Towards a conceptual model of the role of HRM in corporate transformation. Noel M. Cowell & Anne P. Crick

Transcription

1 Towards a conceptual model of the role of HRM in corporate transformation Noel M. Cowell & Anne P. Crick

2 Introduction Businesses in SIDS are small relative to those within advanced capitalist countries and more vulnerable but thy compete in the same global environment; The markets in SIDS are generally too small to sustain long-term growth and profitability; The quest for sustained competitive advantage often relies on extending business across borders by way of inorganic growth a process that requires substantial and far-reaching internal change (corporate transformation); There is considerable empirical evidence suggesting that human resource management can contribute to improved organisational outcomes; Though it is generally acknowledged that change is owned by the HRM function, there appears to be little research that links HRM to business outcomes in the context of corporate transformation.

3 The Paper Research Objective: to advance a conceptual model that outlines and explains how human resource management contributes to the process of corporate transformation in small island developing states. Research Question: How can businesses that wish to undertake a process of corporate transformation in an effort to achieve and sustain profitable growth, leverage human resource management?

4 Why does this matter? There is not much research on the relation between HRM and corporate strategy in SIDS; The character of the transmission mechanism (between HR interventions and organisational outcomes) is varied and highly complex and is described as a black box If context matters then: The mountains of empirical findings drawn from large companies in developed economies may not apply to SIDS; The transmission mechanism will vary with the nature of the change that the organisation is undertaking and the dynamics of the broader socio-cultural and economic environment; Businesses seeking to achieve sustained profitable growth, need this knowledge to guide their choice of HRM strategy.

5 The transmission mechanism High Performance Work Systems Designed on the basis of high managerial discretion (subject to resource constraints) Black box Employee attitudes and behaviours that are subject to low managerial discretion Corporate performance The desired and not entirely predictable state Design and deliver Observe and measure change in employee experience, attitudes and behaviours Observe and measure change in organisational outcomes Evaluate the impact of HRM interventions See Becker & Huselid 2006, p

6 Definition: HPWS Even after more than thirty years of working with this concept (and its variations) there is no consensus on its definition. For this presentation:... a bundle of synergistically aligned human resource management interventions, designed to support (or drive) the organisation s strategic objectives. Also known as high involvement or high commitment systems, the are typically designed to enable broad-based employee participation in decision-making and in theory, greater employee engagement, more strategically focused employee behaviours, more discretionary inputs from employees, greater innovation and ultimately better organisational performance. Noel M. Cowell, UWI, Mona

7 What is corporate transformation?... rapid, fundamental, disruptive, and farreaching change the institutionalisation of change in the way most members of the organisation interact, with a view to securing long term or sustainable competitive advantage (Blumenthal and Haspeslagh 1994, p. 105)... are that it is often unpredictable because the future state is unknown, and secondly it is so radical that successful execution require a change in the culture, behaviour and mindset of the people of an organization. (Anderson & Anderson, 2010a, p. 60)

8 Corporate Transformation...[corporate] transformation is a deliberate, disruptive, systematic and far reaching multilevel and multidimensional initiatives intended to bring about a fundamental departure from an existing state to a desired but not entirely predictable future. It involves a change in the perspective, values, attitudes, beliefs and behaviours of the majority of people in an organisation, comes to assume a life of its own and ultimately becomes ingrained in the culture of the organisation.

9 Method SAMPLING No effort was made to be representative in the sampling process, choosing instead to employ the principle of maximization as defined by Boeije (2009, p. 35), focusing on locations where the phenomenon of study was most likely to manifest itself. SAMPLE Large successful companies with regional and/or international footprints in which the researcher could be reasonably assured of finding robust and sophisticated human resource management systems that were aligned to corporate strategy.

10 1 Strategic HR Leadership Visionary Strategic Personally credible Courageous 6 Sustained profitable growth 2 HR structure Purpose-built Technology-driven 5 Strategically focused employee behaviours 3 Human resource capability Organisational citizenship behaviours Innovation Talent management Organisational learning systems 4 Organisational climate Managerial cognition Organisational health HR analytics Employee engagement Trust Perception of justice Job satisfaction

11 High performance work system Illustrative Black Box Corporate performance Job satisfaction Org. Commitment Employee Engagement Trust Black box employee attitudes & behaviours Org. citizenship (extra-role) behaviours Org. (role-directed) behaviours Org. misbehaviours (deviance, resistance) Messersmith, J. G., Patel, P. C., Lepak, D. P., & Gould-Williams, J. S. (2011). Unlocking the Black Box: Exploring the Link Between High-Performance Work Systems and Performance. Journal of Applied Psychology, 96(6), Becker, B. E., Huselid, M. A., & Ulrich, D. (2001). The HR Scorecard: Linking People, Strategy, and Performance. Boston: Harvard Business School Press.

12 Summary There is considerable empirical evidence of the positive impact of HR management on various business outcomes; This suggests that corporations aiming for sustained profitable growth should seek to create work systems that recognise and leverage human assets; HPWS must be context sensitive one size does not fit all;

13 Summary Our conceptual model suggests that a HPWS in SIDS should focus heavily on building HR leadership, HR structure and HRM capability (over which management has a high level of discretion) This will impact organisational climate and culture and ultimately employee behaviours (elements over which management have less discretionary control); Employee behaviours (positive, neutral and negative) will influence organisational outcomes in different ways.