Business Strategy and Hrm Strategy

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Will the strategy fit between business and HRM strategy influence HRM effectiveness and organisation performance?

It is known that a company’s strategy is very important to their future success however we must evaluate wither there is a correlation between the alignment of the business and HRM strategy and the successful performance of the firm. The alignment of the two strategies was first theorized to have effect by Skinner 1969. Since then it has become the major subject of research pieces (Wright 1992|Huselide 1995|Wang 2006|Alleyne et al 2006).The business strategies researched and recorded by(Porter 1985) cost leadership, differentiation and focus were merged with the HRM strategies, like those developed by (Jackson 1987).This resulted in what we know today as strategic human resource management. A combining of the two fields of management. This strategic form of HRM ensured that all decisions at the upper level were made with in unison with the HRM strategy thus providing a superiorly integrated business unit. Through research two main arguments for such a fit or alignment of the strategies have been deduced; best fit and the best practice views. The best fit as it indicates nominally is a proponent of this idea this notion, alternatively internal fit focuses on the consistency of HRM throughout the organisation, how HRM policies are linked with other departmental polices to ensure the organisational goals are achieved. This is idea is ratified by (Wang, 2006) and can be easily appreciated, as many pieces of literature focusing on SHRM do show support for the horizontal fit. However on the matter at hand of external fit there has been some dispute over the effectiveness of this, as is seen by (Alleyne et al, 2006) who concluded in their research that such a fit was found to be. This fit of the HRM strategy seems to have negligible effect regardless of the type of business strategy employed; this has been a nagging critique of the external fit notion,...
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