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Strategy and Human Resource Management 3rd Edition by Peter Boxall & JohnPurcell
Chapter 1 till 9 & 11
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
Chapter 1: The Goals of Human Resource Management
We are interested in how HRM affects the fundamental viability and relative performance of
organisations.
Defining Human Resource Management
a. An inevitable process in organisations; it is virtually impossible to grow business or
maintain it without employing people. Longstanding firms may have to lay off people,
in order to survive.
b. Managing work and people; HRM encompasses the management of work and the
management of people to do the work. This includes both individual and collective
dimensions.
c. Involving line and specialist managers; HRM is not simply the aspects where HR
specialists are involved, but the totality of the firm‟s management of work and the
people.
d. Building individual and workforce performance; HRM is about building both human
capital (what individuals can and will do that is valuable to the organisation) and
social capital (relationships and networks among individuals and groups that create
value for the organisation).
▪ If managers want to enhance individual performance, they need to influence
individual ability (A), motivation (M) and the opportunity to perform (O). P =
f(A,M,O). However this is not only affected by HRM, but also through
incentives, work processes and the wider organisational environment.
▪ If managers want to enhance collective performance, they need to influence
organisation, capabilities and attitudes (trust, commitment). But also here
plays the wider organisational environment a role.
e. Incorporating a variety of management styles and ideologies; there is no „one best
way‟ to compete in markets and organise the internal operations of the firm.
f. Embedded in industries and societies; HRM is affected by industry differences (craft,
machine-tending, assembly-line and continuous-process technology) and differences
between societies (like infrastructure, education, political and justice system etc.).
What Are the Goals of HRM?
Goals are often implicit and vague, therefore it helps to analyse the goals of HRM in terms of
two broad categories: economic and socio-political goals.
Economic goals Socio-political
Static Cost-effective labour Social legitimacy
To achieve economic viability = Firms are economic actors but they
generating a return on investment that operate in societies, in which there are
its shareholders consider „acceptable‟ laws and expectations for how people
, or which meets the obligations it has should be treated in the workplace.
to its bankers and other lenders. There „Institutional Perspective’ =
are 4 fundamental conditions: organisations are influenced by a
1. Products or services must range of expectations in wider
fulfil market demands of an society. There are 3 pillars of
economically worthwhile institutions:
group 1. Regulative (legal rules)
2. Stabilise a production system 2. Normative (social values and
that delivers these promised norms in the workplace)
products or services 3. Cultural-cognitive (national
3. The system needs to be cost- culture)
effective
4. Capital is needed to make it
possible
Dynamic Organisational flexibility Managerial power
Change is inevitable and so is an The tendency of management is to
element of flexibility to remain viable enhance its power base, something
over time. which can have both positive and
• Short-run responsiveness: negative consequences for the
• Numerical flexibility organization.
• Financial flexibility
• Functional flexibility
• Long-run agility
• Internal capacity to change
quite radical (more
powerful and ambiguous)
Human resource advantage (elite or
egalitarian)
Hard-to-imitate capability through the
special quality of its human resources
1. Human Capital Advantage;
which a firms enjoys when it
employs more talented
individuals than its rivals
2. Organizational Process or
Social Capital Advantage;
which occurs in those firms
that have developed superior
ways of combining the talents
of individuals in collaborative
activities.
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
Strategic Tensions and Problems in HRM
The strategic management of work and people in the firm inevitably involves management
wrestling with „strategic tensions‟ and problems, including trade-offs between employer and
employer interests.
Key tensions and problems that management faces:
▪ The problem of labour scarcity
, • Firms do not only compete in product markets but also in labour markets; large
well-resourced and well-recognised dominate the labour markets.
• Labour scarcity is a multi-layered problem: it can cause severe problems at
organisational, industry and societal levels.
▪ The problem of labour motivation or control
• The labour contract is „indeterminate‟ (risk)
• Motivational challenges like collective action and high levels of individual
resistance can affect management‟s legitimacy, depress productivity and threaten
the firm‟s viability.
▪ Change tensions in labour management
• The most resilient firms are those which can evolve a clever balance between
stability and flexibility while maintaining employee trust and confidence.
▪ Tension between management power and social legitimacy
• Establishing an appropriate social order depends on management accepting some
constraints on its power.
• A third party can be a solution.
▪ Complexity and politics in management
• Complexity grows as organisations grow and as they become more diverse.
• Politics and power within management create conflicts.
▪ Variations in institutional support and societal resources
• Firms are not masters of their own destiny in HRM even if managers perceive the
issues well and want to act effectively. It is influences by the resources in the
environment.
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
Chapter 2: Strategy and the Process of Strategic Management
Strategy is the set of strategic choices that is revealed in the characteristic ways it behaves. It
is not a formal documents setting out an organisation‟s goals and initiatives over a defined
time period.
• Strategy is both our goals and desired ends (what we intend to achieve) and our
means (how we intend to go about it).
• In strategy there should be a clear distinction between critical or strategic issues
involved in running firms successfully and those which are of lesser significance.
Strategic problems
1. The problem of viability; strategy is something that is critical to survival.
• There are 4 necessary elements in a viable business model:
a. Marketing: products or services that target a profitable set of customer needs.
b. Production system: the technology/ know-how and operational processes that
reliably deliver the promised value to customers.
c. Human resource management: recruitment, retention and motivation of people
with the relevant knowledge and skills, employed at an affordable cost.
d. Funding: the necessary financial backing to pursue these business goals.
, Two critical principles about the role of HRM in a firm‟s strategy:
1) HRM is one of the necessary elements in business success.
2) HRM should interact with marketing, production and funding, and the other way
around.
The problem of viability is the most fundamental strategic problem facing the firm. It is an
interactive and dynamic set of concerns involving marketing, production, HRM en finance.
There are critical choice about goals and means in each of these functions, and in how they fit
together, which make or break a business. A viable business model is one which puts these
pieces together in a profitable and sustainable way.
2. The problem of sustained advantage; strategy is a relatively consistent pattern of
superior returns for its shareholders in imperfect competition.
• One can expect to find a blend of similarity and difference in a detailed analysis of
business strategies in any industry.
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
The strategies of firms
Strategies of firms are their particular attempts to deal with the strategic problems they face.
The very best strategies are those which reach beyond the problem of viability to master the
„second order‟ problem of sustained advantage.
• A set of strategic choices about ends and means, with „outward‟ and „inward‟
elements, involving all the key dimensions of business: marketing, production,
human resource management and finance, constrained by competitive forces.
Emergent strategy = a set of actions, or behaviour, consistent over time, a realized pattern that
was not expressly intended in the original planning of strategy.
„Configurational’ or gestalt perspective = a configuration or pattern of elements so unified as
a while that it cannot be described merely as a sum of its parts.
Business strategy = the system of the firm‟s important relationships (customers, suppliers,
employees, investors and regulators).
The process of strategic management
Strategic management is the process of strategy making: of forming and, if the firm survives,
of re-forming its strategy over time.
Two ways why strategic decision making is difficult:
1) Human cognition: human beings are irrational (example: attribution error) and a
subject to „bounded rationality‟.
2) Organisational politics: strategic decision making is affected by power issues and
personal interests.
The role of HRM in improving strategic management processes
Strategy and Human Resource Management 3rd Edition by Peter Boxall & JohnPurcell
Chapter 1 till 9 & 11
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
Chapter 1: The Goals of Human Resource Management
We are interested in how HRM affects the fundamental viability and relative performance of
organisations.
Defining Human Resource Management
a. An inevitable process in organisations; it is virtually impossible to grow business or
maintain it without employing people. Longstanding firms may have to lay off people,
in order to survive.
b. Managing work and people; HRM encompasses the management of work and the
management of people to do the work. This includes both individual and collective
dimensions.
c. Involving line and specialist managers; HRM is not simply the aspects where HR
specialists are involved, but the totality of the firm‟s management of work and the
people.
d. Building individual and workforce performance; HRM is about building both human
capital (what individuals can and will do that is valuable to the organisation) and
social capital (relationships and networks among individuals and groups that create
value for the organisation).
▪ If managers want to enhance individual performance, they need to influence
individual ability (A), motivation (M) and the opportunity to perform (O). P =
f(A,M,O). However this is not only affected by HRM, but also through
incentives, work processes and the wider organisational environment.
▪ If managers want to enhance collective performance, they need to influence
organisation, capabilities and attitudes (trust, commitment). But also here
plays the wider organisational environment a role.
e. Incorporating a variety of management styles and ideologies; there is no „one best
way‟ to compete in markets and organise the internal operations of the firm.
f. Embedded in industries and societies; HRM is affected by industry differences (craft,
machine-tending, assembly-line and continuous-process technology) and differences
between societies (like infrastructure, education, political and justice system etc.).
What Are the Goals of HRM?
Goals are often implicit and vague, therefore it helps to analyse the goals of HRM in terms of
two broad categories: economic and socio-political goals.
Economic goals Socio-political
Static Cost-effective labour Social legitimacy
To achieve economic viability = Firms are economic actors but they
generating a return on investment that operate in societies, in which there are
its shareholders consider „acceptable‟ laws and expectations for how people
, or which meets the obligations it has should be treated in the workplace.
to its bankers and other lenders. There „Institutional Perspective’ =
are 4 fundamental conditions: organisations are influenced by a
1. Products or services must range of expectations in wider
fulfil market demands of an society. There are 3 pillars of
economically worthwhile institutions:
group 1. Regulative (legal rules)
2. Stabilise a production system 2. Normative (social values and
that delivers these promised norms in the workplace)
products or services 3. Cultural-cognitive (national
3. The system needs to be cost- culture)
effective
4. Capital is needed to make it
possible
Dynamic Organisational flexibility Managerial power
Change is inevitable and so is an The tendency of management is to
element of flexibility to remain viable enhance its power base, something
over time. which can have both positive and
• Short-run responsiveness: negative consequences for the
• Numerical flexibility organization.
• Financial flexibility
• Functional flexibility
• Long-run agility
• Internal capacity to change
quite radical (more
powerful and ambiguous)
Human resource advantage (elite or
egalitarian)
Hard-to-imitate capability through the
special quality of its human resources
1. Human Capital Advantage;
which a firms enjoys when it
employs more talented
individuals than its rivals
2. Organizational Process or
Social Capital Advantage;
which occurs in those firms
that have developed superior
ways of combining the talents
of individuals in collaborative
activities.
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
Strategic Tensions and Problems in HRM
The strategic management of work and people in the firm inevitably involves management
wrestling with „strategic tensions‟ and problems, including trade-offs between employer and
employer interests.
Key tensions and problems that management faces:
▪ The problem of labour scarcity
, • Firms do not only compete in product markets but also in labour markets; large
well-resourced and well-recognised dominate the labour markets.
• Labour scarcity is a multi-layered problem: it can cause severe problems at
organisational, industry and societal levels.
▪ The problem of labour motivation or control
• The labour contract is „indeterminate‟ (risk)
• Motivational challenges like collective action and high levels of individual
resistance can affect management‟s legitimacy, depress productivity and threaten
the firm‟s viability.
▪ Change tensions in labour management
• The most resilient firms are those which can evolve a clever balance between
stability and flexibility while maintaining employee trust and confidence.
▪ Tension between management power and social legitimacy
• Establishing an appropriate social order depends on management accepting some
constraints on its power.
• A third party can be a solution.
▪ Complexity and politics in management
• Complexity grows as organisations grow and as they become more diverse.
• Politics and power within management create conflicts.
▪ Variations in institutional support and societal resources
• Firms are not masters of their own destiny in HRM even if managers perceive the
issues well and want to act effectively. It is influences by the resources in the
environment.
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
Chapter 2: Strategy and the Process of Strategic Management
Strategy is the set of strategic choices that is revealed in the characteristic ways it behaves. It
is not a formal documents setting out an organisation‟s goals and initiatives over a defined
time period.
• Strategy is both our goals and desired ends (what we intend to achieve) and our
means (how we intend to go about it).
• In strategy there should be a clear distinction between critical or strategic issues
involved in running firms successfully and those which are of lesser significance.
Strategic problems
1. The problem of viability; strategy is something that is critical to survival.
• There are 4 necessary elements in a viable business model:
a. Marketing: products or services that target a profitable set of customer needs.
b. Production system: the technology/ know-how and operational processes that
reliably deliver the promised value to customers.
c. Human resource management: recruitment, retention and motivation of people
with the relevant knowledge and skills, employed at an affordable cost.
d. Funding: the necessary financial backing to pursue these business goals.
, Two critical principles about the role of HRM in a firm‟s strategy:
1) HRM is one of the necessary elements in business success.
2) HRM should interact with marketing, production and funding, and the other way
around.
The problem of viability is the most fundamental strategic problem facing the firm. It is an
interactive and dynamic set of concerns involving marketing, production, HRM en finance.
There are critical choice about goals and means in each of these functions, and in how they fit
together, which make or break a business. A viable business model is one which puts these
pieces together in a profitable and sustainable way.
2. The problem of sustained advantage; strategy is a relatively consistent pattern of
superior returns for its shareholders in imperfect competition.
• One can expect to find a blend of similarity and difference in a detailed analysis of
business strategies in any industry.
students for legal practice, with specializations that may include constitutional law, criminal law, corporate law, human rights law, or intellectual property law.2.2. Structure of Law ExamsLaw
The strategies of firms
Strategies of firms are their particular attempts to deal with the strategic problems they face.
The very best strategies are those which reach beyond the problem of viability to master the
„second order‟ problem of sustained advantage.
• A set of strategic choices about ends and means, with „outward‟ and „inward‟
elements, involving all the key dimensions of business: marketing, production,
human resource management and finance, constrained by competitive forces.
Emergent strategy = a set of actions, or behaviour, consistent over time, a realized pattern that
was not expressly intended in the original planning of strategy.
„Configurational’ or gestalt perspective = a configuration or pattern of elements so unified as
a while that it cannot be described merely as a sum of its parts.
Business strategy = the system of the firm‟s important relationships (customers, suppliers,
employees, investors and regulators).
The process of strategic management
Strategic management is the process of strategy making: of forming and, if the firm survives,
of re-forming its strategy over time.
Two ways why strategic decision making is difficult:
1) Human cognition: human beings are irrational (example: attribution error) and a
subject to „bounded rationality‟.
2) Organisational politics: strategic decision making is affected by power issues and
personal interests.
The role of HRM in improving strategic management processes
