BUSINESS STRATEGY AND OPERATING ENVIRONMENT

Business Strategy and Operating Environment

Business Strategy and Operating Environment

To examine the effects of organizational strategic variables, such as management values regarding human resource management (HRM). The workers studied were nonmanagers. Firms with high scores on valuing HRM and people as a source of competitive advantage were more likely to have high-involvement HRM strategies. These variables also had positive effects on firm performance. In addition, firms with high-involvment HRM strategies had better performance. (Useem, Harder, 2005)

Gaining competitive advantage through strategic action has become an important focus of research and analysis in the human resource management. Work in this area has gained more impetus as the management strategy literature focuses increasingly on internal resources and competencies. Drawing on an extensive body of past research on strategic human resource management (SHRM), we examine the links between various aspects of organizational strategy, HRM strategy, and firm performance. (Useem, Harder, 2005)

Market Forces, HRM Strategy, and Asian Culture

Authors contributing to the SHRM literature often take a configurational perspective, with strategies envisioned as "internally consistent bundles of human resource practices" (Dyer & Reeves, 1995: 656) that function as a unified system. Many studies have provided typologies of HRM systems and strategies. (Useem, Harder, 2005) However, as Dyer and Reeves pointed out, these typologies tend to array strategies and systems in reasonably comparable continua, from those characterized by high employee participation, extensive training programs, and broad job designs to those characterized by low participation, limited training, and highly specialized jobs. We use the term "high-involvement HRM strategy" to denote the former approach and "traditional HRM strategy" to denote the latter.

Lepak and Snell proposed a framework that depicts various HR "architectures," with considerable discussion centering on internal development versus acquisition architectures (two of four basic architectures they identified). Internal development and acquisition correspond, respectively, to the high-involvement and traditional HRM strategies, though Lepak and Snell argued the relationships are more complex than suggested in relatively simple make-versus-buy arguments. (Useem, Harder, 2005)

As these authors observed, internal development has been linked to a number of desirable organizational effects, including greater stability and predictability of a firm's stock of human resources, higher commitment to an organization, and better coordination and control. Despite these advantages, certain organizations may choose an acquisition strategy. Internalization may have significant costs, and buying or externalization may have significant advantages, including cost reduction and numerical flexibility enhancement regarding employment. (Useem, Harder, 2005)

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