August, 1987

® The Academy of Management EXECUTIVE, pp. 207-219

1987, Vol. 1, No. 3,

Linking Competitive Strategies with Human Resource Management Practices
Randall S. Schuler and Susan E. Jackson New York University ver the past several years there has been increased recognition that there is a need to match the characteristics of top managers with the nature of the business. According to Reginald H. Jones, former chairman and CEO of the General Electric Company,

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The result of such human resource staffing practices has been rather significant:

When we classified. . . [our] . . . businesses, and when we realized that they were going to have quite different missions, we also realized we had to have quite different people running them.^
Within academia there has been similar growing awareness of this need. Although this awareness is being articulated in several ways, one of the most frequent involves the conceptualization and investigation of the relationship between business strategy and the personal characteristics of top managers.^ Here, particular manager characteristics such as personality, skills, abilities, values, and perspectives are matched with particular types of business strategies. For example, a recently released study conducted by Hay Group Incorporated, in conjunction with the University of Michigan and the Strategic Planning Institute, reports that when a business is pursuing a growth strategy it needs top managers who are likely to abandon the status quo and adapt their strategies and goals to the marketplace. According to the study, insiders are slow to recognize the onset of decline and tend to persevere in strategies that are no longer effective; so, top managers need to be recruited from the outside.

Growth companies that staffed 20% of their top three levels with outsiders exceeded their expected return on investment by