...Pearson Exploring the Relationship between Strategic Management and SHRM: The Best-Fit School of SHRM The Best-Fit (or contingency) school of SHRM explores the close link between strategic management and HRM, by assessing the extent to which there is vertical integration between an organisation’s business strategy and its HRM policies and practices. This is where an understanding of the strategic management process and context can enhance our understanding of the development of SHRM, both as an academic field of study and in its application in organisations. The notion of a link between business strategy and the performance of every individual in the organisation is central to ‘fit’ or vertical integration. Vertical integration can be explicitly demonstrated through the linking of a business goal to individual objective setting, to the measurement and rewarding of that business goal. Vertical integration between business strategy or the objectives of the business and individual behaviour and ultimately individual, team and organisational performance is at the core of many models of SHRM. Inherent in most treatments of fit is the premise that organisations are more efficient and /or effective when they achieve fit relative to when a lack of fit exists (Wright & Snell 1991:757) . This vertical integration or ‘fit’ where ‘leverage’ is gained through procedures, policies and processes is widely acknowledged to be a crucial part of any strategic approach to the management of people...
Words: 3955 - Pages: 16
...Schuler and Walker define Human Resource Strategy (HRS) as “a set of processes and activities jointly shared by human resources and line managers to solve business-related problems”. I believe this definition assists on tackling the above question. However, Bamberger and Meshoulam “Conceptualise human resource strategy as an outcome: the pattern of decisions regarding the policies and practices associated with the HR system”. In my view, HRS is a set of ‘processes and activities’ that when implemented, result in an outcome. In aim to justify this statement by discussing the topic of human resource strategy in relation to the sub-headings listed above. By examining the reasons or ‘rationale’ for the emergence of human resource strategies in the modern business environment, the value, various strategy approaches, types and the concept of fit, I believe I can underline the importance of a well devised HRS to any overall business strategy or plan. Modern businesses and the economic environments in which they operate are very different from the organizations and economies examined by Chandler in his studies of ‘managerial capitalism’ (late 19th Century through to the 1970s). The development of technology, and the creation of global economies have resulted in a significant increase in efficient and effective competition within all industries operating in market economies. Firms con longer rely on competing aggressively simply on the reliable favorites of achieving economies of...
Words: 5793 - Pages: 24
...Strategic Human Resources Management: Where Do We Go From Here?† Brian E. Becker* School of Management, State University of New York at Buffalo, Buffalo, NY 14260 Mark A. Huselid School of Management and Labor Relations, Rutgers University, Piscataway, NJ 08854 The authors identify the key challenges facing strategic human resource management (SHRM) going forward and discuss several new directions in both the scholarship and practice of SHRM. They focus on a clearer articulation of the “black box” between HR and firm performance, emphasizing the integration of strategy implementation as the central mediating variable in this relationship. There are direct implications for the nature of fit and contingencies in SHRM. They also highlight the significance of a differentiated HR architecture not just across firms but also within firms. Keywords: strategy; human resources; black box; implementation; differentiation The field of strategic human resources management (SHRM) has enjoyed a remarkable ascendancy during the past two decades, as both an academic literature and focus of management practice. The parallel growth in both the research literature and interest among practicing managers is a notable departure from the more common experience, where managers are either unaware or simply uninterested in scholarly developments in our field. As the field of HR strategy begins to mature, we believe that it is time to take stock of where it stands as both a field...
Words: 14981 - Pages: 60
...Strategic Human Resources Management: Where Do We Go From Here?† Brian E. Becker* School of Management, State University of New York at Buffalo, Buffalo, NY 14260 Mark A. Huselid School of Management and Labor Relations, Rutgers University, Piscataway, NJ 08854 The authors identify the key challenges facing strategic human resource management (SHRM) going forward and discuss several new directions in both the scholarship and practice of SHRM. They focus on a clearer articulation of the “black box” between HR and firm performance, emphasizing the integration of strategy implementation as the central mediating variable in this relationship. There are direct implications for the nature of fit and contingencies in SHRM. They also highlight the significance of a differentiated HR architecture not just across firms but also within firms. Keywords: strategy; human resources; black box; implementation; differentiation The field of strategic human resources management (SHRM) has enjoyed a remarkable ascendancy during the past two decades, as both an academic literature and focus of management practice. The parallel growth in both the research literature and interest among practicing managers is a notable departure from the more common experience, where managers are either unaware or simply uninterested in scholarly developments in our field. As the field of HR strategy begins to mature, we believe that it is time to take stock of where it stands as both a field...
Words: 14981 - Pages: 60
...RELATIONSHIPS BETWEEN HUMAN RESOURCE MANAGEMENT PRACTICES, BUSINESS STRATEGY FIT AND FIRM PERFORMANCE Oya Erdil & Ay e Günsel Gebze Institute of Technology, Turkey ABSTRACT While there has been growing interest concerning the relationship between human resource (HR) practices, firm strategy and firm performance, limited research attention has been paid providing empirical evidence in support of them. This study investigates the relationships between HR practices, human resources management (HRM) - firm strategy fit and the firm performance of 63 small and medium sized firms located around Kocaeli and Gebze from both theoretical and empirical perspective. The findings indicate a strong relationship between different HR practices and HRM-firm strategy fit and firm performance. Further, the results provide support for the assertion that HR-firm strategy fit can significantly assist a firm in improving performance. Therefore, empirical support is obtained for the efforts at aligning HRM practices with firm strategy and firm performance. (recruitment, development, etc.) share the same basic character and play a similar kind of role in relation to strategic management (Luoma, 2000: 771). Effective HRM strategy systematically organizes all individual HRM measures to directly influence employee attitude and behavior in a way that leads business to achieve its competitive strategy. (Huang, 2001: 134). In view of the fact that the goals and necessities of each of the competitive...
Words: 5300 - Pages: 22
...HRM, the concept of strategic fit and how human resource management can lead to a competitive advantage. The manner in which an organization’s personnel are managed has a tangible influence on the productivity of the employees, which ultimately acts upon the firm’s bottom line. Corporate success is dependent upon the integration of the human resource plan and the corporate strategic plan. It has become a prominent part of business management, that people provide organizations with an important source of sustainable competitive advantage and that the effective management of human capital, not physical capital, may be the ultimate determinant of organizational performance (Youndt, Snell, Dean, Jr, & Lepak, 1996). The relationship between the strategic planning of an organization’s people and the overall strategy is being increasingly recognized as one of great importance. A growing recognition of human resources as being a company’s most important asset has, and will continue to, changes the focus of strategic planning. It is no longer acceptable to exclusively plan for those assets that will appear on the balance sheet. A plan integrating human resource management and the overall strategic plan is necessary, such that the management of people is not a distinct function, but acts as a medium through which all other business strategies are implemented (Armstrong and Long, 1994: p. 42). In essence, the competitive, human resource, and structural strategies should all be linked...
Words: 1874 - Pages: 8
...concepts of 'best fit' and 'best practice' are two well known approaches to human resource management. The 'best fit' perspective claims that HR strategy become more and more efficient when it is linked to its environment of the business. It explores the close link between strategic management and HRM by assessing the extend to which there is a vertical integration between an organisation business strategy and its HRM policies and practices. 'Best practice' school claims that certain 'best' human resource practices would result in enhanced organisational performance, manifested in improved employee attitude, lower level of absenteeism and turnover, higher level of skills for higher productivity, enhanced quality and efficiency. That is why the 'best practice' model is also referred as high commitment models. These two concepts are generally described within the literature but it is sometimes difficult to stretch the specifications of each approach. This essay will attempt to fill that gap. Section two compares these concepts according to human resource studies. It will highlight areas of agreement between each approach. Section three therefore stretches the differences between 'best fit' and 'best practice' approaches. We now try to discuss in section four the approach taken in this debate by the CIPD. Concluding elements are found in section five. The terms 'best fit' and 'best practice' are used in strategic human resource management literature. The 'best fit' approach to...
Words: 1878 - Pages: 8
...explore the relationship between the corporate strategy and human resource management of the organisation and their effect on organisation performance outcome. A survey based approach is used to collect data from selected number or organisation. Overall we expected that the fit between corporate strategy and HRM practices will yield to a positive effect on organisation performance List of Contents Abstract ……………………………… 1 1. Introduction 1.1. Overview ………………………………. 3 1.2. Literature review and hypotheses ………………………………. 4 2. The research method and conceptual framework 2.1. Method ………………………………. 6 2.2. Measures ………………………………. 7 3. Results and conclusion ............................... 8 4. References ………………………………. 9 Appendix ………………………………. 10 1. Introduction: 1.1 Overview: Each organization has its particular strategy to fit its distinctive competencies, needs and circumstances. Strategy can be conceptualized into three levels: corporate level, business level and functional...
Words: 1326 - Pages: 6
... (ii) Best Fit 3. Best approach in different contexts 4. Summary – Google case study 5. Contingency perspective of organizational theory and Justification for application Conclusion References 1. Introduction: - This report is based on a case study of Google’s HR practices. Google Inc. is located at Mountain View, California is not simply known for its unique workplace culture but it also known for its advance innovation approach and HR programs. The HR practices at Google which are named as ‘people operations’ is intended to describe that HR is not merely an administration but rather it makes sure the strong relationship between employee and employer. The case encourages discussion on whether the company’s culture is truly emphasis on attracting and motivating the best employees or it is with a business motive. In order to present critical review of the case study , the concept of HRM as a new strategic approach to the management of people is discussed and two different approaches “best practices” and “best fit” is explained. In the end of the report, the case study is presented from “best fit” HRM perspective .Thus this case study helps us to analyze the two different HRM approaches are applied in the organizations. 2. Two perspectives on SHRM: - HRM has experienced a drastic change over the last few years. “Influenced by many internal and external factors HRM has enlarged its work and activities from administration like making HR policies and...
Words: 2670 - Pages: 11
...STRATEGIC HUMAN RESOURCE MANAGEMENT: THREE-STAGE PROCESS AND INFLUENCING ORGANISATIONAL FACTORS Sandeep Krishnan Personnel and Industrial Relations Area D-18, Indian Institute of Management, Vastrapur, Ahmedabad 380 015, Gujarat, India. Email: sandeepk@iimahd.ernet.in Tel: ++91-79-26327816 Fax: ++91-79-26306896 Manjari Singh Personnel and Industrial Relations Area Wing 12-D, Indian Institute of Management, Vastrapur, Ahmedabad 380 015, Gujarat, India. Email: manjari@iimahd.ernet.in Tel: ++91-79-26324914 Fax: ++91-79-26306896 1 Abstract: A three-stage model for the process of strategic human resource management is developed in this paper. The three stages cover strategy formulation, implementation and evaluation. The inter-linkages in this dynamic model have been explored. The organisational factors that have enabling or deterring influence on the success of each of these three stages have been discussed. The paper highlights the key role played by HR professionals in these three stages. 2 STRATEGIC HUMAN RESOURCE MANAGEMENT: THREE-STAGE PROCESS AND INFLUENCING ORGANISATIONAL FACTORS Organisations are increasingly looking at human resources as a unique asset that can provide sustained competitive advantage. The changes in the business environment with increasing globalisation, changing demographics of the workforce, increased focus on profitability through growth, technological changes, intellectual capital and the never-ending changes that organisations are...
Words: 9211 - Pages: 37
...The relationship between Miles and Snow's strategic types and human resource practices. Abstract: Purpose: This study explores the relationship between organizational strategy and human resources practices, specifically as they relate to the Miles and Snow typology of strategic choices (1978). Design/methodology/approach: Using self-classification, employees assessed their firm's strategy using descriptions characterizing the Defender, Analyzer, Prospector and Reactor strategies developed by Snow and Hrebiniak (1980). Findings: This paper presents empirical evidence supporting the notion that different types of human resources practices more closely complement the unique strategic choices. Specifically there is a significant relationship for the use of the more modern types of human resources practices in the Prospector organizations. For Defender organizations, where more traditional human resource practices were expected to be appropriate, the results were not significant. It does appear that Defender organizations use the traditional HR practices more extensively than Prospector organizations. It appears that regardless of their chosen strategy, most companies still make at least limited use of the traditional HR practices. Research limitations/implications: Further research is needed to confirm and validate these findings with a larger sample which could include a broader mix of US companies as well as global respondents. While this exploratory research has...
Words: 6541 - Pages: 27
...STRATEGIC HUMAN RESOURCE MANAGEMENT: THREE-STAGE PROCESS AND INFLUENCING ORGANISATIONAL FACTORS Sandeep Krishnan Personnel and Industrial Relations Area D-18, Indian Institute of Management, Vastrapur, Ahmedabad 380 015, Gujarat, India. Email: sandeepk@iimahd.ernet.in Tel: ++91-79-26327816 Fax: ++91-79-26306896 Manjari Singh Personnel and Industrial Relations Area Wing 12-D, Indian Institute of Management, Vastrapur, Ahmedabad 380 015, Gujarat, India. Email: manjari@iimahd.ernet.in Tel: ++91-79-26324914 Fax: ++91-79-26306896 1 Abstract: A three-stage model for the process of strategic human resource management is developed in this paper. The three stages cover strategy formulation, implementation and evaluation. The inter-linkages in this dynamic model have been explored. The organisational factors that have enabling or deterring influence on the success of each of these three stages have been discussed. The paper highlights the key role played by HR professionals in these three stages. 2 STRATEGIC HUMAN RESOURCE MANAGEMENT: THREE-STAGE PROCESS AND INFLUENCING ORGANISATIONAL FACTORS Organisations are increasingly looking at human resources as a unique asset that can provide sustained competitive advantage. The changes in the business environment with increasing globalisation, changing demographics of the workforce, increased focus on profitability through growth, technological changes, intellectual capital and the never-ending changes that organisations are...
Words: 9227 - Pages: 37
...•Compensation • Benefits • Industrial relations •Health and safety programs •Manage diversity What is strategy? 'Strategy defines the direction in which an organisation intends to move and establishes the framework for action through which it intends to get there.' The purpose of strategy is to maintain a position of advantage bycapitalising on the strengths of an organisation and minimising its weaknesses. To do this, an organisationmust identify and analyse the threats and opportunities present in its external and internal environments. What is strategic management? Strategic management is the process whereby managers establish an organisation's long-term direction, setspecific performance objectives, develop strategies to achieve these objectives in the light of all the relevantinternal and external circumstances and undertake to execute the chosen action plans. The aims of strategicmanagement are to help the organisation to achieve a competitive advantage and to ensure long-term successfor the organisation. Components of strategic management Strategic management involve Strategy formulation - selecting an organisation's mission, or purpose, andkey objectives; analysing the organisation's internal and external environments; and selecting appropriate business strategies, and Strategy implementation - designing an organisation's structure and control systemsand evaluating the selected strategy in achieving the organisation's key objectives. Organisational mission...
Words: 1524 - Pages: 7
...Assignment 1: Literature critique An exploration of the impact of strategic international human resource management on firm performance: The case of Foreign MNCs in China By Chanzi Bao, Robert and UK Farhad Analoui, Robert Gordon University. 2011 Overview of the article’s content The paper reports the intensive competition arising from globalisation requiring MNCs to seek low cost, innovation, speed and adaptability and the need to manage their human resources globally and strategically in order to become a source of competitive advantage. The authors state that there is a need to manage human resources strategically so that they become source of sustained competitive advantage (Wright and McMahan, 1992; Boxall and Purcell, 2008). And that this has led to the evolution of strategic international human resource management (SIHRM), which not only acknowledge the need of balancing global integration and local responsiveness (Evans et al., 2002), but to seek strategic fit between HR policies and business strategy in order to achieve superior business performance. The researcher’s paper focus upon China with reference to foreign MNCs’ operations and the challenges faced from the dual pressure of balancing globalisation and localisation. Arguing that by combining the concept of SHRM with IHRM it identified a new research area of SIHRM which addressed the HRM issues and activities resulting from, and impacting on, the strategic activities and international concerns of MNC’s, that the universality...
Words: 1440 - Pages: 6
...i STRATEGIC HUMAN RESOURCE MANAGEMENT ii For free online support material please go to the Kogan Page website: www.koganpage.com/strategichrm Password: SHRM53756 iii STRATEGIC HUMAN RESOURCE MANAGEMENT A GUIDE TO ACTION 4TH EDITION Michael Armstrong London and Philadelphia iv Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or the author. First published in Great Britain and the United States in 1992 as Human Resource Management: Strategy and Action Second edition published as Strategic Human Resource Management: A Guide to Action 2000 Third edition 2006 Reprinted 2006 Fourth edition 2008 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers...
Words: 74350 - Pages: 298
