SHRM

SHRM

SHRM

1. What is Strategy?

First, a simple answer: Strategy may be defined as a set of fundamental choices about the ends and means of an organization. More recently it might be defined as policies and procedures that are aimed at securing competitive advantage. That said, there are several different approaches in exploring the question 'what is strategy?' Some focus on the content of strategy and its positioning in relation to factors internal or external to the organization that might be seen as salient to its securing competitive advantage. An example of the internal, firm-focused approach would be the 'resource-based' view of strategy of the firm (e.g., Barney 1991). This perspective defines firms as unique bundles of resources and suggests that the route to developing sustained competitive advantage is to develop resources internally that meet the criteria of value, rarity, being costly to imitate, and nonsubstitutability. Examples of the latter, market-focused approach might be Porter's (1980) generic strategies (low cost, differentiation, segment, or niche) in relation to his five-forces model or Miles and Snow's (1978) categorization of firms as prospectors, analyzers, defenders, and reactors, both models emphasizing market-oriented choices. Theories that bring together internal and external perspectives are life-cycle theories of the firm or product (for example, the Boston Consultancy Group's portfolio planning growth-share matrix).

A second approach, which can subsume the content approaches, focuses on theprocesses of strategy making. A famous distinction is that between 'planned' and 'emergent' strategy (Mintzberg and Walters 1985). Building on this is a useful typology of Whittington (1993), based on two axes, relating to continua of outcomes (profit maximizing/pluralistic) and of processes (deliberate/emergent). Four perspectives on strategy are identified: the 'classical' (profit maximizing/deliberate), 'evolutionary' (profit maximizing/emergent), 'processual' (pluralistic/emergent) and the 'systemic' (pluralistic/deliberate). The processes of strategy making that are 'deliberate' comprise of rational, planned, top-down decision making ('classical' model) and decision making shaped by the social systems in which organizations are embedded ('systemic' model). 'Emergent' processes are those that reflect the very bounded, incremental, and political nature of decision making ('processual') or, in contrast, the 'population ecology' view of the competitive processes of natural selection, where the market picks the winners, rendering ineffective any deliberate strategizing ('evolutionary'). Writers typical of each of these perspectives would be Ansoff (1965) ('classical'), Hannan and Freeman (1988) ('evolutionary'), Mintzberg and Walters (1985) ('processual'), and Granovetter (1985) ('systemic').

2. What is Strategic HRM?

Even leaving aside the work on HRM by European writers, such as Anthony, Keenoy, Legge, Townley, and Willmott, that lies within a critical discourse tradition and which, as such, will not be considered here, there has been much debate on this question since the mid-1980s (see, e.g., Beer and Spector 1985, Fombrun et al. 1984, Guest 1987, Walton 1985). For many years, especially in the USA, human resource management was just another term for personnel management. Both terms referred to the management of the employment relationship and of the indeterminacies in the employment contract. In the early 1980s, however, a combination of factors—increased globalization of markets and perceived intensification of competition, the ...