Matching human resource management strategy with competitive strategy to enhance firm performance.docx

1、Matching human resource management strategy with competitive strategy to enhance firm performanceMatching human resource management strategy with competitive strategy to enhance firm performance betterIt is state that The fundamental premise is that business performance will be better when there is

2、an alignment between competitive strategy and the management of core operating workers inside the business. the hypothesis that firms which align their HRM practices with their business competitive strategy will achieve superior outcomes. (Becker and Huselid, 1998; Dyer and Reeves, 1995; and Guest,

3、1997) No matter how, according to Martell & Carroll (1995) point out that nowadays, it is a common belief in the business that the human resources of an organization can be a source of competitive advantage, provided that the policies for managing people were integrated with strategic business plann

4、ing and organizational culture. In fact, Employee creates an important source of competitive advantage for firms (Barney & Elmes, 1997). Therefore, it is important that firm adopts human resource management (HRM) practices that make best use of its employees. In context of this essay gave clear prac

5、tical examples of such a link the does part of question which include supporting or rejecting the positive and/or the negatives. And also, then got stuck in to the should part of the questions often noting the critical difference between competitive strategy and business strategy and their implicati

6、ons. The HR Management system might affect firm performance as well as the necessary conditions for there systems to have a strategic impact. The behavioral perspective (Johnson, 1987) suggests that an effective HR management system will acquire, develop and motivate the behaviors necessary to enhan

7、ce firm performance (Bailey, 1993; Johnson, 1987; Purcell, 1999; Schuler & Jackson, 2000). Complementary work argues that HR management systems provide additional value when they are purposively designed to be internally consistent and are thereafter linked with firm competitive strategy (Mueller, 1

8、996). In essence, prior theoretical work in this area concludes that competitive advantage is in part a produce of HR management systems that elicit employee behaviors consistent with the firms broader strategic and environmental contingencies (Schuler & Jackson, 2000).To review of the literature in

9、dicates that an alignment between HRM and competitive strategy have positive different effects on the performance of business. As according to Schuler and Jackson (1987) were able to renew that there has different competitive strategies imply the need for different kinds of employee behavior, and di

10、fferent kinds of employee behavior reflect different types of HRM demand, especially between differentiators and cost leaders. However, Schuler and Jacksons model state that if management chooses a competitive strategy of differentiation through product innovation; this would call for high levels of

11、 creative, risk-orientated and cooperative behavior. The companys HR practices would therefore need to emphasis selecting highly skilled individuals, giving employees more discretion, using minimal controls, making greater investment in human resources, providing more resource for experimentation, a

12、llowing and even rewarding failure and appraising performance for its long run implications. For example, the impact of different approaches to HRM on the productivity in steel mini mills in USA. This showed that the mills with commitment systems had higher productivity, low scrap rates, and lower e

13、mployee turnover than those with control systems. In addition, human resource systems have moderated the relationship between turnover and manufacturing performance. On the other hand if management wants to pursue cost leadership, Schuler and Jacksons model suggests designing jobs which are fairly r

14、epetitive, training workers as little as is practical, cutting staff numbers to the minimum and rewarding high output and predictable behavior. (Boxall and Purcell 2003: 53-4)Management chooses whatever a business performance model is a very seemingly clear divide between competitive strategies and

15、their implications for HRM, and for ethics. It is really only through sector level research that we can get to grips with competitive strategy and HRM. For example, in the clothing industry, the distinction is between the progressive bundle system, essentially a traditional Tayloristic assembly line

16、 type of production system, and the modular system, a type of cellular manufacturing, TQM and work transformation. The latter produces higher quality, faster turnaround and in some cases lowers cost. (Bailey, 1999: 31-32) Why do so few manufacturers adopt it? According to Appelbaum, Bailey and Berg

17、(2000) point out that “without getting distracted by the diffusion debate the focus here is on competitive strategy.”(pp.23) they also mentions that in essence, early implementers of the modular system were often unsuccessful. Later, strategic coalitions between HRM, operations management, informati

18、on systems and supply chain management came together to link modular production to lean retailing pushed by major customers, like Wal-Mart. The essential requirement was for a three day turnaround, compared with around three weeks under the progressive bundle system.The critical point, however, is w

19、hat particular markets are being served by the clothing manufacturers? The highly successful Spanish ladies fashion retailer, Zara, is a good example. Here rapid changes in fashion, often with unpredictable demand (thus ruling out warehousing and extended shelf life) requires fast response from manu

20、facturers located near retailers distribution depots, with integrated It systems (the EPOS system of bar codes) providing rapid response on data on demand linked to supply. Meanwhile, the closure of clothing plants in Europe and North America is indicative of another trend. In commodity, non fashion

21、 clothing, there is little need for a fast turnaround. Cost pressures are paramount and low wage countries in the developing world become increasingly attractive. (Wright, Gardner and Moynihan, 2003) Furthermore, Clothing is a labor intensive industry. The progressive bundle system is more appropria

22、te where cost minimization is essential for viability and survival, let alone achieving competitive advantage. However, there is a no idea of studies of HRM in the clothing industry in developing countries but work by Wilkinson and his colleagues (2001) in the Japan and Malaysia electronics industry

23、 is instructive, noting the street Tayloristic, short job cycle time, work in the latter country with its concomitant control based HR systems. If it is serious about studying the links between strategy and HRM it really ought to be doing much more comparative research across the range of competitiv

24、e conditions in a sector globally. This would also have to include studies along the supply chain as well as end market. (Kinnie and Swart, 2003:14)Another example of the link between HRM and competitive strategy, it is can be usefully taken from call centers which continue to grow rapidly in develo

25、ping countries like India with a ready supply of well educated and cheap labor. However, the growth continues in developed nations too, as technology, consumer preferences and the opportunity to reduce costs coincide. One of the interesting features of call centre, for our purposes, is how early stu

26、dies tended to lump all such centre together under the rubric of the dark satanic mills of the late 20th century and Panoptican controls (Fernie and Metcalf 1998; Bain and Taylor 2000). Here, markets seen in the relationship with customers (from transactional to relation) is matched with HRM practic

27、es from cost minimization to high commitment management. We could use the same terms transactional and relational in HR too, since they are commonly referred to in studies of the psychological contract. Competitive strategy can never be taken as the dominant force determining HRM (should part). Thes

28、e relate, firstly, to the static nature of the models used. The point made by Wright and Snell (1998) on an integration of fit and flexibility is well made. Markets, technology and supply lines change as Marks and Spencer have found to their cost. Then is the problem that firms rarely face a single

29、pure market with various degrees of diversification, as means of risk reduction, expected. Which competitive market should dominate and how should market variety, and differences in market conditions and market share, be reflected in HRM? Can a firm have different HR systems each linked to competiti

30、ve strategy? How much flexibility and knowledge sharing across markets is optimum? This is especially important for large multi-divisional companies. To prominent a position given to competitive strategy also relegates labor to a subservient position after market, technology, operational and distrib

31、ution choices have been made. Under this logic a failure to take account of employee interests, reflected perhaps in collective and individual conflict expressions would cause competitive disadvantage but getting a fit between HR and competitive strategy is a taken-for-granted requirement of good ma

32、nagement but which would not lead to competitive advantage. (Poter 1996:74) Competitive strategy, in fact, in the whole strategy world, as taught and researched, has opened up in recent years with competitive strategy seen as just one part of a bigger picture. Quite how big this picture is, under th

33、e generic title business strategy is shown by Grant (2002) state that “the task of business strategy is to determine how the firm will deploy its resources within its environment and so satisfy its long-term goals, and how to organize itself to implement that strategy”. (p.13) in the later analysis in the Grants book