The HRM Perspective: In the Context of Strategic Integration, Internal, and External Pressures - Essay Example

?The HRM Perspective: In the Context of Strategic Integration, Internal, and External Pressures Summary The paper presented several HRM challenges and the nature thereof. These challenges include strategic integration (i.e., vertical and horizontal integration), internal, and external pressures. The strategic integration focus on the features of each integration as well as the existing links between the HRM unit, corporate management, and other business units. Perusing through these links offered insight in the extent of support and contribution coming from the HRM’s components towards various organisational needs. The internal and external pressures faced by the HRM unit are depicted through the chosen case organisation, Chrysler LLC. The identified keys to understanding these external pressures include foresight, sensitivity, receptivity, and organisational culture. At the end of the discussions, recommendations are offered to present the viability of positive results out of these organisational-environmental clashes. Contents Introduction 3 Methodology 4 First Theme: Strategic Integration 4 Second Theme: Internal Pressure 7 Third Theme: External Pressure 11 Conclusion and Recommendations 12 References 15 Introduction The human resource management or HRM has long been recognised as a struggling support unit -- expanding its functional developments and covering a wide variety of talents. However, these developments have been facing several challenges; these challenges spawned from both the HRM unit and the organisation by which it offered support services. While the unit has to work hard in proving that it got what it takes to be a strategic partner, the organisational culture in particular has to overcome the previously formed norms about the HRM function. These norms’ prejudiced nature gives off that constricting effect that disables the HRM unit to function at optimal. Indeed, any change introduced to an organisation, be it unit specific, or wholly integrated, long-term or short-term, requires an effective slurring of the organisational culture. Ignoring organisational culture, or making false assumptions (i.e., organisational culture can be effectively shaped by changes alone and not require intervention), are a few of the most ill-afford mistakes committed by change-makers within the organisation. This happens to be the case for organisations that do not recognise organisational culture as its major framework. Thus, this paper aims to present the HRM perspective dedicated to illustrate the unit’s function role in the strategic integrations of vertical and horisontal integration and interaction with the internal and external pressures. The impacts of the three specific challenges (i.e., the HRM application of strategic integration, and the HRM interaction with internal and external pressures) hurled against the HRM unit presented sufficient evidences for the necessity of offering a HRM perspective in the context of these three. Methodology This paper shall focus on three themes: strategic integration, internal, and external pressures. The tackling of these three shall also be in accord of the predominant role of the HRM function in the organisation. Since this exploration implicates the identification of several problems, apart from deriving at conclusions, this paper shall offer recommendations and insights. These recommendations shall also be in the form or nature of the HRM function and practices. The strategic integration-focus shall be tackled through a review of the features of the vertical and horizontal integration. Eventually, the links between the HRM components, the corporate strategy and goals, and the interrelated business units will be discussed to expound the extent through which these HRM components are standardised (i.e., for consistency purposes) to support and contribute to the achievement of organisational strategy and goals. On the other hand, the pressure-focus shall be explained in a realistic and applicative detail through the use of a case organisation. For this paper, the case organisation to be used is the Chrysler LLC. For the internal pressure, the focus shall lie on Chrysler’s merge eras -- the DaimlerChrysler and Fiat-Chrysler merges. The choice of such focus was substantiated by the fact that the HRM unit of Chrysler faced significant HR issues during these eras. Though merges always offer such HR issues, particularly, intercultural and interorganisational dilemmas, Chrysler’s handling of these issues benchmarked the complexity of HR practices in the auto-industry’s context. First Theme: Strategic Integration In light of the challenges hurled on the HRM development is the application of strategic integration. As an effective, strategic partner, the corporate leaders want to see the capacity of the HRM unit to cause effect; the extent of such effectuation is substantiated by the two core concepts of strategic integration -- vertical and horizontal integration. These two concepts not only explore the existing links between the HRM unit, the corporate strategy, and the other interrelated business units, but tend to concretise these links through the efficient utilisation of such links. Moreover, the corporate bosses are enamored to see the ability of the HRM unit to recognise and exploit opportunities; this foresight and sensitivity signals the sustainable capability of the HRM unit. The measures through which the HRM unit has to pursue to guarantee its respected identity as a strategic partner is not limited to those mentioned above. Evidently, it is not as easy to actualise and implement these measures as it is to identify them head-on. Several business units within the organisation have unique links, channels, or methods of establishing connections with the corporate management and with other business units. While organisational charts simplify the visualisation of such connections, in practice and interaction, these connections do not efficiently materialise. Though departmental efficacy is virtually high, that efficacy with regard the connection of one business unit with two or more units seldom reaches average. This may be partly because only particular individuals of such department or unit handle these interactions, the rest of the folks have no idea how their work affects the others’ work. That is why the corporate leaders, apart from other business units, need to see the HRM unit’s capability to effectively establish and proactively exploit its links. The HRM unit’s links are better viewed through the strategic concepts of vertical and horizontal integration. McCourt and Eldridge (2003, p.29) referred to vertical integration as the “links between the HRM activities and the organisation’s strategy,” while the horizontal integration as the “links between the HRM activities themselves.” Thus, in the HRM’s strategic campaign, the identification of such links is considered the first step in expanding its functional roles apart from breaking internal barriers. Moreover, this puts a heavy hand in the shoulders of HR professionals; evidently, “Achieving both vertical and horizontal integration requires that HR professionals work in partnerships with line managers and employees” (Schuler & Jackson, 2007, p.216). Establishing and working such partnerships is easier said than done. While this is easy for an organisational culture having a collective culture, this becomes stressful (if not tackled effectively) for the independent and highly individualistic organisational culture and environment. Vertical Integration. McCourt and Eldridge (2003, p.28) described the process by which vertical integration works on the HRM function as a ‘translation’ process -- “the organisational strategy is first ‘translated’ into a human resource strategy, which is then ‘translated’ into the different human resource activities, which are its practical manifestation.” Evidently, their interpretation captures the essence of the travel of information and process in between the HRM unit and the corporate management. Because of the barriers inherent to such organisational structures and definitions, there is a need to ‘translate’ or ‘transform’ the corporate strategy and goals to HRM’s everyday operations. This guarantees the indispensable contribution of HRM in the organisation’s response to challenges, as well as the development of core competencies (Newlands & Hooper, 2009). Horizontal Integration. This strategic integration was proffered by McCourt and Eldridge (2003, p.29) as “the way that the conduct of one HRM task affects the conduct of another.” With the nature of interrelation among particular business units, it is necessary to achieve a consensus on how a single task is to be handled by several units. In other words, horizontal integration calls for the standardisation of “effective and efficient HRM practices” (Newlands & Hooper, 2009, p.185). MacDuffey (1995) suggested the use of “HR practice bundles” to optimally achieve HRM’s horizontal integration (cited in Newlands & Hooper, 2009, p.185). Thus, while there are unique HRM practices, a ‘practice bundle’ is developed to permit the flexible utilisation among interrelated business units. In general, this ‘practice bundle’ should consist of an “appropriate ‘mix’ of internally consistent HR practices” (Huselid, 1995; Wood, 1995 cited in Farnham, 2010, p.18). Overall, Marchington and Wilkinson (2005, p.28) strongly asserted the need for these two strategic integration concepts to be “strengthened” to “maximise HR contribution” and “minimise the likelihood of conflicting messages.” The extent of HR components’ contribution to the organisation lies in the effective ‘translation’ of corporate goals to everyday HR operations and standardisation of particular HRM practices. Second Theme: Internal Pressure Organisational pressures also play an active role in influencing the flow by which the HRM unit operates, as well as how the unit is viewed in the context of interacting with these pressures. These pressures consisted of the internal and external pressures. Internal pressures are those existing within the walls of the organisation; it comes from other business units, and its impact is immediately felt from the nearest or the closest business unit of interaction. Though this internal pressure work close within the organisation, it does not mean that impacts are automatically contained. In fact, the impacts of such internal pressures on the HRM unit tend to get spilled through the external environment and though discretion is practiced, employee morale, nevertheless, sustains an irrevocable wound. In turn, this wound impairs the HRM unit and, therefore, disables the organisation from optimising its competitive edge. The HRM unit, in general, is not new to internal pressures. In fact, these pressures just started to increment as soon as this business unit pioneered its developmental push. There is pressure to strengthen its existing HRM support services, as well as concretise its strategic claim. Internal pressure look simple when viewed collectively or holistically; apparently, a per basis scenario on HR services had long pointed out that this is not the case. In other words, the complexity of function and interaction is the characteristic nature of the HRM unit. However, each organisation offers a different color when it comes to these internal HR pressure. One example of such unique and complex internal struggle was seen in one of Detroit’s Big Three, the Chrysler LLC. Chrysler’s struggle had been marked by what is considered to be “the most dire” of its periodic near-death experiences” (The New York Times, 2012, Overview section). Undergoing countless, delirious losses, it may be safe to deduce that this organisation is included in the list of organisations that did not have the foresight to watch the consumer trends and relied heavily on its ‘competitive’ edge. However, its repeated resurrection attests to the hard work people in Chrysler put to save the organisation. In fact, Reid Bigland of Chrysler Canada said that “morale in the company – and among dealers – is very good ... the repayment of government loans “in full and with interest” six years ahead of schedule, 16 consecutive months of sales increases and announcement of a profit” (Pegg, 2012). DaimlerChrysler merge. The internal pressure between certain business units and the HRM unit sparked after the DaimlerChrysler merge. Evidently, this merge involved two interorganisational cultures -- German and American. The merge-based pressure on the HRM unit is divided to three temporal sections: the after-merge phase or the beginning phases, integration planning phase, and the post-merger integration phase. Each phase was marked by conflicting pressures that hammered on Chrysler HRM’s capabilities. Kuhlman and Dowling’s (2005, p.55) tale of the internal pressure brought about by the merge started by detailing their observations: “HR issues continued to play a minor role,” and since the merge was dominantly plagued of legal and financial aspects, secrecy was practiced, and, information was withheld off the corporate HR directors. Internal pressure did not actually start in this phase; however, because of the events’ consequential nature, this phase is considered a contributing factor to the occurrence of HRM unit’s internal pressure. Next in the line is the integration planning phase, which was marked by the primary concern in remuneration problems: “the German top managers earned much less than their American counterparts” (Kuhlman & Dowling, 2005, p.55). The HRM’s subsection, which specialised on this issue, comes up with a solution -- salary raise for those German top managers handling international functions (Kuhlman & Dowling, 2005). However, the internal pressure did not lie on this remuneration issue; the secondary concern, which received less attention, was the recognition of the existing cultural issues (Kuhlman & Dowling, 2005). The last triggering phase, the post-merger integration phase, was the actualisation of the organisation pressure on the HRM unit. Kuhlman and Dowling (2005, p.55) indicated the significant lost of “about 20 top executives, especially from the Chrysler side” after the first two years of the merge. Interestingly, the admission of cultural problems in the workplace came up only at this stage; these problems included ”inappropriate humor, political correctness, perceived excessive formality, sexual harassment, private relationships and documentation of meetings” (Kuhlman & Dowling, 2005, p.55). Evidently, solving these cultural problems was not a top priority. Moreover, after the problem fully surfaces did it become easy to blame and pressure the HRM unit in solving these cultural issues. Chrysler HRM inevitably faced this internal pressure through its final attempt: intercultural training and management exchange programs (Kuhlman & Dowling, 2005). Fiat-Chrysler merge. With Chrysler’s rapport on its internal, organisational culture, this brand new, Italian-American merge signaled a continuation of battle, only with a different ally. The pressure on the HRM unit lies on its ability to aid the organisation on battling its old-age enemy -- the deeply Chrysler-rooted bad management practices (Clark, 2011). These bad practices include the “incentives paid to customers to entice them to buy cars,” and “channel stuffing,” which involved “building too many cars and then pressuring dealers to give discounts or even using strong-arm tactics to take more cars than they could easily sell” (Clark, 2011, p.271). The pressure on the HRM unit implicates to what or which roles the unit will take to boost this battling goal of the Chrysler company. In the HRM perspective, these internal pressures (i.e., solving cultural-work issues) spawned in the exclusion of the HRM unit in the overall, dominant operations; this exclusion was blatant in the after-merge or beginning phase. The organisation did not recognise HRM’s potential roles, nor did Chrysler’s HRM unit asserted these roles. Organisational merges like this offered that useful insight; that “Maximising the value of a deal requires that the human side of organisational change must also be managed well” (Kay & Shelton, 2000 cited in Schuler, et al., 2004, p.96). Third Theme: External Pressure On the other hand, the external pressure spawns from the direct external, environment sectors. Collectively, these environment sectors are considered the organisation’s stakeholders. In other words, the organisation’s operations have a resounding impact in these stakeholders’ welfare. The HRM unit gets into the picture when some of the HRM-organisation activities affect the stakeholder or external environment. Unlike the internal pressures, external pressures are highly unpredictable, and, thus, costs so much to control (i.e., and that is partial control because full control is theoretically and realistically impossible). However, tackling external pressure is, nevertheless, as important as handling internal pressure. This is because the external pressures have a way of shaping how the public, specifically, the consuming public, view the organisation. In other words, this particular pressure holds the organisation’s reputation -- either in favor, or in jeopardy. Chrysler’s external pressure was pushed primarily by the media sector after the company decided on putting the Public Relations (PR) unit under the wing of HRM. Cobb (2008) went on to expound that this move was “seen by critics as the relegation of public relations into a relatively slow, inward-looking environment where there is little understanding of how public relations can shape a company’s public image.” However, Chrysler’s HRM chief, Nancy Rae, asserted that the move was “part of the culture transformation” (Cobb, 2008, “It was no surprise” section). This culture introduction did not appease the critics. For instance, Edward Lapham, Automotive News editor, elaborated how reporters get frustrated by the lack of transparency and change of attitude of Chrysler (Cobb, 2008, “Not just a mouth” section). Indeed, much of literature had presented arguments about that ‘thin line’ between PR and HR. Williams (2010) pointed out the HR professional’s ‘can-do’ attitude and confidence towards the PR function, which was backed by HR’s stronger academic knowledge. Meanwhile, Anthoine (2008) claimed the personality-culture of the two units as not being compatible -- HR’s ‘buttoned down’ personality versus PR’s ‘creative’ personality. While there are those opposing the unlikely union of the two business units, there are also those who are pushing integration. Juricic and Momcilovic (n.d.) implicated that it is “this strict classification and separation that is negatively affecting the integration process.” Moreover, Meaning Business (2010) pointed out that “Territoriality and an inability to adapt will be the death of any professional species that is unable to continue to transform: to integrate, collaborate and create new value in business.” Overall, the media pressure tends to dictate how Chrysler treats the two functions and influence the view of the HR professional in its PR-efficacy. Conclusion and Recommendations In the context of these HR challenges, which is inclusive of the strategic integration, internal, and external pressures, foresight and sensitivity among the HRM units, the corporate management, and the other business units are necessary ingredients for optimising the strategic, operational benefits the HRM unit could offer. Vertical integration required a receptive HRM unit to be able to catch on the organisational strategy and goals -- in terms, contextual definitions, practices, implementation, and overall consistency. On the other hand, horizontal integration requires receptivity in all business units involved. It also requires feedback to pinpoint problems in real-time, as well as to develop a flexible and applicable HRM ‘practice bundles’ for all of the involved business units. Thus, facing a HRM-focused integration -- be it vertical, horizontal, or both (simultaneous), requires the receptivity not just from the HRM unit alone but from all business units directly impacted by this integration’s implementation. In HRM’s facing of internal pressures, it is evidently better if the pressure is identified at its potential levels. In Chrysler’s case, and in almost all merge cases, the merge has long been known to introduce such cultural work conflicts. When these pressures are identified early, pre-cautions are developed and implemented. Moreover, people knew what to avoid when they knew the nature and source of such enemies -- pressure from cultural differences and limited international integration. The same can be said for handling external pressures. The little discomfort from the initial identification and reaction-planning for a forecasted pressure is relatively miniscule compared to the aggravation and mitigation costs of late, patch-up pressure-fixtures. Moreover, the unpredictable nature of external pressures should be sufficient enough to deploy strictly constrictive measures. The HRM unit, apart from all other business units, should practice that reflective routine of checking how every move could affect the external environment. If based from this initial assessment, the risks of such external pressure are considerable, and then it should be brought up in the table and assigned a high priority. References Anthoine, J., 2008. PR and HR: where’s the love? [Online] 5 March. Available at: http://plaintalk.typepad.com/blog/2008/03/pr-and-hr-wheres-the-love.html [Accessed 28 February 2012]. Clark, J., 2011. Mondo Agnelli: Fiat, Chrysler, and the power of a dynasty. Hoboken, NJ: John Wiley & Sons. Cobb, C., 2008. Driving public relations: Chrysler moves PR under the HR umbrella, spurs debate about where PR reports. Public Relations Society of America, [internet] 18 August. 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