demonstrated that RBV is a strong analytical tool that can be used to explain the competitive heterogeneity between firms as it rests its man premise on the assumption that organizations are able to develop and sustain competitive advantage only by generating value in a way that is rare and complicated for other competitors to imitate (Saa-Perez & Garcia-Falcon, 2002; Paauwe, 2004). Researchers have examined the antecedents and processes related to development of competitive advantage and creation of value (Haynie et al., 2009), and have conceded to the fact that many organizations fail to break through in the ever-competitive and continuously ever-shifting business environment of the 21 st century due to a perceived difficulty in developing core resources that are hard for other organizations to copy (Cleri & Dowling, 2006). This acknowledgement feeds the impetus to evaluate the relevance of RBV to HRM. Classical RBV theory can be traced back to the ingenious works of Penrose (1959), who argued that a firm is not only an administrative unit, but it is also a collection of productive resources (Liu et al., 2009). As such, it can be argued that Penrose contributed to our knowledge and understanding of the creation and sustenance of a firm’s competitive advantage. Penrose was also one of the pioneer researchers “…to acknowledge the value and quality of human resources in terms of (unique) knowledge an