Strategic Human Resources Management to Manage Diversity and Other Changes - Literature review Example

Academic Report: Strategic HRM to Manage Diversity and other Changes Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive Summary Indeed, in today’s global world, the marketplace has become a pool of diversity, i.e. national, ethnic, values, tastes, etc. Competitive advantage lies in tapping into this diversity. Tapping into this diversity demands vigilant strategies towards diversity in the workplace as well. This paper will examine and evaluate aspects of culture and the real implications that they have had on HRM to lead to a shift, i.e. bring about the contemporary HRM. Having looked at that, the report will equally examine and evaluate the role the contemporary HRM in dealing with not only diversity, but also other changes that the contemporary organization faces. Finally, the paper will make suggestions (recommendations) on the roles of the contemporary HRM in developing and establishing a workplace environment that favors diversity, as well as make it easy for organizations to cope with changes in the marketplace. These may include developing a flexible organizational structure, certain recruitment and selection criteria, etc. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Diversity: culture and ethics 5 HRM in Contemporary Organizations 8 Recommendations/Conclusions 12 Bibliography 14 Introduction The term ‘diversity’ here is used to mean both a diverse workforce as well as the diversity of stakeholders, i.e. both in the internal and external environments. The effectiveness and success of diversity management strategies that an organization adopts depend on whether HRM is vigilant and creative enough. Mathis and Jackson (2004) concur that it is the HRM that defines and oversees the implementation of policies and roles that ensure strategies adopted an in lie with the broader organizational objectives and goals. However, in the contemporary organization, both the marketplace and the workplace have come to present even greater challenges. The challenge, argue Schuler et al (2002), lies in reconciling the two, i.e. meeting global objectives and attaining responsiveness from the internal environment. According to Thomas (2008), organizations do develop in line with the culture that dominates at any particular point in time, i.e. organizational culture changes with the scope of focus. In other words, as focus shifts towards the global platform, so must its culture so as to cater for a diverse pool of stakeholders. This is especially necessary so as to maximize the potential of all stakeholders, what Thomas (2008) calls ‘stakeholder value’. On the basis of these factors, many HRM experts have proposed certain strategies for human resource development to enhance the organization’s capacity and ability to meet broad social goals such as diversity, i.e. address the issues of equal opportunity versus social exclusion. This paper explores the various aspects of diversity both in the organization’s internal and external environment, what implications such aspects have on organizations and the HRM, and finally offer suggestions on what HRM can do to deal with such issues. Diversity: culture and ethics The contemporary marketplace has seen competition become increasingly stiff. Thus, to gain the upper hand, i.e. have competitive advantage, most organizations have been prompts to find novel ways of surviving. The novel ways/strategies must be effective, efficient and productive. These depend on how innovative and flexible such strategies are. This does not mean that the traditional/conventional become void. But they must be redefined within the contemporary context and be accompanied by an organizations’ capacity and ability to manage people effectively and successfully. This management of people (human resource) includes hiring and retaining a talented and competent workforce supported by HRM competencies, reflected in the established policies and accompanying practices (Kundu & Vora, 2009). This talented and competent workforce, assert Kundu & Vora (2004), is the key to gaining a perpetual competitive advantage. The hiring and retaining of this workforce should take into account the circumstances in the external environment. This is in line with Schuler et al’s (2002) call on reconciling both the internal and external environment. To achieve this, Cascio (2006), argues that the HRM must provide important and significant effects for the survival of the organization, i.e. productivity and performance. The HRM strategies therefore involve both the identification and analysis of the needs of its workforce and other stakeholders. One of the elements of diversity is culture. Broad as the concept of culture is, one fact is that it defines people (in terms of individual values, nations, professions, etc), and thus influences how people perceive the world. In relation to organizations, culture can be viewed from two main dimensions: society and organization, i.e. societal versus organizational culture. These two are both significant. Societal culture does impose itself on the organizational culture as much as organizational culture imposes itself on the societal culture. The ideas that underlie the policies and practices of HRM are perceived differently by people of different cultural origins. In other words, diversity management can be said to be the attempt to reconcile the two. But before such a reconciliation can be achieved, it is important of understand the aspects of culture that cause the strain between the two. Hofstede (1980, cited in Thomas, 2008) sought to examine the cross-cultural factors that governed work relationships, and developed four main dimensions for his survey. This paper borrows the same in examining the potential lines of conflict between societal (e.g. ethnic, national, etc) and organizational cultures: Individualism versus Collectivism: This refers to whether one views him/her self as independent and self-sufficient or in relation to group (collective) goals and objectives. The former person may be psychologically and emotionally distant from others. The latter associates with teams or groups. His/her survival therefore depends on the success of the group/team. He/she may therefore value integrity and cooperation of all members. Power Distance: This regards how different cultures perceive and interpret power status and differences. These perceptions may be explicitly or implicitly reflected in the way that managers relate with their subordinates and vice versa. According to Hofstede (1980, cited in Thomas, 2008), there are two types of cultures here: low and high power distance. The former perceive power and status as artificial and do not assign much significance to it. Those with power in these cultures therefore attempt to reduce the perceived power differences by distributing responsibility to others. The latter view power as natural part of society and therefore simply live with the fact that some people are more influential and powerful. The society here is clearly distinguished on the basis of influence, power and status. Uncertainty Avoidance: This dimension concerns itself with the cultural perceptions on and interpretations of life’s uncertainties. Hostede (ibid) acknowledges that uncertainty affects people in all cultures, the impact of such uncertainty is varies, i.e. some cultures are more anxious about the uncertainties of life, while others easily tolerate them. Masculinity versus Femininity: This dimension regards how different cultures view gender roles. For example, men are generally concerned with ambition, competition and excellence, while women generally emphasize cooperation and harmony, and life quality (Bhatti, 2009). These cultural factors influence the work expectations that different employees have, including how they perceive the organizational culture (e.g. whether an organization values individual creativity and uniqueness or teamwork, or both) and relate with the management/leadership. Also related to culture is the issues of ethics. According to Random House College Dictionary (cited in Bhatti, 2009), ethics refers to the recognized and respected ‘rules of conduct’. Indeed, culture determines both business and personal ethics. Besides culture, Pitta et al., (1999) assert, ethics are also shaped by the prevailing legal systems, organizational and professional culture and the established HRM policies and practices. When it comes to the organization, Bhatti (2009) asserts that the culture of a country has a direct effect on the ethical behaviors of managers. This may be overtly expressed in the public and corporate statements, as well actions on ethical behavior, or they may be manifested attitudes and values of groups. While there are many ethical dimensions, the moat regarded mainly concerns on how employees’ behavior. HRM in Contemporary Organizations HRM has always performed many roles in the organization: advocating for employees, managing conscience, etc. But recent times have seen HR adopt new roles, most notably becoming a key ‘business partner’ (Beatty & Schneier, n.d.). As part of streamlining the organization to ensure that, only the moves that add actual value to the organization are adopted. HR can perform this role through downsizing and delayering through outsourcing. HRM is today judged depending on whether it enhances the organization’s competitive advantage in relation to customers. In this line, Beatty and Schneier argue that the steps taken by HR must add value to not only its internal clients, but the external clients: customers and investors as well. A strategic player, as the analogy implies, does not wait for others to score, but also scores. It is clear in the case of AAA that HR is quite passive. Lit is merely a spectator in the company. To enhance its place, it must be given a more active role. It must also be in a position to score for the overall good of the organization. For instance, HR can add operational and financial value to AAA if given more floor to influence the work force. This involves ensuring that the workforce behaves appropriately in relation to work ethics. Respect for job description is one such a behavior worth influencing. This also involves dictating required results from the employees. In recent times, this has been done through performance contracts. Another by which HR becomes a player is trough “caring and feeding the central competency workforce. This refers to obtaining, creating and retaining vital talent that directly determines the firm’s competitive advantage. The third important role is the management of operational activities and processes. This involves HR becoming administrative experts; improving service quality while removing costs from HR systems. In this line, HR undertakes organization design. How HR relates to business strategy can be examined in relation to the three paths to competitive advantage proposed in Treacy and Wiseman’s (1995) model: excellence in operation, product leadership and intimacy with customers. The argument is that the strategy aimed at operational excellence aims at building operational systems that perpetually reduce price/costs, even while offering products of high quality that add more value to customers than the competitors do. This thrives, in part, to flexible and trainable employees. On the other hand, a company that adopts a strategy aimed at product leadership seeks vital anti-bureaucratic and versatile workforce with an entrepreneurial psychology, long-term focus, high tolerance for ambiguities, love for new challenges and cross-functional collaborations, creative behavior and love for risk-taking. Customer intimacy strategies allow close working between the organization and the customers. This enables products and services, or both, to be customized at the lowest customer-interface level. Since unique customer strategies s the foundation for competitive advantage for these organizations, it must go along with seeking and developing active learners, advocates for customers and employees who show a willingness to enhance cross- departmental sharing and learning in the organization. This calls for continuous interaction between the employee network and customers in order to learn new customer tastes and facilitate improvement on customer tastes. Organizational Structure It is unfortunate that Organizational Structure (OS) is almost the last thing on a Program Manager’s mind. An effective OS should facilitate management and clarify relationships, responsibilities and roles, and levels of authority, as well as supervisory and reporting lines. When a manager reviews a an organization’s structure, he/she is in a position to determine which financial, technical and human resources are readily available, which ones are lacking and need to be allocated (Pathfinder International……). A Program Manager can use an orgnogram, which is a graphic representation of an organization to define tasks, decide the flow on information inside the organization, as well as ensure there is accountability in the organization’s goals and objectives. Equally, job descriptions, reflecting the organizational structure should be assigned to every member of staff, and lets everyone know his/her job title, specific tasks, subordinates and supervisors, department or unit and minimum qualification requirements for the job. However, notably, organizational needs and structures may be forced to change by changes in the internal and external environments. For such reasons, job descriptions may have to be periodically and systematically reviewed. Organizational structure is not static. On the contrary, it is dynamic since it reflects a company’s level and stage of growth, which in turn influences its business strategy. Every stage normally calls for different requirements in the organizational structure. “The business strategy of an organization influences its organizational structure/design” (Daft 2010, 39). Types of Organizational Structure These structures reflect: How an organization works and is managed; How information flows and how it is processed in the organization; How the organization is flexible and responsive. There are two major types of organizational structures. These two are further divided into minor structures. Vertical Structure This is based on the belief that efficiency can only be achieved through command, control and domination (Olsen 2006). Horizontal Structure Olsen (2006) puts the word ‘horizontal’ alongside ‘egalitarian’. The second word brings out the general notion of equality amongst employees as the main drive behind horizontal structure. Unlike in vertical structure, horizontal structure emphasizes that control should not come from without but within an individual; that a person should have a personal drive to do what is right towards achieving the organization’s goals and objectives. Recommendations/Conclusions From a management perspective, culture can be interpreted in different ways, including as a set of common/shared mental descriptions by which all employees work and operate. These shape/determine how the managers relate to and with the world (Thomas, 2008). It is thus greatly important for HR managers understand how they behave, as well as act in their roles as leaders. They should also know how the cultural diversity in the organization influences other members of the organization members. In other words, the success of the organization requires that leaders understand fully the work atmosphere as influenced by the cultural diversity, and therefore adopt effective strategies for working with people from various cultural backgrounds, and who have different values, ethos and business rules (Society for HRM 2008). As already mentioned above, the recruitment and selection of a diverse workforce depends on the strategies that the organization hopes to undertake so as to improve its competitive advantage in the market place. Treacy and Wiseman (1995) came up with three main strategies that an organization can adopt in its attempt to win a competitive edge against its competitors. This paper will look at the influence of these strategies on the recruitment and selection of a workforce, i.e. the talents, competencies and expertise needed to achieve the strategies: Operational excellence: This strategy aims to build operational systems that will continually cut costs, even while still offering products of higher quality than the competitors. This requires a highly flexible and adaptable employee. Product Leadership: Here, an organization seeks to adopt a more flexible work environment by reducing bureaucracy. This start requires a versatile workforce that has entrepreneurial mind-set, long-term focus, is highly tolerant to ambiguities, loves changes and the challenges therein, prefers cross-functional team work and collaborations, are creative and risk-taking. Intimacy with Customers: customer-intimacy strategies facilitate close work relationship between the organization and its customers. This ensures that the products and services are informed by the tastes and preferences of the customers, i.e. products and services are customized to the level of the customers. Since this close customer-organization relationship is the key objective, it must be accompanied by attempts to seek and develop active learners, good advocates for the customers, employees who favor cross-departmental coordination and collaboration. Either way, achieving such a feat requires a thorough understanding on the cultures of the customers and the employees who are to be assigned to those tasks. But attaining such cross-cultural competencies demands considerable time, training, awareness and experience amongst others. Cultural ignorance may cause miscommunication and mismanagement, and ultimately cause relationship conflicts. These may than lead to serious detrimental impacts on business services and operations, and perhaps project failures (SHRM 2008). It is therefore important to find ways to avert the negative impacts so as to best manage cross-cultural settings, as well as find ways to utilize this cultural diversity as a key tool for improving productivity and developing novel ways for achieving the needs of global business and market (Quappe & Cantatore, 2005). Bibliography Bhatti, AP 2009. Cross-cultural issues in HRM. Faculty of Business Administration: Simon Fraser University. Budhwar, PS & Debrah, YA 2001. Human Resource Management in Developing Countries. London: Routledge. Cascio, WF 2006. Managing human resources: productivity, quality of work life, profits, 5th ed. New York: McGraw-Hill. Dowling, PJ & Welch, DE 2004. International Human Resource Management: Managing People in a Multicultural context, 3rd ed. Thomas Learning, Singapore. Jackson, T 2002. International HRM: A Cross-Cultural Approach. London: SAGE Publications Limited. Kundu, SC & Vora, JA 2004. ‘Creating a talented workforce for delivering service quality’, Human Resource Planning, vol. 27, no. 2, pp. 40-51 Mathis, RL & Jackson, JH 2004. Human resource management. Singapore: Thomson Asia. Schuler, RS, Budhwar, PS, & Florkowski, GW 2002. ‘International Human Resource Management: Review and Critique’, International Journal of Management Reviews, vol.4, no. 1, pp. 41-70. Thomas, DC 2008. Cross-Cultural Management: Essential Concepts (2nd ed.). Los Angeles: SAGE Publications Limited. Read More