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Human resources are the efforts, skills, and capabilities that people contribute to an employing organization which enable it to continue in existence. Although difficult to define, SHRM is generally perceived as a distinctive approach to managing people which seeks to achieve competitive advantage through the strategic development of a highly committed and capable workforce. moving into the realm of SHRM is about managing the human capital of an organization in such a way as to achieve some type of competitive edge. Having not only a committed workforce, but also having a workforce that is highly trained for the job that must be performed achieves the competitive edge. Moving in this direction is where human resources becomes SHRM.
Van Donk (2001) takes this idea one step further by explaining where in the planning process of a company the human resource management role must fit in order to make it strategic in nature. He also explains how this role has evolved in the past twenty years or so: From the 80s onward there have been pleas for integrating human resource management and corporate strategy. A number of authors have been working on approaches to the achievement of what is called Strategic Human Resource Management. These approaches place the human resource management policy formulation at the strategic level. In these approaches to Strategic Human Resource Management it is claimed that: (1) human resource problems are problems solved by linking HRM and strategy formulation at an early stage; and (2) problems with strategy implementation are solved by early adjustment of the HRM to these strategies
Managers were forced to develop rule, regulations and procedures to control the increasing number of workers. A study of Singaporean companies found that when HR managers lack the necessary skills to perform their duties competently, line managers and executives take over some of the functions of HR managers (Nee & Khatri, 1999). To develop good strategies, SHRM requires some key characteristic factors discussed as follows:
Recognition of External Environment: the external environment presents a set of opportunities and threats to the organization in form of social, economical, political, technological and demographic forces.
Fiscal Functions: Staffing budgets, departmental budget, accounts payable, insurance receivables, total package costing.
Expert administration: SHRM requires an active role of the staff in reengineering administrative and processes effectively with in the firm.
Decision Making Focus: Approaching strategically means choosing among the best alternatives. State, Federal family and medical leave rights, county approved leaves of absence, rights upon return to work, light duty assignments for temporary periods.
SHRM strongly believe in critical capabilities of organization, for the attainment of goals of the organization as well as a particular business a strategy needs to be adopted. Unlike the HRM which covers a wide range of employment practices, SHRM reflects a more flexible arrangement and utilization of human resources to achieve organizational goals, and therefore helps organizations gain competitive advantages; meanwhile the organizations need to develop an emergent strategy to make sure the smooth flow of the work. (Wei, 2006).
Mintzberg and Waters mentioned that realized strategy - the actual strategy that is implemented - is only partly related to that which was intended (Mintzberg suggests only 10-30 percent of intended strategy is realized). The primary determinant of realized strategy is what Mintzberg terms emergent strategy - the decisions that emerge from the complex processes in which individual managers interpret the intended strategy and adapt to changing external circumstances. This model should also been seen as a process and especially if you include the variable of time. As show in the model below the realized strategy effects the intended strategy as times goes by. This is an important part of the model since it shows that current strategies will affect future strategies. There are two extreme types of organizations, the ones that have only deliberate strategies and the ones that have only emergent strategies. These two pure forms are very rare and perhaps there is no organization that has one of these pure types of processes. For a pure deliberate strategy, the organization must have pure intentions with a relative concrete level of detail. This plan has to be carried out exactly as intended. For a strategy to perfectly emergent there has to be consistency in action over time but without any intentions. Except for these two pure types of strategies that are extremely rare according to Mintzberg & Waters (1985 pp 257-258) but they argue that between those two extremes are several different type of strategies that are common in companies today. Mintzberg & Waters (1985) classifies eight different types of strategies:
The planned strategy is clear intentions back by formal control. The leader is the centre of authority with their intentions being very clear and precise and the goal is to transform the intention to collective action with minimum distortion. Programs and systems are built in to the plan to ensure that no one acts in another way then intended.
For this type of strategic process to be effective the environment has to be extremely stable or the organization has to be able to predict it with great accuracy. When organizations put large quantities of resources in a mission or project they might not tolerate unstable environment. When they have plan several years ahead and don't allow avoiding behaviour and commit themselves firmly. An example of this can be mining companies.
The human resource of an organization offered the potential synergy for sustained competitive advantage, when properly deployed, maintained and utilized. From the onset, the traditional HRM, the formal system for managing people in organization, concerned itself essentially with transactional and administrative support services. The emergence of SHRM, concerned with the relationship between HRM and strategic management of the organization, was a paradigm shift. To perform successfully, the roles of business partner and change agent under SHRM, the HR practitioner must be highly knowledgeable, multi skilled and acquire core competencies like business knowledge, strategic visioning and global operating skills, credibility and integrity, internal consulting skills, among others. (Benjamin James Inyang, International Bulletin of Business Administration, 2010)
Examples of Strategies related to Intended, Planned
Motorola in China (A): Dealing with an Evolutionary Industry Life Cycle. This case explains how Motorola tuned its strategies to emerging trends. Actually, by January 2003, its going was becoming tough in the Chinese market. Most of its invented strategies failed. Then it realised that its strategies can no longer neglect the market trends.Â (reference Case Study)
Due to the large size of the Chinese cell phone market and its potential for long-term continual growth, competition for access to China's consumer markets is intense. Â Competitive threats from Nokia, Siemens, Samsung, and local producers like TCL are a cause for concern within Motorola. Â However, eighty-four percent of Chinese consumers prefer foreign mobile phones to local models, with Motorola, Nokia and Ericsson being their favorite makers, according to a nation-wide survey conducted by the China Telecommunications Association and Eaglewings Public Relations. Â For this reason, Motorola's biggest competition for cell phone supremacy would likely appear to come from foreign companies outside of China.
China's aforementioned government structure plays an interesting role in the assumption that foreign companies will maintain dominance. Â As is traditional, the socialist government hierarchy prefers for a majority of any industry to have local majority control. Â The government, which controls the operations of the service provider sector and is a dominant player in distribution channels as well, has the means to make this goal a reality - quickly. Â For this reason, Motorola did not only utilize shorter-term strategies to find a way to grow market share, but long-term change strategies to find a way to compete with government powered locally owned firms. The Ministry of Information Industry showed that Motorola had a leading market share of 28.7% in the mobile phone industry as of April 2002 i.e
10% Market Share of Chinese Cell Phone Market (as of 1st Quarter 2005)
The cellular phone industry in China is going through the growth stage of the industry life cycle.
Hence this was the reason that companies wanted to make sure that local responsiveness should be the ultimate target. The sources needed to plan emergent strategy in order to tackle the consumers.
So in order to tackle the government issues and make sure that people like the way they make sure that the work is done in there way. Hence Motrolla designed strategies which deal with the changing environment. Therefore they caused their own company to make sure that it may emerge as the best practice organization. They practical implementation of Strategies were therefore adopted by setting up long term goals and short term targets simultaneously. Hence China became largest market of Motrolla Mobiles, They had got cheap labour and ample resources to producing these mobiles in this region. This provided them another advantage of capturing the market of Sub-continent as well.
What drives the adoption of Emergent SHRM in Indian Companies?
Managerial innovation in today's global business is well understood. The critical role of adopting new managerial innovation in strategic human resource management is increasingly prevalent in both business and academic literature. While, practically no such study has been undertaken in an emerging country scenario as India. This study identifies the drivers of adoption of innovative and emergent strategic human resource practices (SHRM) in Indian organizations. The liberalization of the Indian economy which started in 1991 is far good example of such innovation. The structural adjustments due to liberalization have created a hyper-competitive environment. This is drawing both innovation and literature in research made under this change. The generalisability, applicability, acceptability, and the diffusion of practices are some common features of Indian organizations.
Insights offered by organizational theories reveal that managerial innovation is adopted by Indian organizations mainly to improve organizational performance. Walston et al (2001) argue that emergent strategy innovation promise to enhance efficiency and is particularly attractive to organizations facing intense competition and can be thought of as either driven by some rare factors of economy. Adoption and diffusion occur as they encompass the generation, development, and implementation of new ideas or behaviors (Damanpour, 1991). and are the characteristics of individual people, by the characteristics of the organization, and by the context in which it operates and out of which it emerged (Kimberly, 1981; Kimberly and Evanisko, 1981).
Standard Corporate Planning Picture
(The above picture shows how a SHRM works. The managers intend to make a predefined strategy they make it possible through the use of SWOT and STEEPLE analysis. Then a corporate strategy is developed. Therefore the main picture come into view is as shown in figure 001.)
The Tata Story
Similarly, when Tata Tea acquired loss-making Tetley of the UK in 2000, many thought it would be an albatross for the Tatas. But the Tata group proved the Cassandra's wrong and the company started showing signs of an early turnaround in 2001. Key to this was a debt restructuring exercise that reduced interest costs.
Tata Tea injected £30 million into the Tetley group to replace the high-cost debt. The fact that Tetley's global retailing operations were complementary to Tata Tea's domestic business also helped. After the acquisition of Tetley, the Tata group made several significant acquisitions, such as US telecom network operator Tyco Global, Daewoo Commercial Vehicles, and Boston's Ritz Carlton hotel.Tata Motors acquisition of the commercial vehicles unit of the bankrupt Korean group Daewoo in March 2004 has not only provided the company with an enhanced product portfolio but also allowed it to make a mark in the international market.
The company is now using Korea as a base for commercial vehicle exports to other Asian markets. Rechristened Tata Daewoo Commercial Vehicle Ltd. (TDCV), South Korea, the company is now growing at a healthy rate. In 2005-06, TDCV recorded a 26 per cent growth in turnover, at Rs 1,647 crore against Rs 1,247 crore the previous year. The company's net profit zoomed 163 per cent to Rs 60.75 crore.
This was all due to the change in strategy of Indian Company. This is one example in many, Indian companies. Another example is of Railway of India. Tata left its Intended strategy and adopted the Emergent strategy. This was done to make sure that the new and changing culture of India becomes the target. Hence it was fruitful.
Intended vs emergent Strategy: Fit for organization
Mintzberg and Waters argue that strategy can and must be seen in a wider perspective. They distinguish between deliberate strategies (realised as intended) and emergent strategies (strategies that emerge in an organization, but not guided by intentions.)
Deliberate strategy:Â A perfectly deliberate and intended strategy must satisfy 3 conditions:
Precise and articulated intentions must exist in a concrete level of detail
Seeing organizations as collective action, intention must be common knowledge to virtually all the actors in the organization.
These collective intentions must have been realized exactly as intended - (also meaning that no external forces could have interfered with them).
Emergent strategy:Â A perfectly emergent strategy is characterised by order, but in the absence of intention about it. It is although difficult to imagine action in the total absence of intention. Emergent strategy does not mean chaos, but in essenceÂ unintended order
The authors expect that purely emergent strategies are as rare as the purely deliberate one. It is more likely to find tendencies in the direction of deliberate and emergent strategies rather than perfect forms of either.
As a consequence of the above, the authors see emergent and deliberate strategies as two poles, where different types of strategy can bee said to exist in the space between them.
They introduce the following strategies, where the first strategies fall closest to the deliberate strategy-pole and ending in the last strategies closest to reflecting the characteristics of emergent strategies.
In organizations like Walmart, Ebay and Citigroup, The strategies are developed from time to time. They have a lot of planning and formulation techniques through which they formulate intended strategies. But they meanwhile also have some mechanism to formulate strategies for emergent happenings. Some very common types of techniques for formulating these strategies are Quantitative analysis planning matrix and Ansoff matrix. In SHRM too they have formulated strategies to tackle these emergent situations.
Deliberate and emergent strategies
Figure 002: Strategies have a form and they are formulated
SHRM: Strategy Analysis
The HR professional becomes more challenging under SHRM - the emergent business partner model. SHRM is a value-added core responsibility that aligns the HR system, policies and practices with business strategy to gain sustained competitive advantage for the firm. In performing the new challenging roles, the HR professional must think outside the intended way of strategy and towards emergent SHRM strategy and develop a more different approach to manage the human element to effectively support the firm's business strategy formulation and implementation. For successful implementation of the business partner role, the HR manager needs to understand the company's business direction and its competitive position in the market place. Apart from this, to become a successful strategic partner, the HR manager must have competencies that have to do with the business issues involved in strategy and strategy development, and ability to contribute to organizational design and change management (Lawler, III and Mohrman, 2003). The HR function, according to Rowden (1999) must change from a staff function that delivers prepackaged HR services to a service that helps managers create customized strategic plans to influence the effectiveness of company performance. The HR manager can play an important role in the formulation of strategy and providing the human resource required to support various strategies and strategic initiatives in the organization. He provides the leadership role in developing the human capital and the necessary capabilities to enact the strategy and drive the implementation and change management processes to success (Lawler III & Mohrman, 2003). Good human capital management is a prerequisite for successful execution of business strategies.
According to Ulrich (1998), the modern HR professional must perform four complementary roles. The first role, administrative excellence, is important because it is an immediate way of contributing to the overall efficiency of the organization. As administration expert, he must rethink how work is done throughout the organization. The second role HR professionals must realize is that of employee champion. The HR manager must play the crucial role of employee advocate. He should be the employee's voice in management discussion, offer employee opportunities for personal and professional growth; and provide resources that employees need to meet the demands put on them. The new role might also involve suggesting, that employees be given more control over their own work schedules. This is the issue of employee empowerment.
Two additional roles the modern HR professional must realize are those of strategic partner and change agent. Being a strategic partner calls for an on going evaluation of the alignment between
current HR practices and the business objectives of the firm, and a continuing effort to design policies and practices that maximize this alignment. HR practitioner should be held responsible for defining an organizational architecture - that is, identifying the organization's way of doing business. Such framework as looking at the organizational components - strategy, structure, rewards, processes, people, style and shared values may be adopted. This new knowledge will allow HR to add value to the executive team with confidence. Being a change agent the HR manager must play a key role in implementing and managing organization change, assessing potential, sources of resistance to change, and collaborating with line managers to overcome these barriers. The HR professional's role as a change agent is to replace resistance with resolve, planning with results and fear of change with excitement about its possibilities. These last two roles - strategic partner and change agent - are of particular interest to us because they represent the emerging strategic dimension of HR function - SHRM.
In addition to the above roles the HR practitioner needs to be a model and take on the specific
role of integrating people strategies with business strategies in a way that advances the bottom line. Metzler (1998) adds that: the HR manager must play an active and guiding role in enabling the organization to choose its human resources well, invest in these people, support that growth and respect their needs, while fostering innovations needed to achieve the strategic business objectives. The HR professional operating under the SHRM system must chart roles that include early and active involvement in key strategic business choices. He must become the partner of decision makers in the organization, and sharing accountability for organizing and performing work. He must carry out effective monitoring to see that everyone in the organization, and at every organizational hierarchy, stay focused on share strategic priorities. He must challenge old ways and constantly promote innovation to enhance corporate performance and the firm's competitiveness.
In the conclusion we can say that both the Strategies Intended and Emergent are important and should be taken along in order to lead these market changes. Most of the companies adopt intended strategy these days and fail to offer any thing when they have to face emergency changes like the recession of 2006. Hence to formulate strategies for both types will help companies to score the planned future success. The example of 3M is very common in this regard they give the employee empowerment formula which then makes them more strategic.
The fundamental difference between deliberate and emergent strategy is that whereas the deliberate focuses on direction and control - meanwhile desired things done with this trategy - the emerging strategy opens up for the notion of "strategic learning"
Emergent strategies do not mean that management is out of control - it is just more open, flexible, responsive and willing to learn. This is an important way of thinking and making the strategy in a complex, uncertain and changing environment. It best case scenario, it enables management to act before everything is fully understood.
Deliberate strategies help to manage, to impose intentions on the organization and to provide a sense of direction.
The conclusion is therefore, that strategy formation walks on two feet, one deliberate, and the other emergent. And the relative emphasis on one or the other may shift from time to time, but not the requirement to attend to both sides of this phenomenon.