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ACTIVITY CHAPTER 1

The Strategic importance of human resource management within the organization.

●How human resource management contributes to business strategy?

ANSWER

Strategic HRM can be very effective in organizations when implemented correctly. It benefits the
organization in several ways. It can be a very useful tool to help identify and analyze both internal and
external threats as well as opportunities. It also helps to provide a clear business vision and strategy. It is
an important influence in the approach to the recruitment and selection process to get the right people
with the right skillset into the most effective positions to maximize their potential within the
organisation.

A key component of linking business strategy to HRM is a culture of clear communication and trust
within an organisation. When employees are encouraged to become involved in various aspects of the
business strategy it develops higher levels of trust and respectability between employees and the
management team. This trust is built on the knowledge sharing which allows employees to also share in
the vision and goals of the organization. The right strategy therefore helps to retain talent and develop
highly competent employees.

The importance of strong teamwork and collaboration between various stakeholders at the senior levels
within an organisation is crucial to the success of any strategy. When leaders can demonstrate their
willingness to buy in to the combined business strategy and HRM processes of their organisation and
openly share this with their teams it can be a very powerful and dynamic tool in gaining competitive
advantage in the marketplace.