Strategic Fit between HR Strategy and Business - Essay Example

?Running head: Strategic Fit between HR Strategy and Business. Strategic Fit between HR Strategy and Business. Insert Insert Grade InsertTutor’s Name 24 February 2012 Strategic Fit between HR Strategy and Business. Introduction Strategic fit express the extent with which a company matches its capabilities and resources with regards to opportunities available in the external environment. Organizations are able to match their capabilities and resources through a particular strategy, and it is therefore important that the every organization is able to access the capabilities and resources to carry out the strategy. Strategic fit may also be used proactively to assess an organization’s current strategy as well as available opportunities. Strategic fit is basically related to a review of organizational resources in consideration of the fact that the important aspect to profitability is not only achieved by industry selection and positioning, but also through a strategy that seeks to utilize resources and capabilities. Capabilities and resources, which have unique characteristics, are matched to develop a competitive advantage in the long run. Fit as Strategy Integration Fit as strategy integration provides organizations with assess criteria with which integrations transactions may be optimized for achieving production frontier before, during, and after integration. The strategy elaborates how well an organization can meet the merger criteria without compromising on performance success. Organizations under mergers process and plans need to put into consideration smooth operations in merging deals, alongside maintaining successful asset combination production through strategy. Strategy integration comes in handy to enable organizations to effectively manage added asset combination value and leverage positioning. Strategy integration, alongside due diligence, goes a long way in maintaining an organization’s profitability during mergers (Gleich, Kierans & Hasselbach, 2010, p.5). Strategy integration allows an organization to exercise more control performance measures and value added integration, rather than mere integration that may compromise on performance. Backward strategy integration may be undertaken to enable organizations access needed raw materials from a more dependable source. On the other hand, forward integration strategy enables a manufacturing company to build a more reliable market to its products. The integration strategy also allows an organization to gather more control on how it sells products and services and pursue product differentiation to build competitive advantage. The strategy generally outlines a clear perspective on what particular activities organizations should engage in with relation to its situations and visions to achieve increased profitability and success (Tan, 2002, p.48). The processes enable an organization to evaluate viability of mergers prior to proceeding with the transactions. More so, the process seeks to establish best practices that would enable growth, improvement, and attainment of better profitability prospects, alongside possible performance success obstacle identification and elimination. Strategic fit basically enables organizations to successfully launch merger integration amidst continued present successes, value added asset combination, and long-term performance success. Through strategic fit, organizations are able to optimize available technologies, human resources, and operation systems. Fit as an Ideal Practice Strategic fit is the best practice between human resource and business, although a number of practices may still be wanting for an organization. The human resource is widely actualized for its commitment and competencies that need to be governed by strategic focus that forms the best practice available. Through strategy, the organization is able to actualize its potentials with regards to complexities and multiple dimensions involvement of organizational human resource capabilities matched with available resources. Considering these complexities and multi dimensional aspects of organizations capabilities and resources, there is no doubt that best practice is a necessity (Reilly & Williams, 2006, p.67). Fit as a combination of best practices is the result of productivity frontier, which seeks to drive an organization towards attaining its maximum value using the best technologies, inputs, management techniques, and skills available. When an organization seeks to put in place best practices as a strategy for improving its operational effectiveness, it maximizes its profitability potential. However, productivity frontier constantly shifts as new practices, technologies, and management techniques are developed and the needs for ideal practices that are considered up-to-date. Best practice is a set of practices that are best universally seeks to encompass organizational performance success through ideal human resource management approaches. The organization’s internal practices seek to focus on the so-called best practice that is ideal for success, considering a broad range of practices that may not necessarily be beneficial to the organization (Michael Armstrong, 1992, p.43). Organizations adopt techniques such as employee training, continuous improvement, and empowerment, although organizations may improve on multiple dimensions of success performance and fail to achieve operational effectiveness with regards to capability resource complexities. Human resource department is tasked with dimensional complexities in ensuring it manages the human resource in the best way an organization’s performance can be improved. Ideal practices seem to be the best practice available to manage human resource complexities for better performance (Sherman, 2006, p.65-73) Fit as a Contingency Strategic fit as a contingency, in consideration of the dynamic perspective of organizational operations, practices alongside the matching of its human resource with available resources. The strategy proposes an analytical point of view with regards to contingency, and company resources environmental and organizational contingencies are identified for the purpose of predicting change in operations that have negative performance implications. Change prediction and contingency identification seek to place emphasis on opportunity utilization with constraints and threats avoidance within existing organizational structure and culture. Strategic fit as a contingency basically places emphasis on consistency of situations surrounding an organization with those of the internal environment. Contingencies such as technology misfit with the organizations internal process call for strategic fit to bring about consistency (Burton & Obel, 2004, p.21). Strategic fit as a contingency encompasses logical prediction with respect to the timing, magnitude, and direction of strategic changes in organizational resources and external environment leading to negative performances. However, strategic fit seeks to change approaches with selected practices in the existing internal environment. Existing organizational structure needs not be changed every time there is a misfit in an organization’s internal operations, since strategic as a contingency plays a big role in contingency adjustment. Organization structure, being of value to its operations, needs to be maintained irrespective of internal process consistency or misfit (Donaldson, 1996, p.27). Fit as Bundles Strategic fit as bundles puts into consideration organizational performance success as a result of specific bundles of human resource management practices being put in place. Organizations undertake to put in place various human resource practices that will enable organizations to succeed through better performance. Most effective composition of a variety of practices may vary from one organization to another depending on organizational differentiations. Strategic fit as bundles seems to be more realistic, providing a variety of practices for sustainable solutions rather than a single ideal practice that may be unrealistic. Human resource practices in organizations differ considerably from one call centre to another with regards to bundling together organizations practices, existence of organizational fit with bundles of practices, and importance of strategic fit. Organization’s bundles of practices not only need to be consistent with the organization itself, but also become beneficial in terms of efficiency and comparative advantage (Holman, 2003, p.121). The strategy puts into consideration organizational differentiation that renders universally supportive strategies as inapplicable in the real world. The reality is that, the strategy claims that, universal best practice in human resource management that organizations may embrace is unrealistic and unsustainable in terms of achieving productivity frontier. Strategic fit as bundles is generally not applicable universally, since it solely focuses on human resource management in a particular organization. Every organization is in need of a tailor-made bundle of human resource practices that fits the organization structure and culture in its entirety. Conclusion Strategy fit as strategy integration, as an ideal practice, as a contingency, and as bundles collectively provides techniques and tools for organizations to identify and take corrective measures to increasingly competitive and continually changing competitive environment. The strategies seek to scan and intelligently scrutinize the environment for performance improvement. Through strategy fit, organizations put in place measures to align its operations with the changing environmental aspect for improved performance and profitability. Strategic fit enables organizations to improve and sustain their competitiveness through maximum effectiveness in utilizations of its capabilities and resources to maintain its productivity frontier. Strategic fit achieves productivity frontier by aligning its operations through optimization of production, administration, integration, and development. Production, development, integration, and development optimization is replicated through the organization’s leadership style, business strategy, culture, and competitive advantage over its competitors. Reference List Armstrong, M., 1992. Strategic Human Resource Management: A Guide to Action. Replika Press Pvt Ltd. Burton, R., & Obel, B., 2004. Strategic Organizational Diagnosis and Design: the Dynamics of Fit. Kluwer Academic Publishers. Donaldson, L., 1996. For Positivist Organization Theory: Proving the Hard Core. SAGE Publications Inc. Gleich, R., Kierans, G., & Hasselbach, T., 2010. Value in Due Diligence: Contemporary Strategies for Merger and Acquisition. Gower Publishing Company. Holman, D., 2003. The New Workplace: A Guide to the Human Impact of Modern Working Practices. John Wiley & Sons Ltd. Reilly, P.A. & Williams, T., 2006. Strategic HR: Building the Capability to Deliver. Gower Publishing Company. Sherman, P. 2006. Usability Success Stories: How Organizations Improve By Making Easier to Use Software. Gower Publishing. Tan, F. 2002. Advanced Topics in Global Information Management. Volume 1. Idea Group Publishing. Read More