Essential Role Of HR In Corporate Culture And Strategy

The attention given to human resource management has been changing over the past 20 years. HRM used to be considered as a secondary support function, merely focusing on administrative tasks related to recruitment and selection, development and training, and performance management. Hop over to this website to learn HR practices to develop a company culture.

organizational culture characteristics

While a sound strategy is important, the firm needs to specify the organisational capabilities needed to support the business, evaluate internal gaps if any, and then design and deploy HR practises that enable differentiating capabilities.

For companies that internationalise, one of the main decisions is whether to push for consistency or differentiation in their HR policies between their home office and their country subsidiaries. 

While management practices – including HR – may have been a source of competitive advantage at home, they may not translate into the desired organisational capabilities in different cultural and administrative contexts. As for the strategy that considers global integration vs. local responsiveness, HRM must also contend with the same pressures.

Corporate structures – functional, divisional, geographic, matrix, network – often stem from the historic development of the firm. For internationalising companies, their structure will often depend on whether they have distinct product lines and/or markedly different geographic markets. 

Corporate culture is inherently difficult to manage top-down and strong organisational cultures often reflect values and practices honed over many years. HR is a very good starting point to shape the corporate culture. 

In short, the new hires have to conform to the existing culture, but are also instrumental in shaping it. Therefore, the HR function is instrumental for change management through attraction and selection, development, and performance assessment to ensure that the values important to the organisation are understood, shared, created and pursued.