Title: Integrating
HR Strategy with the Business strategy
Author: Nitu Ghosh
Affiliation: Brindavan
College , Bangalore .
Address: Dwarkanagar, Bagalur
Main Road ,
Yelahanka, Bangalore- 560063.
Email id: nitughosh2k@gmail.com
“Expecting
the unexpected” is the main mantra of doing business in the present millennium.
The consequences of the 2009 Global economic recession are witnessed even
today. The world economy is in doldrums and every nation is now facing the
problem of low GDP, unemployment, volatile stock market, falling businesses,
increasing debts and credit crisis. In such an uncertain environment, mere
survival is becoming an issue for businesses.
In this global
economy, business organizations are driven by market pressures and they need to
include in their goals, improved quality and productivity, greater flexibility,
continuous innovation and the ability to change to respond rapidly to market
needs and demands. Pro-activeness and change is the secret of sustaining
business houses. Thus, in this intensely
competitive and global marketplace, maintaining a competitive advantage by
becoming a low-cost leader or a differentiator entails having a highly
committed and competent workforce. Competitive advantage lies not just in
differentiating a product or service or in becoming the low-cost leader but in
also being able to tap the organization’s special skills or core competencies
and rapidly respond to customer’s needs and competitor’s moves. In other words,
competitive advantage lies in management ability to consolidate corporate wide
technologies and production skills into competencies that empower individual
businesses to adapt quickly to changing opportunities and hence innovate. This
has been the driving mantra for most organizations in this millennium that have
consistently maintained the leadership positions in their own sectors. Be it
Apple Computers, Google, Cognizant, TCS, Tata Motors, Tata Steel, Nucor etc.,
these are the names that have made big through their Human capital. Its their
human resources and the strategic way they procure, utilize and develop their
human resources that has enabled them to have a competitive edge over their
competitors and sail through the stormy business environment. Companies that
have not been able to tap their human capital in a strategic manner have ceased
to remain as an innovator and hence have failed to sustain their leadership
positions. Infosys, HP and Motorola are best examples that have made way for
their rivals to replace them as the leaders. Motorola’s decline has resulted
from its delay in innovating and as a result a company that had pioneered the
concept of learning organization and six-sigma is now no more. Better are the
fates of Hewlett Packard and Infosys. Poor leadership and utilization of human
resources are the causes of the giant’s infamous decline and for Infosys,
failure to tap the future markets as has been smartly done by its near rivals
TCS and Cognizant. The consequences of these minor delays and fallacies are
catastrophic. Infosys that has consistently been the leader in Indian IT
industry for nearly a decade has been replaced by TCS according to the latest
performance records.
These
are some recent examples of the significance of human capital in today’s
organizations and how the strategic integration of human resource practices
with the corporate goals can make a difference. The changing competitive
business environment has made the human capital an organization’s key asset,
with HR largely responsible for cultivating it. Recognizing the importance of
human capital, in turn, makes the HR function more strategic and fundamental to
an organization’s success. Human competency in an organization helps in
coordinating its resources and using them productively. These competencies get
embedded in an organization’s routines and processes. By nature, competencies
are more difficult to copy or imitate as they are often the result of a complex
interaction between the structure, systems and values of an organization.
Though it is sometimes difficult to explain post facto how exactly a capability
was created, or for an organization to re-trace the path traversed by another
organization that enabled the latter to create certain capabilities, it is
possible for an organization to take deliberate actions to create capabilities[1].
The deliberate actions taken to create resources and capabilities, spring from
the functional strategies adopted by an
[1] Dorothy Leonard Wellsprings of Knowledge Harvard Business School Press, 1995
organization[2].
Thus Leaders today must juggle the tasks of monitoring current performance,
managing incremental innovation, and leading revolutionary or discontinuous
change efforts. A clear understanding of the drivers of performance, innovation
and change is required to manage human capital in today's competitive
environment.
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 undergoing have led
to increased importance of managing human resources (Devanna, Fombrum, &
Tichy, 1981; Wright, 1998). In this scenario, a human resource (HR) department
that used to be highly administrative in function has to operate more
strategically so as to add a competitive edge to the organization through its
competent human resources or rather human capital. The three-step process of
SHRM involving strategy formulation, implementation and evaluation is
recommended in the light of external and internal environmental variables. The
Integrated Approach of SHRM is best suited for modern organizations enabling
them to sustain as learning organizations.
HR professionals are expected to be proactive as their actions
and ideas influence organisational objectives, policies and procedures. Therefore,
HR professionals need to demonstrate consistent and high level of integrity in
the form of reliability, honesty, equality, transparency and fairness that help
motivate staff and further engagement. HR
professionals must spend more time and effort understanding the business
environment and the key strategic issues faced by the company. They must see
themselves as knowledge workers and facilitators of knowledge flows within the
organization. They must be involved in the main decision and strategy making
process as a line manager
[2] Krishnan, Rishikesha T. “Linking Corporate Strategy and HR Strategy: Implications for HR Professionals,” In R. Padaki, N.M. Agrawal, C. Balaji and G. Mahapatra (eds.) Emerging Asia: An HR Agenda, New Delhi : Tata McGraw-Hill, 2005, pp. 215-223.
rather than as a staff. They must act as transformers
and change agents. For this it is inevitable that HR professionals make a transit from the support paradigm to a
value-creation paradigm.
Conclusion:
If a global company is to function
successfully, strategies at different levels need to inter-relate. An
organization’s human resource management policies and practices must fit with
its strategy in its competitive environment
and with the immediate business conditions that it faces. The human resources–business
strategy alignment cannot necessarily be characterized in the logical and
sequential way suggested by some writers. A HR system has to be designed which
is a complex and iterative process. The integration between business goals and
HR strategies is inevitable to sustain in today’s uncertain ever-changing
environment. Hence HR professionals have to act as the strategic business
partners and change agents to lead their organizations towards sustainable
growth.
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