Human Resource Management

Assignment BA3 LJMU

Date : 17/01/11

Words : 3 236

Students:
Alexandre BERKANI
Antoine COULAUD
Quentin DAUNAY
Sommaire
INTRODUCTION......................................................................................................................................3
ORGANISATIONAL CULTURE...................................................................................................................3
Definition of Organisational Culture :.................................................................................................4
Links between HRM and Organisational Culture:...............................................................................5
ORGANISATIONAL STRATEGY.................................................................................................................7
Definition of Organisational Strategy:................................................................................................7
Links between HRM and Organisational Strategy:.............................................................................8
LINK BETWEEN CORPORATE STRATEGY AND ORGANISATIONAL CULTURE..........................................11
CONCLUSION:.......................................................................................................................................12
REFERENCES.........................................................................................................................................13
BOOKS:.............................................................................................................................................13
WEBSITES:........................................................................................................................................13
INTRODUCTION

First of all, it is important to recall that HRM is the organizational function that deals
with issues related to employees such as compensation, hiring, performance management,
organisation development, safety, wellness, benefits, motivation, communication,
administration, and training.. (ABOUT HUMAN RESOURCES.COM,” What is HRM ?” by
Susan M. Heathfield).

In this assignment, we will attempt to describe and explain the interactions between
HRM, organizational strategy and organizational culture.

ORGANISATIONAL CULTURE

“Throughout human history, cultures have provided much of the additional guidance
need for human beings to collectively survive, adapt, and achieve (Geertz, 1971). Similarly,
cultural processes underlie much of what happens in moderns organisations.” (Principles of
organisational behaviour: an Irish text, 1998)

The organisational culture is the specific collection of values and norms that are shared
by people and groups in an organization and that control the way they interact with each other
and with stakeholders outside the organization. (Charles W. L. Hill, and Gareth R. Jones -
2001)

Every company has its own organisational culture, and knows that it could be either
the reason of its success or its failure. That’s why the managers have to pay very attention to
the organisational culture, no matter in what company they work in.

We can’t discuss about organisational culture without speaking about Edgar H Schein,
an MIT professor at the Sloan School of Management, who had his own interpretation of
organisational culture. He defined in 1992 in his book Organisational Culture & Leadership
three levels of organisational culture which could be applied in many, if it is not all the
companies.
Definition of Organisational Culture:
Artifacts/Observable symbols
It defines all the elements that can be visible, “on surface”, like the way the dress code
of the employees in a Starbucks coffee, the quality of the building, the offices… And even the
awards the company could have, like this
year in Ireland the best place to work, in
terms of hospitality is McDonald’s,
concerning IT it is Microsoft Ireland, or
even 02 is considered as the best place to
work in terms of telecoms. (Announcing
Ireland's Best Workplaces 2010,
greatplacetowork.ie, 24th February 2010.)

Espoused Values
“The espoused values are the
conscious strategies, the goals and the
philosophy of the company”. (Defining
organisational culture, three levels of
culture, Value Based Management.net).
They can be considered as “laws” because
they are legal, it thus means that every
single employee (and managers also) have
to obey these espoused values. Although,
according to Douglas Macgregor, who also
was professor at the Sloan School of
Management such as Schein, highly successful organizations don’t simply proclaim a set of
values, but they “force” their employee to adopt a behaviour that matches the espoused values
they chose. In certain ways, this is a step towards the third level of organisational culture in
Schein’s way of thinking.

Basic (Underlying) Assumptions

These are the values that exist subconsciously in a company, there are kind of taken
for granted. “For example, in an organization, a basic assumption employees and managers
share might be that happy employees benefit their organizations” (Understanding
Organisational Culture, on web-books.com).
Links between HRM and Organisational Culture:
As we precised earlier, organisational culture is important and often helps to define if
the company is well or not.

To define the “level” of culture in the company, several ways exist, they allow the
employee and even the customer to understand the culture within the enterprise. When an
employee first enters in a company, he/she isn’t necessarily aware of the organisational
culture, but he can have access to several clues, first of all by simply speaking with the older
employees, but there are more “concrete” examples such as the employee handbook that we
can find in several companies.
“The primary purpose of an employee handbook is to confirm, in writing, each
employee’s terms and conditions of employment, while at the same time outlining the
responsibilities and expectations of employees. The document is an extension of an
employee’s contract of employment, and may be used to support this pillar of the employment
relationship.” (Docstoc.com, Employee handbook by David Nunan)

We can of course speak about other examples such as the surveys (as we precised
earlier) that are often distributed in workplaces, most of the time anonymously so that the
employees can be truly honest, and thus the managers can see what should or could be
changed to improve the company’s atmosphere, which can lead to a better productivity if it is
a good one.
When changes are necessary
The following and logical step after controlling the organisational culture of a
company is to decide if it has to be changed or not. If a company discovers, for example, that
the survey they gave to employees underlines the fact that there is too much stress in the work
atmosphere, managers thus know they have to take decisions to reduce this sensation of stress
among the employees. This could look like a very simple example, but if this kind of cultural
issue isn’t studied, it can lead to dramatic issues, such as suicide, this happened in France, like
this article of the guardian explains:
“France Telecom is struggling to deal with a wave of staff suicides which has
seen more than 20 workers take their lives in the past 18 months – some leaving notes
blaming job stress and misery at work” (The Guardian, Wave of staff suicides at France
Telecom, 9th of September 2009)

When the structure of the culture has to be changed, we can compare the situation
with trying to make a child eat vegetables he doesn’t like. "You could tell the children you
expect them to eat their vegetables. And reward them with ice cream if they did. You could
explain all the reasons why eating their vegetables is good for them. And you could eat your
own vegetables as a good role model. Those things might help” (Peter Bregman, A Good
Way to Change a Corporate Culture)
Of course, in this metaphor the reward would be the salary the employee receives,
and the good reasons to eat the vegetables would be the explanation of the benefits a good
work could bring to the company (and to the employee himself).

According to Susan Heathfield, a Human Resources expert, there are three steps a
company should respect if it wants to change its culture.

1. Before an organization can change its culture, it must first understand the current
culture, or the way things are now.

2. Once the managers have understood their current organisational culture, they have to
decide what the organisational culture should look like to support success. What vision
does the organization have for its future and how must the culture change to support
the accomplishment of that vision?

3. Finally, the individuals in the organization must decide to change their behaviour to
create the desired organisational culture. This is the hardest step in culture change.
ORGANISATIONAL STRATEGY

Definition of Organisational Strategy:

This notion is related to all the means that enable a company to develop more effectively and
efficiently its strategy, and consequently to improve its performances in a sustainable way.

The organisational strategy (or corporate strategy) is basically the way a company should
evolve to achieve the targets set previously by the head of the company.
These changes, that could be called improvements in the present case, must be contained in
the actionable plan. Aiming to right this plan out, the company must first of all measure the
gaps between its current state and its desired state.
To size up these differences, the company has to keep in mind what is commonly named key
strategic considerations, that is to say the decisions that could enable the organization to
cover the gaps.
For example, the followings changes are considered as key strategic considerations:

 an extension or a modeling of the structure of the enterprise,

 the acquisition of new skill or knowledge,
 a new managerial methods used to improve the labor force’s performances,
 the use of a different operating culture within the enterprise (that is to say a change in
the producing process or in the way a service is delivered…),
 every organisational modifications that will be necessary if higher performance
results are expected, etc.

Once these key strategic considerations are defined, the company will have to decide what are
the changes to operate by imagining different scenarios (or plans) and choosing the most
relevant(s) and realistic(s)* one(s): this is the actionable plan.
*: in terms of budget and time.
But before taking any decision, a preliminary step must not be forgotten: the Processes of
strategy. Obviously the key strategic considerations cannot be chosen haphazardly, that is
why a certain amount of studies have to be conducted.
The first process consist in performing global studies about the enterprise’s situation in order
to get to a S.W.O.T analysis that will be the summary of all the researches. This model is
divided in two distinct parts:

 Identification of the Strengths and Weaknesses of the company. These elements

must be the result of the internal analysis (= measurement of the enterprise’s current
level of activity, efficiency and effectiveness and growth capacity…).
 Performing an external analysis, at a micro and macro-environmental level. This
must define in a detailed way the context in which the company is acting (to determine
Opportunities and Threats. To achieve a full market study, competitors must be
analyzed as well as the global environmental context (the factors of the P.E.S.T.E.L
 model can be scanned for example: Political-Economical-Sociocultural-
Technological-Ecological-Legal).

(Source: http://www.leader-values.com, within the article “So what is organizational

strategy anyway ?” by Edward Ferris, 2008).

Once the S.W.O.T analysis is drafted and before the actionable plan is decided, three factors
determined by Gerry Johnson, Kevan Scholes and Richard Whittington (“Exploring
Corporate Strategy”, 2008) must be taken into account: “suitability, feasibility and
acceptability” of the objectives.

To sum up, the organisational strategy has to be part of the business strategy development and
not be determined once the objectives are already set. That is why, organisational strategists
must always chart and act over several time horizons.
As we tend more and more toward a service society (in which the human capital element is
primary), a lack of efforts in establishing the organisational strategy in a company is
certainly a barrier to competiveness.

Links between HRM and Organisational Strategy:

HRM is an everyday work that must accompany the pursuit of fulfillment of the different
aims set by the company itself. These goals –as mentioned above- are determined by the
organisational strategy and must shape a map of directions for the HR managers.
In fact, HRM is something that is deeply connected to organisational strategy because it
has to enable the company to improve its adaptability and flexibility to changes (of its
market and competitors offer, or of its activity level…).

Here is why some recent studies have attempted to underline that “competitive strategy should
determine the design of a firm’s HR system” (John Purcell from University of Bath, in the
paper “Business Strategy and Human Resource Management: uneasy bedfellows or
strategic partners ?”, 2005.16).

In fact, the Strategic Plan (= S.W.O.T analysis) and the actionable plan have to be connected
with HRM. That is a necessity for the company simply because the aim of both plans is to
determine (from the global environmental context) how to create or maintain a competitive
advantage and this asset cannot exist without the support of some managing tools.
Hence the importance of Strategic Management, that could be defined as the “process of
identifying and executing the organization’s mission by matching its capabilities with
the demands of its environment”.
(from presentation by Charlie Cook at the University of West Alabama, 2011. After Gary
Dessler’s “Human Resource Management”).
Consequently, the managers of the company should be really closely associated to planning
process. Managers are key links within the enterprise’s organization, their mission is basically
to coordinate all the employees together, that is why they must be exhaustively aware of the
goals set in the Strategic Plan.
Strategic Plan is thus a roadmap for managers, from which the draw the guidelines and
instructions to be given to the employees.
The (fundamental) relation existing between Organisational Strategy and HRM is as simple as
that: goals are set by the head of the company and go through managers to employees.
Strategy, by using managerial tools, shapes the organization structure of the company
and tells (among other) what changes could be performed to use the work force in a
more relevant way.

Here is below a chart showing interactions between all the elements that have been discussed
so far:

(Devanna et al. (1984) in Fombrun et al., Strategic Human Resource Management).

Now that we have underlined the necessity of Strategic Human Resource Management
(SHRM) in the pursuit of a sustainable competitive advantage, we can try to explain
concretely how firms employ SRHM to higher their performances.

First of all, it is important to distinguish the two types of links existing between corporate
strategy and HRM: the vertical integration and horizontal integration. These links are more
communally called fits and were define by Wright and McMahan (In the book “Theoretical
Perspectives for Strategic Human Resource Management. 1992: p298) as “the pattern of
planned human resource deployments and activities intended to enable the firm to achieve its
goal.”
Vertical integration is relate to all “the links between environmental context, business
strategy and human resourcing”; whereas horizontal integration is “a concept that relates to
the degree to which different aspects of human resourcing are compatible with each other”.
(“Strategic Human Resourcing. Principles, Perspectives and Practices”. 1999: p47. After
Marchington and Wilkinson, 1996: p359).
(http://www.cbs.curtin.edu.au /, in the article « Strategic Human Resource Management:
Determinants of fit” written by Li-Qun Wei).

 Example of vertical and horizontal integration within a company: Cargill Europe.

Cargill is an “international producer and marketer of food, agricultural, financial and

industrial products and services” (taken from: www.cargill.com). Here is below a chart
summarizing relations related to both kinds of fits. It shows concretely how (as we have seen
before) the process of establishment of the Strategic HRM is articulated: market/external
changes are first analyzed and have an impact on organisational changes that will themselves
determine the HRM decisions.

(“Strategic Human Resourcing. Principles, Perspectives and Practices”. 1999: p48, Case
Study 2.3 on Cargill Europe).

To conclude, we can say that linking Organisational Strategy and HRM is fundamental,
especially in the global economic context. Nowadays, it is a necessity for companies (because
of the competition and the negative economical background) to coordinate objectives with
managerial tools. In fact HRM must be the natural continuity of the Corporate Strategy, this is
sin qua non for the creation or the maintaining of a competitive advantage.

LINK BETWEEN CORPORATE STRATEGY AND ORGANISATIONAL

CULTURE

We have just put forward the relation between the organisational culture and the human
resources management as well as the link between the organisation strategy and the human
resources management.

Through our researches on this subject, we have found that a large amount of managers and
academics has also been interested in the relationship between organisational strategy and
corporate culture.
It is imperative for a company to consider the impact of culture in order to ensure a proper
fitting between the culture and strategy, it is really essential for the success of a company.

Johnson and Scholes explain that organisational culture is a set of entities: rituals, routines,
symbols, stories, controls and organisational structure interconnect each other to form and
influence the strategy of the organisation. (Johnson, Scholes and Whittington, 2005)
Charles Handy, who popularized the 1972 work of Roger Harrison, describes four basic
cultural types, role, task, power and person predominant in a western organization.
Acknowledgement, understanding and influencing organisational culture is complicated. But,
an appropriate understanding of its different components can seriously help to know the
culture of an organisation; and so on influence it to align with the strategy of the
organisation. 
Corporate strategy is extremely dependent upon organisational culture for policies’
implementation and achievement of aims. Culture affects directly strategy.
Peter Ferdinand Drucker summarize this in one quote “Culture eats strategy for breakfast”
(Tarrant, John C., Drucker: The Man Who Invented the Corporate Society, 1976)
 Organisational Culture:
Cognitive
processes

Behaviour Organisational
processes

Realized strategy and

performance

The figure above indicates in which way the organisational culture affects the realisation of
the strategy and so on the performance. All processes in and outside the organisation
influence how people understand and make sense of the world, and modify their individual
perceptions and cognitions. (Cliff Bowman, Strategy in Practice, 1998)
Culture is one of the most powerful aspects that have the capacity to influence corporate
strategy. (Peter Ferdinand Drucker, The Essential Drucker – 2001)

CONCLUSION:
Organisational culture and corporate strategy closely relate to human resources
management, but the strong existing linkage between the organisational culture and the
corporate strategy has also to be known in order to take the right decision in term of HRM.

Human Ressources Management

Organisational Strategy Organisational Culture

REFERENCES

BOOKS:
 Charles W. L. Hill, and Gareth R. Jones -  Strategic Management - Houghton Mifflin,
2001
 Edgar H Schein - Organisational Culture & Leadership – 1992
 Douglas A. Macgregor - Breaking the Phalanx - Westport: Praeger – 1997
 M. Morley, S. Moore, N. Heraty and P. Gunnigle – Principles of Organisational
Behaviour, an Irish text – Gill & Macmilllan – 1998
 Cliff Bowman, Strategy in Practice , Great Britain - 1998
 Johnson G ,Scholes K, Whittington R, Exploring Corporate 7Th Edition Harlow
Financial Times Prentice Hall Essays and Term Papers – 2005
 Tarrant, John C., Drucker: The Man Who Invented the Corporate Society – 1976
 Peter Ferdinand Drucker, The Essential Drucker – 2001
 Gerry Johnson, Kevan Scholes and Richard Whittington, Exploring Corporate
Strategy - 2008

 Wright and McMahan, Theoretical Perspectives for Strategic Human Resource

Management - 1992.
 John Leopold, Lynette Harris and Tony Watson, Strategic Human Resourcing.
Principles, Perspectives and Practices - 1999

WEBSITES:
 GREAT PLACE TO WORK - IRELAND’S BEST WORKPLACES
http://www.greatplacetowork.ie/news/index.php?date=1059
 VALUE BASED MANAGEMENT.NET - THREE LEVELS OF CULTURE BY EDGARD SCHEIN
http://www.valuebasedmanagement.net/methods_schein_three_levels_culture.html
 ISME.TAMU.EDU - THE IMPACT OF POLICIES ON ORGANISATIONAL VALUES AND CULTURE
http://isme.tamu.edu/JSCOPE99/Bell99.html
 WEB-BOOKS.COM – UNDERSTANDING ORGANISATIONAL CULTURE
http://www.web-books.com/eLibrary/NC/B0/B58/050MB58.html
 DOCSTOC.COM – EMPLOYEE HANDBOOK BY DAVID NUNAN
http://www.docstoc.com/docs/2211328/Employee-Handbooks
 THE GUARDIAN.COM – WAVE OF SUICIDES AT FRANCE TELECOM BY ANGELIQUE CHRISAFIS,
9th September 2009
http://www.guardian.co.uk/world/2009/sep/09/france-telecom-staff-suicides-phone
 BLOGS.HPR - A GOOD WAY TO CHANGE A CORPORATE CULTURE BY PETER BREGMAN
http://blogs.hbr.org/bregman/2009/06/the-best-way-to-change-a-corpo.html
 http://www.leader-values.com/Content/detail.asp?ContentDetailID=144
 http://www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/pt4ch16.html
 http://www.pmforum.org/library/papers/2007/Dallas/Suda-Strategy_Leadership_Culture
%20.pdf
 http://mgv.mim.edu.my/MMR/9709/970906.Htm
 http://www.leader-values.com, within the article “So what is organizational strategy
anyway ?” by Edward Ferris, 2008.
 www.cargill.com
 http://www.cbs.curtin.edu.au /, in the article “Strategic Human Resource
Management: Determinants of fit” written by Li-Qun Wei).
 Paper “Business Strategy and Human Resource Management: uneasy bedfellows or
strategic partners ?” (2005.16)
John Purcell from University of Bath.
 Presentation by Charlie Cook at the University of West Alabama, 2011. After Gary
Dessler’s “Human Resource Management”.