2. Explain the links between HR strategy/policy and national/organizational culture. Recent research suggests that the management of human resources has become increasingly important for business success. Employees are said to be one of the most valuable assets to an organization; as a result the effective management of these employees is essential. Management literature has had a tendency to associate human resource management (HRM) with firm performance. It is this link which has been the underlying cause for the abundance of research regarding HRM practices and their effects on a firm. However, there is a substantial debate within the literature that argues that HRM practices do not directly impact organizational performance (Boxall & Purcell, 2000), with claims that there is a missing link between the two. In regards to this ‘black box’ the concept of organizational culture has emerged. It is said that organizational culture is manifested in the behavior of its employees (Ngo & Loi, 2008), and is entrenched in the everyday working lives of cultural members (Martin, 2004). Culture is claimed to affect employee’s job attitudes, efficiency and productivity (Mahal, 2009), and can impact the ability to carry out an organizations plans and meet strategic goals (Chan, Shaffer & Snape, 2004). With these assertions, organizational culture could in fact influence a firm’s productivity and their overall performance. This paper examines the relationship between HRM, organizational culture and firm performance. The next section of this paper defines and explains the organizational culture concept. I then investigate the relationship between HRM and organizational culture by exploring the overarching themes which emerge from the literature regarding this link. Finally, I explore the relationship between HRM, organizational culture and firm performance.
The Link between HRM and Organizational Culture
Previous literature has identified and focused around two common sources of organizational culture: (1) founders of the organization, and (2) national culture. Barney (1986) claimed that firms are historically bound. In line with Schein (2004) he argued that a firm’s culture reflects the unique personality of its founders. Along with these unique personalities a number of scholars have alleged that culture originates in the values and assumptions articulated by top management, which in turn, play an important role in shaping cultural views and employee’s behaviours (Chew & Sharma, 2005; Mahal, 2009). These values are then reinforced in a number of ways. Smircich (1983) articulated that top managers mould organizational cultures, and thus the values and beliefs held by employees, to suit their strategic ends; in turn the corporate culture should reflect the vision of the firm (Ngo & Loi, 2008). Values are also reiterated in hiring employees with similar priorities to top management as well as thoroughly socializing new employees to elicit those desired behaviours (Martin, 2004). Furthermore, national culture plays a prevailing role in shaping organizational culture. National culture refers to the culture specific to a national group (Chew & Sharma, 2005), and is entrenched deeply within individual’s everyday lives. These ingrained values will subconsciously affect how management practices are both carried out and received in an organization, and therefore how employee’s will behave within the firm (Chew & Sharma, 2005). Consequently, acompany’s culture is said to be linked to the founders of the organization and the values which they demonstrate, as well as the National culture in which the organization was first founded. A third relationship has begun to emerge out of management literature. There have been claims by a number of scholars (Bowen & Ostroff, 2004; Cabrera & Bonache, 1999; Lau & Ngo, 2004; Wilkins,1984) that organizational culture is related to HRM and the human resource practices...
Please join StudyMode to read the full document