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Article Summary

A New Mandate for Human Resource


Management
-by Dave Ulrich

Human Resource Management


- Prof. Ranjeet Nimbudari

Submitted on:
18th
January, 2011

Section – B, Group – 08

Aditya Agarwal | Kiran Yadav | Manmit Rout | Puneet Pareek | Sachin


Rane| Sarwanga Samrat Thakella| Sohit Kumar
Summary
In the recent years, many people in the business have been debating whether
HR is relevant anymore or not, because there is a prevalent doubt that HR
doesn’t add any value to the organizational performance. But the fact is that the
kind of competitive challenges that business managers face today and will
continue to face in the future make the HR function much more relevant and
imperative to provide a competitive advantage to the business. Because these
challenges demand organisational excellence which is an HR issue.

Why HR matters more these days


The competitive challenges that are to be taken care by an able HR department
are:

• Globalization
The resources of the company, the people, ideas, products and entire
operations have to be truly global and have to be located in different countries
to meet their needs. Hence a strategic decision becomes all the more complex
like local political situation, exchange rates, Cultural unfamiliarity etc come
into picture.

• Profitability through Growth


Most companies have been making efforts to reduce costs, improve processes
thereby increasing efficiency. The growth hence has led to a large number of
mergers, acquisitions, joint ventures etc. In order to integrate different
cultures and organizations, a high level of skills is required to ensure a smooth
transition.

• Technology
Technology has been changing at a rapid pace and there is a need to
continuously adapt and better utilize the technological advances. Managers
should be able to make use of them to gain a competitive advantage.

• Intellectual Capital
The ability to retain the best people in the organization and providing superior
service to customers, has been a major reason for the success of most global
organizations.

• Change, Change and More Change


There is need for a drive to continuously transform the organization, to make
rapid decisions and to continuously stay ahead of the competition.

HR’s New Role


The challenges described above make it clear that an effective and efficient
organization is the only competitive advantage that a company has today,
because all other forms of competitiveness can be easily copied by competitors.
Thus the new role of HR to respond to the discussed challenges, involve the
following activities.

• Becoming a Partner in Strategy Execution


HR should be involved in the discussion of how the company should be organized
to successfully execute the strategy formed by the executive team. The steps to
it are:
o HR should be held responsible for defining an organizational culture.
Frameworks can be used for performing this exercise.
o HR should be accountable for conducting an organizational audit. Thus the
company can identify what areas need to be changed in order to facilitate
strategy execution.
o HR should identify methods for renovating the parts of the organizational
architecture and need for new approaches to improve processes in the
organization.
o HR should take stock of its own work and set clear priorities. It should
ensure that its goals are in line with the overall strategy of the
organization.

• Becoming an Administrative Expert


HR should ensure that it optimizes its day to day operational activities to
reduce costs and also help creating a good image for the HR department as a
strategy partner in the organization.

• Becoming an Employee Champion


HR should ensure the satisfaction of the employees in the organization. HR
should educate the line management to achieving high employee morale.
They should voice the concerns of the employees in front of the management
and ensure that their problems are resolved.

• Becoming a Change Agent


HR needs to ensure that the organization is geared up to adapt to change,
and to continuously innovate and improve. The HR need to overcome the
resistance to change in the organization.

Four Changes for the Line


As important it is for the HR managers to change so is it for the top management
and the line managers to support the HR achieve the desired changes. The ways
it can be done are:

• Communicate to the organization that the “soft stuff” matters


Line managers should realize that stuff like culture change and intellectual
capital are critical issues to be addressed for an organization to prosper
and must handled properly.

• Explicitly define the deliverables from HR, and hold HR


accountable for results
Ensure that HR is focused on achieving its set goals and held accountable
for failing in those.

• Invest in Innovative HR Practices


Ensure that the HR has the proper tools required to improve the overall
organization and perform its role better by being in tune with the
continuous innovations.

• Upgrade HR Professionals
The company should settle for the best while recruiting the HR
professionals who are capable of taking care of their responsibilities and
goals in the best possible way. Timely training must be given to update
their skills
Hard Work Ahead
Finally, HR managers need to focus on setting goals, and ensuring that they
behave and act in a manner well suited to a strategic partner. They should bring
in processes that give quick results. The senior management and line managers
need to understand the importance of HR and should give it the proper time and
attention that it deserves.

Critical Review for a new mandate for human resources

A New Mandate for Human Resources – by Dave Ulrich, Havard Business


Review, January-February 1998
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.
In this scenario, a human resource (HR) department that is highly administrative
and lacks strategic integration fails to provide the competitive advantage needed
for survival, thus loses its relevance and many a times give birth to a question,
“Should we do away with HR”, in the mind of senior executives.
This is the question with which Dave begins the article and answers the question
with a resounding “Yes”, if it is still focused only on the traditional HR practices
of staffing, compensation and does not sees its role in delivering the results that
enrich the organization’s value to customers, investors and employees.
The business environment is changing at a neck-breaking speed, world has
become a global village, and it is imperative for the managers to think, globally,
and act, locally. To be competitive in this era, the only efficiency is not sufficient
and the need of the hour is to also pay attention to the other part of the
profitability equation and that is revenue growth. Besides, all these the
technology has become both bane and boon for the business and, eventually, for
the managers and the biggest challenge that the organizations are facing today
is to how to ensure that they find, assimilate, develop, compensate, and above
all retain such talented individuals. To brave all these challenges, the
organisations must build up new capabilities and who is, currently, responsible
for developing these capabilities? This is the question that Dave asks and sees
an opportunity for HR to play a leadership role in enabling the organization in
building these capabilities.
Dave sees HR to meet the above mentioned challenges in four ways. First by
becoming a partner in strategy execution, second by becoming an administrative
expert, third by becoming an employee champion and, finally, by becoming an
agent of change.
But Dave does not think that it is possible for HR alone to achieve these
objectives and holds the line managers to be accountable for integrating HR into
the organization’s real work by giving due respect and importance to HR
functions, explicitly defining deliverables from HR and holding HR accountable
for the results, investing in innovative HR practices and upgrading HR
professionals.
While the article presents Dave’s in-depth understanding of the
integrated role of HR and senior management in the today’s business
scenario, it lacks in some aspects. Firstly, it does not give a vivid description
of the process to integrate HR effectively with the organizations’ real work and,
therefore, leaves the readers no doubt excited but bit directionless. Secondly, it
discusses the internal factors (for example, structure, style, staff, shared values)
affecting the strategy formulation in the organization but does not discuss the
relevant external environmental factors affecting the organization and HR’s role
in that.
Overall, it is a quite comprehensive article that discusses the real purpose of HR
in today’s competitive world in a lucid language.