Study guide
Leadership and HRM Study Summary
- Instelling
- Erasmus Universiteit Rotterdam (EUR)
Short concise study guide for the course
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LECTURE 1: INTRO TO LEADERSHIP & HRM IN INTERNATIONAL ORG.Organizational Behavior (OB): study of how people behave in organizations and how organizations
themselves behave + models that can be used to manage or change certain behaviors
● Three levels of analysis: individual (psychology), group (sociology), and organizational level
(management studies)
● Origin: emergence of the scientific method (= most efficient way to organize jobs and
workplaces; maximum output for minimum input)
Three researchers of OB
● Max Weber (Bureaucracy): the most efficient and rational way to organize modern
workplaces, key characteristics of his ideal type:
o Selection based on meritocracy (best person for the job)
o Permanent workplace (no place for work at home because that is not cost effective)
o Career structure: ability to have a career in a workplace incl. promotion
o Fixed salary or wages + pension
● Frederick Taylor (Taylorism): promoted scientific management and involves maximizing
output with minimal input; division of labor to increase productivity
o The manager is responsible for organizing and doing the thinking, whereas the
workers are responsible for just working (no room for creativity)
o The manager defines how the work must be done
o Selection of the best person (similar to Weber, selection based on meritocracy)
o Monitoring of performance
● Elton Mayo (Hawthorne studies): determined that social relations impact productivity more
than the environment (e.g. lighting) does, paved the way for motivation-based research and
the human relations movement
Human Resource Management (HRM): management of work and employees towards the
organization’s goals (more than just behavior, it is about everything that involves human resource)
● Employment relationship is central
● HRM should consider the strategic integration of HR activities within organizational strategy
● Originally HRM tasks were carried out by supervisors but that changed with the creation of
o Employment offices: responsible for employment-related matters (e.g. payroll)
o Welfare offices: responsible for providing better conditions (e.g. medical care)
Three levels of analysis
● Micro HRM: includes HRM policy and practice; this involves managing individuals and small
groups (psychology) through administrative HRM activities (recruitment, training, and
development) and managing organizational work and employees (sociology) through union-
management
● Strategic HRM: a strategic approach to managing human resources within the organization
(assumes that HRM is critical to organizational success). How can micro HRM activities be
best integrated to fit within the bigger picture of the organization?
● International HRM: concerns the functioning of HRM in multinational companies and how
HR strategies can be tailored to suit different countries and institutions
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,Two approaches to labor-management
● Harm HRM: quantitative approach to HRM, managing human resources in the same way as
other factors and emphasizing the business strategy. Employees are seen as a cost and focus
is on compliance and control
● Soft HRM: emphasizes human interactions, focusing on communication, leadership and
motivation. People are led rather than managed (room for more creativity and proactivity).
Employees are seen as a resource and sharing a common goal with the organization
HRM choices are important because they influence HRM-relevant outcomes which in turn influence
long-term consequences. Decisions on reward or work systems can impact employee commitment
which then go on to impact organizational effectiveness. Stakeholder interests and situational
factors can influence HRM choices and the other way around.
Four principles of HRM
1. Integration: HRM should match and be integrated into the organizational strategies
2. Employee commitment: HRM can motivate employees to identify with the interests and
goals of the organization which can lead to higher performance and satisfaction
3. Flexibility: HRM increases flexibility and responsiveness of the organization by strengthening
trust, commitment and motivation
4. Quality: good HR practices can ensure that organizations are employing quality candidates
which in turn impacts performance of the organization (goal = retention of quality
employees)
Strategic tensions within HRM: what should HRM policies focus on?
1. Employer control versus employee motivation: more control results in less flexibility for
employees which has a negative impact on employee motivation
2. Short-term productivity versus long-term adaptability: organizations exist for the long run
so they can’t just make decisions that are good for the short-term
3. Corporate survival versus employee security: is it more important for companies to survive
or is the well-being of your employees also important?
4. Managerial autonomy versus social legitimacy: how much autonomy do you give individual
workers and how does this affect social legitimacy? Think of the role of authority and control
in legitimizing organizations
Challenges of OB and HRM
1. Individual or organization?
Both OB and HRM focus on the behavior of individual suffer of the ecological fallacy: a fault in
reasoning that we make when we assume something about the individual based on
something we observed of the group (problem of generalization). This has led to the
emergence of multi-level models.
2. Theory or application?
OB and HRM must find the balance between theories and practical applications. If we focus too
much on theory, then we lose sight of how to apply the solutions but focusing on applying
one solution to different situations is ineffective. Well-researched theories should be
combined with a clear understanding of the practical application.
3. Link with performance?
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,The basic assumption of OB and HRM is that learning about these fields will lead to increased
performance, but performance is difficult to define and measure.
Organizational strategy: the understanding of the business it is in (or should be in) and its plan for
future success.
● Strategy as the legitimization of hierarchy: strategy is created by top-managers and is
separated from the rest of the workforce
● Strategy as an art and science: it involves data-gathering, decision-making, and engaging in
nuanced thinking (= acknowledging all the complexities and layers)
● Strategy as a competitive advantage: it aims at defeating an opponent therefore
competition is an inherent element
Mintzberg’s 5Ps of Strategy
1. Plan: brainstorming options and planning how to deliver them
2. Ploy: beating competitors by plotting to influence them
3. Pattern: strategy emerges from past organizational behavior
4. Position: the match between the organization and its environment
5. Perspective: a shared perspective that managers in an organization have
SWOT analysis: identify the internal strengths and weakness and the external opportunities and
threats of an organization
Porter’s five forces model: analyzes an industry’s attractiveness and likely profitability by looking at
the competitive environment (factors beyond the actions of competitors):
● The threat of new entrants to the industry: your position can be affected by people’s ability
to enter your market (= how high are your barriers of entry?)
● The threat of substitutes: the likelihood of customers finding a different supplier
● Power of suppliers: powerful suppliers can threaten the profitability of an organization by
increasing costs or reducing quality
● Power of customers: relates to the threat of substitutes but focuses on the ability of
costumers to drive your prices down (based on consumer choices)
● Competitive rivalry: looks at the number and strength of your competitors
Three competitive strategies based on the five forces model:
● Cost leadership strategy: aims to become the cheapest production organization by
delivering products at a lower cost than competitors
● Differentiation strategy: aims to be differentiated by delivering products that are unique
● Focus strategy: aims to meet the needs of a narrow segment of customers specifically (both
cost and differentiation advantage within a smaller market)
VRIO framework of analysis (Wernerfelt, 1984): strategies should balance the exploitation of
existing resources with the development of new resources (resource-based view) → looks beyond
product- and market-based strategies
● Valuable: does the resource add value by allowing the organization to exploit opportunities
or neutralize threats?
● Rare: how unique is the resource?
● Inimitable: how easily can the resource be copied or substituted?
● Organized: can the organization exploit the resources effectively?
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, If a resource meets all these criteria, then it can be a source of sustained competitive advantage.
Strategy implementation
An effective strategy has a clear relationship between the overall goal and direction and the efforts
that each business unit is making. This suggests a need for different levels of planning at different
levels of the organization, however we cannot view strategy implementation at distinct levels
because this leads to separation and a reduction in responsiveness to change.
● Enterprise strategy: identifies the aim of the organization
● Corporate strategy: identifies the markets, products, technologies that the organization will
engage with
● Business strategy: identifies the organization’s distinctive offering and integrates the
different business functions
● Functional strategy: identifies offerings at function level
Strategic HRM: emphasizes a strategic approach to managing human resources within the
organization (linking the people with the strategic needs of the business
● Hard SHRM: human resources should be utilized in the same way as other organizational
resources: efficiently (human resources should be cheap and exploited as fully as possible)
● Soft SHRM: considers the relationship between the employer and employee and attempts to
integrate the interests of all stakeholders with the overall management objectives
Main tasks of SHRM
● Formulation (integration): HRM functions should be formulated in line with overall business
strategy and should aim to ensure that the organization strategically allocates human
resources
● Implementation (adaptation): ensures compliance and manages performance and aims to
ensure that HR practices are accepted and used by all employees
5P Model of HRM (Schuler, 1992)
1. Philosophy: how people in the organization are valued and treated
2. Policies: establish guidelines for action on people related business issues and HR programs
3. Programs: coordinate the efforts to introduce and manage change
4. Practices: makes sure that employees are motivated to engage in needed role behaviors
5. Processes: defines how activities are formulated and carried out
Three general approaches to HR strategies (Armstrong & Taylor, 2014): all aim to support and
direct employee behavior in line with organizational values
1. High performance strategy: aims to improve performance using HR practices
2. High commitment strategy: aims to enhance employee commitment using HR practices that
promote trust and encourage self-regulation
3. High involvement strategy: aims to offer employees the opportunity to contribute to the
organization by increasing their involvement in the decision-making process
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