Trinity College, Dublin

What is Human Recourse Strategy?

Author: Elizabeth Luger

Contents

1. Introduction 3

2. The Development of HRS 3

3. Different Connections between HRS and Business Strategy 5

4. Conclusion 7

5. Bibliography 8

1. Introduction

The field of Human Recourse Strategy (HRS) is a relatively new area of research and therefore a lot of different approaches and opinions exist. With the emergence of different schools, approaches and frameworks the gap between the academic world and the one of managers and their businesses widened up. Therefore, Wright and McMahan (2001, p.50) suggest the need for a good theory, which goes in line with the business strategy field where Elfring and Volberda (2001) see the need for synchronizing the diverse ideas which have developed (2001). 

To get the whole picture I will first illustrate the historical background and the value of Human Recourse Strategy (HRS), then go on to the different approaches of HRS and also examine if these approaches are rather a plan, an outcome or a process. Finally, I will conclude with an own perspective on the HRS field.

2. The Development of HRS

During the 70’s it was stated that “corporate planning” would have to involve all parts of an enterprise (e.g. Marketing, Finance, Human Resources) (Johnson and Scholes 2002). This was the time for HRM to gain more and more importance, also in top-management levels. Especially when the Japanese market took off the American companies wanted to identify the reason for their competitor’s business success (Mabey, Salaman and Storey 1998, p.37). Managers figured out that loyalty, commitment and responsibility were the driving factors. Soft factors like knowledge, skills and organisational culture (Miles and Snow 1978 in Segal-Horn 1998) gained importance and shook the former economically focused strategy-research field to the core. In the early days of HRS, management efforts centred on increasing flexibility; they have recently moved to increasing work output through re-engineering and downsizing, but flexibility remains a values objective (Mabey, Salaman and Storey 1998). When business became an even more complex environment the emergence of HRS can been see as an attempt by HRM to become more integrated in the HRS – Plan, Outcome or Process strategic management. When the term competitive advantage came up Schuler and Jackson (1988) discovered that organisations which follow different business strategies also follow different HRS.

The research focused now on how managers could adapt or integrate the HRS into the business strategy of a firm. Two major approaches (which are explained in following chapter) arose, the Universalistic Approach and the Contingency Approach, which are still competing against each other. Only in the last years when the strategy research area opened up to the Resource Based View, HRS had the chance to shift into the centre of the strategy research field. “I believe we are in a war for talent. […] Let′s face it — talented employees are the lifeblood of any successful organization. To remain competitive in the global marketplace, governments must do more to recruit the best and brightest, and then RETAIN them.” (Speech by Janice Lachance 2000) Statements like this one show us that the RBV not only created the missing link between the traditional strategy research and the HRS research (Barney 1991) but with the outlook of the emergent Knowledge Based View the two fields might become one in the future. The following paragraph illustrates the financial value of HRS and what the reasons are for a company to focus on a good running HRS.

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