This paper reviews and explains why organisations are increasingly taking a more strategic approach to managing their human resources function and integrating this function with the corporate strategy development of the organisation. The paper is divided into three key parts: • Introduction and Context – This section presents the issues and provides a brief context into the situation highlighting the resulting variances in the approaches taken by management. • Current Situation, Issues and Management Approaches – This section presents the current situation and the issues, and discusses the different approaches that management pursue to integrate their human resources function into their organisational strategy. • Conclusion – The final part presents the conclusion to the analysis in this paper, and suggests actions that organisations could take in being competitive in their sectors in the current environment.
A.INTRODUCTION AND CONTEXT
The global markets continue to become increasingly competitive driven by a number of factors which include innovation (Morgan & Berthon, 2008) and the focus of firms in differentiating their offering versus competitors. The recent financial markets’ crisis which has impacted the financial and economic markets globally has further placed an additional impetus for firms to seek lower cost products while maintaining the quality that consumers expect from their products. In the past few years, there has been increased integration of the human resources function in the organisational strategy and development of organisations. A large number of firms have realised the impact that a strategic human resources function can take in bringing the organisations to a more competitive position versus competitors. B.CURRENT SITUATION, ISSUES AND MANAGEMENT APPROACHES
The current situation shows that firms have increasingly pursued the integration of the human resources function into the strategic activities of organisations. The human resources function can take a number of its defined activities and bring this to a level that benefits the organisation greatly. For example, in terms of promoting job quality in the work environment and also gender equality, the human resources function can play an integral part in making these factors relevant in the work place, and factors which can help an organisation improve its operational performance (Smith, Burchell, Fagan & O'Brien, 2008). The key challenges and issues that human resources functions face in this integration are the following: • Moving from administrative-focused function to a business partner. A key challenge for the human resources function is being able to evolve from an administrative-focused function to one that is considered a business partner of the organisation across various divisions, and a function that can lead to strategic impact for the organisation (Wright, 2008). The challenge is as much for the whole organisation including senior management as it is with the human resources function itself. The openness of senior management and the recognition of the possibility that the human resources function can lead to improved performance in the work place is a first step in this evolution for the human resources function. In the move of the human resources function to a more strategic role, there could be tensions within senior management as to the right level of strategic importance of the human resources function. Similarly, the other people in the organisation may see this as an encroachment of their turf as the human resources function increases its strategic role and importance in the organisation. • Learning from other people and organisations....