Human Resource Strategic Essay


Theoretical, Conceptual and Empirical Developments in the field of Strategic Human Resource Management

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This essay will discourse the theoretical, conceptual and empirical development in the field of strategic human resource direction. It is found that the thought of best-fit and best-practices has been popular in the elaboration of SHRM. The best-fit school of idea argued that HR scheme will be more effectual when it is suitably incorporate with its specific organisational and environmental context.

Whereas, the best patterns school of idea favors universalism, reasoning that all houses will be better off if they identify and follow ‘best-practice’ in the manner they manage people. However, in last 20 old ages, the resource-based position of the house has played a polar function in the theoretical and conceptual developments in the field of SHRM.

The resource-based position of the house put accent on the internal resources of the house as the beginning of sustained competitory advantage. These all thoughts have of import function in the elaboration of SHRM field. Further, integrating of SHRM thoughts and constructs in Nipponese MNEs operating in USA, Russia, UK, China and Taiwan has been investigated.


In this epoch of globalization and intense competition houses are seeking ways to continuously derive competitory advantage, flexibleness and be advanced. It has been argued in literature that efficient and effectual human resource’s constabularies and patterns play polar function in deriving this competitory advantage and hence, much accent is now on associating organizational schemes to human resource schemes. Strategic human resource direction ( SHRM ) has its foundation in the US in 1980s in the work of the ‘Harvard Group’ ( Beeret Al., 1984 cited in Truss and Lynda, 1994 ) and the ‘Michigan/Columbia Group’ ( Fomburnet Al., 1984 cited in Truss and Lynda, 1994 ).

Before continuing farther to research the developments in the field of SHRM, some assorted definitions in the literature which describe the construct of strategic human resource direction are as follow:

Truss and Gratton ( 1994 ) states that SHRM is associating of HRM with strategic ends and aims of house to heighten concern public presentation and to develop organizational civilization that support invention and flexibleness.

Schular and Walker ( 1970, cited in Truss and Lynda, 1994 ) states that, human resource scheme is a set of procedures and activities jointly shared by human resource and line directors to work out people-related concern issues.

Wright and McMahan ( 1992, cited in Wright, 1998 ) defined SHRM is the form of planned human resource deployments and activities intended to enable the house to accomplish its ends.

In the position of above definitions, strategic human resource direction hence, takes a macro-level position ( Truss and Lynda, 1994 ) and contains batch of argument in the literature for the factors act uponing the development and execution of the field of SHRM.

Best-fit school of idea:

The best-fit school of idea argues that HR scheme will be more effectual when it is suitably incorporate with its specific organisational ( Horizontal tantrum ) and environmental ( Vertical tantrum ) context ( Boxall and Purcell, 2000 ; Wright and McMahan, 1992 cited in Wright, 1998 ). However, the reappraisal of literature reveals that this tantrum can be better achieved when certain eventuality, configurational and contextual factors are taken into history.

Mart??n-Alca?zar, Romero-Ferna?ndez and Sa?nchez-Gardey, ( 2005 ) have grouped the eventuality relationships into three generic classs ; strategic, organisational and environmental variables. They pointed out that the HR patterns that are efficaciously incorporated ( tantrum ) into concern scheme would give high organisational public presentation ( Niniger, 1980 ; Fombrunet al.,1984 ; Hax, 1985 ; Van de Ven and Drazin, 1985 ; Kerr, 1985 ; Slocumet Al., 1985 ; Lengnick-Hall and Lengnick-Hall, 1988 ; Rhodes, 1988a, 1988b ; Miller, 1989 ; Kerr and Jackofsky, 1989 ; Butleret al.,1991 ; Cappelli and Singh, 1992 ; Begin, 1993 cited in Mart??n-Alca?zaret Al., 2005 ).

Further, organisational variable such as size, engineering, construction ( Jones, 1984 ; Jacksonet al.,1989 ; Jackson and Schuler, 1995 cited in Mart??n-Alca?zaret Al., 2005 ), internal political relationships ( Jones, 1984 ; Pfeffer and Cohen, 1984 ; Pfeffer and Langton, 1988 ; Pfeffer and Davis-Blake, 1987 ; Balkin and Bannister, 1993, Pfeffer, 1987 cited in Mart??n-Alca?zaret Al., 2005 ) and environmental variables such as competition, technological alterations, macro-economics and labor ( Kanter, 1983, 1989 ; Warner, 1984 ; Coates, 1987 ; Walker, 1988 ; Schuler and Walker, 1990 ; Becker and Gerhart, 1996 ; Boxall, 1998 ; Jackson and Schuler, cited in Mart??n-Alca?zaret Al., 2005 ), all have influence of HR on organisational scheme.

The writer farther indicated that behavioral theory and resources and capablenesss position of the house foster the development of eventuality theoretical accounts. Boxall and Purcell ( 2000 ) besides elaborated this statement by indicating out that the more realistic theoretical account for pattern is one in which tantrum with bing competitory scheme is developed in conformity with flexibleness in the scope of accomplishment and behavior, that have the possible to get by with uncertainness and different competitory scenarios in the hereafter and hence, HR scheme should integrate firm’s current competitory ends and aims, by enrolling and actuating people with the kind of accomplishments and motives required in firm’s competitory sector.

In this respect, Guest ( 1997 cited in Tekeuchiet al.,2003 ) argued that effectual and efficient alliance of HRM patterns is able to convey out the interactive effects on performance’, he referred it “fit-as-bundle” attack. The 2nd attack which he identified for deriving higher organisational public presentation through HR is what he called the “fit-as-gestalt”. The underlying construct of this attack is that, amount of single HR patterns is greater than it parts, the form of combinations among HRM patterns is linear instead multiplicative and that one cardinal facet of HRM pattern is needed.

This statement favours, what SHRM research worker called “configuration perspective”. Harmonizing to constellation theory, a house seeking high public presentation have to construction whole HRM patterns and associate each pattern to all the others in a systematic mode, so that the system is internally consistent ( Tekeuchiet al.,2003 ; Mart??n-Alca?zaret Al., 2005 ). Whereas the “contextual theory” writers argued, that to better understand the complexness of the construct of SHRM, one should non merely size up the internal working and its consequence on concern public presentation but instead besides see the influence on the external and organisational context in which managerial determination are made ( Brewster, 1999 cited Mart??n-Alca?zaret Al., 2005 ). Therefore, the underlying thought of contextual attack is to efficaciously analyze the relationship between the SHRM system and its context ( Mart??n-Alca?zaret Al., 2005 ).

In nutshell, Boxall and Purcell ( 2000 ) argued that the best-fit theoretical account is one in which HR scheme becomes more effectual when it is designed to suit certain critical eventualities in the firm’s specific context. They proposed that configurational theoretical accounts are more capable of placing the complex interactions involved in concern scheme and toward more dynamic theory.

Best-Practices school of idea:

This school of idea favors universalism, reasoning that all houses will accomplish high public presentation, if they identify and follow ‘best-practice’ in the manner they manage people ( Boxall and Purcell, 2000 ). It is recognized that the construct of ‘best practices’ is widely acknowledged by research workers and practicians ( Delery and Doty 1996, 806 cited in Boxall and Purcell, 2000 ) and there is huge list of statement in the favor of best patterns in the literature.

Wright, Snell and Dyer ( 2005 ) reported that the development of the thought of best-practices came in the mid-1990s when Huselid ( 1995 cited in Wrightet Al., 2005 ) published his survey showing a statistically and practically important relationship between HRM patterns and corporate public presentation. It was besides when MacDuffie’s ( 1995 cited in Wrightet Al., 2005 ) industry-focused survey illustrated how peculiar packages of HR patterns, when aligned within an organisational scheme leads to high plant-level public presentation.

Since so, the focal point of research is on happening relationship between HRM rules and patterns and of import organisational ends ( Becker and Gerhart, 1996 cited in Wrightet Al., 2005 ). Jeffrey Pfeffer ( 1998 cited in Boxall and Purcell, 2000 ) identified seven best patterns:

  • Employment security.
  • Selective preparation.
  • Self-managed squad or squad working.
  • High wage contingent on company public presentation.
  • Extensive preparation.
  • Decrease of position differences.
  • Sharing information.

However the best patterns thought is non short of unfavorable judgment as Wrightet Al.( 2005 ) pointed out that most of these developments have come from communities of bookmans concentrating on their ain peculiar states or parts, be it the US ( e.g. Arthur, 1994 ; Batt, 1999 ; Delery and Doty, 1996 ; Huselidet al.,1997 ; Youndtet al.,1996 cited in cited in Wrightet Al., 2005 ), the UK ( e.g. Brewster, 1999 ; Guest, 1997 ; Guestet Al., 2003 ; Tyson, 1997 cited in cited in Wrightet Al., 2005 ), elsewhere in Europe ( e.g. d’Arcimoles, 1997 ; Lahteenmakiet al.,1998 ; Rodr??guez and Ventura, 2003 cited in cited in Wrightet Al., 2005 ) or Asia ( e.g. Bae and Lawler, 2000 ; Lee and Chee, 1996 ; Lee and Miller, 1999 cited in Wrightet Al., 2005 ).

SHRM and Resource-based position of the house: SHRM and Resource-based position of the house:

Another, theoretical development in strategic human resource direction is its integrating with the resource-based position of the house. Although the field of SHRM does non straight emerge from resource-based position ( RBV ) of the house, but to borrow constructs and theories from the broader scheme literature, the integrating of the RBV of the house into the SHRM literature was at hand ( Wrightet Al., 2001 ).

Therefore, two major developments have emerged over the past old ages. First, the popularity of the RBV within the SHRM literature as a foundation for both theoretical and empirical scrutiny ( McMahan, Virick and Wright, 1999 cited in Wrightet Al., 2001 ). Second, the application and deductions of the RBV within the scheme literature have led to an increasing convergence between the field of strategic direction and SHRM ( Snell, Shadar & A ; Wright, 2001 cited in Wrightet Al., 2001 ).

The RBV proposes that internal organisational resources that are valuable, rare, inimitable, and non-substitutable are a beginning of sustainable competitory advantage ( Barney, 1991 ). Barney ( 1991 ) further argued that firm’s resources can be amiss imitable for three grounds:

  • Historical status ( Path dependence ) : As house evolve they obtain accomplishments, abilities and resources over the period of clip that so go alone to the house ( Barney 1995 cited in Paauwe and Boselie, 2003 ). Paauwe and Boselie ( 2003 ) argued that this is every bit true for firm’s human resources who are recruited and trained over the clip to be decently embedded in firm’s cultural web.
  • Causal ambiguity: Causal ambiguity issues when the relationship between firm’s resources and competitory advantage is non understood or amiss understood by the house who posses the competitory advantage and most significantly by the rivals. Paauwe and Boselie ( 2003 ) argued that the ways employee’s competences have been formed are capable to 1000s of little determination and events in the houses which have contributed to specific form of capablenesss and hence these forms are no easy understood by the rivals.
  • Social Complexity: And eventually firm’s resources are amiss imitable because they are capable to really complex societal phenomena that are beyond the ability of the houses to consistently pull off and influence. So when the competitory advantage is based on such complex societal phenomena so the ability of other houses to copy these resources is ceased ( Barney, 1991 ). Paauwe and Boselie ( 2003 ) pointed out that societal complexness issues in HR features such teamwork, interpersonal relationships among directors, cultural traditions, and firm’s webs.

Wright et Al. ( 1994 cited in Wrightet al.,2001 ) separate firm’s human resources and HR patterns. In using the construct of value, rarity, inimitable and non-substitutability, they argued that HR patterns can non be the beginning of firm’s sustainable competitory advantage as HR patterns can easy be copied by rivals. Rather they voted in the favor of human capital pool ( a extremely skilled and extremely motivated work force ) as beginning of sustainable competitory advantage for the house. They noted that to derive a beginning of competitory advantage, the human capital pool must hold both high degree of accomplishment and willingness ( i.e. motive ) to exhibit productive behavior.

Opposingly, Lado and Wilson ( 1994 cited in Wrightet al.,2001 ) argued that HR patterns could supply the beginning of sustainable competitory advantage. There point of position is that HR systems can be alone, causally equivocal and interactive in how they enhance steadfast competences, and hence could be inimitable. Snellet Al.( 1996 cited in cited in Wrightet al.,2001 ) further justify Lado and Wilson point of position and seem it as widely accepted in current SHRM paradigm.

Boxall ( cited in Wright, 1998 ) indicates the procedure through which Human Resource Advantage ( HRA ) can be developed. He argues that HRA consists of two constituents:

  • Human resource capital advantage which may supply advantage when house employs people with higher degree of accomplishment than their rivals.
  • Human resource procedure advantage which can be derive when employees’ relationships and joint job work outing procedure enable the house to put to death operations more rapidly, expeditiously and/or efficaciously.

Furthermore, Lepak and Snell ( 1999 cited in Wrightet al.,2001 ) argued that some employees groups are more instrumental to competitory advantage than others, so they are likely to be managed otherwise. This may assist research workers to acknowledge that existent and valid difference exists in HR patterns in administrations and looking for one HR scheme may non assist to place the of import differences in the types of human capital available to the house ( californium. Truss & A ; Gratton, 1994 cited in Wrightet al.,2001 ).

Research workers besides have consensus that employee behavior is an of import independent constituent of SHRM. Unlike, the accomplishments of human capital pool, employee behaviors recognize persons as cognitive and emotional existences who posses free will and this free will enables the employees to do determinations sing the behavior in which they are engage ( Wrightet al.,2001 ). MacDuffie ( 1995 cited in Wrightet al.,2001 ) argued about discretional behavior that recognizes that within prescribed organizational functions, employees exhibit discretion that may hold positive or negative impact on the house.

Similarly, March and Simon ( 1958 cited in Wrightet al.,2001 ) recognizes the discretional behavior and suggest that competitory advantage can merely be gained if the members of human capital pool separately or jointly choose to prosecute in behavior that benefits the house.

Based on the above treatment Wright et Al. ( 2001 ) supply a preliminary model that suggests core competency, dynamic capablenesss, and cognition serve as a span between the accent in the scheme literature on who provides beginnings of competitory advantage and the focal point in the HRM literature on the procedure of attractive force, development, motive, and keeping of people.

The writers pointed out that the people direction systems concept which is really the focal point on HR field that creates value to the extent that they impact the stock, flow, and alteration of rational capital/knowledge that form the footing of nucleus competences. They further argued in this theoretical account that, skill construct should be looked from the broader position of the house scheme and hence, might be expanded to see the stock of rational capital in the house, embedded in both people and systems, this stock of human capital consists of human ( cognition, accomplishments, and abilities of the people ) societal ( the valuable relationships among people ), and organizational ( procedures and modus operandis within the house ).

The “behaviour” component within the SHRM literature has been embedded in the flow of cognition within the house through its creative activity, transportation, and integrating. The writers have indicated that, this “knowledge management” behavior becomes really of import as information and cognition play greater function in steadfast competitory advantage. It is through the flow of cognition that houses increase or maintain the stock of rational capital.

They further suggest that nucleus competences arises from the combination of the houses stock of cognition ( human, societal, and organizational capital embedded in both people and systems ) and flow of this cognition through creative activity, transportation, and integrating in a manner that is valuable, rare, inimitable, and organized. Finally, the dynamic capableness concept represents the procedures that the administration has to get by with, in order to stay competitory.

It illustrates the relationship between the work force and the nucleus competency as it changes overtime. The writers argued that dynamic capableness requires altering competences on the portion of both the organisation and the people who comprise it. It is facilitated by people direction systems that promote the alteration of both the stock and flow of cognition within the house that enable a house to invariably regenerate its nucleus competences.

This frame work developed by Wright et Al. ( 2001 ) is an of import development in SHRM literature ; nevertheless its application in existent universe scenario is capable to empirical testing.

SHRM in Nipponese Multinational in USA, Russia, UK, China and Taiwan:

To further look into the issue in the existent universe scenario, this essay will look into the affair of SHRM integrating in Nipponese transnational companies runing in USA, UK, Russia, China and Taiwan. This treatment is based on the empirical research conducted by Park, Mitsuhashi, Fey and Bjo?rkman ( 2003 ) on 50 two Nipponese transnational corporation runing in USA and Russia, Basu and Miroshnik ( 1999 ) instance survey of Nisan and Toyota ( Nipponese car companies ) runing in UK and Takeuchi, Wakabayashi and Chen ( 2003 ) survey of 286 Nipponese affiliates runing in Mainland China and Taiwan.

Nipponese fabrication administrations have made a batch of inroads in abroad production bases. The successes of their endeavors have raised involvements on the system of production and administration peculiar to the Nipponese concern houses ( Wickens, 1987 ; Suzaki, 1987 cited in Basu and Miroshnik, 1999 ). Nipponese system of direction is a complete doctrine of administration which can impact every portion of the endeavor ( Ohno, 1978 ; Nohara, 1985 cited in Basu and Miroshnik, 1999 ).

The empirical research done by the writers, mentioned above to look into the issue of HRM scheme and house public presentation in Nipponese MNEs is capable to the thought of best HR patterns. However, some interesting facts come into attending with the old treatment of best-fit, best-practices and resource-based position of the house which would be discussed below.

The Nipponese MNEs have maintained their ain direction manners in abroad operations and despite of cultural difference, environment impact, and local labor market conditions these MNEs have adopted the best patterns thought and tried to organize the HRM policies and patterns between their abroad subordinates and parent central offices.

The Nipponese doctrine ofuninterrupted betterment, zero defect, just-in-time method of bringing, squad based job work outing patterns ( Quality circles, direction by aims, kaizen ( suggestion and betterment ) ), long-run committedness, in-company public assistance system, extended preparation for accomplishment development, public presentation based wagess, decentralized duties, perpendicular information systemsare at the bosom of their direction scheme. And this manner of direction has non merely proved to be successful for Nipponese MNEs but it has forced other local companies to follow Nipponese manners of direction for increased organisational public presentation.

The construct of squad working through quality circles and direction by aims ( MBO ) are the of import constituents to pull off the human resources of the house and convey them in align with company strategic ends to accomplish higher public presentation. Employees through quality circle squads can set forward their suggestions, and so feedback is given to employees for their suggestion and there are besides wagess for employees.

This Foster employee’s motive and give them the sense of engagement. It does non merely ends here, as the construct of quality circle is besides of import for organisational acquisition, as the members of choice circle comes from every section of the organisation and portion their cognition and information, this helps in making new accomplishments and attitudes that can assist to achieve the company ends.

Zero defect policy refers to the fact that alternatively of single parts the whole procedure is controlled and quality is insured through procedure alternatively of review. Therefore, employees are given extended on the occupation and off the occupation preparation non merely for specific but instead multiple operations of the house. This refers to the fact of upskilling of employees.

The long term committedness and public presentation based wagess helps to guarantee employee keeping and uninterrupted committedness towards the firm’s aims, this refers to the fact that the valuable and rare accomplishments of the employee’s that have been developed over the period of clip and are integrated into firm’s HR systems should non be imitable and substitutable.

The above treatment points out, that these Nipponese MNEs’ HR systems are some what in coherency with the model developed by Wrightet Al.( 2001 ). As it is obvious from above treatment that the people direction systems of Nipponese abroad subordinates are continuously keeping their stock of rational capital both embedded in people and systems of the company i.e. through extended preparation, public presentation based wagess, construct of uninterrupted betterment etc.

And the construct of squad working through quality circles and MBO is furthering larning in Nipponese organisation and this valuable cognition and accomplishments that employees developed is retained by the policy of long-run committedness and in-company public assistance system, decentralised responsibilitieswhich all aid to develop employee’s behavior and attitudes for high committedness and hence increased organisational public presentation. It is besides observed that these forms of HR pattern is rather relevant to our earlier treatment of best patterns in which we refer to the seven patterns identified by Jeffrey Pfeffer ( 1998 cited in Wrightet al.,2001 ).


The empirical research done in the field of SHRM to look into the issue of strategic HRM and its impact on public presentation of Nipponese MNEs is merely based on happening relationship between HR patterns ( configurational position ) of the house and their impact on organisational public presentation. The constructs of dynamic capablenesss, nucleus competences, organisational acquisition are deriving popularity in strategic literature and as argued by Wrightet Al., 2001 are the of import beginning of deriving sustained competitory advantage.

Therefore, the future empirical research should integrate these constructs to look into the issue of integrating of HR into firm’s scheme. Second the above research besides lack the grounds of how these Nipponese MNEs incorporate the local market, authorities ordinances, cultural impact that can hold influence on HR schemes of these houses.

In the position of above theoretical developments in the literature it can be proposed that the houses who seek high public presentation and want to derive competitory border over their rivals should device their HR policies and patterns that develop accomplishments, attitudes and behaviors of the employees in such a manner that are valuable, rare, amiss imitable and non-substitutable in the firm’s same line of concern, organisational acquisition is an of import constituent in developing up these features and hence, houses should develop up cognition direction systems incorporated into their HR scheme to further organisational acquisition that would hold positive impact on firm’s public presentation.


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