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The Link Between Hr, Strategy and Culture

Essay by   •  November 7, 2011  •  Essay  •  2,732 Words (11 Pages)  •  2,676 Views

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Introduction

Human resource managements historically were lead by the line managers where the main functions in the organization basically focused on the management, recruitment and providing the right path or direction to their employees towards reaching the company goals. Today, human resource management normally deals with people and organization's performance, compensation, wellness, communication, administration and motivation. In general, successful human resource management will always connect or interlink with the organizations strategy and its culture.

Figure 1: The three dimensions defined

Source: own source

In literature, the general thesis contends that Human Resource is guided by the organisations overall strategy. Once the overall strategy is defined it is the Human Resource responsibility to ensure the employees have the required KSA's (Knowledge, Skills and Abilities) that are combined with motivation, commitment and engagement in order to achieve the overall objectives and goals (Armstrong, M. 2009). The following graph further clarifies how HRM follows strategy.

Figure 2: Linking Company wide and HR strategies

Source: Dessler, G. (2010)

This model also links indirectly into the cultural aspect and how their HR policies create an innovative environment in order to achieve the overall business strategy. This appropriately provides the example of how Google blends culture, HRM and strategy into a unified system that drives the organisation. (Dessler, G. 2010)

Dessler argues that Human Resource can effectively influence the formulation of the overall strategic plan as they are "in a good position to supply competitive intelligence...information about current employees strengths and weaknesses...details regarding competitors incentive plans, employee opinion service and information about pending legislation" (Dessler, G. 2010). Due to globalisation and increased competition, the influence of Human Resource on overall Strategy is increasing and can act in some respect as a key source of competitive advantage as the focus of Human Resource Management pays more and more attention to employees performance (Gunnigle, P., Heraty, N & Morely, M. J. 2007).

Moreover, theoretical approaches suggest that Human Resource Management should be familiar with the organisational culture in order to understand how it affects the day-to-day operations and how it can be managed or changed. Alternatively, organisational culture is a multi-dimensional component that is deeply embedded in the organisational structure, rooted by all employees' values, beliefs and assumptions that define the work environment (Armstrong, M. 2009). Porter stated, " different organisational cultures are implied in each strategy and that HR policy choice is a key influence in establishing and maintaining appropriate corporate cultures." (Gunnigle, P., Heraty, N & Morely, M. J. 2007) Therefore, culture can influence both Human Resource and Strategy as it indirectly influences the way a strategy is set up and Human Resource manages their employees.

In certain circumstances strategy can even impact culture. Strategic change, transformational change or operational changes that are based on the overall strategy of an organisation can lead to changes in the culture. For example an organisation has to downsize or when two organisations merge. Especially changes that have a direct impact on the behaviour and attitudes of employees have on the long term a direct influence on the company culture (Karen, E.L.).

From an academic point of view it is clear that there is a link between Human Resource, Strategy and Culture. This is especially true for Google that will be further illustrated in detail.

Google; an overview

Google is the world's leading Technology Company that focus on search engines, Internet technologies and advertising. Google's various Internet web sites and services are costless available on its search engines as it creates its revenues mainly through specialised online advertising. Around 70% of its resources are distributed to core search and advertising. Thus its major product is Google.com, followed by 5 further broad categories, namely Google Geo, Android and Google Mobile, Google Checkout and Google Labs and many more, which it all contain several sub categories that offer plenty of products and services.

Google reached a strong market position in the global search market primarily because of its popular internet brand with a significant image and its various free of charge Internet services, which provide a powerful competitive advantage in an intense competitive market.

Moreover, Google's major focus is basically on the product innovation which resulted in many product launches recently, as stated by Larry Page that "finding important technological areas where progress is currently slow, but could be made fast, is what Google is all about." (Marketline)

Google has a research-based view in regard of creating a competitive advantage. It distinguishes itself from its competitor by focusing on employees with valuable KSAs. (Gunnigle, P., Heraty, N & Morely, M. J. 2007)

Google hires and retains the best people from all over the world and any age because the company's environment and culture, which creates happy, productive and effective employees in such the best talents of the world, wants to work in. (Work Example: Google)

As a result from our collective research we have devised a graph that illustrates our understanding of Google.

Figure 3: How Google is constructed

Source: own source

How Google applies theories

Competitive advantage model applies ideas which were first conceived by Porter in 1985 and further developed upon by Schuler and Jackson (1987). It contends that an organisation's HRM policies should depend on its overall business strategy, with the strategy falling into 3 generic categories: Innovation, Quality Enhancement and Cost Reduction,

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