Strategic Human Resource Development

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There is now a general acceptance of a stakeholder theory of the modern organization (see, e.g.[1, 2,3]). Such a theory implies that managers have a duty to stakeholders. Stakeholders are defined as those groups who have a stake in or claim on the firm. Translated to the human resource development (HRD) context it suggests that each stakeholder group has a right not to be treated as a means to some end and should therefore participate in determining the future direction of human resource development activities within the organization. The evolution of a strategic HRD concept has also highlighted the need for the application of a stakeholder theory to HRD within the organization. Commentators such as Sparrow and Pettigrew[ 4] and Harrison[5 ] emphasize the need to develop people as part of an overall human resource strategy and ensure its alignment with the organization's mission and strategic goals. This requires a different approach to managing the HRD function, and is an issue which has yet to receive consideration in the training and development literature. This article represents an attempt to address some of the key issues involved. This article will focus on defining the nature of stakeholders followed by an analysis of alternative models of stakeholder management within the context of strategic HRD. The article will conclude by commenting on the significance of stakeholders at the operational level of HRD policy implementation. Who is a stakeholder?

Within the context of strategic HRD, a stakeholder is anyone whose actions can affect the management of strategic HRD activities within the organization. Tsui[6] uses the alternative term "constituencies" - which she defines as clients, customers or other stakeholders who depend on, but at the same time exert control over, the HRD policies and activities within the organization. Because of their mutual interactions each stakeholder has a stake in what the HRD activity does and vice versa. Stakeholders may also be HRD activity claimants in that they depend on the function for the realization of some or all of their goals. The activity in turn depends on its key stakeholders for the full realization of its mission. Because of this mutual dependency each stakeholder is in effect an advocate that furthers the goals of the HRD function. Freeman and Reed[3] identify two definitions of the term "stakeholder". The narrow definition includes those groups who are vital to the survival and success of the business/function. A broader definition includes any group or individual who can affect or is affected by the business/function. In this article the narrow definition is used. Power is a key issue in any consideration of stakeholder influences. The relative power of the different stakeholders is fundamental and the HRD function may sometimes trade off one against the other, establishing a hierarchy of relative importance. Using Cyert and March's[ 7] analysis, the argument is sustainable that the goals of an organization or function are a compromise between the different stakeholders. They suggest that this inevitably leads to conflicts of interest. In the short term, because issues are more tangible and because decisions have to be taken as situations change, functional activities adapt over time and it is likely that once a compromise situation is reached, there is a tendency to seek to retain rather than change it. The attitudes of stakeholders both inside and outside the organization will be strongly influenced by its cultural context. Few stakeholders have sufficient power to determine unilaterally the strategies of the HRD function. Influence is likely to accrue only because individuals share expectations with others by being part of a stakeholder group. Many individuals may belong to more than one stakeholder group. The key issue for the HRD function is the need to understand the expectations of different stakeholder groups and assess them in terms of what power...
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