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Strategic Human Resources Management

What is meant by a strategic approach to HRM? How can a strategic approach to HRM be a source of competitive advantage to an enterprise? Illustrate your view by reference to relevant literature and case studies drawn from GSN406 course materials.

“The most powerful of the strategic configurations of power remains people... you must work on developing an organizational espirit de corp that aligns the hearts and minds of your staff with the aims of the business”.

(Boar 1997, p. 196)

Acronyms used in this paper:

HRHuman resources
HRMHuman Resources Management
SCASustainable Competitive Advantage
SHRMStrategic Human Resources Management

Student: Jason D Bingham
Student no.:
Unit: GSN406 HR Management Issues
Assessment:1 (15% weighting)
Word limit (( 1000)1047 (excl. list of references etc.) Lecturer:
Due date: Friday 25 May 2001

Table of contents

1.0Introduction1

2.0Definitions1

2.1Human Resource Management1

2.2Strategic management1

2.3Competitive advantage1

3.0Strategic approaches to HRM1

4.0How SHRM can provide competitive advantage2

5.0Validation of SHRM: Case studies of successful firms3

5.1SAP (Australia)3

5.2Delta Airlines (USA)3

5.3Pepsi-Cola International3

5.4Apple Computer (USA, Europe, Pacific)3

6.0Conclusion3

7.0List of references5

8.0Bibliography6

Appendix I - Equal status organisational chart7

Introduction

Human resources management in contemporary business is significantly different to traditional personnel management. Furthermore, many organisations now adopt a strategic approach to HRM in recognition of the competitive advantages that it can provide to the organisation as a whole. This essay discusses strategic approaches to HRM and how they can provide those advantages. It begins with some relevant definitions, moves to a discussion of broad SHRM frameworks, then proceeds to show how strategic approaches can provide competitive advantages for organisations. The essay concludes with a selection of illustrative case studies, followed by concluding comments.

Definitions

2.1Human Resource Management

There are a plethora of definitions for human resources management (HRM). Two definitions cited by Cornelius (2001, p. 9) include:

a) (HRM - the) critical management task is to align the formal structure and the HR systems (selection, appraisal, rewards and development) so that they can drive the strategic objectives of the organization.

(Fobrum, Tichy and Devanna in Cornelius 2001, p. 9)

b) (HRM) is directed mainly at the management needs for human resources (not necessarily of employees) to be provided and deployed. There is a greater emphasis on planning, monitoring, and control, rather than on problem-solving and mediation. It is totally identified with management interests, being a general management activity and is relatively distant from the workforce as a whole.

(Torrington and Hall in Cornelius 2001, p. 9)

2.2Strategic management

Viljoen and Dann (2000, p. 618) define strategic management as:

The process of identifying, choosing and implementing activities that will enhance the long-term performance of an organisation by setting direction and by creating ongoing compatibility between the internal skills and resources of the organisation and the changing external environment within which it operates.

3 Competitive advantage

Viljoen and Dann (2000, p. 619) define sustainable competitive advantage (SCA) as “long-term advantage over the organisation’s...
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