Strategic human resources: a new source for

competitive advantage in the global arena

Abstract As demands are made on organizations to expand their global markets, having an
effective global human resources function becomes imperative. Based on interviews with global human
resource executives in sixty of the largest. US-based multinational organizations, this study first
identifies ten factors, or guiding principles, that facilitate such effectiveness. Using data from surveys of
these HR executives as well as of managers of non-HR areas and the CEOs/business unit executives of
these companies, the paper then analyses how the members of these various groups rated the
effectiveness of the global HR function. The survey findings demonstrate that the global HR executives
and the CEO/business unit executives rated the global HR function relatively high, while the executives
in the other functional areas rated its effectiveness somewhat low. The relationship between the
effectiveness of the global HR function and firm performance was also examined and revealed that three
of the ten factors identified by the HR executives were related to bottom-line organizational
performance measures. These findings suggest that, in successful organizations, global HR is perceived
to be making a contribution and actually is making a contribution to the overall financial performance of
the organization

Keywords Strategic human resources, international human resources, global human resources,
human resources effectiveness, global leadership, HR strategic partner

Introduction
As increasing global competitiveness has become imperative for US corporations, any process or
function that enables corporations to gain a competitive advantage in the global arena is considered
valuable to those at the helm. One area whose contribution is just beginning to be assessed is that of
the global human resource function. This study begins this process by examining both the actual and the
perceived contribution of the global human resource function to the overall effectiveness of the
multinational organization

Past research suggests that an organization's employees can be a source for sustained
competitive advantage and can determine the ultimate success of their organizations (Pfeffer, 1994;
Prahalad, 1983). Given the importance of people in organizations, most strategic human resource
departments consider the management of the competencies and capabilities of these human assets the
primary goal. Such forward-looking, strategic operations contrast sharply with more bureaucratic,
traditional human resource departments, which tend to manage human costs as liabilities (e.g., as
incurring wage bills and benefit expenses) (Hamel and Prahalad, 1994

Strategic HR departments are future-oriented and operate in a manner consistent with respect to the
overall business plan in their organizations (Adler and Ghadar, 1990; Adler, 1997; Kobrin, 1988; Milliman
et al., 1991; Tung and Punnett, 1993). Such departments tend to employ progressive human resource
practices in which theemphasis is on assessing the knowledge, skills and abilities needed for the future
and to institute staffing, appraisal and evaluation, incentive and compensation, and training and
development programmes to meet those needs (Cascio, 1995; Schuler and Walker, 1990; Schuler and
Jackson, 1987

Research by several scholars has shown a close association 'between these highperformance
work practices and organizational effectiveness. MacDuffie (1995), for example, found that the presence
of integrated strategic HR practices was related to .higher productivity and higher quality in automotive
assembly plants. Terpstra and Rozell (1993), studying a variety of industries, found that the .presence of
strategic staffing practices was positively related to an organization's annual profit and its profit growth.
Finally, in a study of more than 1,000 organizations, Huselid (1995) found that a relationship existed
between high-performance work practices 'and such positive employee outcomes as lower turnover and
higher productivity, , as well as better corporate financial performance.

Research has also shown that executives company-wide view strategic HR departments as more
effective partners in directing their organizations' larger business plans (Dyer, 1983). One could
conclude, therefore, that, when an organization's HR strategy is linked to its business strategy,
organizational effectiveness should improve (Dyer, 1983; Lengnick-Hall and Lengnick-Hall, 1988; Schuler
and MacMillan, 1984; Tichy et al., 1982; Stroh and Reilly, 1994)

Literature review
An impressive number of theoretical works in HRD theory and theory building have contributed
to the profession. The theories and bodies of knowledge that should rightfully constitute HRD’s
theoretical foundation have been debated in an effort to establish a sound theoretical foundation upon
which to ground research and practice. Theoretical research in HRD is now at a stage where many
avenues exist for further contributions to the field (Torraco, 2004). Major paradigms in the field include:
performance, learning, and other perspectives such as change, etc

Previous Strategic HRD literature (Garavan, 1991, 1995; McCracken & Wallace, 2000; Gilley &
Maycunich, 2000; Walton, 1999; Yorks, 2005) are found mostly focused on bringing together and
building on a comprehensive body of knowledge of Strategic HRD and strategic roles of HRD (Torraco &
Swanson, 1995). But few HRD literature can be found to address specific Strategic HRD theoretical
framework. Instead, in the related field, strategic human resource management (SHRM) has been
particularly warm discussed for its theoretical perspectives (Delery & Doty, 1996; Pfeffer, 1995; Wright &
McMahan, 1992). The situation of theoretical work Strategic HRD now is very similar to what it was for
Strategic HRM a decade ago to gain its self-identity and enhance its own theoretical framework from the
mother matrix.

Purpose For the purpose of this article, author defines organizational Strategic HRD as a
systematic process of developing strategic human resources (which including talent development,
training/development, organization development, performance development, and leadership
development) in order to enable organization to achieve its strategic objectives which including financial
performances and sustainable competitive advantages.

1. Succession planning and Hotel Employees Organizational

Commitment
Succession planning is a strategy for passing on leadership roles—often the ownership of a
company—to an employee or group of employees. Also known as "replacement planning," it
ensures that businesses continue to run smoothly after a company's most important people move
on to new opportunities, retire, or pass away.

A succession planning tool is a human resource (HR) software that allows companies to
identify future leaders. ... In short, a succession planning tool identifies qualified people who can
step up to perform critical roles in the company should a leader resign or retire.

Organizational commitment refers to the connection or bond employees have with their
employer (the organization). This is based on industrial-organizational psychology (I/O psychology) and
describes the individual’s psychological attachment to the organization.
 The level of organizational commitment can help predict employee engagement and
satisfaction, performance, and distribution of leadership.

Hypothesis :1 successsion planning has a significant effect on Hotel employee organizational

commitment

2 Hotel Employee creativity

Vishal Gupta

The Indian Journal of Industrial Relations, 649-662, 2014

The present study develops a multi-level causal framework linking HRM practices, positive
psychological capital and employee creativity. The paper develops propositions about the mediating and
moderating role of psychological capital for HRM-creativity relationship. The paper argues that, to
provide a convincing explanation of the association between HRM practices and creativity, we need to
improve our theoretical understanding in three key areas: the nature of HRM, especially the rationale
for the specific lists of HR practices; the linkage between HRM practices and employee creativity; and
the 'black-box' linking HRM practices to employee creativity.

Hypothesis: 2
Hotel Employees Organizational Commitment has significant effect on Hotel Employee creativity but
succession planning is highly significant effected for both

Proactive Personality
This study examined the relationship between proactive personality and career success by
surveying a sample of 496 employees (320 men and 176 women) from a diverse set of occupations and
organizations. Proactive personality was positively associated with both self-reported objective (salary
and promotions) and subjective (career satisfaction) indicators of career success. Hierarchical regression
analyses showed that proactive personality explained additional variance in both objective and
subjective career success even after controlling for several relevant variables (demographic, human
capital, motivational, organizational, and industry) that have previously been found to be predictive of
career outcomes. These findings were consistent using both self-report and significant-other ratings of
proactive personality.

Hypothesis: 3
Proactive personality Is highly effected on succession planning and hotel employee organization
commitment
Research Methodology
Sample and procedure:
In this research, we distributed 200 structured & close-ended online questionnaire
links in a group of students through Whatsapp, Facebook and Instagram as well. The
survey respondents were male and female students pursuing graduation studies in a city
Multan, Pakistan. The research was conducted online. Only one response per student was
measured. The reason for choosing students is that the arrival of technology has had a
profound effect on students' purchasing behavior, with the introduction of smart phones
and tablets making it much easier for them to get what they want because of the
advertisements utilized in social media platform. Students are not just one group. They
have different ideas and opinions from each other. Businesses need to be proactive and
direct to understand how students think and feel about certain things.
We make use of the English language in our questionnaire, because we will only
focus on the students who know the language well, so it was very easy for us in order to
collect the necessary data. In this research, we use non probability convenience sampling
technique. Because this technique is easy to use and less time consuming. We used pilot
survey tactic to test the questionnaire using a minor sample compared to the planned
sample size. A total of 250 individual students were approached and 200 useable
responses were collected. Thus, the response rate was 80%. The majority of participants
was male (119; 59.5%), ages ranged from 18 to 34 years, with education levels being
mostly graduates (104; 52%) and masters (48; 24%). Monthly income averaged 20k
(range = 12k–20k rupees) and average tenure was five years (range = 1–5).

Problem Statement
The importance of theory to the development of professional disciplines such as HRD is one of
the most frequently discussed topics in the field (Holton, 2002a; Kuchinke, 2000; Lynham, 2000;
McLean, 1998; Swanson, 1999a, 2001; Torraco, 1997, 2004; Weinberger, 1998). Through years’ diligent
work on a variety of theoretical and conceptual work, it has been flourished on theory and theory-
building of a broad area of HRD. Meanwhile, the topic of Strategic HRD (Garavan, 1991; Garavan et al.,
1995, 1998; Harrison, 1997; Higgs, 1989; Holden & Livian, 1993; Keep, 1989; Lee, 1996; McCracken &
Wallace, 2000; Noel & Dennehy, 1991; O’Donnell & Garavan, 1997; Rainbird, 1995; Saggers, 1994;
Sloman, 1994; Stewart & McGoldrick, 1996; Walton, 1999) and strategic role of HRD (Torraco &
Swanson, 1995) has also been explored from broad-based literature in training, development, learning,
and human resources during the last decade, across academia primarily in Europe and the U.S. However,
there has been little consensus on what common definitions of Strategic HRD are and what strategic
approaches and characteristics should be included in the model of Strategic HRD. In this paper, revision
and new frameworks are proposed through examination and critique on the current theoretical work of
HRD, thus moving towards a new definition and model of Strategic HRD.

The significances of this study are argued for at least following reasons: First, this research can
add new knowledge to current theoretical work in HRD and specifically Strategic HRD through its
synthesis and critique on current works. It benefits people interested in Strategic HRD theoretical
research by providing a new conceptual framework work, new definition, and new model. A sound
model will ground future research and practice, as providing conceptual framework for further empirical
research. Particularly different from current models, talent development, performance development,
and leadership development as proposed new strategic approaches in the new model are raised to the
same extent of importance as training development (T&D) and organization development (OD) in the
field of HRD. Second, for HRD practitioners who are often criticized by lacking of strategic linkages with
business in practice thus curiously looking for strategic approaches in practical arena; a new model
proposed by this study can help them refresh ideas beyond the current paradigms and link to their
practices with two-stage strategic objectives: financial performance and sustainable competitive
advantages.

Because of space limit, this paper begins with a brief review and critique on existing HRD
theories. Then it discusses the barriers for current HRD theories if move to be strategic. At next part, it
primarily offers a new definition, theory, and model of Strategic HRD for better bridging the gap
between the purpose of Strategic HRD and current paradigms. At the end, implications and conclusion
are also included

Conclusion
This article first examines and critiques existing HRD performance, learning, and other
paradigms. It identifies the barriers of moving current HRD theories to strategic focus. Further, this
paper offers a new definition and model of Strategic HRD based on the resource-based view of firm and
human resource. The implications of the new definition and model are also discussed. In the future,
more research is desired to validate the model and further to provide empirical evidence to justify the
new Strategic HRD model

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