Use the guideline below to analyze the articles in each session. Be thorough and expound on each section area. Use APA headings to separate your sections. Short Summary Provide a short summary of the...

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Use the guideline below to analyze the articles in each session. Be thorough and expound on
each section area. Use APA headings to separate your sections.

Short Summary Provide a short summary of the article. What are the main
components and subject matter?

Key Variables What are the key variables in the study or article? How are they
associated? What is the relationship of the variables to the application
in HR?

Strengths Identify the strengths of the article. Why are they strengths in the
study and how do these strengths add value to the field of HR?
Weaknesses Identify the weaknesses of the article. Why are they weaknesses in the
study and how do these weaknesses affect the outcomes to the field of
Application of the concepts
Based on the results in the article, how are they applicable to the field
of HR? What are the main points that can be used to add value?
Recommendations Provide any recommendations for the application of the findings to the
field of HR. In what type of situations would they be beneficial to the
improvement of HR?

E:\Jim's Files\AA Journals\ASMJ\ASMJ_Vol_10_No_2_2011.wpd 11 Academy of Strategic Management Journal, Volume 10, Number 2, 2011 STRATEGIC FIT AMONG BUSINESS COMPETITIVE STRATEGY, HUMAN RESOURCE STRATEGY, AND REWARD SYSTEM Yi Hua Hsieh, Tamkang University Hai Ming Chen, Tamkang University ABSTRACT Competitiveness is inevitable in highly dynamic and uncertain environments. Business strategy is concerned with how businesses achieve a competitive advantage. Its implementation involves the fit between the organization’s business strategy and its internal processes. An appropriate match enhances organizational effectiveness and generates superior performance. A strategic fit between a business strategy and a human resource strategy can help retain and motivate employees and translate into organizational performance and competitive advantage. Based on Porter’s generic strategies as business competitive strategies and an extensive literature review, this study proposes and develops three different human resource strategies. We also thoroughly designate three alternatives of reward systems that are suited to each human resource strategy. Through a close linkage among business competitive strategy, human resource strategy, and reward systems, we hope to provide mangers with directions for designing and implementing an appropriate reward systems under various business competitive strategies and help firms to create competitive advantage effectively. INTRODUCTION In recent years, there has been marked increase in competition in virtually all areas of business. The ability to outperform competitors and produce above average profits lies in the pursuit and execution of an appropriate business strategy (Yoo, Lemak & Choi, 2006). This has resulted in greater attention to analyzing competitive strategies under different environmental conditions. Porter (1985) argued that the three generic strategies that require different resources, organizational arrangements, control procedures, styles of leadership, and incentive systems could translate into organizational performance and competitive advantage. According to the resource-based view, the firm is regarded as a unit of resources and capabilities. The acceptance of this concept has prompted interest in identifying the nature of these various resources and in evaluating their potential to generate a competitive advantage (Lopez, 2005). As a result, the resource-based view provides a logical link between human resource 12 Academy of Strategic Management Journal, Volume 10, Number 2, 2011 management and strategic management. Furthermore, according to the contingency view, there is no one best way to structure an organization; it all depends on the particular circumstances facing the organization. In this case, human resource strategy must fit with specific business strategy (Porter, 1985). The concept of fit refers mainly to the close connection between human resource strategies and business strategies in ways that will help retain and motivate employees. Employees are the human capital of an organization. Organizations have the ability to reward employees in many ways (Lawler & Worley, 2006). To attract, retain and motivate employees, the company must implement an appropriate reward systems. The objective of this reward systems is to encourage desired employee behaviors to ensure the success of human resource strategies. Therefore, designing and implementing an appropriate reward systems that complements human resource strategies and fits business competitive strategies is currently an important issue. The deployment of a strategy requires a focus on the organization’s business processes (Reidenbach & Goeke, 2007). Based on an extensive literature review, this paper cites Porter’s (1980, 1985) generic strategies as business competitive strategies, and then deduces and develops three different human resource strategies. At the same time, we designate three alternatives of reward systems to fit Porter’s (1980, 1985) generic strategies above. To support the human resource strategies and facilitate the implementation of generic strategy, each reward systems must be tied to some alternatives with identifiable attributes, activities or contents. We have labeled these reward systems as human capital, output, and position reward alternatives, according to different human resource strategies and business competitive strategies. The following sections describe the criterion, object, and mode of each reward systems in detail. The strategic fit concept helps firms to manage their resources more efficiently, reduce operational costs, respond to environmental change, and take advantage of new opportunities. Consequently, an effective linkage among business competitive strategy, human resource strategy and reward systems should enhance organizational performance and create competitive advantage (Huang 2001). LITERATURE REVIEW Competitive Strategy A competitive strategy involves a series of systematic and related decisions that give a business a competitive advantage over other businesses (Schuler & Jackson, 1987; Dowling & Schuler, 1990). The concept of business competitive strategy is primarily derived from Porter’s (1980, 1985) classifications of generic strategies. He argued that superior performance could be achieved in a competitive industry by pursing a generic strategy, which he defines as the development of an overall cost leadership, differentiation, or focus approach to industry competition. Miles and Snow (1984) classified business strategies into three types – defender, prospector, and analyzer – and proposed corresponding strategic human resource systems. Schuler and Jackson 13 Academy of Strategic Management Journal, Volume 10, Number 2, 2011 (1987) used labels slightly different from those Porter to classify three types of business competitive strategies: cost reduction, innovation, and quality enhancement. Schuler and Jackson (1987) also designated different types of employee behavior and human resource management methods for each competitive strategy. With the three types of Schuler and Jackson’s competitive strategy, Dyer and Holder (1988) reclassified these as inducement, investment, and involvement, respectively. Dowling and Schuler (1990) combined the respective human resource strategies of utilization, facilitation, and accumulation. In spite of these different classifications, competitive strategy consists of skills and resources that firms can use in a competitive industry. It defines superior skills in terms of staff capability, systems, or marketing savvy not possessed by a competitor. A superior resource is a resource that can be used to assist the implementation of strategy (Powers & Hahn, 2004). Porter’s generic strategies remain the most commonly supported and cited theory in key strategic management textbooks (David, 1999; Miller, 1998 ; Thompson & Strickland 1998) and in the literature (Kim & Lim 1988; Miller & Dess,1993). Although Porter’s scheme may be too simple to represent all possible strategic behaviors, it captures the essence of more complex business strategies and plays a significant role in differentiating various strategic configurations (Campbell- Hunt, 2000; Hambrick, 1983; Kotha & Orne, 1989). Porter’s (1980, 1985) generic strategies have also received more empirical support than other constructs have (Hambrick, 1984; Miller & Friesen, 1986; Dess & Davis,1984). Porter’s typology is generally accepted as a useful interpretation of business level strategy. Therefore, this paper adopts Porter’s generic strategy as the primary method of achieving a competitive advantage. Porter argued that the firm must adopt one of three generic strategies: overall cost leadership, differentiation, or focus. This classification of generic strategies has formed the basis for a whole body of research regarding the development of more generic strategies (Feurer & Chaharbaghi, 1995). The basic premise behind the generic strategy is that an industry’s structure plays an important role in determining the competitive strategies potentially available to an organization in that industry. There are three generic strategies to compete in a selected industry according to Porter’s methodology. According to Porter, there are three generic strategies for competing in any given industry. To be successful, a firm must decide how to position itself in a competitive market. The three generic strategies are determined by two factors, identified as competitive advantage and competitive scope. He proposed generic strategies that enable a firm to develop a competitive advantage and create a defensible position. The following sections briefly describe these generic strategies. Overall Cost Leadership Organizations that pursue the generic strategy of overall cost leadership seek to become the lowest cost producers in the industry. Cost leadership firms serve a broad industry segment or 14 Academy of Strategic Management Journal, Volume 10, Number 2, 2011 several industries. They frequently sell a standard product and exploit scale and absolute cost advantages. By emphasizing cost control, these organizations aim to make above average returns. A cost advantage can come from various methods, including economies of scale, proprietary technology, access to raw materials, rigorous pursuit of cost reductions from experience, tight cost and overhead control, and cost minimization in areas like R&D, service, sales force, advertising, etc. Regarding the choice and viability of generic strategies in different environmental contexts, an overall cost leadership strategy is appropriate in a stable and predictable environment (Hambrick, 1983; Miller, 1988; Kim & Lim, 1988). This is because unpredictable environments may create severs diseconomies for organizations pursuing a low cost strategy as they attempt to control costs and improve efficiency (Kumar & Subramanian, 1998). Cost leaders also emphasize a highly trained and experienced workforce (Dess & Davis, 1984; Kim & Lim, 1988). Organizations adopting cost leadership strategy should foster and educate their employees in production efficiency and the idea of cost controlling. Differentiation The generic strategy of differentiation aims to create a unique product or service. Differentiation-oriented organizations attempt to create differentiated products and services that are perceived as unique by customers, provide value to them, and create loyalty. Firms following the differentiation strategy try to be unique in a way that is valued and important for their customers. Possible sources of distinction include the product itself, the delivery system, or the marketing approach. Uniqueness will be rewarded by the ability to charge higher prices (Davidson, 2001). The differentiation strategy must typically be supported by heavy investment in research, product or service design, and marketing. Firms trying to implement Porter’s differentiation strategy have used many different bases, such as differentiating by types of technology, or the quality of customer services offered (Kumar & Subramanian, 1998). A differentiation strategy is associated with dynamic and uncertain environments (Hambrick, 1983; Miller, 1988; Kim & Lim, 1988). Differentiation often involves new technologies, and unforeseen customer or competitor reactions (Lamont, Marlin & Hoffman, 1993). In this case, the management control system must emphasize flexibility and focus on long-term operations (Nilsson, 2000). The corresponding human resource strategy should enhance employees’ adaptability and innovation to match the differentiation strategy. Focus The focus strategy is qualitatively different from the first two strategies. A firm adopting the focus strategy decides to select a narrow scope within an industry and develop a specialized strategy 15 Academy of Strategic Management Journal, Volume 10, Number 2, 2011 to serve that segment only. This type of firm seeks to achieve a competitive advantage and superior returns by targeting specific segments. There are two variations on the focus strategy theme both of which require that the target segment’s needs are significantly different from the broader industry market. A firm adopting the cost focus strategy attempts to be the low-cost producer for a specific market segment. A firm adopting the differentiation focus strategy rests on identifying differences between the target market segment and the broader market. However, a narrow focus is insufficient to achieve strong performance in
Answered Same DayNov 28, 2019Swinburne University of Technology

Answer To: Use the guideline below to analyze the articles in each session. Be thorough and expound on each...

David answered on Dec 27 2019
85 Votes
Strategic Fit between Organisation Strategy, HRM Strategy and Compensation Strategy
With changing times, business needs to change their ways of functio
ning. “It is right stated that the ability to outperform competitors and produce above average profits lies in the pursuit and execution of an appropriate business strategy” (Yoo, Lemak & Choi, 2006). But the roots of an organisation should never change. What it should change is the alignment of its activities. The organisation needs to see that its strategies are aligned to its goals. In order to see that all this is done smoothly, the HR department has to play a vital role. This is because the employees are the ones who implement the strategies and the HR DEPARTMENT is the one who takes care of the employees in the organisation. This paper takes into account the Porters generic model of organisation strategy as a base. It tries to maneuver away from a literature review, towards mapping key ideas as well as relationships, in order to develop a reward system which is ideally suitable to human resource strategy along with the competitive strategy. The article starts with Porter’s generic strategies of business for competitive advantage namely, differentiation, overall cost leadership, and focus. Depending upon the individual nature of each of the competitive strategy, the article tries to
ing about co
esponding human resource strategies namely contribution-oriented, innovation oriented and commitment-oriented. It finally
ings about and develops appropriate reward options namely output reward, human capital reward and position reward. The...

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