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While the concept of integrating the Human Resource is not new, the alignment of HR and corporate strategy. McKinsey’s 7-S framework that emphasized the need for the alignment of seven organizational variables (super ordinate goals, strategy, structure, systems, staff, skills and staff) for organizational effectiveness is about twenty years old. But, during this time the importance of people to organizational success has, if anything, only multiplied as businesses have become more knowledge and technology driven. As a result, even strategy gurus, who typically, talk about esoteric topics like transnational corporations and integrated networks, today emphasize the importance of the “individualized corporation”
Corporate and business strategy
Corporate strategies refer to decisions what business to enter, what businesses to retain in the portfolio and those to exit from. It specifically directs attention at how the corporate office can add value to the diverse businesses in the portfolio so that their value as a part of the corporation exceeds the value they would have as free-standing businesses.
The Alignment of HR and Corporate Strategies
For corporate, business and HR strategies to be integrated well, it is apparent that the top management, business heads and HR professionals need to work closely with each other. In most companies, the lead and the lead and the philosophy have come from the vision and strongly-held beliefs of the CEO with HR professionals in an important, but essentially complementary role. There are five ways in which HR professionals can enhance their ability to contribute to this integration process.
- HR professionals must spend more time and effort understanding the business environment and the key strategic issues faced by the company.
- HR professionals must get more involved in the nitty-gritty’s of the business, i.e., in operational details and issues.
- HR professionals must move towards taking an integrated look at the people in the organization, bridging the gap between HR and IR (Industrial Relations).
- HR professionals must see themselves as knowledge workers and facilitators of knowledge flows within the organization.
- HR professionals need to change from a support paradigm to a value creation Paradigm.
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