3.1 Generic perspectives on strategy

OUTCOMES Profit-maximizing

PROCESSES Classical Evolutionary

Deliberate Emergent

Systemic Processual

Pluralistic

Figure 3.1 Generic perspectives on strategy (Source: Whittington (1993). Reprinted with permission of Thomson Publishing Services).

outcomes of strategy and on the other hand the processes by which the strategy has been made. Figure 3.1 gives a schematic representation on the generic perspectives on strategy.

The vertical axis indicates whether a strategy is aimed at producing prof itmaximizing outcomes or also allows for more diverse/pluralist outcomes. The horizontal axis focuses on the way in which the strategy process takes place with, on the one hand, deliberate calculation and reasoning and, on the other hand, a more emergent approach based on coincidence, muddling through, etc. (Whittington, 1993). Based on Paauwe (2004) we link the different approaches of Whittington to relevant aspects of strategic HRM.

The classic approach considers strategy as a rational process of deliberate calculation and analysis, designed to maximize long-term advantage. In the HRM area this approach simply implies that the role of the HR-function is to maximize the contribution of human assets in order to achieve corporate goals. It encompasses approaches by which we attempt to link individual attitude and role behaviour to organizational performance in a logical and rational manner (see, for example Huselid, 1995; Koch and McGrath, 1996). This approach is especially popular in the US in order to justify that the chief HRM off icer should have a seat on the board, by demonstrating that people make a difference to prof it and generate added value.

The evolutionary approach considers businesses ‘... like the species of biological evolution: competitive processes ruthlessly select out the f ittest for survival’ (Whittington, 1993: 3–4). It is the market that decides and not the manager. The only thing the manager can do is to adapt the organization as optimally as possible to the demands of the market place. If this is not done, the

Strategic HRM: A critical review 41 organization will not survive. In the f ield of HRM we recognize this perspective in HR managers who want to keep their human resources as flexible as possible, embarking on core/ring strategies (Atkinson, 1984) and making use of transaction cost economics in order to decide on make or buy issues. Make or buy, both with respect to the employees themselves and in connection with the kind of HRM activities that should take place in-house or should be outsourced and/or delegated to line management or to autonomous work groups.

In the processual approach, strategy emerges in small steps based on a process of learning and adaptation. Related to HRM this approach refers to the incremental way in which strategic assets (among which patents, knowledge, culture, and organizational routines) gradually develop over time into core competences. The main role of the HRM function is to develop and maintain people-related competences over time. The HRM function can also be seen as responsible for contributing to the social fabric, which builds up over the long term, encompassing the less planned and intentional processes of skill formation, tacit knowledge, willingness to change and spontaneous co-operation among the members of the organization.

In the systemic approach, strategies reflect the social system in which they are enacted. Emphasizing the social embeddedness of economic activity, the objectives and practices depend on the particular social system in which strategy making takes place (Whittington, 1993). Social systems can be found at the national level, the branch or industry level, or in a certain region. Networks, in which economic activity is embedded, may include families, the state, professional and educational background, religion and ethnicity and these very networks influence the means and ends of action. The systemic perspective is very important, especially from an HRM point of view. It refers to the wider social context of the organization and how this influences and shapes HRM policies and practices. These settings differ by country, by branch of industry and even by organization. This perspective implies a plea for embracing the context of the organization, not only with respect to culture, legislation, institutions, etc., but also with respect to its technological and knowledge context (for example Silicon Valley or web based companies).

After having given an overview of strategy approaches and their implications for strategic HRM, we will then explain some traditional models used in strategic HRM.

Traditional approaches in strategic HRM In describing the traditional approaches used in the area of strategic HRM we need to distinguish between process and content models. The process of strategy refers to the way strategies come about, whereas the content is concerned with the product of strategy in terms of the ‘what’ of strategy. In addition to this wellknown distinction, de Wit and Meyer (1998: 5–6) also distinguish the context of strategy, which refers to the set of circumstances in which both the process and content of strategy are shaped, being developed or simply emerge.