this document contains am extensive summary of the most important issues discussed in chapter 1 to 7 of the book. This is an excellent document to help you study for the oral exam.
Lecture notes 205- Digital Marketing Strategy, HRM, and Performance, ISBN: 9780192536006
Summary Seminar Human Resource Studies Chapters 2-3-4-5 + additional lecture info (760831-M-12)
Summary Oral Exam Seminar HRS, chapters 2-5 INCLUDING tables and figures
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Master Human Resource Studies
Seminar HRS (760815M12)
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HR seminar Noor van Loon Fall 2021/2022
Chapter 1- introduction
A lot has changed since the previous version of this book came out.
- Firstly the most important questions was if HR did matter
- Then, HR could lead to competitive advantage when implemented in the right way
- Then, the need for a more critical approach was emphasized
- A more balanced perspective on HR and performance was needed → managers have
to walk the delicate line between achieving hard, financial outcomes for the firm and
the softer, well-being outcomes for employees and society. There are two approaches
o 1. Best practice= universalistic, as long as a company has all practices in place,
high performance will ensure
o 2. Best fit/contingency= type of organization and desired performance criteria
can vary.
All these developments result in the birth of strategic HR, it should thus be aligned with the
overall goals of the firm. The macro perspective in this book shows the difference between
strategy, HRM and performance e.g. organizational perspective.
Performance should not only be considered in terms of financial benefit but a broader
perspective should be adopted.
Human resources are active individuals with past experiences, values and norms and they do
not only belong to an organization so they are no means to an end (instrumentalism). A
humanist perspective should be taken that employees are an end in themselves, worthy of
being developed.
HRM is about fairness, a fair balance between their contribution and what they receive back
form the organization in return. Also, legitimacy is important, referring to the exchange
relationship at a more collective level and relating to the organization and society as a whole.
Human Resources can be split up in ‘resources’, added value, profitability etc and ‘human’,
people wanted to be treated humanely. So it is added value against moral value, HR can help
getting these two aligned.
Chapter 2- HRM and strategy
What is strategy
An organizations goals, including different performance indicators and the means to achieve
these goals. In larger organizations there is a difference between
- Corporate strategy= overarching strategy with different business units and markets
- Business strategy= to achieve competitive advantage, focused on specific markets.
Generally speaking strategy is about achieving fit between organizations and its environment.
There are different types of strategy developed over time for example
The Classical approach= rational and planned based on the economic man with prime
responsibility resting with the chief executive officer. There is a strict distinction between
formulation and implementation. The classical approach relies on the readiness and capacity
of managers to adopt profit-maximizing strategies through rational long-term planning.
Strategy might resemble to HR but it has many guises as Mintzberg (1987) demonstrates in
his 5 meaning of strategy:
,HR seminar Noor van Loon Fall 2021/2022
1. Strategy as a plan (intended): direction in the future
2. Strategy as a pattern (realized): consistency in behavior over time, focused on the past
3. Strategy as a ploy: specific maneuver intended to outwit (te slim af zijn) a competitor
4. Strategy as a position: the way in which the organization positions its products and
services in particular markets in order to achieve a competitive advantage
5. Strategy as a perspective: fundamental way of doing things
Because there is a lot of variety, Mintzberg, Ahlstrand and Lampel (2009) created 10 schools
that present an overview of the field. The school highlight the importance of taking multiple
factors into account including
- The role of the entrepreneur- often the founder who also creates the culture. When
he or she starts the company without specific departments there might be lack of
flexibility
- Cognitive processes-due to bounded rationality cognitive processes distort filters
resulting in different mental maps of the participants involved.
- Incrementalism/ learning- because there are many parties involved it can be difficult
to understand cause and effect linkages.
- Power and resources- power positions of parties involved is often neglected in HRM.
- Culture/ideology- the way in which collective perspectives and intentions develop over
time will undoubtedly have an effect upon the shaping of HRM policies and its
effectiveness.
- Environmental and institutional forces- these are sources of societal pressure to which
management must react in order to achieve legitimacy.
Three prescriptive schools of strategy
These schools assume that the environment is more or less stable and can be studied
objectively. This is called an outside in- approach. The environment is the starting point for
developing strategic responses.
1. Design school= strategy formation is a deliberate process of conscious thought
a. Environment: SWOT analysis, strengths, weaknesses, opportunities, threats
b. Key player: CEO
2. Planning school= strategy is a formal process entailing a stepwise approach to creating
an all-encompassing strategy.
a. Environment: stable and controlled. More formalized and detailed than design
school
b. Keyplayer: planners
3. Positioning school= perceiving strategy mainly from an industrial economic
perspective.
a. Environment: can be analyzed. Using economic models and techniques like the
5-forces model, the value chain and generic strategies
b. Keyplayer: analysts
Six descriptive schools of strategy
4. Entrepreneurial school= emphasizes the importance of a visionary leader who is
actively engaged in a search for new opportunities in order to speed up the companies
growth.
a. Environment: can be influenced
,HR seminar Noor van Loon Fall 2021/2022
b. Keyplayer: leader
5. Cognitive school= considers strategy formulation as a cognitive process that takes
place in the mind of the strategist. Strategy is a perspective that shapes how people
deal with inputs from the environment.
a. Environment: hard to understand because inputs are subject to many
distorting filters before they are decoded by cognitive maps.
b. Keyplayer: mind because it is a mental process
6. Learning school= strategy is a stepwise incremental process. Change and direction are
the result of mutual adjustment between the different actors involved and between
outside and inside decisions.
a. Environment: demanding
b. Keyplayer: everyone who learns
7. Power school= formation of strategy is a bargaining process between powerblocks in
the organization and between organizations. Power and politics are used as bargaining
skills.
a. Environment: can be moulded but difficult
b. Keyplayer: everyone with power
8. Cultural school=strategy formulation is a process of social interaction based on the
beliefs and shared understandings of the members of the organization.
a. Environment: incidental
b. Keyplayer: collectivistic
9. Environmental school= the environment is a central actor in the strategy-making
process.
a. Environment: dominant and deterministic. The organization must respond to
the forces of the environment.
b. Keyplayer: environment, stakeholders.
One synthesizing school of strategy
10. Configurational school= synthesize the previous nine schools. Emphasizing that there
is no one best way of organizing but it depends on the environment and circumstances.
Mainardi and Kleiner (2010) present a useful synthesis summarizing the different schools of
thought regarding how to achieve competitive advantage through corporate strategy. They
suggest four options
• Position based strategy= future oriented, top-down formulation. Organizations
undertake a comprehensive analysis of internal capabilities and external
markets/needs to position themselves appropriately to take advantage of both. This
relies on great data collection and strategic planning.
• Execution based strategy= present oriented, collective decision-making. Focusses on
operational excellence, redesigning processes to be more quality focused or cost
effective.
o Drawback: it focusses on improving current processes but not on deciding the
future business
• Adaptation based strategy= future oriented, collective decision making. Refers to
continual experimentation and renewal of ideas rather than focusing on analysis and
planning.
, HR seminar Noor van Loon Fall 2021/2022
o Drawback: This strategy is highly unstructured and can lead to excessive
diversity in the firms products and processes.
• Concentration-based strategy= present oriented, top-down formulation. Appealing as
it focusses on developing the core competencies of the firm to achieve success.
o Only current competencies are developed, foregoing the opportunity to
innovate and expand into new areas of product development or services.
De Wit and Meyer present an overview of inherent tensions in the field of strategic
management theory and practice which gives rise to different perspectives.
1. Tension between markets and resources= outside-in (already discussed, more popular
in classic HR) vs. inside out (resource based view, unique internal resources are key to
organizational success, more popular in current HR). on the one hand hr depends on
the strategic positioning of the firm, fitting with environment but on the other hand
human resources can be cultivated to create competitive advantage.
2. Tension between profitability and responsibility= shareholder value vs. stakeholder
value. in the us, organizations serve the goal of increasing shareholder value but in the
EU there are more stakeholder oriented approaches.
These discussions relate to an alternative stream in organizational theorizing; coevolution;
“organizations and populations not only respond to influences from the environment but also
affect it.”
Classical strategic approaches in HRM
The process of strategy refers to the way strategies come about whereas the content is
concerned with the product or ‘what’ of strategy. The context of strategy refers to the set of
circumstances in which both the process and content of strategy are shaped, developed or
simply emerge.
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