In recent years, human resource management (HRM) has been integrated into the process of strategic management through the creation of strategic HRM. Linking HRM to organizations’ strategies for success has been buoyed by the realization that HRM greatly influences an organization’s human and organizational resources (Jackson and Schuler). Accordingly, HRM practices can be used to gain competitive advantage over rival organizations. The extent to which HRM can be used to gain a competitive advantage and the means of achieving this are influenced by the climate in which the business operates. The impact of HRM strategy and practice on organizational performance is an important facet of any business strategy and is essential in creating a source of sustained competitive advantage. The aim of this work is to explore the HRM practices at Dell Computer Corporation and their contribution to the success of this company.
A SHORT HISTORY OF DELL COMPUTER CORPORATION
Dell is a leading computer maker that offers a broad range of product categories, including PCs, desktop computers, software and peripherals, servers and networking services and storage. The company headquarters is located in Round Rock, Texas and was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to customers, the company could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. Direct selling to consumers is what sets Dell apart from its competitors as it is only the company which cuts out the “middle-men” and operates without the obstruction of in-store inventories. Over the years, Dell has expanded its business model to reach even more end-users around the world. To optimize the company’s global supply chain manufacturing locations around the world were established. Dell also had to embrace the online PC retailing, making the company a leader in providing customers’ requirements using software which allows customers to select among an array of choices while also proving online technical support. Dell has developed elaborate and sophisticated decision-support software to help its own technical staff troubleshoot problems. Dell’s mission statement is “to be the most successful computer company in the world at delivering the best customer experience in markets we serve” (www.dell.com). Dell employees, direct salespeople, help-desk operators, engineers, and are involved in ensuring Dell service providers are knowledgeable and customer focused to ensure Dell’s continued competitiveness.
LINKING HUMAN RESOURCE PRACTICES TO THE COMPANY’S BUSINESS STRATEGY The concept of linking business strategy to HRM practices stems from the research of Skinner in the late 1960s (cited in Wang and Shyu, 2008) who suggested that companies tailor their production systems to perform tasks that are vital to corporate success and in line with corporate strategy. Building on Skinner’s work, many researchers have shown that aligning business strategy with HRM practices is of paramount importance in the success of an organization. Competitive strategy encompasses a series of deliberate plans and decisions that give a company the competitive edge over its rivals in the industry (Noe, Hollenbeck, Gerhart and Wright, 2008: 74-77). The concept of competitive strategy originates from Porter’s classification of generic strategies. According to him, competitive advantage stems from a company’s being able to create value in its production process (Guthrie, Spell and Nyamori, 2002). Value can be created by reducing costs of production or by differentiating a product or service. This leads to two basic strategies; “overall cost leadership” strategy which focuses on becoming the lowest cost producer and “differentiation” strategy that attempts to make its product different from those of its competitors. Another classification of business strategy has formulated three types:...