THE UNIVERSITY OF BURDWAN

DIRECTORATE OF DISTANCE EDUCATION

M.B.A. 4st SEMESTER SESSION:

JAN 2019 TO JAN 2021

PAPER CODE: HRMD 405

PAPER NAME: STRATEGIC HUMAN RESOURCE MANAGEMENT
Assignment Topics
in
CASE STUDYS-1
INTEGRATING STRATEGY
AND
HUMAN RESOURCE MANAGEMENT

DATE OF SUBMISSION: 05-12-2021

NAME: KUNAL DAS

ROLL NO: 3019010031






-1-
 


 1) Based on these descriptions of the experiences of People’s Bank, Ingersoll
Rand, and Maid Bess, what is the unifying theme of the role played by
human resource management?

Strategic human resource management is the process of linking the human

resource function with the strategic objectives of the organization to improve
performance. Attracting and keeping talented and skilled employees is one of the most
important challenges organizations face in today’s dynamic business world. No strategy,
no matter how well designed, will work unless the organization has the right people,
with the right skills and behaviors, in the right roles, motivated in the right way and
supported by the right leaders.

The experiences of several organizations provide good examples of the

integration of strategy and human resource management. One such example is
provided by the experiences of People’s Bank, a financial services company
headquartered in Bridgeport, Connecticut. Massive changes began to take place in the
business environment of banking with deregulation and relaxation of ceilings on
interest. Money markets began to drain off funds that ordinarily went into bank’s
deposits, forcing them to rely on more expensive sources of funds. Further, the money
center banks began to compete in the same middle markets as regional banks. People’s
which was a small regional bank, responded by changing its strategy from product
orientation to one directed towards markets. With product orientation, products are
developed and then markets are sought out in which to sell the products. Conversely, a
market orientation involves and opposite approach in that market demands are
determined and then products developed to serve the market. As a result of these
changes, people have transformed itself into a diversified financial services company
with 139 branches and a fully-integrated banking services and stock trading presence
on the internet.

Because of major changes in People’s strategy, there was recognition that new
organizational structures would be needed to accommodate the changes. The
organization was decentralized, hierarchical levels removed, strategic business unit
formed, and new senior vice presidencies created within a matrix structure. The bank
then conducted a study of the types of employees that would be needed with the
strategy’s skill and orgizational requirements. Major changes were undertaken as a
result of the audit. For example, the performance appraisal system was revised. The
revised system emphasized goal setting, linked individual goal accomplishment and
rewards with the attainment of the bank’s objectives, and placed greater emphasis in
performance appraised on marketing and sales. Further, human resource planning was
more fully integrated with the strategic planning process through synchronization of its
-2-
 scanning process with the bank’s overall environmental scanning process.

 2) How does the strategic role of human resource management in the US

Navy case differ from the others? 

“Strategic human resource management means formulating and executing human

resource policies and practices that produce the employee competencies and behaviors
that the company needs to achieve its strategic aims.”- Gary Dessler

Strategic HRM focuses on actions that differentiate the firm from its competitors
(Purcell, 1999). It is suggested by Hendry and Pettigrew (1986) that has these
meanings:

1. The use of planning,

2. A coherent approach to the design and management of personnel,
3. Systems based on an employment policy and workforce strategy and often
underpinned by a ‘philosophy’,

The experiences of the US Navy provide another example of the integration of strategy and
human resource management. As a result of its linkage of strategic planning with human
resource management. As a result of its linkage of strategic planning with human resource
management, the Navy was able to pursue a proactive strategy that provided lower labor
costs. In the Navy’s case, its human resource planners analyzed the labour cost saving of
a strategy involving its civilian employees that would substitute local wages policies. By
developing human resource forecasts to determine labour market reactions to these
changes, planners could determine whether sufficient labor supplies would be available with
the cost-saving strategy. In this example, the planners also examined the impact of the
reduction of private sector middle also examined the impact of the reduction middle
management positions and fond that higher- Quality employees could be hired.

 3) What were the environmental influences stimulating the actions described

for each of these organization ? 

In transforming the HR structure from traditional to SHRM, it is common for the

organizational unit to restructure. The major issue in designing a new strategic HRM
unit is to determine whether to centralize or decentralize HR function. The relevant
structure for the HR function depends on the nature of the firm’s business, the size of the
firm and the firm’s overall business strategy.

In some organizations, a centralized structure for the HR unit would be

appropriate and in some highly decentralized HRM may be necessary. Regardless of
which particular structure has used the key element in the successful transformation
from traditional HR function to SHRM is to find a structure that meets the pressing

-3-
needs of business strategy and allows the HR unit to provide services designed to help
the firm achieve strategic objectives.

-4-
 Given the increasingly significant role of human resources in an organization,
HRM has become strategic. Strategic human resource management (SHRM) is
concerned with the relationship between HRM and strategic management in an
organization. Strategic human resource management is an approach that relates to
decisions about the nature of employment relationship, recruitment, training,
development, performance management, reward, and employee relations.

Wright and McMahan (1992) defined SHRM as ‘the pattern of planned human resource
deployment and activities intended to enable the firm to achieve its goals’.

This definition implies the following four components of SHRM:

1. It focuses on an organization’s human resources (people) as the primary source of

competitive advantage of the organization.
2. The activities highlight the HR programs, policies, and practices as the means
through which the people of the organization can be deployed to gain
competitive advantage.
3. The pattern and plan imply that there is a fit between HR strategy and the
organization’s business strategy (vertical fit) and between all of the HR
activities (horizontal fit).
4. The people, practices, and planned patterns are all purposeful, that is,
directed towards the achievement of the goals of the organization.

4) What managerial trends are indicated in the experiences of these

organizations?

The theoretical perspectives have identified six key elements necessary in developing
SHRM within the firm.

 Transforming HR Staff

There exists a significant difference in the skills needed by HR staff in the

traditional and strategic orientations to HRM. In traditional HRM staff had to be
specialized in certain functional areas like interviewing, recruitment and training. The
strategic HRM role played by HR professionals is “change management”, involving
strategic planning, team building and having a global perspective. Most HR units will face
a significant transformation to manage human resources with a new strategic view.

 Enhancing administrative efficiency

Dave Ulrich (1996) suggested that one of the key roles of HR staff is to be
“administrative experts”.

As administrative experts, HR staff members must take an active role in

engineering, administrative and other processes within the firm and find ways to share
services more effectively throughout the organization. The objective is to increase HR
5
 service efficiency and save money. Several processes are needed to enhance the
administrative expertise of HR units.

i. Improving administrative efficiency by targeting current processes for improvement,

by examining the gaps between the “as is” process and what the system “needs to be.”
ii. Administrative efficiency can also be enhanced by the development of centralized HR
services that are shared throughout an organization.
iii. The ultimate process involves HR staff to rethink how they create value to the firm
in terms of value perceived by the customers rather than perceived by the provider
of the program.
iv. Integrating HR into the strategic planning process

The strategic integration of HR requires the strategic planning process and the
involvement of HR managers in that process. The development of a strategic plan
involves top management, with the help of outside consultants, to go through and
analyze the current and future condition of the organization. To achieve full integration,
HR managers should not only have the ability to influence the development and
selection of information used in decision making but should also have the ability to
influence decision making.

 Linking HR practices to business strategy and one another

This issue of fitting HR practices to business strategy is becoming increasingly

important and relevant HR issues for HR staff and line managers. HR fit involves making
sure HR activities make sense and help the organization achieve its goals and
objectives. The three aspects of HR fit are:

A. Vertical fit

This aspect of vertical fit concerns the coincidence between HR practices and
overall business strategy.

B. Horizontal fit

This relates to the extent to which HR activities are mutually consistent.

Consistency ensures that HR practices reinforce one another.

C. External fit

The third aspect concerns how well HR activities match the demands of the
external environment. Ensuring these aspects of fit requires HR practice choices. The
challenge is to develop internally consistent configurations of HR practice choices that
help to implement the firm’s strategy and enhance its competitiveness.

There is a need for strategic flexibility along with a strategic fit for the long-term
competitive advantage of the firm. The fit is defined as a temporary state in an
6
organization, whereas flexibility is defined as the firm’s ability to meet the demands of
the dynamic environment.

 Resource Flexibility

Resource flexibility is the extent to which a firm can apply its resources to a
variety of purposes. It also involves the cost, difficulty, and time needed to switch
resources from one use to another.

 Coordination flexibility

Coordination flexibility concerns the extent to which an organization has decision

making and other systems that allow it to move resources quickly from one use to
another. This task is accomplished by having an effective partnership between HR
managers and line managers.

5) The Ingersoll-Rand case indicates that its solutions to problems it faced

were based largely on employee empowerment approaches. Explain how
employee’s empowerment can provide a viable source of competitive
advantage to be considered in strategic decision-making?
Ingersoll-Rand’s experience with one its divisions also provide a good example of
the outcome of a strong linkage between strategy and human resource
management. Ingersoll-Rand’s rocks-drilling division was experiencing rapid
growth and had shortages of labour. It also needed to train its employees to work
with new technology and wanted to control labour costs. The outcome of
integrating its human resource capabilities with its strategic planning process was
that the company implemented a number of programmers, including gain sharing
and employee involvement teams. It also had employees participate decisions on
the purchase of new technology and made a major commitment to technological
training.

A final example of the integration of strategy and human resources is provided by

Maid Bess, a manufacturer of uniforms. The company faced intense competition
from foreign manufacturers, and control of labour costs become very critical.
Because of its labour intensity, the company closely integrated human resource
management with the strategic planning process. As an outcome of the integrated
strategic planning process, the company’s executive vice president designed a
compensation programme that incorporated bonuses that enhanced productivity,
increased employee wages, and reduced turnover.

Strategic HRM supplies a perspective on how critical issues or success factors

related to people can be addressed, and strategic decisions are made that have a
major and long-term impact on the behavior and success of the organization. The
fundamental aim of strategic HRM is to generate strategic capability by ensuring
that the organization has the skilled, committed and well-motivated employees it
needs to achieve sustained competitive advantage.

7
 .

 Conclusion

Effective strategic management requires effective human resource management.

Strategic Human Resource Management implies how HRM is crucial to organizational
effectiveness.

Hence organizations have to carefully design strategies and relate to human resources
for effective utilization in achieving greater organizational performance. The human capital,
practice, which includes the kind of strategy, company, has to follow in terms of greater
performance and the pattern should be taken care of in maintaining strategic human resource
management (SHRM).

The emerging discipline of SHRM offers interesting and insightful variants so far as the
views and approaches are concerned.

An ongoing effort is required to unravel the mysteries of SHRM that holds the promise
of being a powerful tool to manage human resource in the environment of fast-paced changes
that organizations are experiencing today.