3. 1. Executive Summary
• The purpose of the study was to examine empirically the
relationships or fit between types of business strategy
and HRM practices.
• Relationship between Human Resource management and
strategy have been studied from different perspectives.
• The results provides some evidence to support
a contingency approach to relationship between
strategy and HRM.
• Not many significant differences were found between
strategy and acquisition practices, companies with
innovation strategy invested more in HRM training
• Innovation, quality and cost have significant relation with
HRM
• Variable relationship between HRM(Dependent Variable)
and strategy(Independent Variable) .
4. Key Terms
• Human Resource Management(HRM),
• Strategy,
• Small and medium enterprises,
• Empirical Study
5. 3. Review of Literature
• From the beginning of 1980s , vast literature
emerged.(Devenna et al. 1981).
• The link between HRM and Firms strategy has
been further clarified with development of
Resource based Theory.(Prahalad et. al.1990.0).
• Success of firms depends on better management
of employees.(Sustainable competitive
advantage perspective),(Itami et al.1991).
• The relationship will be more closer.(Clark et
al.,1993)
6. • In general the relationship between company
strategy and HRM have been examined with
how and when HRM considered in strategic
process.(Dyer et al. 1993).
• Reactive and proactive approaches.
• Empirically, few studies have been done to
test connotations between the two,
• some of them focus on relationship between
one personnel practice and different types of
strategy(Balkin and Gomez 1990).
7. • Others analyze the relationship between one
business strategy and the set of HRM
practices.(Jackson et al., 1989).
• The third group of studies deals with the
relationship between different types of
strategy and supportive HRM practices.(Arvey
et al., 1994).
8. 4.Problem/Hypothesis
• Do Human Resource Management Practices
vary with business strategy?
• (What are the strategies followed by the
firms? (RQ 1)
• what are the HRM practices practised? (RQ2)
9. 5. Methodology
• Sample and Data collection
• Total firms 375 (has more than 25 employees).
• 200 valid responses were included.
• Rate of response was 53.33%.
• Structured questionnaire with close ended
questions was used as tool.
• Interview was conducted with the CEO of the
each firm.
• Pre-tested for content validity.
• Time for interview January-February 1996.
10. Methodology…….
• Steps:
• Determination of the Strategies followed by the
firms.
• Classification of HRM practices.
• Measurements:
• Firm Strategy through multi item scale was
employed rather than traditional paragraph
approach.
• A 5 point Likert scale was used.
• 12 competitive variables were developed for
factor analysis.
23. 7. Discussion and conclusions
• Three types of strategies were identified
Innovation, quality and cost.
• In regard to the relationship between acquisition practices and strategy
not many significant differences were found. Companies preferred
internal recruitments.
• Firms with innovation strategy preferred more temporary contracting.
• Company with innovation strategy invested more money on KSA of
employee.
• Promotional plans were found not to be usual practices.
• Most significant differences between types of strategy were detected in
relation to salary system more in innovation strategy.
• Some of the findings were similar to previous research findings.
• HRM practices and business strategy do not vary.
24. Critics
• Topology of sample size can not be
generalized in all cases.
• The non HRM factors also vary the links.
• Less dealing on how aspect and proactive
approach .
• Literature review limited(1990 onwards).
25. References
• Raquel Sanz-Valle , Ramon Sabater-Sanchez & Antonio, Aragon-Sanchez
(1999), Human resource management and business strategy links: an
empirical study, The International Journal of HumanResource
Management, 10:4, 655-671, DOI10.1080/095851999340323
