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Theoretical perspectives for strategic human resource management

К содержанию номера журнала: Вестник КАСУ №4 - 2008

Автор: Богун Анастасия Юрьевна

The past decade has seen an increasing interest in the strategic management of organizations. Numerous models of strategic management have been proposed. This interest in strategic management has resulted in various organizational functions becoming more concerned with their role in the strategic management process. The Human Resource Management (HRM) field has similarly sought to become integrated into the strategic management process through the development of a new discipline referred to as Strategic Human Resource Management (SHRM).

Theoretical Models of HRM

Resource-based view of the firm. The most recent entry into the theoretical discussions of strategic human resource management comes from the organizational economics and strategic management literature and has been coined the resource-based view of the firm. Since the birth of strategy as a recognized area in the field of management, industrial organization strategists have relied primarily on a single framework (strengths, weaknesses, opportunities and threats) to structure their research. Major contributions to the strategy literature have centered around the extenally focused portions of this competitive advantage model. Due to the dissatisfaction with the static, equilibrium model of industrial organization economics that has dominated the strategy field. This resource-based view of competitive advantage differs from the traditional strategy paradigm in that the emphasis of the resource-based view of competitive advantage is on the link between strategy and the internal resources of the firm. The resource-based view of competitive advantage is firm-focused whereas the traditional strategic analysis paradigm has had an industry-environment focus. Central to the understanding of the resource-based view of the firm are the definitions of competitive advantage and sustained competitive advantage. Barney describes a competitive advantage as when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors. A sustained competitive advantage exists only after efforts to replicate that advantage have ceased. According to the resource-based view of the firm, competitive advantage can only occur in situations of firm resource heterogeneity and firm resource immobility, and it is these assumptions that serve to differentiate the resource-based model from the traditional strategic management model. Firm resource heterogeneity refers to the resources of a firm (i.e., physical capital, human capital, and organizational capital) and how different these resources are across firms. In the traditional strategy model, firm resources are viewed as homogeneous across firms in the industry. Firm resource immobility refers to the inability of competing firms to obtain resources from other firms. In the traditional strategy model, resources are considered mobile in that firms could purchase or create resources held by a competing firm. In order for a firm's resource to provide sustained competitive advantages, four criteria must be attributable to the resource: (a) the resource must add positive value to the firm, (b) the resource must be unique or rare among current and potential competitors, (c) the resource must be imperfectly imitable, and (d) the resource cannot be substituted with another resource by competing firms. Therefore, given resource heterogeneity and resource immobility and satisfaction of the requirements of value, rareness, imperfect imitability, and non-substitutability, a firm's resource can be a source of sustained competitive advantage. Barney states that the resource-based view makes it clear that firms cannot expect to buy or purchase sustained competitive advantages, in that the advantages, if they exist, can only be found in the rare, imperfectly imitable, and non-substitutable resources already present in the firm. Ulrich partially relied on the resource-based theoretical perspective in describing human resources as a competitive advantage. He expanded the model of competitive advantage to include organizational culture, distinctive competence, and strategic unity as "mediators" in the strategy-competitive advantage link. He then discussed how human resource practices can be used by firms to develop strategies that will lead to a sustained competitive advantage, stating that there must be a focus on the relationship between human resources, strategies and competitive advantage. Human resources can be considered as a sustained competitive advantage rather than providing any justification for their positions within the context of the theory. Relying on the assumptions of individual ability being normally distributed, the four criteria for a sustained competitive advantage were elaborated and we attempted to evaluate the conditions under which human resources meet these criteria. First, in order for human resources to exist as a sustained competitive advantage, they must provide value to the firm. This condition requires that there is a heterogeneous demand for labor (i.e., that firms have jobs that require different types of skills) and a heterogeneous supply of labor (i.e., individuals differ in their skills and level of skills). Under these circumstances, human resources can add value to a firm. A resource must be rare if it is to be a sustained competitive advantage. Due to the normal distribution of ability, human resources with high ability levels are, by definition, rare. The goal of virtually all selection programs is to ensure that the organization is hiring only the highest ability individuals. The issues then are the validity of the selection system and whether or not the organization is able to attract and retain those applicants deemed to be of the highest ability. Thus, a firm could theoretically obtain employees of superior ability through a combination of valid selection programs and attractive reward systems. In order for a resource to be considered a sustained competitive advantage, human resources must be inimitable. In this discussion, we use the concepts of unique historical conditions, causal ambiguity, and social complexity to demonstrate the inimitability of competitive advantages stemming from human resources. Unique historical conditions refer to the particular historical events that have shaped a firm's practices, policies, and culture. Causal ambiguity describes a situation where the causal source of the competitive advantage is not easily identified. Social complexity recognizes that in many situations (e.g., team production) competitive advantage stems from unique social relationships that cannot be duplicated. Due to the fact that many competitive advantages that might be based in a firm's human resources are characterized by unique historical conditions, causal ambiguity, and social complexity, it is highly unlikely that well developed human resources could be easily imitated. Finally, a resource must not have substitutes if it is to be considered a sustained competitive advantage. One could easily picture a firm that had the highest ability individuals who constituted a competitive advantage. However, what happens if a competitor develops a new technology that provides vast productivity increases greater than the productivity differences in firms due to ability? If the technology is imitable (which it likely is because a firm could simply purchase the technology in the marketplace), then once the local firm purchased the new technology, the human resources would once again exist as a competitive advantage. Resource-based theory is currently receiving a significant amount of attention in the strategic management literature. Great potential exists for the use of the resource-based theory in SHRM research. The theory's focus on an internal analysis of the firm provides an extremely important avenue for SHRM researchers to examine the ways that firms attempt to develop human resources as a competitive advantage. Thus, this theory provides a framework for viewing human resources as a pool of skills that can provide a resource to serve as a sustained competitive advantage. In addition, the need to integrate human resource practices in the formulation stages of a firm's strategy seems paramount for the continuing study of SHRM. The resource-based approach provides a framework for examining the pool of human resources that may be either able or unable to carry out a given strategy during the formulation phase of strategic management. Thus, the resource-based view may demonstrate the fact that strategies are not universally implementable, but are contingent on having the human resource (i.e., personnel) base necessary to implement them.

The behavioral perspective. One of the original and more popular theoretical models used in the SHRM literature is the "Behavioral Perspective". The theory focuses on employee behavior as the mediator between strategy and firm performance. It assumes that the purpose of various employment practices is to elicit and control employee attitudes and behaviors. The specific attitudes and behaviors that will be most effective for organizations differ, depending upon various characteristics of organizations, including the organizational strategy. Thus, in the context of SHRM, these differences in role behaviors required by the organization's strategy require different HRM practices to elicit and reinforce those behaviors.There must be a rationale for the linkage of competitive strategies with HRM practices in order to predict, study, refine, and modify both strategy and practices in certain circumstances. The rationale implies that employee role behaviors are instrumental in the implementation of the competitive strategies. These role behaviors can vary along a number of dimensions, such as repetitive versus innovative behavior, low versus high risk taking, and inflexible versus flexible to change. The innovation strategies require among other things a high degree of innovative behavior, a long-term focus, a high level of cooperative behavior, a moderate degree of concern for quality, a moderate concern for quantity, and a greater degree of risk taking. This can be contrasted with a cost reduction strategy that requires such things as repetitive behaviors, a short-term focus, autonomous activity, high concern for quantity, moderate concern for quality, and low risk taking. HRM practices can be considered as a menu of options for HR executives, from which they can choose the practices that (a) promote the most effective role behaviors consistent with the organizational strategy, and (b) are aligned such that each HR practice is congruent with the others. HR philosophy, policies and programs express the culture, values and goals of the HR function, it is the specific HR practices that motivate employees to exhibit the needed role behaviors associated with various strategies. All of the HRM activities must be consistent with each other, and in turn, linked to the strategic needs of the business. Employee role behavior, in a generic sense, is the main mediator between strategy and the effective achievement of the strategy. Finally, the assumption of the behavioral perspective is that strategies lead to HRM practices that elicit employee role behaviors that lead to a number of outcomes that provide benefits to the firm. Although firm performance seems to be the most obvious outcome of good HR practices, Walker and it was noted a number of additional outcomes of SHRM such as employee attitudes, accident rates, productivity, and labor costs. Once again, though this model seems to have some intuitive appeal, there is no empirical data demonstrating that employee role behaviors do lead to positive organizational outcomes. Thus, the entire model could be tested to demonstrate (a) different strategies are associated with different levels of firm performance, and (b) that the relationship between strategies and firm performance is either mediated or moderated by HRM practices and employee role behaviors.

Cybernetic systems. Another set of popular theoretical models being applied to SHRM research is the use of cybernetic systems models. Cybernetic models vary in their treatment of the system. Some models focus on closed systems (much like the behavioral perspective) that seek to set up mechanisms to buffer the technological core from the environment. Other models treat systems as being open to exchanges with their environment. Open systems models are based on the general systems models, and hold that organizations can be described as input, throughput, output systems involved in transactions with a surrounding environment. Organizations consist of the patterned activities of individuals aimed at some common output or outcome. These activities can be characterized as consisting of the energic input into the system (i.e., inputs of people, money, technology, etc., the transformation of energies within the system (i.e., putting the inputs to work together) and the resulting product or energic output (i.e., the product that results from the patterned activities of the input and throughput phases). Central to open systems models is the idea of a negative feedback loop that informs the system that it is not functioning effectively, thereby allowing for changes to reduce any discrepancies. The inputs in the HR system are competencies (i.e., skills and abilities) of the individuals in the organization that the firm must import from its external environment. The throughput process can be characterized by the behaviors of those individuals in the organizational system. Finally, the outputs consist of both performance (e.g., productivity) and affective outcomes (e.g., job satisfaction). SHRM consists of two general responsibilities: competence management and behavior management. Competence management deals with those things that the organization does to ensure that the individuals in the organization have the skills required to execute a given organizational strategy. This recognizes the negotiations with the external labor environment in order to attract, select, retain, and use employees with the necessary knowledge, skills, and abilities for executing the strategic business plan. There are four competence management strategies. Competence Acquisition refers to the activities such as training and selection that seek to ensure that the individuals in the organization have the required competencies. Competence Utilization deals with activities that seek to utilize latent skills or skills that had been deemed unnecessary under a previous strategy. Competence Retention is a strategy aimed at retaining various competencies in the organization through reduction of turnover and constant training. Finally, Competence Displacement consists of activities aimed at eliminating competencies that are no longer necessary for the organizational strategy. Behavior management is concerned with ensuring that once individuals with the required skills are in the organization, they act in ways that support the organizational strategy. Similar to the approach of the behavioral perspective, Behavioral Control consists of activities such as performance appraisal and pay systems that seek to control employee behavior to be in line with organizational goals. Behavioral Coordination strategies consist of appraisal and organizational development activities that seek to coordinate behavior across individuals to support the organizational strategy. The major focus of the model is on the coordination of various HR practices across subfunctions (i.e., selection, appraisal, compensation, training, etc. An open systems view of SHRM requires organizations aligning all of the various HR practices toward some strategic end, rather than simply focusing on how one set of practices (e.g., compensation) supports a firm strategy. Thus, the research implications of this theory would focus on examining exactly how organizations develop and align HR practices across traditional functional lines. There is a hybrid model of SHRM, combining cybernetic systems and behavioral perspectives which is called a "control theory" view of SHRM. The behavioral perspective has not been thorough in explaining how various HRM practices work in combination and managers have a clear understanding of the organizational context, knowledge of required behaviors from all levels of employees, and knowledge of the HRM practices that will elicit the behaviors required to achieve the organization's strategic goals. The administrative information mediates the relationship between strategy and HRM control.

The control theory model is based on cybernetic systems and implies that the control process includes (a) superior intentions, (b) influence mechanisms, and (c) evaluation and feedback. In this model, the various HRM practices can be combined into three types of control systems: (a) behavior control, (b) output control, and (c) input control. The organizations seek to control inputs (through selection and training), behaviors (through behavior-based appraisal and reward systems), and outputs (through outcome-based appraisal and reward systems). This model also emphasizes the need for coordination across various HRM practices. However, it goes beyond most other models by explicitly recognizing the imperfect nature of decision making in SHRM due to bounded rationality and/or uncertainty. Most models tend to implicitly assume that environmental and strategic contingencies, the exact competencies and role behaviors necessary to achieve the strategy, and the proper HRM practices to elicit these competencies and behaviors are perfectly known, can be put in place on a timely basis, and can be quickly revised as needed. A fruitful avenue for future research is the contextual factors that affect SHRM decision makers to develop and/or use certain HRM strategies. In addition, although not explicitly explored control theory (and open systems theory in general) in the cybernetic sense, is a dynamic model of constant environmental monitoring and internal adjustment. Most SHRM researchers have tended to focus on cross sectional studies that only give a glimpse of the relationships among practices at a particular point in time. However, practitioners are often more concerned with the constant monitoring of the outcomes of HRM practices and the corresponding adjustment of those practices whenever the outcomes tend to deviate from those desired. In order for these cybernetic models to describe true open systems, they must be expanded to consider the relational feedback from the environment and to discuss the internal HRM adjustments in response to this feedback. Thus, this theory has impressive potential for examining how SHRM practices change or need to change over time.

Agency/transaction cost theory. One popular theoretical model in the strategic management literature that has recently been applied to the HRM function is the exploration of transactions as means of controlling employee behavior. An agency/transaction cost theory approach to examining the problems of human exchange is based in the fields of finance and economics. The approach seeks to identify the environmental factors that together with a set of related human factors explain why organizations seek to internalize transactions (as opposed to transacting in the market place) as a means of reducing the costs associated with these transactions. The approach identifies bounded rationality and opportunism as the two human factors that serve as major obstacles to human exchange. Bounded rationality is the term used to refer to the fact that people are subject to information processing limits. Opportunism refers to the fact that people will act with self-interest and guile in pursuing their own goals. The pairing of uncertainty with bounded rationality results in a situation where it is very costly or impossible to identify all future contingencies and specify all of the appropriate responses to each contingency. Opportunism is relatively harmless so long as competitive (large numbers) exchange relationships exist. However, when paired with small numbers exchange relationships, opportunism must be held in check by costly and risky short-term contracting. Transaction costs are the costs associated with negotiating, monitoring, evaluating and enforcing exchanges between parties, and they are incurred in order to make exchanges more efficient. As transaction costs increase, there is a tendency to internalize the transaction through organization. The agency problem exists when one party requires services from another in a situation where uncertainty exists and both parties will behave self-interestedly. Agency costs are the costs associated with establishing efficient contracts between parties. Agency/transaction cost theory has been very popular in the strategic management literature for studying diversification, internalization and restructuring. Because of the fact that agency/transactions cost theory seeks to explain control in organizations, they have implications for the design of HRM practices. The central premise of the transaction cost approach is that employees have strong incentives to shirk (reduce their performance) and free-ride (rely on the efforts of others in the group) and no incentive to increase their performance unless task conditions allow employees to demonstrate their unique contributions and to benefit from those contributions. It views the aggregate performance of groups or organizations as contingent upon the control systems used to monitor employee behavior. Thus, the role of HRM practices is to allow for the measurement of unique contributions and to provide adequate rewards for individual employee performance. These practices are the means through which firms are able to align employee behavior with the strategic goals of the organization. These models have recently been linked to human resources through the concept of bureaucratic costs. Bureaucratic costs refer to the transaction costs associated with managing human resources in a hierarchy. These costs are defined as the negotiating, monitoring, evaluating, and enforcement costs associated with managing human resources when an authority relationship exists.

Thus, all the presented assumptions are the theoretical basis for a successful development of any enterprise and they should be implemented into practice and only then will it be possible to see the real value of their existence.


1. Fombrum, C. Strategic Human Resource Management. - New York: Wiley, 1984.

2. Kanter, R.M. Frontiers for Strategic Human Resource Planning and Management. – Cambridge: Cambridge University Press, 1983.

3. Smith-Cook, D., & Ferris, G.R. Strategic Human Resource Management and Firm Effectiveness in Industries Experiencing Decline. – Cambridge: Cambridge University Press, 1986.

К содержанию номера журнала: Вестник КАСУ №4 - 2008

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