Relationship Between Business Strategy And Human Resource Management Strategy

Definition of Business Strategy

The following report has discussed about the different types of the theories and models that are clearly related to the strategic human resources management. The report aims to provide a clear understanding of the relation that exists in between the business strategy and the human resource strategy and also gives a detailed explanation of the vertical and horizontal integration of the strategic management across the organization. A detailed analysis and comparison based on the theoretical basis of the Human resource Strategy used in the following research has made the research more compact in nature. The second part of the report has dealt with the employee relations and its perspectives in an organization. Both the strategic Human Resources and Employment relations are a key element of the Human Resource management of the organization.

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Business Strategy can be defined as the particular course of action or the set of some decisions taken by the management of the company which helps to assist the entrepreneurs in the achievement of a set of different business objectives. The following plan can be defined as a plan by the management to create a stronghold in the competitive market and also achieve a strategical and competitive market position. The following is used to secure safety and security in the market, carry out the different kind of operations and also satisfy the customers and achieve the desired results in the business. The main intent of the management of the business to create the following business strategy are as follows;

  • Mobilizing the resources available in the business
  • Perceiving and utilizing each and every opportunities in the business
  • Directing efforts and behavior
  • Securing an advantageous position in the market

There are three different levels of business strategy which is followed by most of the organizations. They are as follows;

  • Functional Level Strategy
  • Corporate level Strategy
  • Business Level Startegy

Strategic Management of Human Resource refers to the linking of the Human Resources with the different kinds of strategic goals and objectives of the company. Such kind of special initiative helps to improve the present performance of the organization and also boost the productivity of the organization. The following also helps the management to improve the organizational culture to foster innovation, flexibility and the competitive advantage of the country. Strategic Human Resource management is the process to accept and involve the Human Resources function by means of HR activities like recruiting, selecting, rewarding and involving the employees into training and practical activities in the workplace. The presence of a strategic based Human Resource Management is important for the success of the business as because it helps the organization to maintain a proper environment in the workplace which in turn helps in development process of company.

The main relation that exists in between the practices of human resource and business strategies of a company are structured in different kind of ways. The main goal of the following alignment is to take the help of human capital as instrument to increase the amount of the assets and the profitability of the organization. This comes in the benefit of the stakeholders of the business. The recruitment and selection process of the organization is critical to the building of the productive workforce. The development of a human resource strategy for the recruitment and the selection of the perfect employees have a serious impact on the bottom line of the management of the organization. The maintenance of a workforce where the employees have the tendency to enjoy the high level of satisfaction and also the job security changes itself into a strategic and competitive workforce that is mostly necessary for the achievement of different kind of business goals. Apart from the above factors the major test of a particular relationship between the human resources and the overall business strategy is the quality that is maintained during the interaction process and that generally takes place between the executives of the human resource and the executives of other companies. The presence of a sound relation between the strategy of human resource and the strategy of the company is also necessary for innovation and development of a competitive advantage in the market.

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Definition of Human Resource Management Strategy

Vertical Integration is a competitive strategy by which the management of the company generally takes total control of the product by means of complete control in more than one or two more stages. The management of any company decides to opt for vertical integration to make sure about the total power on control over the manufacture the products of the company. Such integration also helps to control the total distribution process of the organization. The best example that suits the purpose of the following integration is owning the production of the raw materials and also owning the source through which the finished products are supplied to the end customers. Vertical integration helps to soften the supply chain of the business and makes the sales services and after sales services more efficient in nature. On the other hand there are different disadvantages of vertical integration. This includes the likes of the proper quality of goods supplied earlier by means of different external sources. It also makes it difficult for the organization to ensure the sustainability of the core competencies as it focus on the integration of the different kind of new units.

The horizontal integration on the other hand is the total acquisition of different kind of business strategies that are at the same level of the value chain in different or the same kind of industries. The best example can be an apparel business merging with or acquiring another apparel business in other places or markets outside the country. The bigger is the integration, the more is the profit for the company. The implementation and the use of the use of the horizontal integration in the company is helped to achieve a higher production level at a much lower cost. It also helps to gain power in the market and start business in new and large markets. The main disadvantage of using horizontal integration is based upon legal terms as a lot of legal activities have to be maintained by the company.

Maslow’s Model- Maslow’s Model provides a structured and comprehensive view of the human needs. It helps to identify and explain why the different people in the organization behave in a different manner (Armstrong, Michael and Stephen Taylor, 2014). According to, Brewster (2017) the theory also explains and identifies the reasons behind the motivating factors among the needs of the organization and the needs to be looked into by the managers when they want to be inspired by the subordinates in the workplace of the organization. There are different kinds of proposition such as the satisfied need is not the motivator of the behavior of the individuals. On the other hand  Boselie, Paul and Chris Brewster (2015) also highlights the need to focus more on the lower order than to emphasize on the upper tier or the management of the company. However, Maslow’s theory has also received widespread criticism on different points that have been addressed in the following theory. As said by, Cohen et al. (2016) the main idea of the theory clearly explains that the unsatisfied needs of a person generally leads to or motivates a satisfied need activates movement to a new need level and the need of the structures are laid and organized in a proper way along five different dimensions of growth. However, according to, Jacoby and Sanford (2018) this following idea is believed to be vague and inadequate in nature. Apart from this there is no solid evidence that while a need has been presented to show the strength of the need diminishes.

Relationship between Business Strategy and Human Resource Management Strategy

Herzberg’s Two Factor Theory- According to, McBride et al. (2015) the following theory can be said to as an extension of the Maslow’s Theory that is capable of creating a specific and precise content theory of the work motivation. The main results points out that the time when people talk about the feelings that are good and satisfied them they generally highlights features that are quite intrinsic to the job. On the other hand, Rees, Gary and Paul Smith (2017) says that when these people talked about discomfort while doing the job, they generally have the tendency to talk about the features that are extrinsic to the job.

AMO Theory- The AMO theory has been mainly accepted in HRM literature for explanation of the linkage between the human resources practice and the performance of the employees within the organization (Rees, Gary and Paul Smith, 2017). The following model is one of the most effective and structured frameworks that helps to provide a better and efficient understanding on the relationship between Human Resource Management and performance. In contrast to the other theories a study by Kramar (2014) it is seen that an experienced and skilled employee will have the tendency to perform better while on the other hand a motivated employee will have the tendency to walk the extra mile for success. In sharp contrast to the other two theories mentioned here, the AMO model has to be thoroughly understood before implementing it in the organization.

According to, Kramar (2014) the modern day organizations has shown a much higher degree of commitment towards the reinforcement of the different kinds of reward practices which are now aligned to the HR practices and the objectives of the organization for attracting, retaining and motivating the employees of the organization. The presence of effective reward practices helps to bring out the best in the organization as the employees feel motivated to work and provide their best performances to improve the productivity level of the companies and also be nominated for the role of the best performer. The study conducted by, knies et al. (2015) reward generally refers to monetary, non-monetary and psychological benefits for the employees of the organization. If the employees develop the belief that the company treats them fairly, they will tend to give their best efforts to perform and improve the current status of the organization. However the absence of fair treatment may lead to job dissatisfaction and ultimately lead to the decrease in the productivity of the company. In contrast a recent study by, Jacoby and Sanford, (2018) A new challenge that has come up in the workplace is the increasing diversity of the workforce. As because employee rewards are meant to motivate and reward both the permanent and the temporary employees, the managers and the supervisors will face huge challenge to deliver the perfect package that suits the needs of the employees accordingly.

The companies that opt for the reward management scheme must ensure to keep a tab on the cultural diversity present within the organization. Apart from this the organization must make sure to implement the best strategies that generally suit the demands of the people within the organization. The type of the reward system must be fixed after some rounds of discussion with the stakeholders and the management of the business firms.

Vertical and Horizontal Integration-Definition

Employee relation can be judged by three different perspectives which are as follows;

  1. Unitarist Perspective- The study by, (Jacoby and Sanford, 2018) says that in the following perspective the organization or the company is considered as an integrated and harmonious set of people with a particular loyal culture. The management of the organization attaches much importance to the mutual cooperation among each other and shares a mutual purpose. In addition to these the following perspective is similar to paternalism and therefore has a huge demand for the loyalty of all the employees of the organization. The management of the following organization is all beyond doubts and is the most effective and stable in nature.   
  2. Pluralist Perspective- On the other hand the study by, McBride et al. (2015) shows that the pluralist perspective is generally made up of different types of sectional groups. Each of the group has its own legal identity and loyalty and also their own goals and leaders. The management and trade unions are the groups in the pluralist perspective.
  3. Marxist Perspective- The following perspective can also be defined as the radical perspective and its main task is to identify and present the nature of the capitalist society in front of everyone (Boselie, Paul and Chris Brewster, 2015). The following perspective has the ability to recognize the inequalities that are in charge of the employment relationship. Conflict is generally perceived as inevitable and is solved by means of a collective process of bargaining.

The different perspectives that have been discussed in the above part have different types of approaches against conflict amongst the employees in the workplace. The unitary perspective conceives the term with a bad sense and generally presents three different reasons of starting conflict such as agitators, communication breakdown and interpersonal friction. Apart from this it does not refer to any kind of solution. On the other hand the pluralist approach refers to collective bargaining which is the way of tackling conflict. Apart from this it also has the capability to manage conflict in a proper and effective way.  The Marxist view is very radical in approach. From its point of view, the inevitability of conflict comes from the presence of inequalities of the powers caused by exploitation in a capitalism environment. This defines the difference from Unitarist perspective, the Marxist perspective and gives away different reasons of bringing about conflict.

The major parties to employee relations are mainly the individual employees and the managers in the organization. Apart from this there are also other kinds of stakeholders in the organization. Each of the mentioned parties have equal role to play in the development of the employee relations in the business. The managers and the supervisors of the organization have the tendency to see the following activities in terms of one or more than one activities. This includes the likes of;

  1. Sharing the decision making process with the employees of the organization
  2. Negotiating the terms and the conditions of employment with the employee representatives
  3. Creation and maintenance of the employee relations
  4. Obtaining of commitment from the employees working for the organization

The Trade Unionists tend to see the activities by means of;

  1. Regulation of relations with the other trade unions of the office or the company
  2. Improving the capability of the employees to have a strong influence on the different events in the workplace
  3. Collective bargaining with the employers on the terms and conditions of the employment
  4. Strong representation of the employees within the organization when there is a conflict with the management of the organization

Lastly the individual employees of the organization have the tendency to see the organization in a different way;

  1. Improve the conditions of the employment
  2. Voice the grievances of the employees
  3. Share their views in the process of decision making
  4. Improve the conditions of the employment process

The changing nature of the employment relation and the business environment forces the managers of the business organization to change their strategies while trying to establish an effective and sound relation with the employees of the business. The managers in today’s world often face issues like cross training, interdepartmental communication, personnel management and broadening of the scope of the job. The managers today’s culture has to re shape the working of the business organizations to cope up with the above mentioned challenges. The hectic work schedule and the multimodal nature of the tasks have made the managers to look for different kind of opportunities to improve speed and quality. Managing the work force diversity, addressing the issues of globalization and improvement of productivity and quality can be beneficial for the success of the organization and can also help the managers to sustain themselves in the competitive market.

As mentioned earlier, similar to the changing role of the managers, the trade unions have also changed their roles significantly and now have a much greater role to play in terms of the different growing trends in legal constraints, outsourcing and employer sponsored forms of the participation of employees. The coming years promises to be equally challenging for the trade union movement. The trade unions over the next few years have to respond to different kind of challenges and opportunities will be key to the determination of the level of influence at work. The unions need to have a thorough understanding of the collective agreements and also gain thorough legal knowledge of the company rules and regulations to negotiate in a competitive manner.

Critical Evaluation and contrast of the three theoretical base and the models

The employees will have to be engaged in different kinds of new challenges to manage themselves in the organization accordingly. The employees will have to be super active and smart to enhance their capability and provide the best services to the organization. The employees of the organization must also evaluate all the different kinds of the organization demands to provide the best in the organization.

Some recommendations on employee participation are as follows;

  1. The participation of the employees in decision making process will help to develop the organization in a proper way
  2. The participation of the employees in the organization is important for the business as because the ideologies of each and every employee must be noted to come to a conclusion
  3. The employee participation must be direct and individual
  4. The presence of a depth in the organizational decisions is important as because such a depth helps the organization as well as the employees to have a good and proper understanding about each other


The following report has provided a clear and comprehensive picture on Strategic Human Resource Management and Employee relation. A number of different theories and perspectives have been provided in the following report to make the report dependent on theoretical perspective. A thorough analysis of the report will provide the readers the analysis of the strategic Human Resources and their use in the different business organizations. The second task will provide the readers with a proper analysis of the employment relations and the perspectives along with the actors of employment relations.


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