HRMs Strategic Choices versus Market Structures - Example

Running Header: Strategy Management Student’s Name: Instructor’s Name: Course Code: Date of Submission: Title Report HRMs strategic choices versus Market Structures Table of contents Synopsis 4 Introduction 5 Research methodology 5 Discussion 6 Strategic management and human resource management alignment 6 Market structure and management strategy 7 Conclusion 9 Recommendation 10 References 12 Synopsis This research was order in order to study concept of management strategy and its relationship with market structure and management structure. The research has managed to find out that strategic management is described as the set of managerial decisions which are used as a framework for the corporate long-term performance. The research has also managed to review the works of other scholars like Hyman, Chandler and Kramar to establish their stand with respect to management strategy. According to Hyman, the structure of the market is what determines the human resource structure. On the other hand, Chandler is of the view that structure must come before the management structure. Finally, this report has managed to pose four recommendations on how HRM can align itself with strategic management with respect HRMs administrative, one- way, two-way, and integrative linkage Introduction The word strategy is derived from the Geek noun known ns as strategus. This meant that the ‘commander in chief’. This word is composed from two main Greek nouns namely stratus which means army and agein which stands for leading. In a management environment, the term strategy has been used to replace the traditional meaning to refer to the term long-term planning. This involves the design and development of certain managerial decisions in order to achieve certain goals for the company (Batt 2000). Strategic management is described as the set of managerial decisions which are used as a framework for the corporate long-term performance. According to Hill and Jones (2001), strategy refers to the company step towards achieving high level of performance. Strategic management requires constant evaluation and adjustment of three main interdependent areas of the business namely the corporate senior management and the environment as well as the resources. The primary objective of this report is to take a critical review of the relationship that exists between human resource structure and management strategy. This is will be done by considering the arguments of different scholars who have different opinions with regard to which comes fast between human resource structure and management strategy and management structure. The report will also consider discussing different recommendations on how management can align itself with strategic management with consideration to HRMs administrative, one- way, two-way, and integrative linkage. Research methodology This part describes out the steps and the methods that were employed by the researcher in achieving the objectives of the report so highlighted in at the introduction of this paper. It defines location of the study, research procedures and analysis plan that will be addressed in the course of the study. Success of the report is a factor of the reviewing of credible information that explains the relationship that exists between human resource management structure and management strategy. It is important to note that this report was based on the already existing literatures of different scholars such as Hyman, Chandler and kramar. Secondary research Secondary research involves the collection of existing data, which is already available, in contrast to primary research. For example in this report, secondary methods were used as the method of obtaining data on how various scholars perceive the relationship that exists between human resource management structure and management structure. The advantage with this method is that it’s not time consuming however the disadvantage is that the information retrieved may not be very correct. Choice of research strategy Another aspect that was of great significance in this report is the research strategy. It’s the research strategy that indicates which methods a researcher adapted to answer the report objectives on the relationship between human resource management structure and management strategy. Use of literature review was the main strategy that was used to review the argument of Hyman that the structure of markets determines management’s strategic choices and that according to Chandler (1962), strategic management often demands that HRM is aligned with its strategic turning HRM into a "structural" support function. Discussion Strategic management and human resource management alignment According to Hyman, the structure of the market is what determines the human resource structure. According to him the analysis of the dynamics at the market place are important in setting the organizational goals and objectives. The market environment entails different activities and players who in one way or the other influence the level of success in the market. Market analysis, according to Hyman, requires that corporate identify the key stakeholders who include the customers, the competitors, the suppliers and the government through legislation. The purpose of doing this is to enable the business formulate certain market strategies that will be used for survival at the market place. Hyman’s concept has been built on the basis that corporate will be expected to set up human resource management structures that can be up to the task (Kathy and John 2001). Once the market structures have been identified it is possible to determine the necessary tools that will enable the company successfully compete with other rivals in the market. Different market structures require different human resource management structures with certain skills and competencies. Therefore, the responsibility of the human resource management team is to ensure that it is able to secure and develop certain human resource management structures that align with the market demands. Market structures’ analysis, help organizations to establish it is strengths and weaknesses in taking advantage of the business opportunities that are available in the market and manage any threats that may face the company. Company analysis is considered paramount for any business. This is because it helps in determining whether the business is able to manage its strategies in the market. The most important thing to be taken into consideration when doing S.W.O.T analysis is the availability of important resources such as manpower and capital. It is from this basis that Hyman, continues to argue that one cannot establish a certain human resource structure without having an objective (Boxall and Purcell 2003). Ideally, it is the target that determines what tool to use in reaching it. Appropriate skills, competencies and human resource management structures are important for any focused organization which is ready maximize realizations from a well organized and strategically planned human resource team. Market structure and management strategy According to Chandler (1962), strategy comes before structure. He argues that after that before companies embark in developing management structures, management structures must be established first. According to him, it is only possible for organizations to develop the most appropriate management structures after the strategies have been determined. This is the only way the stated organizational objectives can be achieved with very minimal cost. This concept once it was developed in 1960s, it received great acceptance from all areas of management across the world. According to Webster, a strategy can be described as a carefully designed plan towards realizing a certain goal. Chandler relates strategy to the determination of the long-term goals and the next course of action to achieving them. It is from this point that Chandler argues that a structure must be part of the course of action that has been designed to attain an already determined goal. Strategy determination involves determining the number of people that should be required to execute the strategy and the amount of resources required to make the strategy a success (Peccei and Rosenthal 2001). The most appropriate response to strategy must include the mobilization of resources that are needed, the structure that will be used and the individual roles towards implementing the strategy. Let us consider the situation where, the management has identified a certain market niche with specific demand that need to be served. The strategy will entail all the activities that will be committed until the demand has been satisfied. What then follows is the establishment of an appropriate team with a certain structure clearly specifying functions of each party to the structure (Osterman 2000). A good structure is expected to tie together all the key stakeholders in working towards a common goal. A good structure must clearly define who is to do what and the systems of communication. The channel of communication needs to follow a certain flow depending on the organizational arrangements. Conclusion In concluding this report, it is important to highlight that a number of lessons have been drawn. First, it has been found out that Strategic management is a set of managerial decisions which are used as a framework for the corporate long-term performance. A strategy is an important tool that can be used by companies to achieve high level of effectiveness in their daily operations. Second, this research has established that there are different theories that try to explain the relationship between market structure, management strategy and management structure. According to Hyman, it is the structures of markets that determine management strategic choices, while Chandler on the other hand believes that for a certain organizational goal to be achieved, the management structure must follow the strategy. However, irrespective of these opinions and arguments, the most important factor that should be considered when formulating a certain strategy is the senior management view, the company resources and the market environment. In addition to this human resource management must be aligned with the companies’ strategies for effective execution. Recommendations Administrative linkage: at this level of strategic management there is no direct relationship between the strategic planning and the human resource function. In many occasions, the strategic planning of the company runs its day-to-day activities independently. However, this management structure does not look sustainable in that manpower is important contributors to the process. In future, there is need to full involve the human resource function to make sure there are necessary skills and competencies for the strategy. One-Way Linkage: at this level the human resource function is only expected to assist the strategic planners in implementing strategies. However, this structure is not real conclusive since it does not source for any advice from the function especially with regard to the availability of manpower and other capital resources. Two-Way Linkage: on this level, the human resource function is a key player in strategy planning and formulation. The function is always expected to correspond with the strategic planner on issues of importance to the company. The human resource management is expected to persistently inform the planners of the most important resources that will be required alongside employee training and development in order to gain more skills and knowledge. Integrative Linkage: under integrative linkage, the human resource function is expected to take its rightful by ensuring that the company’s employee structure is corresponding with the company long-term goals and objectives. The process involves developing good policies that govern the recruitment and selection of employees. References Batt, R. 2000, ‘Strategic segmentation in front-line services: matching customers, employees and human resource systems’, International Journal of Human Resource Management, 11(3), 540-61. Boxall, P. & Purcell, J. 2003, Strategy and Human Resource Management, New York, Palgrave Macmillan. Kathy M. & John M. 2001, Designing and aligning an HR system. Human Resource Management, 11(2), 57–72. Osterman, P. 2000, ‘Work reorganization in an era of restructuring: trends in diffusion and effects on employee welfare’. Industrial and Labor Relations Review, 53(2), 179- 196. Peccei, R. & Rosenthal, P. 2001, ‘Delivering customer-oriented behaviour through empowerment: an empirical test of HRM assumptions’, Journal of Management Studies, 38(6), 831-57. Read More