Hrm of Lenovo

Topics: Human resource management, Strategic management, Management Pages: 11 (3292 words) Published: May 11, 2007
Human resource management (HRM) is a way of employment management which can create sustainable competitive advantage and add value by integrating employment policies, programs and practices (Bratton and Gold, 2003). According to Storey, HRM consists of two approaches in term of style: ¡®hard¡¯ and ¡®soft¡¯ approaches. Compare with personal management, HRM not only identifies the ¡®hard¡¯, which roots in the manpower planning approach, but also considers the ¡®soft¡¯, which focuses on human relation and high commitment that is seen as the key factor in achieving competitive performance (Storey, 2002). As a strategy approach to HRM, strategy human resource (SHRM) has been proved to influence company performance and company strategy by recent empirical evidence. Furthermore, it can develop strategy to get the systemic change (Liao, 2005). Owning to the rapid environmental change, especially globalization, it is more reasonable and necessary to analyze international SHRM and comparative SHRM.

This essay will focus on analyzing the HRM of the company of Lenovo Group Limited. An assessment will first be made of the background of the firm, and then the overall HRM strategy and HR activities of the firm will be examined, and finally there will be a brief recommendation about the HRM of Lenovo.

Lenovo, which was established in 1988, is the largest information technology company in China. Its main businesses are the sale and manufacturing of personal computers, mobile telephone handsets, computer servers and printers. It has been the market leader for seven consecutive years, with a 27 per cent share of the domestic PC market in 2003. It is also the market leader in the Asia Pacific region (excluding Japan), having a market share of 12.6 per cent in 2003 (Fan, 2006). In 2003, because of the internationalization strategy, group changed its English brand name from Legend to Lenovo, which is intended to build an innovative image for the group worldwide. Following its opening of seven overseas offices in 2001, Lenovo made the first attempt in internationalization. In 2004, the company bought IBM's personal computer division for US$1.75 billion in cash, stock and assumed liabilities (Fan, 2006).

Overall HRM Strategy:
According to Bamberger and Philips¡¯ (1991) model, there are tight connections between tree poles: environment, business strategy and human resource strategy (Bratton and Gold, 2003).

Environmental and competitive changes, including market, technology, national government policies, trade unions and global competitors, significantly affect HRM strategy. Instead the low unskilled and semi-skilled labour in china, the pay level of Lenovo, which requires more managerial employees and engineers with high skill and knowledge, is much higher than the other companies¡¯ even competitors¡¯. In order to maintain the competitive technology and employees Lenovo also establishes its own training school for cultural and technical training and development. Owning to the economy reform & opening policy and cultural revolution, the seniority-based flat rate system is replaced by system that closely links to performance, and recruitment and selection practices are becoming less effected by political bureaucracy and more influenced by economic and market concern (Beardwell, 2004).

On the other hand, According to contingency theory of competitive advantage model (Sculer and Jackson, 1987), there is a close link between business strategy and HRM strategy, which means the HRM strategy need to fit the generic strategies of cost reduction, quality enhancement and innovation. Firms that use a cost-reduction strategy must control and minimize expenses, and look forward to greater economies of scale. Therefore, efficiency, is achieved mainly through ¡®hard¡¯ HRM techniques, is significant for firms to succeed (Beardwell, 2004). Following certain HRM practices such as standard operating procedures,...

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Mabey, C., Salaman, G., and Storey, J
Storey, J. (2002) Human Resource Management: a Critical Text. 2nded. Cornwall: Thomson Learning
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Lawrence S. K. (1997) Human Resource Management: a Tool for Competitive Advantage. New York: West Publishing Company
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Beardwell, I., Holden, L., and Claydon, T. (2004) Human Resource Management: a Contemporary Approach. Harlow: Person Education Limited
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Lenovo (2006) About Lenovo [online] available from
<> [01th January 2006]
Fan, Y. (2005) The Globalization of Chinese Brands [online] available from
[01th January 2006]
Liao, Y. (2005) Business Strategy and Performance [online] available from
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