stoikmusah2

2016-10-19T06:27:00.001-07:00

2010-10-24T09:01:00.000-07:00

2010-10-24T08:57:00.000-07:00

The Consequences of Globalisation for Labour.

2008-05-14T06:17:00.000-07:00

Stoik Musah,
LBS.Leicester.
stoikmusah@gmail.com

This essay critically examine the effect of internationalisation of economic activity for employees and labour movement. It considers the contribution of Multinational Corporations in the subject and trace the origin by linking it to the neo liberal structural economic reforms by powerful western countries. It also highlight how globalisation has accelerated trade union movement in the international level. In the end, it argues the inability of an international code of workers right to manage the impact of globalisation on labour worldwide and introduce possible solution for labour to build international working class power.

Literature abounds with various definitions of globalisation. Perhaps this may arise as a result of the fact that the concept has achieved a huge degree of popularity in recent years. This is evident judging by the number of publications on the subject in various social and humanities disciplines. According to Giddens (1990), globalisation is the intensification of world wide social relations which links distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa. This involves a change in the way we understand geography and experience localness. In a sense globalisation implies a borderless world. Under this perspective, the speed of communication and exchange, the complexity and size of the network involved, the volume of trade that is carried out within short time frame has all given this phenomenon a peculiar force that attract attention(Yaw 1999 ).

From industrial relations perspective, this phenomenon is transforming events in the workplace. It is also changing the nature of the entire world labour markets and employment practices (Dolvik 2001). For example there is evidence( Chaykowski and Giles 1998) suggesting that the transformation of working life in some European Union countries have been greatly affected by this phenomenon. For instance, the emergence of the service economy in developed countries, changes in work systems in developed countries(i.e. the rise of contingent workers, and flexible work practice), rapid technological innovations worldwide(i.e. digitalization), cultural and ideological changes around the globe, the rise of education and business schools, the evolution of gender relations in the workplace etc.(Dolvik 2001)

Equally important is the separation of work from home. Organisation has adopted new technologies that involve people in less face to face interaction. Today most organisations engage in outsourcing some aspect of their operations to enable them concentrate on those activities in which it can establish distinct core competences (Hamel and Prahalad 1994). These development has been brought about by the frequent pressure from organisations stakeholder groups on management to constantly streamline the way business operates. Under this consideration, it becomes interesting to know that outsourcing has become one option on a larger menu of strategies required for efficient business processes. This is because other strategies as corporate restructuring, downsizing, the use of child labour, redundancy and plant closure are sometimes utilized as credible alternative to effect improve business performance (Laabs 1993 )

Within the parameters of these manifestations, tension and pressure emerge in the contractual relationship between capital owners, management and employees (Willmot, 1997). Employees are therefore disciplined by a variety of audits and performance monitoring processes which are intended to secure their cooperation and trust (willmot, 1997). The employer- employee relationship becomes essentially a cost- profit relationship which is governed by a tight financial framework involving penalty for failing to meet performance criteria (Cook, 2006). Employees are sometimes subjected to accept frequent wage cuts and reduction of pension benefits in exchange for job security- since in most cases companies threaten to shut down plants and move to areas where the cost of production is less- which in some cases has resulted in competition between workers from different countries who possess thesame knowledge skill and ability. Like for instance Studies(Heery 2002) on this subject reveals that from the 1980s through the 1990s changes in the UK domestic market exposure to globalisation has frustrated the capacity for trade unions to either block via collective bargaining the transfer abroad an organisation’s operations or block changes in staffing levels using immigrant workers(Heery 2002). This form of unionism based on bargaining is becoming unsustainable as organisation employ the use of sophisticated human resource management practices as selective recruitment, the use of contigent workers and contract workers to promote lean workforce management and greated levels of commitment among employees in the organisation. In consequence, rendering trade union activities less effective among employees (Kochan and Lansbury 1997).

However these actions on the part of multinational corporations can be traced to the benefit accrued from the neo liberal policies of powerful economies after the cold war((Brien 2000 ).This is because at the end of the cold war, the variety of policy responses that have been initiated to deal with structural economic transformation and challenges of increased competition across different nation states was geared towards the promotion of labour market flexibility. This was also carried out as an remedy to allow these countries competitive among other nation states. As a rsult policies as deregulation and privatisation of government managed institutions were introduced to facilitate increased competition between private actors(Brien 2000). Automatically the continue support given to these structural economic transformation by the state simultaneously challenge the power of organised workers. For instance, the extent of independent workers organisation activities interfering in the market was reduced(Brien 2000). Legislation backing these activities- that was required for workplace union participation was also removed and market forces were allowed freedom to dominate the scene(Brien 2000).

Within this broad legal paradigm, scholars(Dolvik 2001) of industrial relation will argue that when such legislative provisions that supports unionisation purpose is removed Trade Union hardly possess strong legal backing to effectively utilize their core power resources of national unionism, which is the legal backing to mobilise membership, engage in collective bargaining, take industrial action, channel voice at the workplace, and use these sources and its weight in elections to gain societal influence through various institutionalised modes of interest representation and political exchange with the state. For example in the UK the neo-liberal policies of the conservative government was bent on weakening trade union influence in the work place and to create circumstances within which management could re assert authority among employees (Waddington 2003).

In the same way the labour constitutional reform of the 1990 which was accompanied by a parallel initiative to diversify sources of funding to the union also contributed to the weakening of the scope of unionisation mobilization in the United Kingdom(Bach 2002; Waddington 2003). This was the main point of conflict between the unions and the party in Tony Blairs second term. The aftermath of this conflict of interest was the questioning of the source of financing the labour party, the eventual expulsion of the rail, marine and transport union for supporting non union labour candidates, the withdrawal of the fire brigade union and the success in union election of anti-Blair candidate to name just a few (Bach 2002).
All these restriction on the legal possibility for Trade Unions to mobilise gave multinational companies more influence to benefit from these neo- liberal policies. And with the help of transnational institutions, as the World Trade Organisation (WTO) and the International Monetary Fund (IMF), other countries that were seeking structural adjustment policy help from the IMF and its sister institutions i.e World Bank- were convinced of these recipes to economic recovery(Brien 2000). It is for this reason that studies on comparative industrial relation assert that multinational corporations and transnational institutions are the key driving force of internationalization of economic activities (Brien 2000).
Consequently, the effect of this evolutional process implies that labour will have to seek new ways to make its existence relevant in the new world order. A movement in this direction is seen in trade union alliance with company’s management in most European Union Member state multinational corporations. This is facilitated by the European Union (EU) workers council directive, which in recent years has lead to the setting up of six hundred and seventy European Workers council in multinational companies operating in European Union states(Dolvik 2001). In the United Kingdom this is reflected in the activities of state institutions as The Department of Trade and Industries- Partnership Funds, which has provided support and knowledge resources to locate new management-union relations(Rainbird 2004).One advantage of such approach to labour policy is that it sometimes serves as a buffer for home company’s - against the power of global market force and also afford unions an opportunity to deepen their institutional roles at various levels at the workplace(particularly strategic areas)(Arkers and Payne 1998). On the other hand, such policy can restrain trade union core power resources of national unionism and even force Trade Union to legitimate workplace change programme that trade off employment security with greater work intensification (Taylor and Ramsey 1998).
Other recent development as the above is the manner at which Multinational companies have now become more dependent in public reputation and credibility. This has made companies more sensitive to campaigns and boycott instigated by Non Governmental Organisations, sometimes in cooperation with Unions to disclose dubious social, environmental and labour practices. In a way this increasing campaign for ethical trade and labour practices has lead to the increasing concern for corporate social responsibilities- an avenue which trade union has exploited greatly to their advantage.
Other recent development for Trade Union as the above is the gradual development of an international trade union structure. This attempt to stimulate renewed labour has led to an inter- relationship with other social movements globally(Brien2000). For instance a grass root mobilisation with focus on women, youth and immigrant workers (since these group of individuals consist of a large part of the working population) (Global Labour Institute 1999). This broad outlook has forced unions to expand its activity in international trade unionism.
A recent development in this direction in Europe is associated with the build up of viable systems of industrial relations, unionism and social protection in some Eastern European Countries and some loosely Trade Union network in other part of the world (Global Labour Institute 1999).This is aimed at making sure that multinational companies do not exploit these countries as havens for socially unprotected, low cost production.(Dolvik 2001). It is however interesting to also include here that the key drivers of global unionism have observed that building trade union strength internationally depend on the organization of the informal sector. This is because a vast majority of the world’s workers, including the poorest - who most need self-defense through organization - are in the informal sector (Global Labour Institute 1999). For instance in Africa, Asia, Latin America, Central and Eastern Europe evidence indicates that the informal sector is rapidly growing as State enterprises are privatized and unemployment increases (the same applies to China).(Global Labour Institute 1999).
Amidst this development a report by the Global Labour Institute (1999) reveals that these informal sectors workers are already organizing partly- into associations which are sometimes unknowingly referred to as Non Governmental Organizations which often have international networks. Unions on their part have observe this trend, that activities and organizations created this way are valuable resources and point of leverage for the entire trade union movement at the international level( Global Labour Institute 1999). In other words if we consider the amount of employees that has been dispersed away from the formal sectors into informal enterprises due to excessively contracting out of various organizational business processes- which eventually has lead to the decline in TU membership in the workplace/formal sector. It is common sensical that by organizing this loosely held workers base, trade union can acquire the critical mass in terms of membership and representativity it lost in the formal sector. For this reason Union has taken this bold step by specifically tailoring programmes to recruit and organize informal sector workers.
An example has been the Self Employed Women’s Association (SEWA) in India, which started twenty-five years ago with a few hundred members and now numbers over 210,000 members in four Indian federal states (Global Labour Institute1999). SEWA organizes home workers, street vendors, paper pickers and refuse collectors, etc. In return the association has created an infrastructure of flanking services for these workers i.e a bank providing microcredit, a vocational and trade union training program at different levels, producers’ cooperatives (artisans, agricultural producers), service cooperatives (health, housing) etc. Also in the UK, are many informal enterprises local projects (NGOs or local authority schemes), and other similar campaigning organization called the National Group on Home Working. This group has led the campaign for home workers to be included in the national minimum wage and has been a major influence on government policy, public awareness and trade union policy on home working (Global Labour Institute1999).

However, in as much as this developments by unions is praised in some quarters, critics condemn the lack of coherence and integration of Trade Unions structures globally unlike their European case, which historically in many aspects remains the backbone of any international union movement worldwide(Dolvik 2001). For instance the present International Trade Union bodies lack strong links with other Trade Union bodies in developing countries and other emerging economies that is playing host to many multinational corporations off shoring operations (Dolvik 2001). The reason for this has been their limited ability to secure political influence through institutionalised representation, and political channels across these areas (regions). For this reason the Trade Union movement in most cases rely on indirect mode of representation using these nation states national affiliate to reach out to members (Dolvik 2001).
Another implication of these recent development for Trade Union is in the various internal problems generated between key International Trade Union Bodies, as they move to revitalise the movement amidst the increasing effect of powerful globalisations forces(Brien 2000, Dolvik 2001). The various International Trade Union bodies has been confronted with magnitude of political reinterpretations of individual objectives and divergent positions on various issues on how to reposition the movement internationally. This has lead to the rift between the ICFTU and the WCL- the two global trade union bodies that should be in the forefront of driving global trade union change agenda and international diplomacy(Crouch 1993, Visser 1995). These obstacles has been compounded by the international absence of adequate political third parties and institutions with rule making power, which historically played a crucial role in the evolution of unionism in Europe(Crouch 1993,Visser 1995).
Furthermore the internet has also contributed to the changing Trade Unions too. For instance the global transnational trade union networks discussed above is being made possible as a result of the internet. This is because new communication technologies create new possibilities for trade unions. Therefore by increasing investment on cyber unionism, to develop transnational union information networks and new ways of mobilisation, unions can now communicate with their entire membership on a daily basis, using email and the web (waterman, 1998). Historically information sharing among members was limited by tight budget discipline on the number of printed newsletters and mail to be distributed to members- which sometimes do not get to their destinations(Centre for Economic Performance 2002). Today the internet has played a big role in strengthening unions by helping to share information across continents to union members. It has also facilitated new ways of mobilisation and recruitment strategies i.e. the emergence of cyber unionism.On the other hand the Internet is a disruptive, even a threatening, technology for those who currently run the trade union movement through traditional, centralised, hierarchical power structures (Centre for Economic Performance 2002). Like for instance, when an individual member obtain full details of an agreement any time of the day or night from the union's Web site, the power of the head office official to control and interpret this information is challenged (Centre for Economic Performance 2002). For this reason, progressive officials will see this new technology as opportunities to democratise the union and empower members, but many of them will feel challenged by technologies that they do not understand and cannot control and they will endeavour to limit its use and development. (Centre For Economic Performance2002)
Another topic for discussion is the increasing literature on the issue of setting a “fair labour standard” globally. This is aimed at reducing the burden of capital flight on labour. In this context, the key issue of concern is on the question of universality of the standards sort, and the appropriateness of the legal enforcement of such standard. Under this consideration, scholars (Hanami 1997, Luce 2005) of industrial relations will argue that many people in the world consider workers right -as presented in various types of legal documents, have their roots in the west and do not belong to them, i.e. secular Middle East and Chinese societies. In other words, these values that are most important in the west are less important in these societies. This is seen in politics and other literature studies where writers and politicians strongly criticize the effort of the west in inducing other people to adopt their ideas concerning democracy and human rights.
For instance Luce (2005), argues that if some of the international labour organisation conventions are ratified universally, it can result in putting workers and employers of poorer countries at a competitive disadvantage. This is as a result of the changing picture of industrial relations and labour market in different parts of the world (i.e. countries where majority of employment is home base production or micro enterprise which has nothing to do with trade union).
Second, is the issue of enforcement of these international standards, which- in some poorer countries can come at a high economic cost(Hanami 1997). For example, the argument for enforcing a universal labour standard will lack strong popularity in poor countries where families only survive through child labour or other labour abuse to children i.e unpaid work in a family business or other informal enterprise. Under these consideration, the only reasonable proposition for setting up a fair international code of workers right can only arise if such provisions allows for varying its strictness or allowing for temporary exceptions in some less competitive countries(Hanami 1997).

Consequently, from the above analysis and discussion so far on the above subject issue, one will argue that the debate on globalisation vis a vis capital- labour relationship is a zero sum game. Taken a holistic perspective on the dynamics of the entire phenomenon discussed one is left with little doubt that, as the influence of big capital grows the influence of labour recedes . At the same time the reverse will be the case if labour influence in the new world order grows, as it will be seen that the influence of capital will recede. The reality is that most of the agenda behind the origin of globalisation has been about expanding the influence of capital and protecting multinational companies investments in other countries (disguised under the economic power tussle between the western bloc and the rest of the world) – renewed labour internationalism is labours response to this.
Given that labour is on the defensive at this point, the challenge for labour is to find any possible leverage to increase its power relative to that of capital. In the end, the best alternative for labour is to make the most of any opportunity available, to aid in further organising to increase its influence in the new world order and not so much agitating changes in employment relationship, or agitating changes in labour market reforms, or critiquing fairness in labour standard or otherwise. The best alternative for labour is to call for union strategies that combine mobilisation through political and industrial channels with construction of transnational structures with capacity to link together trade union and civil society efforts at the grass root, national, regional, and global levels. In such a situation the interaction with public interlocutors with political authority to regulate the relevant markets for capital and labour is a crucial prerequisite for the construction of viable structures of industrial relations and trade unionism (Crouch 1993, Hyman 2001). In this way Trade Union can build organisational structures and links that can pool resources to equip their global network with the necessary clout and mandates to coordinate and influence industrial policies across different regions around the world.

REFERENCE.
Arkers. P and Payne.J (1998) British Trade Union and Social Partnership: Rhetoric, Reality, and Strategy. An International Journal of Human Resource Management, Vol9,No3,pp529-549.

Taylor.P and Ramsay.H(1998)Union Partnership and HRM: Sleeping with the Enemy? An International Journal of Employment Studies,Vol6,No2,pp115-143.

Rainbird.H (2004) Assessing Partnership Approaches to Lifelong Learning: A New and Modern Role for Trade Union, In: Stuart M and Martinez Lucio.M (eds) Partnership and Modernisation in Employment Relations. Routledge Publishers, London.

Yaw.A Debrah (1999) Introduction : Globalization, Employment and the Workplace- Responses for the Millenium.

Centre For Economic Performance(2002) The Internet and the International Trade Unionism. Being Paper Presented at the Networked Labour Conference Held at the London School of Economics 6/12/2002.

Giddens .A (1990) The Consequences of Modernity, Cambridge .

Dolvik .J (2001) European Trade Unions: Coping With Globalisation. Being Paper Presented at the ETUC Conference on Globalisation, Europe and Trade Union, Brussels 7/02/2001.

Dolvik, J. E. ed. (2001) At Your Service? Comparative Perspective on Employment and Employment in the European Private Sector Services, PIE Peter Lang, Brussels

Chaykowski.R and Giles.A (1998) Globalisation ,Work and Industrial Relations, Relations Industrielles- Industrial Relations, Vol53,No1,pp3-12.

Hamel .G and Prahalad.C(1994) Competing for the Future, Havard Business School Press, Boston.

Laabs.J (1993) Why HR is Turning to Outsourcing. Personnel Journal.

Wilmot.H (1997) Rethinking Management and Management Work: Capitalism, Control and Subjectivity. Human Relations, Vol50,No11.

Cooke.F(2006) Outsourcing of Public Services and Its Implications for Managerial Knowledge and Careers. A Journal of Management Development,Vol25,No3.

Heery .E (2002) Partnership Versus Organising: Alternative Future for British Trade Unionisms. Industrial Relations Journal, Vol33,No1,pp20-35.

Kochan.T and Lansbury .R (1997) Lean Production and Changing Employment Relations in the International Auto Industry. Economic Industrial Democracy, Vol18,567-579.

Brien.R(2000) Workers and World Order: The Tentative Transformation of the International Union Movement. A Review of International Studies, Vol26,533-555.

Waddington.J(2003) Heightening Tension in Relations Between Trade Unions and the Labour Government in 2002. British Journal of Industrial Relations, Vol41,No2,pp335-358.

Bach.S(2002) Public Sector Employment Relations Reforms Under Labour: Muddling Through or Modernization? A British Journal of Industrial Relations,Vol40,No2,pp319-339.

Global Labour Institute (1999) Notes on Trade Unions and the Informal Sectors. ILO Bureau of Publication, Geneva.

Crouch.C (1993) Industrial Relations and European State Traditions, London: Sage.

Visser.J (1995) Trade Unions From a Comparative Perspective, In Rysseveldt.V etal (eds) Comparative Industrial and Eployment Relations, London Sage.

Waterman.P (1998) Globalisation, Social Movements and New Internationalisms.Mansell. London

Luce .S (2005) The Case for International Labour Standards- a Northern Perspective. An IDS Working Paper.

Hanami. T(1997) Globalisation of Employment and the Social Clauses. Being Paper Submitted to the 1st World Law Congress “ Motion in Law”, Brussels,9/09/1996.

Crouch. C (1993) Industrial Relations and European State Traditions,Sage ,London.

Hyman.R(2001) Understanding European Trade Unionism Between Market,Class and Society, Sage, London.

BIBLIOGRAPHY.

Cooke .N(2005) Excercising Power in Prisoners Dilemma: Transnational Collective Bargaining In an Era of Corporate Globalisation? Industrial Relations Journal, Vol36,No4,pp283-302.

Munck.R and Waterman.P (1999) Labour Worldwide in the Era of Globalisation: Alternative Union Models in the New World Order, Macmillan,London.

Waterman.P (2001) Globalization, Social Movements and the New Internationalisms. Continuum: London.

How Tacit Knowledge can be used to improve organisational performance.

2008-04-10T02:20:00.000-07:00

stoik musah,
LBS,Leicester.
stoikmusah@gmail.com

This essay will describe how tacit knowledge management practice can be utilized in an organisation to improve its organisational, market and financial performance alongside how there is more competitive value to its practice as opposed to explicit knowledge. With emphasis ascertaining the application of the various model/framework to tacit knowledge management practice in the organisational context. With reference to the above, the way business and organisational activities are carried out is increasingly changing, as recent years has seen an unprecedented growth in the speed of product and service change as a result of the application of information (Gulati and Zajac 2000). This increasingly turbulent environment has forced organisation to become more interested in new ways of gaining and sustaining competitive standing in the product and service they offer. Firms tend to devise continual strategic change process to manage and mobilized its resources through time for a competitive response. In this situation, the capacity of a firm to identify and understand the nature of competitive force and how they change with time will contribute to its competitive standing (Hosley, Lau etal 1994).Similarly the increase efficiency resulting from the process cited above allows for firms to specialize in the value creation activities supported by their own distinctive competence and knowledge (Janillo 1988,Langlois and Robertson 1995,Park 1996).To effect this process organisation engage in backward integration of breakthrough innovation in its human capital resources for deeply held and highly personal form of knowledge emerging most often, from the creative power of the mind(Mascitelli 2000).It is believed that a firms capability of effectively utilizing this source of knowledge to provide insight for creating value for customers need will provide significant impact on its market and financial performance.

However this concept of value has been given different shades of meanings by authors as Hakasson and Snehota (1995),Norman and Ramirez(1993),Porolini(1999) and Porter(1985). The central core issue among these various literature studies on this subject is in the area of in-depth knowledge on the value system and activities provided by organisations resources and to what extent can these value activities be effectively utilized. As value activities are essentially based on knowledge –the value of determination and motivation from employees is also related to the level of codification of that knowledge .The aspect of how well known, the capabilities underlying the value activities is related to- how easily the underlying knowledge can be assessed and shared among employees. Although such original thinking may manifest itself in a variety of ways .This has caused both scholars and Human Resource Practitioners to dig deeply into the source of creativity and insight. The works of Mascitelli (2000) reveals evidence of studies that highly creative artists, scientist, mathematicians etc often displays exceptional intelligence most often when confronted with a task. Mascitelli(2000) provides a plausible explanation for exceptional intelligence as above with reference from the works of Polanyi (1996) on “Tacit Dimension”. Polanyi(1996) argues that the portion of individual knowledge that is readily accessable to us is only a small fraction of the totality of our knowledge.The writer asserts that, in a sense, the knowledge that we can express in speech and in writing is only the tip of the entire human intellectual framework. Beneath the surface of conscious thought lies a vast proportion of tacit knowledge derived from a lifetime of experience ,practice ,perception and learning .

To Polanyi(1996), the essential nature of tacit knowledge embodies a lifetime of experience, indwelling by the innovator ,with the particulars of his chosen field, such that it becomes an intrinsic part of his mental makeup. This particulars, impact a kind of vision of things not yet known. In a sense, tacit knowledge allow you to see solutions without the conscious ability to explain your vision to pursue your aspiration by your action. From the standpoint of the firm, tacit knowledge problem solving skill is evident and seen in the multidisciplinary problem solving skills of Senior Researchers and Project Team leaders to develop visions that transcends precise details and subjects, thereby enabling the fusion of multiple facets of scientific knowledge for practical purposes and work processes. In the same way Quinn(1992), in his work on “Managing Proffessional Intellects” posit that pure invention most often is in the area of specialty of such highly capable individual. This is because they are best able to recognize the interrelationships among technologies required for value creation and move in the direction to visualize and provide complete solution to it. This is contrary to the views of the relationship between action and tacit knowledge explored by Hedesstrom and Whitley(2000), who argues that tacit knowledge is merely difficult to explore by the knowledge bearing expert to provide solutions to managerial concerns. What they put forward as a basis for their argument was that tacit knowledge almost from its definition can not be codified, in essence: because of where it is –typically in the minds of individuals. To them tacit knowledge is the knowledge you never see. This claim emerge from a similar distinction made by Sutton(2000) in his work on” knowledge and Conscious Execution of Task”. Sutton distinguish between the human state in conscious execution of a task and the human state in unconscious execution of same task. To Sutton unconscious knowledge cannot be directly assessed. If this being the case, how do you trust judgement from such human mental state .To Sutton how does reason prevail to make sense out of such judgement. Clarification was given on the above assertion by Zander and Zander(1993)that they maybe, infact possibilities of directly accessing this unconscious knowledge when it is converted to other form,so as to utilize the specific action in it, which an organisation can benefit from under certain conditions i.e management routine practice, specific human interaction context, when the pace performance is slow and pace variations are tolerable by the individual and when a standardize controlled context for the performance is assured( Zander and Zander 1993 cited in Howells 1999).

Similarly other related ideas were drawn from the works of Collins and Kush(1998) who in Hedesstrom and Whitley sense argue that, since tacit knowledge is personalised, and it resides in the mind of an individual. Once it is processed in the mind of individuals it becomes information. When this information is articulated or communicated to others in the form of data via computer output or written words then the conversion process can occur as discussed in the works of Zander and Zander (1993).Under this circumstances, in the organisation context, informations that are express in the above form is said to appear in explicit form or source of explicit knowledge.In the organisation, explicit knowledge is technical and carefully codified in a hierarchy of database or manuals (Smith 2001).For example explicit knowledge implies factual statements about issues as material properties, technical information, and routine manual instructions. Unlike tacit knowledge, explicit knowledge has the potential to explain why things work. As a result of the ease to communicate and store explicit knowledge in the organisation, there is little chance of losing explicit knowledge stored in files, since it is available in organisational repositories. Such knowledge can be accessed and used easily by anyone in the organisation unlike tacit knowledge(Grant1996).In this regard Hall and Andrrani(2003) argued that explicit knowledge is internally safe. However, plausible as this seems, explicit knowledge management practice in the organisation amidst heavy market competition involves heavy investment in electronic systems (Eginton 1998; Sbarcea 1998).Alternatively if that being the case, a vast space is needed to keep documents. In this regard Boral(2002) argues that this involves excessive documentation. Far greater than this is that, there is a high risk of imitation –if competitors gain assess to these document; leading to the loss of actual competitive advantage. In this situation explicit knowledge is externally vulnerable(Hall and Andriaini 2003).At this end, if we contend that the knowledge base of an organisation between the two ends over emphasis one at the expense of the other – a paradox exist, which leads to the question of which among tacit and explicit knowledge there is more competitive value in facilitating its exploration and management in the organisation, amidst the accelerating dynamics of market environment. Following this reasoning several scholars argued that tacit knowledge occupies the centre stage in the development of more competitive value (Nonaka 1991).

These authors offer analogies between breakthrough innovation and artistic creation. They affirm that the relationship between these two forms of knowledge expression is truly intimate. But still innovators, often have a difficult time expressing in words a vision derived from years of experience and indwelling- which brings to the fore again, the distinction among the two knowledge forms. They(Innovators) often experience a compelling desire to express themselves to pursue a hidden truth that demands talents to be revealed .To this end creating value in future market may become increasingly dependent on the ability of innovators to exploit tacit knowledge as a medium for forming deep connection with customers needs. This is because, the merging of tacit knowledge logical insights with an emphatic understanding of human needs has the potential to capture market attention and inspire customer loyalty. In practice when this singular act is reinforced by appropriate managerial actions, the capacity of employees to merge multiple sources of tacit knowledge into a breakthrough product can represent a truly unique competitive advantage and value to the organisation (Mascitelli 2000).

Strategically from the standpoint of the firm , the tacit knowledge content in the heads of employees can be a powerful source of great insight to creativity. The ability of the organisation to nurture such knowledge source may be more important to longterm competitive value than the benefits of even the most successful business product line of the organisation. Recent literature studies has emphasise the importance of this form of knowledge assets(Quinn 1992;Burton 1995). Quinn (1992) posit that tacit knowledge intangibles as know how, design expertise, market insight e.t.c largely determine the value of most product .A good illustration of such knowledge base tangibles and its antecedent effect is the significant effect company loyalty card take part in , among major UK retailers operations today. Contrary to the popular belief that Tesco Plc competitive advantage in the UK is its economy of scale- is that the clubcard which conveys an array of material benefits across virtually every discipline of its business is Tescos most potent weapon in the UK retail industry(Financial Times 11/12/2006).With the loyalty card which was introduce by Tesco ,you can gain insight on a customers shopping habit and you can judge his/her social class. Brand managers can track who is buying their products or responding to promotion and in turn make better decision.

This was a strong concept generated by creative minds from the companys knowledge assets which was first treated with scepticism by other retailers when it was first introduced by this company. By the time other retailers realized that the loyalty card is the big brother of the shopping world –the company was far ahead of these retailers. Although the concept has being copied by other retailers-core capabilities as well spring of innovation as the above concept from employees, are so steeped in the tacit cultural social and intellectual environment of a firm that they cannot be discern by outsiders (Leonard Barton 1995).In his work on “The Wellspring of Knowledge” Leonard Barton (1995) quoted a company CEO of suggesting to take his rival competitors on a detail tour of his facility and give away nothing, this is because they cannot take the knowledge and insight home with them. Infact the major drawback for the case of explicit knowledge as a useful competitive knowledge tool is its vulnerability to being transferred easily. Unlike tacit knowledge that is difficult and costly to transfer, making it considerable less mobile than explicit knowledge, as a result firms can possess unique capabilities that are hard to copy and invisible to outside observers. This can be carried out by personalising or codifying this particular type of knowledge using information technology support tools depending on the balance of series of competitive strategic knowledge management options applied by organisation (Alavi and Leidner 1999).The application of the codification strategy allows knowledge to be distinct and independent of individuals. While knowledge management strategy as personalisation allows the channelling of individual strategies to the right place when it is needed. Knowledge management strategies involving codification can be well facilitated by technologies as database. For example Accenture Knowledge Space System Database -where descriptions of management consultant interventions and outcomes are described, alongside Xeros Eureka Database System –where the experiences of service engineers are captured is a good illustration of the above knowledge management strategy practice by organisations(Quin, Andersen etal 1996). Similarly the popular Mckinsley Institute Development Network Database which is utilized by its users and members to facilitate organisational learning still fall under this category.

By contrast the personalisation of tacit knowledge are often sparingly supported by technology because of the nature of its form –they have a greater emphasis on specific human interaction and relationship building(Connell,Klein etal 2003).The works of Alavi and Leidner (1999) on “Knowledge Management System Challenges” highlight clarifications on the above subject.They argued that for one persons personalised knowledge to be useful to another, such knowledge must be communicated in such a manner as to be interpretable and accessible. Since knowledge management is a systemically organized process of acquiring, organising and communicating tacit knowledge of employees for usage and accessability by other employees for effective work functions. Put differently this suggest that if a cognitive intellectual activity to tacit knowledge management practice is adopted, Brown(1998) argues that; then the issues facing those responsible for its management are less related to creation, innovation and value added but more concerned with capture and integration. Such a perspective is contrary to the definition of knowledge management from a systemic view and its transfer perspective. On the other hand if knowledge cannot be shared , it will inevitably have limited organisational value. However Daveport and Prusak (1998) considers issues as these cited by Brown(1998) can be redressed by attending to cultural issues eminent within the organisation .They emphasised that, this can be facilitated by making knowledge more visible in the organisation by developing and encouraging activities such as knowledge sharing. For instance Ernst and Young Incentives to stimulate knowledge sharing are used in routine work performance reviews. Employees who spend a lot of time helping each other and adding to the corporate knowledge base are openly rewarded and recognized (Wah 1997).Besides Merrill Lynch rewards its employees for sharing knowledge with others based on how much direct help they give colleagues. The degree of high quality person –to-person dialogue a partner has with others can represent as much as one quarter of his or her annual salary (Quinn,Anderson. etal 1996; Hansen, Nohria. etal 1999).In the same way Andersen worldwide shares its knowledge among its customers anywhere in the world through its ANET electronic system links of 82,000 people operating in 360 offices in 76 countries (Quinn.,Andersen,etal 1996). Similarly to add value in an organisational context , tacit knowledge utilization management process, involves stimulating creativity and innovation within people and intergroup function ( Harrison 2002).It involves putting knowledge source (people) in the right direction , developing their commitment to listening to the voice within , and providing data to demonstrate the improve result achieve( Harrison 2002).

However there are different and relative model framework to which tacit knowledge can be utilized to add value to the organisation. Perhaps the most revealing works on tacit knowledge was performed by Nonaka and Takeuchi (1995), and a similar work was also performed by Talcott Parsons (1951) in organizational learning systems model and general theory of social action. One peculiar aspect among these models is the emphasis on specific organisational factors which gave the models significance in their application. These factors- if when influenced by effective knowledge management practice in line with organisational human resource management practice in the work place, will help enhance the capability of the whole organisation to make significant progress. This factors are further categorised into factors within the individual(knowledge source) and situational factors outside the individual. Factors within the individual comprises of intangible resources as memory, communication, and motivational system while situational factors outside the individual consist of issues as leadership style and organisational culture, in other words factors which more or less describe the situation in which tacit knowledge is utilized(.Koshinen 2003). Memory system consist of ones experience, mental models and intuitive ability. It is believed that multi faceted experience of an individual increases his or her possibilities to solve problems arising in a task. That is, the capability of an individual to solve a problem is dependent on the richness of his or her existing knowledge structure(Lyles and Schwenk 1992; Bower and Hilgard 1981).The mental model on its part, provides the context to view and interprete new material information(Argyris 1989,Kim1994).Mental models can be developed in the workplace if there are constant provision for teamwork where participants engaged in cross fertilization of ideas. Similarly it is also important to know that the tacit knowledge resource of an organisation rest within the mental models of its personnel. From the aforementioned analysis discussed so far, what is critically important in the application of these factor is –if it is well identified by human resource practice in the workplace .This will be of valuable help to make a perfect fit to what is required from the work environment to bring about innovative ideas of value.

Intuition on its part is the end product of tacit knowledge acquisition (Reber 1989). It operate to assist an individual to make choices and to engage in a particular class of action –to have a sense of what is right and proper, and “to get a point” without really able to verbalize what it is that one has gotten (Reber 1989). For example innovators have rich intuitions about complex problems which they can not explain how they come about the situation in details (Stahle and Gronroos 1999;Cooper and Sawaf 1997).Individuals with deep insight as the above are common in most organisation. It is believed that records and experience will help to identify these individuals and engage them in organisational roles which will help them stimulate these qualities, particularly organisational roles in operational research and development. Similarly the practice of interaction through face to face communication allows organisation personnel to get to know each other through building and maintenance of strong social networks that generate trust and commitment. Put differently, through constant communication people learn to trust each other. Koskinen (2003) stress that they can depend on one another, regardless of the situation. This kind of relationship build organisation social capital, which provide the foundation for sharing tacit knowledge that creates the conditions necessary for high task performance. In the same way (Weick 1995) stress the need of close proximity to foster communication in his works on “Collective Mind in Organisation”. He posit that if people want to share meaning it needs to be carried out in a place they choose where they can talk about their shared experience in close proximity. Architectural design and physical building which regulate this social interaction should be removed. Furthermore factors such as commitment and trust are important functions and motivational components that affect the willingness and openness of people in harnessing tacit knowledge in an organisation (Senge 1990). Several literature studies of motivational theories abound in organisation behaviour study, where employees can be bounded to work task /duties by the organisation, and these are content theories, process theories, and equity theories(Pionton 2006).Within these theories, knowledge creation is anchored in the commitment of its holder and receiver. This implies that knowledge is related to human action stemming from individuals level of motivation to the task(Nonaka and Takeuchi 1995).

Furthermore the possibilities and willingness of people to share tacit knowledge in the organisation in a way which will be of valuable benefit to the organisation financial and market performance is for the organisation to provide them with an environment that allows learning and innovation to flourish (Drucker 1993). This is made possible when the organisation leadership style connotes support for emerging processes with collaborative altitudes and skill towards reinforcing reciprocal relationships that facilitates dialogue and learning(Nonaka 2000, Jones 1996). In the light of the above it is believed that the leadership that create new knowledge is largely a matter of giving the people creative freedom within a framework devise by the leader (Koskinen 2003).In addition the cultural web theory highlight in precise terminologies the underlying ways of life of people in an organisation, alongside the set of management practice and behaviours that both exemplify and reinforce these ways of life in the organisation(Denison 1990). For this reason organisational culture has a major role in facilitating how tacit knowledge in an organisation can be an added value to organisation overall performance. Within this concept emerge the organisations shared values and visions –which is vital for the organisation .This is because they provide the focus and energy for knowledge creation. On the basis of the above discussion, it can be asserted that organisational culture stabilizes a firms way of operation which inturn supports the initiative and effort of individuals in their work( Marijosola 1991).

Consequently as product and service becomes increasingly knowledge intensive, the means of making profits and competing in the marketplace is to become an effective learning organisation- profit and product remain the goal, but it is continous learning that enables growth (Owen 1991). To achieve and sustain competitive and added value requires organisations to learn better and faster amidst ever changing market environment. For this reason the knowledge base of a learning organisation should continuously engage in Tacit knowledge learning processes to acquire, capture and re use knowledge. This process of knowledge is integral to work activities to improve processes and results. Recognizing the dynamic nature of this phenomenon involves all those internal and external factors previously discussed, in the models to the application of tacit knowledge in the organisation .Accordingly, the intense competition in the corporate landscape and critical academic literature studies on this subject introduced in this essay cannot help, but reveal the increase attention paid to tacit knowledge in todays corporate world of business. Tacit knowledge makes work go smoothly, it increases the quality of the work and it often characterizes a master of his/her profession. For this reason, the critical task for Human resource development is to develop resourceful humans able to access and use the tacit knowledge learning resources around them. Together these factor create understanding on how the organisation knowledge management process in relation to tacit knowledge creation can be effectively utilized.

REFERENCES

Agyris. C. (1989) Reasoning, Learning and Action: Individual and Organisational .Jossey-Bass, San Francisco, CA.

Alavi .M. and Leidner. D (1999) Knowledge Management Systems: Issues, Challenges, and Benefits. Commun AIS Article 7, 1:1-28.

Aaltio-Marjosola.I (1991) Culture Change in a Business Enterprise. Acta Academiae Oeconomicae Helsingiensis, Helsinki.

Boiral .O (2002) “Tacit Knowledge and Environmental Management”, Long Range Planning, Vol35,pp 291-317.

Brown A (1998) “Narrative, Politics, and Legitimacy in IT implementation” In: Connell .N and Klien. J etal (2003) Its Tacit Knowledge But Not As We Know It: Redirecting the Search for Knowledge. Journal of the Operational Research Society, Vol 54, 140-152.

Brown .J and Duguid .P(1998) Organizing Knowledge, California Management Review,Vol 40, No.3, pp90-111.

Bower .R and Hilgard E (1981) Theories of Learning. Prentice-Hall, Englewood Cliffs, NJ

Cooper .R and Sawaf.A (1997) Executive EQ, Orion Books, London.

Connell .N and Klien J etal (2003) Its Tacit Knowledge But Not as we Know it: Redirecting the Search for Knowledge. Journal of the Operational Research Society,Vol 54, pp140-152.

Collins. H and Kusch. M (1998) The Shape of Action: What Humans and Machines Can Do.MIT Press: Cambridge, MA, USA.

Denison.D(1990) Corporate Culture and Organizational Effectiveness.Wiley.NewYork.

Drucker. P (1993) “The New Society of Organisations “, In: Howard.R (Eds) The Learning Imperative. Managing People for Continuous Innovation, Harvard Business School Press, and Boston, MA.

Daveport.T and Prusak. L(1998) Working Knowledge. Harvard Business School Press: Boston, USA.

Eginton. K (1998) “Knowledge Management-law Firms can do it too” In: Jasimuddin.S, Klien.J etal (2005) The Paradox of Using Tacit and Explicit Knowledge: Strategies to Face Dilemmas. Management Decision Journal, Vol43, No1, pp102-112.

Financial Times (2006) Eyes in the Till. Financial Times Magazine .11/12 /2006.pp17-22.

Grant.R (1996) “Towards a Knowledge Based View of the Firm”, Strategic Management Journal, Vol17, Special issue, pp109-22.

Gulatti.R.and Zajac.E (2000) “Reflection on the Study of Strategic Alliance” In: Faulkner.D and De Rond .M (Eds) Cooperative Strategy: Economic, Business, and Organisational Issues. Oxford: oxford university press, 363-74.

Hansen.M, Nohria.N etal (1999) “Whats your Strategy for Managing Knowledge?”, Harvard Business Review, March-April ,pp106-16.

Hall .R and Andrrani (2003) Managing Knowledge Associated with Innovation, Journal of Business Research, Vol56, 145-52.

Hedesstrom.T and Whitley. E (2000) What is Mearnt by Tacit Knowledge? In: Proceedings of the 8th ECIS Conference, Hansen.H, Bichler.B, and Mahrer.H (Eds) 45-51, Vienna.

Hakasson.H and Snehota.I(1995) Developing Relationships in Business Networks. London: Routledge.

Harrison.R (2002) Learning and Development. Third Edition, CIPD. London.

Hosley.S, Lau.A etal (1994) The Quest for the Competitive Learning Organisation. A Management Decision Journal .Vol 32, No6. pp5-15. MCB University Press.

Jones .S. (1996) Developing a Learning Culture, McGraw-Hill, London.

Jarillo.J (1988)”On Strategic Network”. Strategic Management Journal, Vol9, pp31-41.

Kim .D(1994) “From Individual to Shared Mental Models” The System Thinker, Vol 5, No 3.

Koshinen.K (2003) Evaluation of Tacit Knowledge Utilization in Work Units. A Journal of Knowledge Management.Vol 7, No5, pp 67-81.

Lawson.C and Lorenzi.E (1999) Collective Learning, Tacit Knowledge and Regional Innovative Capacity. Journal of Regional Studies, Vol33, o4, pp 40-54.

Lyles.M and Schwenk.C (1992)”Top Management, Strategy and Organizational Knowledge Structures”. Journal of Management Studies, Vol 29, No2.

Leonard- Barton.D(1995) Wellsprings of Knowledge. Harvard Business School Press.Boston.

Langlios.R and Robertson.P (1995) Firms, Markets and Economic Change: A Dynamic Theory of Business Institutions.Routledge, London.

Moller.K and Svan.S (2006) Role of Knowledge in Value Creation in Business Nets. Journal of Management Studies, July, Vol 43:5.

Mascitelli.R (2000) From Experience: Harnessing Tacit Knowledge to Achieve Breakthrough Innovation. Product Innovation Management Journal.Vol17, 179-193.

Nonaka.I, Konno.N etal (2000) “Emergence of Ba”, In: Nonaka.I and Takeuchi.N (Eds) Knowledge Emergence, Social, Technical and Evolutionary Dimensions of Knowledge Creation. Oxford University Press, London.

Nonaka.I and Takeuchi.H (1995) The knowledge Creating Company. Oxford University Press. New York.

Nonaka.I (1991) The Knowledge Creating Company. Harvard Business Review, Vol 69, No6, pp96-104.

Nonaka.I (1994) A Dynamic Theory of Organisational Knowledge Creation. Organisational Science Journal, Vol 5, pp14-37.

Norman.R and Ramirez.R (1993) “From Value Chain to Value Constellation: Designing Interactive Strategy”. Harvard Business Review, July –Aug, pp65-77.

Owens .H (1991) Riding the Tiger: Business in a Transforming World. Abbott Publishing, Potomac, MD.

Polanyi.M (1996) The Tacit Dimension. Doubleday Publishers.In: Mascitelli.R.(2000) From Experience: Harnessing Tacit Knowledge to Achieve Breakthrough Innovation. Product Innovation Management Journal,Vol 17,pp179-193.

Porter.M(1985) “Competitive Advantage: Creating and Sustaining Superior Performance”In: Pollini.C (1999) The Value Net: A Tool for Competitive Strategy. John Willey and Sons. Chichester.

Pionton.J (2006). Organisational Behaviour Module Handout. MA Personnell and Developement.2006 Session.Leicester Business School.

Quinn.J, Anderson.T etal (1996) “Managing Professional Intellect: Making the Most of the Best “. Harvard Business Review, March/April,pp71-80.

Quinn.J (1992) Intelligent Enterprise. The Free Press, New York.

Reber.A. (1989) “Implicit Learning and Tacit Learning”, Journal of Experimental Psychology: General, Vol 118 ,No3,pp219-35.

Shwandt.D and Marquardt.M (2000) Organisational Learning: From World class Theories to Global Best Practices, St Lucie Press, Boca Raton, FL.

Senge (1990) The Fifth Discipline, The Art and Practice of the Learning Organization, Doubleday, New York.

Stahle. P and Gronroos.M (1999) knowledge Management –Knowledge Capital as Competitive Advantage of a Firm.WSOY, Helsinki.

Sbarcea.K (1998) “Know What, Know How, Know Why: Implementing a Knowledge Management System- the Phillips Fox Experience” In: Jasimuddin.S, Klien.J etal (2005) The Paradox of Using Tacit and Explicit Knowledge: Strategies to Face Dilemmas. Management Decision Journal, Vol143, No1, pp102-112.

Smith.E (2001) The Role of Tacit Knowledge in the Workplace. Journal of Knowledge Management. Vol5-No4, 2001 pp311-321.

Sutton.D(2000) Knowledge and Conscious Execution of Task. European Journal of Information System10:80-88.

Wah. L (1999) Making knowledge sticks. Management Review, May, pp303-12.

Wah. L (1999) Behind the Buzz. Management Review. April, pp.17-26.

Weick. K (1995) Sense Making in Organisations, The British Psychological Society, Leicester.

Zander.U and Zander.I (1993) “ Innovation and Imitation of Multinational Companies: Preliminary Remarks on the Role of Tacitness” In: Howells (1999).Tacit Knowledge, Innovation, and Technology Transfer.Technol anal Strat Manage 8: 92-106.

BIBLIOGRAPHY.

Arauyo.L, Easterby Smith.M etal (1999) Organisational Learning and the Learning Organisation: Developments in Theory and Practice. Sage Publishers.London.

Bate .P (1999) Creating Training and Development Strategy. Institute of Personnell and Development. London.

Mayo.A (2004) Creating a Learning and Development Strategy: The Human Resource Business Partners Guide to Developing People.CIPD Publication. London.

Prahalad.H. (1994) Competing for the Future . Harvard Business School Publication. Boston.MA.

Stoik Musah writes from LBS.
stoik_joy@yahoo.com

Why Organisations Engage in Corporate Social Responsibility.

2008-04-01T02:58:00.000-07:00

Stoik Musah
LBS, Leicester,
shamsmusah@gmail.com

Responsibility results when an individual or organisation accepts a certain duty , and follows up by endorsing that duty with corresponding behaviours. In the case of social responsibility by an organisation the corresponding behaviour will be manifested in its corporate , legal, and economic systematic actions in recognition of a given societal responsibility and its attempt to meet that social need ( Oosterhout and Heugens 2006). This essay intends to explore why organisation might get involved in Corporate Social Activity- and even seek to demonstrate the extent organisation legitimize their CSR potentials in the eyes of critical outside audience by adopting formal CSR ethical programmes and policies to influence CSR practice.

Much academic work conducted ( Carroll 2000, Bovens 1998, Goodin 1986, Lantos 2001) in this subject area, would agree that the corporate social responsibility concept is about the societal duty of business organisations in general. Carroll (2000) define corporate social responsibility as the economic , legal,ethical and discretionary expectations that society has of an organisation at any point in time. In a more broader terminology of the concept, the Worldbank(2004) define corporate social responsibility as the commitment of business to contribute to sustainable economic development – working with employees, their families, the local community and society at large to improve the quality of life, in ways that are good for business and good for development. Overall the basic idea of the literature studies in the concept is that corporate social responsibility is rooted in the recognition that businesses are an integral part of the society, and it would seem common sensical they have the potential to make a positive contribution to social goals and aspirations (Jones, Comfort etal 2005).

From the above definitions, it can be very well imagined that the notion of corporate social responsibility in the academic field of business and society is a vague term which can mean anything to anybody. The CSR concept literature studies not only seek to define CSR in these vague terms but also stretch to develop the framework to understand more systematically , the complex network of factors that lead companies to engage in CSR initiatives. For instance there is an increasing public demand on business leaders to include social issues as part of their strategies in the present day social and political business climate (Lantos 2001). Managers continually meet demands from various stakeholder groups to devote resources to CSR. Such pressures emanates from constituencies as employees, consumers, communities and environment( McWilliams and Siegel 2001). Employees pressures includes the increasing public recognition of certain employee rights in the workplace , including non-discrimination in hiring, firing and promotion. Similarly consumer pressure includes production of safe products and greater amount of consumers information. While community and environmental pressure encompass investing in pollution abatement equipment and ensuring that the business operations do not threaten the safety of local community etc. With reference to the above highlighted stakeholder groups, the pressures from internal actors as employees was highlighted in the works of Aguilera, Rupp etal (2005) analysis on examining how employees might push corporations to engage in CSR initiatives. Their findings suggests that CSR perception shapes employees altitudes and behaviours towards their firms. Infact the perceived fairness of any working environment do impact employee well being (i.e job satisfaction , stress and emotion) as well as other internal organisational considerations as absenteeism, and employee commitment (Collquit 2001). In effect where fairness is perceived , employees are happy and hardworking.

Equally pressures from external actors as consumers and community usually exercise their CSR demands using voice and social movement strategies, such as impose sanctions and demonstration as in the case of the anti-genetically engineered food and crops campaigns in the E.U, the anti-Nike activist demonstration in the US or the anti-Shell activist demonstration in Ogoni, Nigeria (Paine and Moidoveanu 1999). Smith(2002) observed that these organisations are sceptical on the possibility that product boycott announcements is associated with significant negative stock market reaction, and this affect investors belief on sales both directly and indirectly, through harm to the firm and brands reputation.

For example , the criticism of Shell-BP by environmentalist on the companys operation in Ogoni-Akwa Ibom State, Nigeria, and the company apparent failure to use its influence to prevent the death penalty sentence passed by the Nigerian authorities on Ken Saro-Wiwa and others protesting Shells environmental damage to Ogoniland has resulted in the widespread negative publicity of the British company in that country(Aguilera, Rupp, Williams etal 2005).For this reason a critical consideration of CSR by many firm is the reputational risk, heightened by criticism of corporate practice as the above (Shell Nigeria experience),particularly by NGOs- as a result the business case for CSR is much stronger. This consideration has forced companys to realise that being socially responsible is not only the right thing to do, it can also distinguish a company from its industry peers. In this case - in a highly competitive market, CSR might provide a valuable basis for differentiation; this is seen as more firms now include environmental claims within their advertising instruments (Drumwright 2000).

On the contrary, the subject academic debate entails those critics who question the greater attention of the concept application of shareholders fund to the CSR community initiatives, without regard for the likely effect on companys profits and organisations future opportunities for research, innovation and expansion. Kapstein(2001) in his work on “ False Notion of Corporate Social Responsibility” reiterated the ideas of the neo-classic economist Milton Friedman(1962) that business only social responsibility is to use its resources to engage in activities designed to increase its profit, so long as it engage in open and free competition without deception or fraud. Friedman (1962) concept of business and societal relationship was strictly centred on the latter producing the needed goods and services at prices the former can afford. Friedman reasoned that a departure from this business role amount to spending some one else money, and placing the firm at a competitive disadvantage. He question whether managers were competent to engage in social issues, and saw no reason this group of individuals should carry out the role of government in the society.

However the accuracy of the ideas in Friedman economic model in separating business and society in the present day economics of business is widely contested, since the strategic decisions of large organisation inevitably involves social as well as economic consequences (Mintzberg 2002), invariably there is no such thing in the agenda of most organisation as purely economic strategic decision any more. Yet many managers still find some element of Friedman ideas appealing. This is seen in most organisations action programme on CSR initiatives, that is- there is often little real substance to what some firms claim to do. Klein (2000) argued that in some instances, the amount spent promoting a firm CSR achievement is often more than the amount spent on the CSR activity itself. Furthermore if eventually organisations decide to commit to such initiative, the expenditure is often viewed as investment which will yield financial return in the near future (McWilliams and Siegel 2001).These long term benefit might not immediately show up on a firms financial statements, but this bank of goodwill on the part of the organisation can be of future benefit when the organisation come under public criticism or other image/reputational risk.

To illustrate this point, Ford Motors spent millions of dollars on an advertising campaign to convince parents that most 4-8years old children should rise in booster seats, which raise children in auto seats, so that adult seat belt fits better. The company gave away 1million such seats (Kiley 2001). The goodwill generated among customers, government regulators and consumer advocates from such effort might likely justify the investment someday. For this reason strategic CSR initiative as the above can result in those helped feeling grateful and indebted to the organisation and would reciprocate in various ways, by giving it their business , recommending it to others, asking government regulators to stay at bay and so on (Brenkert 1996).This makes good business sense as it is in line with Friedman(1962) organisation profit maximization concept -for owners of capital, by promoting societal CSR initiative.

Furthermore, far greater than the longterm financial security and profit maximization CSR provides for the firm are organisational considerations at the operational level. For instance business imperatives like cost and efficient work process seems to be the key drivers of CSR initiatives, that is- CSR initiative as environmental issues (energy savings, reduced CO2 emission etc) designed to reduce CO2 emission and global warming is also seen to businesses as an avenue to reduce cost (i.e the cost of maintaining fleet of delivery trucks). In a similar way, social issues focusing on good working environment and conditions, health and safety at work discussed previously all help to promote stability, security and efficiency within the workforce (Jones and Comfort 2005).

Another organisational motive in line with the above illustration result from the natural resource based view and dynamic capabilities application theory of a firm (Barney 1991). This theory maintains that the ability of a firm to perform better than its competitors depends on the interplay of human, organisational and physical resource over time. The rationale behind this theory entails that; resources, most likely - that will lead to competitive advantage are those that meet four criteria-VRIO(Value, Rare, Inimitable and Organisation). Based on this perspective some authors ( Petrick and Quinn2001) identified social resources which can be a source of competitive advantage such as the process of developing proper relationships with primary stakeholders as employees, customers, suppliers and communities using CSR initiatives.

In addition to the above in the CSR debate, there emerge alternative theoretical framework in the practice of legitimizing and economising the concept theories in the eyes of critical outside audiences. For this reason, the adoption of formal programmes of ethics is hard to deny that organisations increasingly try to influence ethical CSR practice within industries using formal CSR ethical programmes and policies (Weaver, Trevino etal 1999). Today the adoption of formal programme of ethics is popular in the contemporary business world, ie The DowJones Sustainable Index(ISO9000 and ISO9001), The Influential KLD Research and Analytics Inc(Domini 400 Social Index, DSI), Quality and Environmental Standards(ISO14000 and ISO14001) and others. Such programme involves the adoption of ethical codes to set organisational norms and guide concrete behaviour in CSR organisational practice. This involves formalised procedures for auditing and evaluating ethical standard (Godfrey 2005). Godfrey (2005) in his works on “The Relationship Between Corporate Philanthropy and Shareholders Wealth” posit that in most organisation, formal ethics programme described as the above is often adopted as some kind of risk management tool. The writer argues that-again, this make good business sense for managers on the consideration that – by improving the ethical climate of the organisation, managers may seek to avoid excessive costs associated with risks like employee theft, fraud and bribery. Likewise this ethics programmes often serve as small investment in preventive measures, which are deliberately made in order to avoid much greater liabilities in the court room (Trevino, Weaver etal 1999).

In addition to the aforementioned ethical considerations an organisation may adopt an ethics programme when powerful stakeholders like financiers threaten to discontinue their support to the organisation if it would not do so (Frooman 1999). Another plausible account of this demonstration may result from the coercive demands of institutional actors like the state or the profession (Professional Institutes or Chambers of Commerce) or from the examplinary behaviour of high status peers in the industry (Haveman 1993). By this, the organisation without such programmes, who look up to the state and these high status companies are likely to imitate these successful companies- again with coercive institutional pressure from the state, ethical falsibility on the part of organisations is most likely expected. This demonstrates that ethical considerations are mere ceremonial qualities by industry actors to legitimize their CSR potentials in the eyes of critical outside audience.

Overall, given this broad analysis explored on business and its relationship with the society, and considering the diverse links of CSR that cuts across a broad range of activities carried out by organisations - previously know under diffused labels as corporate philanthropy, corporate community involvement, ethics, sustainability management, cause related marketing as well as stakeholder integration, it is hard to deny that there has being nothing appealing to organisations on the notion of CSR (Oosterhout and Heugens 2006). For this reason if management leadership is interested in moving the CSR agenda forward, it will require management awareness in these subject areas, to help inform better judgement of the main issues on the concept to facilitate drastic organisational change initiative. In consequence, management must understand that- at the moment CSR drives companies, to achieve competitive advantage. They should understand that it is their behaviour that serves as a model and message – sender to all, in the course of driving this change programme forward, therefore their commitment is the key to reinforcing these values, alongside the commitment from other top management, ie marketing unit as well as the support of the board of directors(Lantos 2001). Similarly to implement this change programme,it is the role of management to innovate and communicate a few simple shared values and visions that form a common ground upon which CSR activities can stand, by proclaiming these values continuously and demonstrating devotion to it through (i)actions (ii)encouraging employees to invent and innovate new CSR ideas that conform to these values and visions and (iii) rewarding every attempt to advance these values and visions(Lantos 2001). Moreover, measurable and achievable goals should be set in each of the CSR activities, including expected benefits to every stakeholder.

Consequently, wide academic research studies exist to unearth the greater sentiment that continues to underpin business thinking why organisations get involve in CSR. However the previous discussion reveals the analogy that organisation, is extremely liberal in giving is misleading. Although it is expected of business to be liberal in their contribution to societal good - in the real world of business this is not so, what is commonsensical to remain competitive is how you make do with the resources and opportunities available to you, and not what would be the ideal practice in your actions. This is because businesses are formed for limited economic purpose and competitive market resources are so efficiently applied to business initiatives, that it would be impossible to attain fairness in CSR initiatives without making some other persons (shareholders) worse off. Nevertheless the verdict today is that CSR is increasingly expected from organisation by the society, and this can be rewarding for both societal stakeholders and the firm if a clear, strategic and measurable CSR agenda is put in place by the organisation as spelt out previously in the role of management leadership in moving the CSR agenda forward.

REFERENCE.

*Aguilera.R, Rupp.D, Williams.C etal (2005) Putting the Back in Corporate Social Responsibility: A Multi-Level Theory of Social Change in Organisations. An Academy of Management Review,Vol 16,pp 691-71.

Ambrose .M, Seabright.M and Schminke.M (2002) Sabotage in the Workplace: The Role of Organisational Injustice. A Journal of Organisational Behaviour and Human Decision Processes, Vol89, pp47-965.

Barney.D (1991) Firm Resources and Sustained Competitive Advantage. A journal of Management, Vol17,pp 99-120.

Beardwell. I, Holden.L, and Claydon.T (2004) Human Resource Management: A contemporary Approach. 4th Edition; Harlow: Prentice Hall Financial Times.

Bovens.M (1998) The Quest for Responsibility: Accountability and Citizenship in Complex Organisations. Cambridge University Press.

Brenkert.G (1996) “Private Corporations and Public Welfare”. In: Larmer.R (eds) Ethics in the Workplace: Selected Readings in Business Ethics. West Publishing Company, Minneapolis, USA.

Brooks.I (1999) Organisational Behaviour, Financial Times Management, London.

Buchanan.D and Huczynski.A (2004) Organisational Behaviour, Financial Times Management, London.

*Carrol. A and Buchholtz. A (2003) Business and Society: Ethics and Stakeholder Management. Thomson. Ohio.

Colquitt.J(2001) On the Dimensionality of Organisational Justice: A Construct Validation of a Measure. Journal of Applied Psychology,Vol86,pp425-445.

*Carroll.A (2000) The Four Faces of Corporate Citizenship. Academy of Management Journal, Vol4, pp497-508.

Drumwright.M (2000) Socially Responsible Organisational Buying: Environmental Concern as a Non-Economic Buying Criterion, Journal of Marketing ,Vol58,pp1-19.

*Elkington.J (1999) “Cannibals With Forks”. In: Aguilera.R, Rupp.D etal (eds) Putting the Back in Corporate Social Responsibility: A Multi-Level Theory of Social Change in Organisations. An Academy of Management Review, Vol16, pp691-71.

*Friedman.M (1962) “Capitalism and Freedom”. In: Kapstein.E (eds) The Corporate Ethics Crusade, Foreign Affairs, Vol80, No5, pp105-119.

Frooman.J (1999) Stakeholder Influence Strategies. The Academy of Management Review,Vol 24,No2,pp191-205.

Godfrey.P (2005) The Relationship Between Corporate Philanthropy and Shareholder Wealth: A Risk Management Perspective. The Academy of Management Review,Vol 30,No40,pp777-798.

Goodin.R (1986) Responsibilities. The Philosophical Quarterly,Vol36,No142,pp50-56.

Hillman.A and Keim.G (2001) “Shareholder Value, Stakeholder Management, and Social Issues: Whats the Bottomline”. In: Garriga.E and Mele.D (eds) Corporate Social
Responsibility Theories: Mapping the Territory. A Journal of Business Ethics, Vol53, pp51-71.

Haveman.H (1993) Follow the Leader: Mimetic Isomorphism and Entry Into New Markets. Administrative Science Quarterly, Vol38, pp593-627.

Jones.P, Comfort.D, etal (2005) Corporate Social Responsibility: A Case Study of the UKs Leading Food Retailers. British Food Journal, Vol107, No6, 423-435.

Kiley.D (2001) Ford To Replace Up To 13Million Tires. USA Today, 22 May 2001.

*Klien. K (2000) Perils of Corporate Philantropy. In: Lantos.G (2003) Corporate Socialism Masquerades as CSR: The Difference Between Being Ethical, Altruistic and Strategic in Business. Strategic Direction,Vol 19,No6,pp31-35.

Kapstein.E (2001) The Corporate Ethics Crusade. Foreign Affairs, Vol80,No5,pp105-119.

Kozinets.R and Handelman.J (2004) Adversaries of Consumption: Consumer Movements, Activism and Ideology. Journal of Consumer Research,Vol31, pp691-704.

*Lantos.G (2001) The Boundaries of Strategic Corporate Social Responsibility. Stonehill College Publication, MA.

McWilliams.A and Siegel.D (2001) Corporate Social Responsibilty: A Theory of the Firms Perspective. Academy of Management Journal,Vol21,pp117-127.

Mintzberg.H (2002) Beyond Selfishness. MIT Sloan Management Review.pp67-74.

McWilliams and Siegel (2001) Corporate Social Responsibility: A Theory of the Firm Perspective.In: Lantos.G(eds) The Boundaries of Strategic Corporate Social Responsibilty. Stonehill College Publication,MA.

Oosterhout.J and Heugens.P (2006) Much Ado About Nothing: A Conceptual Critique of CSR. Erasmus Research Institute Publication, Erasmus School of Economics,Netherland.

Paine.L and Moidoveanu (1999) Royal Dutch/ Shell in Nigeria: Case Study. Harvard Business School Publication,Vol9,pp399-426.

Petrick .J and Quinn.J (2001) The Challenge of Leadership Accountability For Integrity Capacity as a Strategic Asset, In: Garriga.E and Mele.D (eds) Corporate Social Responsibility Theories: Mapping the Territory. A Journal of Business Ethics,Vol53,pp51-71.

Robbins.S (1996) Organisational Behaviour. 7th Edition, Prentice Hall.

Rollinson.D and Broadfield.A (2002) Organisational Behaviour and Analysis: An Integrated Approach, 2nd Edition; Harlow: Financial Times Prentice Hall.

Smith.C (2002) Corporate Social Responsibility: Not Whether But How? Centre of Marketing Working Paper,London Business School Publication.No3-701.

Trevino.L ,Weaver.G etal (1999) Managing Ethics and Legal Compliance: What Works and What Hurts. Carlifornia Management Review,Vol41,No2,pp131-151.

The Economist (1990) Boycotting Corporate America, In: Aguilera.R, Rupp.D, etal (2005) Putting The Back in Corporate Social Responsibility: A Multi-level Theory of Social Change in Organisations. An Academy of Management Review.Vol 16,pp691-71.

Thompson.P and Mchugh.D (2002) Work Organisations: A Critical Introduction. 3rd Edition,Basingstoke: Palgrave.

Weaver.G, Trevinol.L etal (1999) Integrated and Decoupled Corporate Social Performance: Management Commitments, External Pressures and Corporate Ethics Practices. The Academy of Management Journal,Vol42,No5,pp539-552.

Evaluating The Extent to Which People and Performance AMO Model has Contributed to the Strategic Human Resource Debate.

2008-04-01T02:52:00.001-07:00

Stoik Musah,
LBS.Leicester,
shamsmusah@gmail.com

Strategic HRM system can be seen as an investment. This focuses on developing and maintaining a firm’s strategic infrastructure (Becker et al. 1997). The role of HRM can help the organisation achieve competitive advantage through their people. This is an advantage the organisation has that leads to superior performance relative to current and potential competitors. This therefore produces a significant relationship between HR systems and performance, where HR systems contribute to organisational performance. The ‘bundles’ of integrated HR practices are at the centre of High Performance Work Practices (HPWP). These practices include comprehensive employee recruitment and selection, incentive compensation and performance management, employee involvement and training. These practices will result in improving the knowledge, skills and abilities of the firms’ current and potential employees. This will lead to enhance employee motivation consequently a strategy to retain high quality workforce (Huselid, 1995). The best practice model emphasises the importance of horizontal alignment and vital role of managers in recognising the commitment of their employees which in return will lead to enhance performance, however, best practice approach tends to neglect the external environment on factors that can hinder or enhance organisational performance. The configurational approach has had a major influence on organisational performance as the approach firstly tends to look at the needs of the business and then designs its HR on a continuum to help deliver the business strategy, therefore, enhancing organisational performance.

Barney (1991) Resource Based View claims that HR can be the source of sustained competitive advantage; however, there are four criteria that have to be met. Firstly, the HR system has to add value to the firm production process; therefore, the level of individual performance has to be taken into consideration. Secondly, the skill the firm seeks has to be rare, this will help the firm maintain competitive advantage as this will cause the skills difficult to imitate and reproduce my competitors which is the third criteria of non imitability. Hence, investing in firm specific human capital will decrease this. Lastly, the firm specific skill should not be substitutable by other methods such as technology if it is to maintain a competitive advantage and continuously lead to high level of performance. Wright and McMahan (1992) claim that although these criteria are important in sustaining competitive advantage. The crucial factor is the actual creation of firm specific competitive advantage and then look at how the firm can capitalise on this to potential source of profitability.

High Performance Work Practices have to be tailored to meet an individual organisations specific context to produce high levels of performance. Therefore, in order for these practices to have an impact on organisational performance there needs to horizontal and vertical alignment where HRM systems support the business priorities (Golding, 2007). Support for this comes from Appelbaum (2000) AMO theory of performance. This theory states that performance is the function of employee ability, motivation and opportunity. The theory claims that people will perform well when they are able to do so (because they have the necessary knowledge and skills to the job), they have the motivation to do so (they will do the job because they want to) and finally, there will be enhance performance if their work environment provides the necessary support (for example through functioning technology).

It is therefore important for HR to be ‘fitted’ to business strategy. This can be done in a number of ways take for example the influence HRM practices have on employee skills through the acquisition and retention of the firm capital. Recruitment strategies often include an attempt to sell the organisation as an attractive place to work as this will reach out to a pool of applicants. However, in order to be effective this has to be paired with reliable and valid selection processes to capture high quality staff into the organisation, therefore, increasing the chances of higher profitability and other high performances such as high standard of customer service. Formal and informal training is also necessary in order to further develop the workforce such as coaching, mentoring, on the job experience, management develop can all aid personal as well as business growth. However, these types of training programmes can only be implemented by Walton (1999) refer to as Strategic HRD where there is a supportive learning culture. This will means that HRD will have to take on a more influential role by helping individuals to develop and innovate through activities such as team working. Yet, in order to successfully tap into the tacit knowledge of individual employees there has to be trusting relationships within the organisation, as knowledge is not only a competitive resource for the organisation but also for the individual. By converting tacit knowledge into explicit, this can lead to threats of unemployment for the individual concerned. If anything the firm needs to make sure that strategies are implemented to retain these high quality individuals within the firm as they have the skills and knowledge for innovation which could lead to high levels of performance as well as sustaining competitive advantage in the long term.

Yet it can be argued for these employees to want to share their knowledge as well as continuously performing to high standards, these individual employees need to have some kind of motivation. Employers need to find ways to motivate staff not only to work harder but also smarter. This can be assessed through forms of performance appraisal which will direct employers to evaluate how well individuals or groups are performing. These appraisals can be linked in with incentive compensation schemes that can be aligned to the interest of the employee such as ESOP. Another common form of financial incentive from the best practice model is contingent pay, when an organisation is performing well employees are rewarded accordingly. However, there have been cases where senior managers of poor performing organisations have been rewarded with large pay-off, therefore, eliminating the purpose of the scheme (Golding, 2007). High performance is often initiated when employees work together in teams as they can share high ideas and this can lead to innovation. But tension may arise which has to be managed effectively when trying to implement these schemes within the organisation, as those who traditionally earned good bonuses on an individual systems of performance related pay, do not welcome team based production systems (Appelbaum, 2000).

It is often difficult to see how organisations operating in highly competitive markets, with tight financial control and margins would be able to invest in HR practices that promote best practice model. This can be overcome by implementing non financial strategies such as matching individual skills and potential to the skills that are required by the job. That way even the firms that have limited resources are able to increase high levels of employee satisfaction and commitment which will naturally lead to lower levels of turnover and high levels of performance from these individuals. This is also supported by the balance score card (Kaplan and Norton, 1996) which also contributes to the development of SHRM. The strategy involved is establishing goals and measuring cause and effect relationships as well as the shared understanding between different areas of the business. However, the balanced scorecard has been criticised as it does not have a direct link to productivity therefore, require the acknowledgement of the multidimensional nature of the organisational performance.

Although there has been is a link between SHRM and performance, there is a question of the validity of the research methods that has been used to gather the data such as questionnaires and self reports. This can lead to high levels of subjectivity. Also Wall & Wood found that in 25 of research studies, 21 of the studies had used single respondents as the sole source of data. This again is highly subjective and does not really get a holistic representation of the influence SHRM has on performance. Wall & Wood (2005) argue that in the relationship between SHRM and organisational performance should depend on using large scale, long term research in partnership between research, practitioner and government communities. There is also a lack of empirical evidence for many organisations to implement high commitment model and best practice, as this can be problematic due to the short-termist driven economy, where most organisations are just looking to increase return on shareholders value. Therefore, long term performance is not the focal point for many organisation, only looking to increase performance in the short term, hence integrated SHRM is of little value to these organisations.

In conclusion, SHRM can be seen as an investment and can help the organisation achieve a competitive advantage against current and potential competitors. This superior performance indicates that there is a significant relationship between HR systems and performance, with bundles of integrated HR being at the centre of High Performance Work Practices. These practices must have an impact on organisational performance through horizontal and vertical alignment. However, in order to be highly effective AMO theory of performance needs to be applied within practices, where the employee ability, motivation and opportunity for performance are taken into consideration. This can be achieved through bundles of HR such as training and development, recruitment and selection, reward and recognition. Although these factors play a crucial part on high performance it is also important to ensure that there is a supportive organisational culture and all key stakeholders are involved. The RBV claims that there are four criteria have to be met in order for HR to have a sustainable competitive advantage: HR systems have to be valuable, non imitable, non substitutable as well as be rare to ensure that high performance is maintained and to ensure sustainable competitive advantage.

What Makes Human Resource Development “ Strategic”.

2007-05-16T06:33:00.000-07:00

Stoik Musah,
LBS,Leicester.
United Kingdom.
Stoik_joy@yahoo.com

Human resource development is defined as a set of intentional activities by an organisation to increase employees skills, abilities or knowledge, and direct these skills and abilities for the company’s benefit (Marsick and Watkins 1990).The term refers to the planned procedures through which the human capital of the organisation grows- to people behind that function or to the outcomes of developmental procedures i.e. growth in the skill and knowledge reserve (Marsick and Watkins 1990).Traditionally, within this concept understanding, the existence of different dimensions of strategy, perspectives ,contents and process-helps strategist avoid the pitfall of a single isolated practice on its impact on organisational performance. This essay therefore sort to describe what makes human resource development strategic within these divergent literature perspectives, with particular interest in the systematic logic in its application with organisations internal components issues and people related matters.

Similarly some evolution has taken place in this frame of reference. This entails that for scholars to contribute to the richness of the strategic significance of the concept, the strategic requirements of the organisation need to draw research design from multiple theoretical perspective- this has caused, the focus on internal resources and processes, to be a large part of the discussion. For this reason it can be stated that only the recognition of the internal component has made it possible for issues of adding value to business performance, issues of knowledge skill and ability to meet business objective, issues of gaining synergy from human resource process and practice through horizontal alignment etc, among other people related issues to truly find their way into the strategic arena (Ulrich 1997). Although some other parts of the literature studies see human resource development as a philosophy of management (Beer and Nohria 2000).
Moreover a one central feature to human resource development among these studies is its strategic logic in its application. This has made several authors adopt the findings of the study of Human resource development also from the view point of strategy models. For example Schuler (1989) and Walton (1999) have created integrated frameworks to cover different aspects of human resource development by using a certain approach to business strategy. Here strategy is seen generally as an idea of how a company reaches its goals. This is carried out through the implementation of strategic planning and systematic processes.

In another direction, within the concept literature studies ,another common feature by many writers (McCracken and Wallace 2000, Boxall and Purcell 2000) is the tendency to create one model which is then applied to all people related activities within the organisation (Recruitment, Training, Development, Appraisal etc). This entails an underlying assumption that all these human resource activities share the same basic nature and play a similar kind of role in relation to strategic management. Although there are exceptions, if we wish to analyse the contribution of Human resource development as a whole, to business performance; each activity deserve its own consideration. For this reason human resource development has many applications in modern literature.

But also well represented in the human resource development literature within this definition is Luoma (2000) works on: (i) The Traditional Approaches that can be formed based on conventional views on the strategic role of human resource development and (ii) Organisational Approach to internal capabilities as a central source of competitive advantage to the concept (HRD) application. Within this Luoma (2000) traditional approach to human resource development, it is assume that; (i) human resource development is driven by development needs within the organisation and that (ii) some concept of the subject have their interest in the outer world of the firm. Mabey and Salaman (1995) reiterated this position that a general view of the role of human resource development in relation to strategy within this framework is to see strategy as a means to assess and address skill deficiencies in the organisation. In other words, the task that is being carried out in the organisation has been further broken down into certain roles, and that a competence profile has been identified for each of the role. The company can then pursue its strategy if it’s entire people live up to their roles and possess the appropriate competencies. On the contrary, the reverse will be the case when people fail to accomplish their roles; they face a skill performance opening. This requirement can be closed with the help of human resource development (Pettigrew and Whipp1991).

The adoption of human resource development as the above demands constant monitoring of factors affecting the expected performance of people issues and processes within the organisation. For example a change in any area has to be translated into new competences profiles and any noticeable failing area is closed by human resource development initiatives (Torraco and Swanson 1995). The strategic logic behind this process (HRD) implies that the development within these internal arrangements is being driven from the objectives of the organisation rather than from those of individual personnel. Robinson and Robinson (1990) stressed that since the development is driven by the organisations objective, the approach often tends to be rational, deliberate and a sequential process, starting from the needs assessment and ending in the phase of evaluation-were the results achieved are compared with the learning objectives set earlier in the process. This is strategic in the sense that unless the emerging needs are being taken care of (Organisations Interest), the implementation of the strategy can be compromised by the organisation. This development need approach within the organisation gives human resource development a vital role in the strategy implementation of the situation. Consequently when the company is forging ahead towards its objectives, and the critical parts within the organisation face a lack of appropriate competence, human resource development is used to close the performance skill requirement and so assisting the progress.

Furthermore some literature studies on human resource development also have their strategic logic influenced by interest in the outer world development trends (Beer 1980, Butler et al 1991, French and Bell 1990). In contemporary business environment, those responsible for human resource development unavoidably encounter a constant stream of external developmental options available. The continous supply- from the environment, of this developments, form trends that organisations find very difficult to ignore. The reflections of these trends are (i) Total Quality Management (ii) Teambuilding (iii) Empowerment (iv) Management Development Programmes etc. This trends, Jackson and Schuler (2003) suggest; that synergies can be achieved when bundles of its practices are horizontally aligned with the organisations set objectives- this position the writer re-emphasized; can contribute to a define set of behaviours and performance expectations within the organisation. Likewise, and most recently Guest (2002) strengthened this position that in addition to the above, it is important to have functional and process integration to achieve the economies of scale expected from the application of these practices. The strategic functional integration both writer suggest, emphasize the need to have a high quality human resource development process mechanism to ensure enormous strategic impact. However the strategic rationale behind this horizontal alignment with human resource practices is not only in the direct benefit organisations get for their businesses, but also in the risk of losing in competitiveness, if these trends were ignored.

In addition to the aforementioned illustration, human resources development can be a part of the organisations strategic planning exercise by facilitating the learning process itself as suggested by Agyris (1989). According to Agyris (1989) the internal learning process can be seen as a set of learning experiences to shape employees behaviour where participant are required to make use of skills related to solving problems and interaction between individuals etc. This set of strategic learning activities (as critical reflection, tacit learning and action learning) are designed to facilitate organisational learning. Garavan (2007) posit that the capacity of the human resource development plans to focus on these learning activities is dependent on its capacity to cultivate a working environment of openness with accessibility of information and involvement of individuals at all levels in the organisation.

Furthermore, some writers (Burgoyne 1988) see this strategic learning perspective of human resources development as one of the ultimate level of the strategic integration of management development and business planning. Alternatively, this thinking has led to the second element of Luoma (2000) works on the idea of organisational approach to the internal capabilities as a source of competitive advantage introduced earlier at the onset of this discussion. According to the theorist (Prahalad and Hamel 1990, Pfeffer, Ghoshal and Bartlett 1998) arguing for this theoretical perspective the strategic management literature has traditionally emphasised factors within the organisation about the way people act, and that these factors, when harnessed, will be very difficult for competitors to copy. This is because they constitute knowledge, skills and processes developed over time into workable combinations within the context of a particular organisational setting (Long and Vickers-Koch 1995).It is assume here that the term organisational setting in this respect stands for two important aspect required for the strategic process of human resource development; and they are (i) The Organisational Structure and (ii) The Human Resource Strategy applied. The relationship between these two important aspects of strategic human resource development has been discussed extensively in many notable writings Mintzberg 1990, Galbraith and Lawler 1993, Dalton et al 1996 among others too numerous to mention) on strategic management.

That is to say, in this theoretical perspective, the decisions on structuring are based on the nature of competencies required in different operations. These studies presented frameworks for using the resource based theory in aligning organisational structure with strategy. The central debate within the literature studies emphasize the role of organisational capability as a critical source of competitive advantage- and thus as the determinant of structural decisions. Moreover other research studies on the strategic nature of human resource development process in an organisation structure, is close to Beer et al (1984) age long Matching Model distinction between strategy and organisations structure- that structure follows strategy . The underlying assumption behind this theory is that human resource development strategy and an organisations structure follow and feed upon one another- and this is influenced by environmental forces. The environmental influence the writer assert emerge from the fact that- there must be a fit between competitive strategy, internal human resource development policies and a fit among the elements of human resource practices( ie action learning etc). This relationship is said to be reactive in the sense that human resource strategy is submissive to corporate strategy (Boxall 1992). As Boxall (1991) emphasis; that human resource development cannot be conceptualise as a stand alone corporate issue, strategically it must flow from and be dependent upon the organisations structure- it is therefore seen as strategic by virtue of its alignment with business strategy, organisational structure, and internal consistency.

Furthermore, the other important element of organisational setting consideration in the strategic logic behind human resource development is the human resource strategy. The strategic significance of the human resource development in this direction is to effectively feed the targeted individual behaviour with all those human resource practice that guide employees behaviour in the organisation. For the most part, issues relating to competences emerge in the course of facilitating this process- but even at that, this is not enough to provide the organisation with the requirement, of the capabilities we search to introduce in the understanding of the strategic nature of human resource development. The competences has to be processed to turn into capabilities, alongside sustained and reinforced with the help of other aspects of human resource management i.e. Selection, Appraisal, and Reward (Ulrich and Lake 1990). For this reason human resource development gives the guideline for these practices and thus create a framework for human assets to be exploited and developed (Schuler 1992). This makes the strategic nature of the human resource development concept apparent again. Since at first, human resource development can be used for creating organisational capabilities, that calls for the alignment of other HR practices and secondly it can also be used for the modification of organisation structure to generate desired behaviours, it follows that according to this capability driven approach, human resource development thus support strategy by making the process of strategy happen.

Similarly strategic action process is required to institute the work habit and culture required for the implementation of human resource development policies. For this reason and to effectively shape the organisation working culture in line with strategic human resource development systems; the key to implementing this internal consistency is to institute the visions and values to develop the desired work habits within the organisation- and an effective leadership structure will be the platform to set the scene for this process, like Garravan (2007) suggested in the dynamic framework for strategic human resource development: that leaders set the agenda for the organisation by conferring legitimacy on human resource development policies through strategic action processes, their strategic influence to the human resource development course will be concern with showing bottom-line results i.e. Creating employee commitment to the vision, establishing the fit of all those SHRD systems introduced previously with organisations processes, people and resources.

Consequently, the beauty of these analogies is that, to understand the strategic significance of human resource development , one has to search in depth, the thinking, theories and research studies on the concept(SHRD), and then try to connect these postulations with our understanding of the concept application. The main premise of this reflective exercise is to unearth the strategic logic in the notion of human resource development, and also to comprehend that its application process consists of a multi- level concept whose contribution to the organisation is to enhance its performance in the long-term. This Human Resource Systems processed, can be rewarding if a clear, measurable SHRD systems is put in place, alongside the right leadership structure and culture by the organisation – for this will go a long way to facilitate this process.

REFERENCES

• Agyris .C. (1989) Strategy Implementation: An Experience in Learning. Organisational Dynamics, Vol18, pp14-15.
• Beer. M. (1980) Organisational Change and Development. Scott-Foresman and Co Publishers.
• Beer. M. and Nohria. M. (2000) Cracking the Code of Change. Harvard Business School Publication.
• Beer. M et al (1984) Managing Human Assets. Free Press, New York.
• Boxall. P (1991) Strategic Human Resource Management: Beginnings of a New Theoretical Sophistication. A Human Resource Management Journal, Vol2, pp60-75.
• Boxall. P (1992) Strategic Human Resource Management: Beginnings of a New Theoretical Sophistication, Human resource Management Journal, Vol2, No3.
• Boxall. P and Purcell. J (2003) Strategy and Human Resource Management. Industrial and Labour Relations Review, Vol57, Issue1, Article84.
• Burgoyne, J. (1988) Management Development for the Individual and the Organisation. Personnel Management, June, pp40-4.
• Butler J et al (1991) Strategy and Human Resource Management. South-Western Publishing, Cincinnati. OH. Chicago.
• Dalton .G et al (1996) Strategic Restructuring. A Human Resource Management Journal, Vol35, No4, pp433-52.
• French. W and Bell. C (1990) Organisational Development: Behavioural Science Interventions for Organisation Improvement 8th Edition, Prentice-Hall.
• Galbraith. J and Lawler. E (1993) Organising for the Future, Jossey-Bass, San Francisco CA.
• Garavan. T (2007) A Strategic Perspective on Human Resource development. Advance in Developing Human Resources Journal, Vol9, No1.
• Ghoshal. S and Bartlett. C (1998) The Individualized Corporation. Heinemann, London.
• Guest. D (2002) HRM, Corporate Performance and Employee Well Being: Building the Worker into HRM. Journal of Industrial Relation, Vol44, No3, pp355-358.
• Jackson. S and Schuler. R (2003) Managing Human Resources Through Strategic Partnership. 8th Edition, Cincinnati. OH.
• Johnson.G and Scholes. K et al (2006) Exploring Corporate Strategy, Prentice-Hall.
• Long. C and Vickers-Koch. M (1995) Using Core Capabilities to Create Competitive Advantage. A Journal of Organisational Dynamics, pp7-22.
• Lundy.O and Cowling.A (1996) Strategic Human Resource Management .Thompson Learning.
• Luoma M. (2000) Investigating the Link between Strategy and Human Resource Development. Personnel Review, Vol29, No6, pp769-790.
• Mabey C. and Salaman G. (1995) Strategic Human Resource Management, Blackwell, Oxford. Management Journal, Vol35, No4, pp433-52.
• Marsick .V and Watkins K. (1990) Informal and Incidental Learning in the Workplace. Routledge, London.
• Marsick V and Watkins K. (1993) Sculpting the Learning Organisation: Lessons in the Art and Science of Systemic Change. Jossey-Bass, San Francisco CA.
• Mazzucato.M (2001) Strategy for Business. Sage Publication, London.
• McCracken. M and Wallace. M (2000) Towards a Redefinition of Strategic Human Resource Development. Journal of European Industrial Training, Vol24, No5, pp281-290.
• Miles.R and Snow.C (1984) Designing Strategic Human Resource Systems. A Journal of Organisational Dynamics.Summer,pp36-52.
• Mintzberg H. (1990) Strategy Formation: School of Thought, In: Fredrickson, J. (eds) Perspectives on Strategic Management. Harper Business, New York.
• Pettigrew A. and Whipp, R. (1991) Managing Change for Competitive Success. Oxford; Blackwell.
• Pettigrew.T and Whittington.R (2001) Hand Book of Strategy and Management. Sage Publication, London.
• Pfeffer. J (1994) Competitive Advantage Through People: Unleashing the Power of the Work Force. Harvard Business School Press, Boston MA.
• Prahalad. C and Hamel G. (1990) The Core Competence of the Corporation. Harvard Business Review, May-June, pp79-91.
• Robinson. D and Robinson. J (1990) Training for Impact. Jossey-Bass Publication, San Francisco CA.
• Schuler.R (1992) Strategic Human Resource Management: Linking the People with the Strategic Needs of the Business. Organisational Dynamics, pp18-32.
• Schuler, R. and Jackson, S. (1999) Strategic Human Resource Management. Blackwell Publishers, Oxford.
• Torraco. R and Swanson. R (1995) The Strategic Roles of Human Resource Development. Human Resource Planning, Vol18, No3, pp311-35.
• Ulrich. D (1997) Human Resource Champions. Harvard Business School Press. Boston MA.
• Ulrich. D and Lake. D (1990) Organisational Capability: Competing From The Inside Out. Wiley Publication, New York.
• Walton. J (1999) Strategic Human Resource Development. London: Financial Times Prentice Hall.

Special tribute and thanks to Luomo.M, Who contributed greatly to my studies on this subject.
Stoik Musah writes from LBS leicester.Tel:07737251501,01162516339.

A Critical Analysis of In-depth Qualitative Interview in Organisational Research Studies,

2007-05-01T15:41:00.000-07:00

By
Stoik Musah.
LBS.Leicester.
United Kingdom.
Stoik_joy@yahoo.com

This essay seeks to obtain knowledge on the research methodology literature studies of indepth qualitative interview. It also sought to critically evaluate its practical application process in an academic journal article, whose report findings was derived using this data collection method. With reference to the above, an indepth qualitative interview is a dialogue between a skilled interviewer and an interviewee. Its goal is to elicit rich, detail material that can be used in research analysis (Lofland and Lofland 1995). The dynamics of this process is similar to a guided conversation, where the interviewer becomes an attentive listener who shapes the process into a familiar and comfortable form of social engagement (Patton 1990). In other words, qualitative indepth interviews typically are much more like conversations. In this type of conversation, the researcher explores a few general topics to help uncover the participants views, but otherwise respects how the participant frames and structures the responses. That is to say, the participant perspective on the phenomenon of interest unfolds as the participant wants, not as the researcher views it. In other words, the task for the qualitative researcher is to provide a framework within which people (interviewee) can respond in a way that represents accurately and thoroughly their point of view on the subject of the interview. By this, both parties behaves as though they are of equal status all through the period of the interview- whether or not this is actually so (Fontana 2002).

In sociological terms, the above illustration often brings about complexities on how the interview framing is being done. This means that; whether the interviewer is just trying to be a nice person or is following a format- these techniques can be varied to meet various situations. Here, Dezin (2004) notes that traditional techniques as the above tell us that the researcher is involved in an informal conversation with the respondent, thus the researcher must maintain a tone of friendly chat while trying to remain close to the guideline of the topics of enquiry the researcher has in mind. That is, the researcher begins by “breaking the ice” with a general questions and gradually moves on to more specific ones, while also – intelligently asking questions intended to check the veracity of statements made by the respondent. As this process continues, the researcher avoid getting involved in a real conversation in which the researcher, provides personal opinion on matters discussed- instead the conversation should entail a real “give and take”, alongside emphatic understanding from the perspective of both parties(Douglas 1985). This particular aspect of indepth interview makes the interview more honest, morally sound and reliable. This is because, it treats the respondent as equal, and it allows the respondents to express personal feelings on the subject of the interview.

In addition to the above Gordon (1980) also noted that effective indepth qualitative interview entails creating a shared concern for each other, in which both the interviewer and the respondent understand the contextual nature of the interview. For instance listening to others without taking notes or trying to direct the conversation is also important to establish rapport and immerse oneself in the conversation realm, while gathering a store of tacit knowledge about the people and the culture being studied (Fine and Sandstrom1988). The point to note in this line of thought is that, to effectively carry out an indepth qualitative interview the researcher must adapt to the world of the individual studied and try to share their concern and outlooks- only by doing so can the researcher learn anything at all. Some researchers use several methods to accomplish this task, while others apply a combination of different methods as the conversation elapse (Fine and Sandstrom1988).

For this reason, Britten etal (1995) in their work on “Qualitative Research Methods in General Practice and Primary Care” emphasis that the most widely used methods in this context, is the structured indepth interview, unstructured indepth interview and semi structure indepth interview. A structure interview is an interview in which questions to be asked and detailed information to be gathered are all predetermined (Dezin and Lincoln 2003). In a structured interview, the interviewer asks all the respondents the same series of pre-established questions with a limited set of response categories. Put differently, there is- generally, little room for variation in responses among the respondents, except where open ended questions may be used. That is, the interviewer controls the pace of the entire conversation by treating the questionnaire as if, it were a planned script to be followed in a straight forward manner. Under this circumstance, all respondents receive the same set of questions asked in the same order by an interviewer who has been trained to treat all interview situations in a like manner – thus there is very little flexibility in the way questions are asked, nothing is left to chance – there is simply little room for error. This is as a result of the inflexible, predetermine nature of the interviewing –which makes the interviewer have relatively minor impact on the response quality (Gordon 1992). However one major drawback in the literature study, the advocates of this method- are unaware of, is that; the interview takes place in a social interaction context and that its influence by that context. As Denzin and Lincoln (2003) observed that good interviewer recognised this facts are sensitive to how interaction can influence responses. In other words, interviewers should comprehend that interviewing skills involve a high order combination of: observation, emphatic sensitivity to these environment response and intellectual judgements.

Furthermore qualitative interviews can also be carried out in an unstructured manner in order to contrast them with the above highlighted form of interview method. An unstructured interview is a spontaneous conversation, not a set of questions asked in a predetermined order (Herman and Bentley1993). Here you have a focus and you welcome information on different aspects of the subject question from the interviewee. In this type of qualitative method of interview, you can direct your conversation in any direction- that is to say: you proceed in an order that is natural. The important point to note, in this type of interview method is to gather and record information on every aspects of the subject in question. Besides you can always return to an earlier subject that you did not explore at the time it was mentioned, to ask more about certain topics that require clarification (Herman and Bentley1993).Unstructured interviews are simple, informal and saves time when preparing for the interview. It provides a general understanding of the important concepts, relationships and general rules on the subject content, and this make way for problem solving strategies that can guide future enquiries in the course of the conversation. This informality aspect of the unstructured interview helps the researcher to get quickly to the basic structure of the subject domain. On the contrary this form of interview generally lacks the organisation that allows for preparation as the previously discussed structured form of interviewing. Besides both parties –in the course of the conversation- usually find it very difficult to express some of the important elements of their knowledge. In the same way the data acquired from an unstructured interview is often unrelated; existing at various levels of complexity and its difficult for the interviewer to review, interpret and integrate (Bashir and Besim 1997).Accordingly, many studies employ a combination of these two types often called a semi structured interview. This kind of interview combines both methods to bring forth the foreseen information- and also apply open ended questions- to elicit unexpected types of information. Semi structured interviews are flexible as well, unlike the structured interview which have a set of questions. In this method of interviewing, the interviewer may have a framework of themes in mind, at the onset- to explore, like it is in a structured interview, but as the conversation commence- a different method of interview, new questions and clarifications can be brought up as a result of what the interviewee says.

Consequently, the above excerpt gives a concise, yet informative synopsis of what an indepth interview entails- what is important now is to lay out the primary issues that selecting this method demand. For instance indepth qualitative interview is usually based on sample sizes (Minichielli etal 1991), and the most common form of sampling techniques used in indepth interviews is most often snowballing sampling and theoretical sampling. The snowballing sampling involves interviewing initial contacts in the organisation and then asking these contact persons who they think is appropriate to interview- to gain insight on a particular subject issue (Rubbin 1995). On the other hand the theoretical sampling involves the generation of conceptual or theoretical categories during the research process(Bowling 1997).The principles behind this method application process, is that sampling aims to locate data and to develop or challenge emerging hypothesis –this process stops when no new analytical insights or hypothesis is forthcoming.

Turning to another line of thought in this subject, that is similar to the above excerpt - is the question of having a valid research indicator to measure a concept. That is, would other researchers reach similar conclusions if they apply the same method in their research analysis? For this reason indepth interviews arguably have the greatest problems with validity of any research method(Remenyi etal 1998).In other words, while an individual may hold a matter as true and valid it may not correspond across the whole population or even among other researchers in that area of study. However, the most striking aspect in this area of validity and measurement of concept in many papers reporting the results of qualitative research is the absence of detail accounts of methodology and data analysis to describe exactly what was done in the research work. For this reason Bryman. and Burgess (1994) argues that journals need assessors who are properly equipped to evaluate qualitative reports using criteria appropriate to the methods used. In particular, an example of this application process is a critical assessment of Fang Lee Cook study entitled “Outsourcing of Public Services and Implications for Managerial Knowledge and Careers” in the Journal of Management Development Dated 00/05/ 04. The purpose of this study was to explore how the nature of work and career prospects may have changed for managers in both the public and the private sector under the public/private outsourcing relationship. It investigates managers new roles, problems, new relationships and multiple principal-agency relationships they confront, as a result of this public/private organisations outsourcing practices.

Notably, one positive outcome of the research findings was the insight in revealing interestingly unexplored issues confronting managers in these outsourcing relationships. The researcher discussed in depth the impossibility of the outsourcing provider to function properly in the outsourced firm without making use of the tacit knowledge of experience employees; who as a result of their length of work experience with the organisation have social and technical knowledge of how processes within the outsourced organisation are managed effectively- this fact reveals that management knowledge is often context specific and cannot be easily codified and transferred as some literature on knowledge management postulate(explicit knowledge)-something most of the literature studies neglect in their research analysis.

With reference to the above critical analysis on the content of the aforementioned article, reference should be made first; on the source of findings, such as the interview with the principal people in the outsourcing provider firm. That is to say, the researcher failed to provide more informations, from the interview; on the reason why these outsourcing providers fail to train their own managers as alternative to these experienced employees (in the outsourced organisation) to take over this newly acquired businesses . And to also find out from the principal staffs interviewed ( from the outsourcing provider company), if there was other reason they refuse to train these managers other than cost and the time frame involved in the process. For the most part, this should have been an interesting area to explore and understand the problems these outsourcing providers confront from their own end, in the course of the business relationship. This is because the literature studies on outsourcing most often fail to extend further, their research analysis on this subject issue. In most cases what you find in academic text is that: after portraying outsourcing companies as solution providers to complex issues confronting big businesses– they conclude and do not extend further in their analysis: to provide insight on the problems these outsourcing providers encounter in the course of managing these extensive portfolio from different client organisations.

Furthermore, the hypothesis drawn from the research work tends to be a bit focus on what the research was about. In other word, although the research question of “The Changing Role of Managerial Workers in Managing the Public/ Private Outsourcing Relationships” tend to contain what the reader expects from the researched work- yet the understanding of the question tend not to be a closed question but a question making way for a mass of loosely linked descriptive issues, that are very broad in their own making, if one wants to further explore them individually. Nevertheless, with its loosely linked nature, it becomes more focused as the study progresses. Moreover from a critical perspective on the heart of the principal line of thought in this article- the understanding of the nature of strategic alliance, management task( as define in the article), and interorganisational relationships, demands more detail analysis than that derived from the use of this method (Indepth Interview). Under this circumstance, it is not surprising that it did have been appropriate to use both qualitative and quantitative method together in a complementary fashion to bring about indepth understanding of these organisational phenomenons. This is because the loosely linked issues that emerged in the course of the research, requires quantitative analysis to dissect their constituent form to help understand their nature more. For instance, clarification on the issues underneath the rationale behind the quotation below would have been better explained using both method (qualitative and quantitative method).

“Supervisors in housing benefit are now taking – work – home, in their spare time, whereas before “they switch off” once they finish work for the day. This new approach to work gives a sense of ownership and satisfaction, but the invisible pressure is constantly presents as one supervisors said: you feel that you have to make an impression on the company”.

A formal quantitative testing of the root causes of the above excerpt would have helped standardise and evaluate the robustness of this causal hypothesis. Another critical area in question, in the use of this method in the article is in the generalisability of the representative sampling which strengthen the claims and findings in the article. For instance in page 272, the writer asserted that the source of most of the data inherent in the research findings was from over 60 semi structured interviews, carried out with senior managers, junior managers, middle managers, supervisors, trade union representative and other staffs. Moreover a total of 27 managers were interviewed face-to –face. In addition to the above, the writer described the categories of the managers interviewed: that 12 of those interviewed were senior or middle managers. But the researcher failed to provide more information on this group of individuals interviewed- more information as (i) How long have they been with the organisation and (ii) How long have they served in management positions within the organisation. In this way the researcher, thus allows the reader to note the similarities and differences between the settings, which is analysed, in the research.

On the contrary, the researcher has carefully taking into account clarity in describing the methods used to sources the research findings- one area the researcher has demonstrated to the reader that careful considerations has been given to the above subject, in this method of interview, is the way and manner a pragmatic categorisation of the three managerial groups interviewed was singled out for the research interview (Page 273). It was a perfect segmentation of the particular individual whose nature of work and career prospect has been affected by this inter-organisational relationship (outsourcing). The impact of this careful selection process- to some extent, has contributed to the robustness of many new flag up issues introduced in the course of the research findings; that was never discussed in most outsourcing literature studies. For this reason, in qualitative research literature studies, readers needs to know how the data sourced, were categorised for analysis. In particular Britten etal (1995) reiterated that readers need to be reassured- that the researcher did more than glanced through their field note and transcript, and then look for examples which will confirm those ideas. Readers are looking for evidence of rigorous and systematic analysis. That is, the reader should be confident that where researchers wants to make a claim on the basis of their data- there is evidence in the study that this data was sourced systematically.

Above all, in all research methods, the ability to present ones method and findings clearly and succinctly is of central importance. This means that clearity in the categorisation of the data sourced, clearity in the data analysis, and clearity on how this data was chosen- like for example, if quotations were properly referenced providing clarification on the source of the statement etc. In the same way, just as quantitative researchers present the data in their report in the form of tables and statistics so also do qualitative researchers present their datas in the form of quotation from transcript or excerpt from field note (Nicky etal 1995). A good description of the above illustration in the article is the quotation below.

There is no real love in between the trust and the private firm but we still scratch each others back and try to get the best out of each other… middle managers are often the scape goat and get sacrificed when things go wrong ( A Supervisor).

With the introduction of raw data as the above in the article, the researcher has to some extent demonstrated understanding in thinking clearly on the above subject by skilfully referencing the particular source in the organisation who made this statement – no name was attached. In this way it has been possible for the reader to tell who made that statement, and what is the source authority- within that organisation to come up with such claims- usually failure in this area of writing clearly demonstrates the analysis has not been sufficiently well developed.

Furthermore, the findings generated from this research work has to some extent demonstrated the significance of its result and how this apply to particular practical /theoretical problems in managerial capacity within an organisation- surely this to some extent, did contribute to the literature studies on this subject(outsourcing). In particular the study provides evidence that the adoption of information technology in management of organisational activities as seen as major cause of recent demise in middle management (Scarbrough and Burrell 1996) is not sufficiently true and valid. Infact, technology to some extent serves as a good source of competitive advantage but the tacit knowledge of managerial workers is more – a core competitive source of advantage that organisations will do all they can to acquire, retain and develop these individuals and their body of knowledge to add value to the organisations performance.

Consequently wide academic research literatures exist to demonstrate the practical application of indepth qualitative interview in organisation research study. However as has been discussed in the dynamics of its application process. It is the researcher that holds the balance of power in managing the outcome of the conversation, it must be their role, in the course of the conversation and the method of interview applied- which gives direction to what the interviewee says, and ultimately the strength of the research findings.Accordingly, success in this area will involve having to make a number of adjustments (as it applies to the article discussed previously) to the detail accounts of methodology applied, data analysis and assumptions they bring to carry out their research.

REFERENCE.

Basir .S and Besin.G (1997) The Advantages and Disadvantages of Structured Versus Unstructured Interviews. London South Bank University Publication. London

Britten. N etal (1995) Qualitative Research Methods in General Practice and Primary Care. A Journal of Family Practice, Vol12,No1,pp104-110.

Bowling .A (1997) Research Methods in Health(Chapter 6). Open University Press, Buckingham

Bryman.A (1996) Quatity and Quality in Social Research. Routledge Publishers. London.

Bryman.A and Cassell.C (2006) The Researcher Interview: A Reflective Perspective. Qualitative Research in Organisations and Management: An International Journal, Vol1, No1, pp41-55.

Bryman.A and Burgess.R (1994) Analysing Qualitative Data. Rutledge Publication. London.

Barbour.R and Babour.M (2002) Evaluating and Synthesizing Qualitative Research: The Need to Develop a Distinctive Approach. A Journal of Evaluation in Clinical Practice, Vol9, No2, pp41-55.

Cassell.C and Symon.G (1994) Qualitative Methods in Organisational Research: A Practical Guide. Sage Publication, London.

Cook. F (2006) Outsourcing of Public Services and Implications for Managerial Knowledge and Careers. A Journal of Management Development, Vol25, No3, pp269-284.

Denzin.N and Lincoln.Y (2000) The Sage Handbook of Qualitative Research, Third Edition. Sage Publication, Thousand Oaks, CA.

Denzin.N and Lincoln.Y (2003) Collecting and Interpreting Qualitative Materials, Second Edition, Sage Publication. London.

Douglas.J (1985) Creative Interviewing. Sage Publication, Beverly Hills, CA.

Easterby-Smith.M etal (2002) Management Research. An Introduction. 2ndEdition.Sage, London.

Fine.M (1984) Coping With Rape: A Critical Perspective On Consciousness. Imagination, Cognition and Personality, Vol3, pp249-267

Flick.U (2002) An Introduction to Qualitative Research. Sage Publication, New Delhi.

Frontana.A (2002) Post modern Trends in Interviewing, In: Gubrium.J. and Holstein.J (eds) Handbook of Qualitative Research, Context and Method, Sage Publication, Thousand Oaks, CA.

Gordon.R. (1980) Interviewing: Strategy, Techniques and Tactics. Dorsey Publication.IL.

Gorden.R (1992) Basic Interviewing Skills. Peacock Publications, IL.

Harman E and Bentley.M (1993) Rapid Assessment Procedures to Improve Household Management of Diarrhoea. INFDC Publication, Boston MA.

Kvale. S (1996) Interviews: An Introduction to Qualitative Research Interviewing. Sage Publication, London.

Lofland.J and Lofland.L (1995) Analysis Social Settings: A Guide to Qualitative Observation and Analysis, Third Edition.Wadsworth Publication.CA.

Marshall.C and Rossman.G (2006) Designing Qualitative Research. Sage Publication, London.

Minichiello.V etal (1991) Indepth Interviewing: Researching People, Second Edition. Longman Publications, Hong Kong.

Patton. M (1990) Qualitative Evaluation and Research Methods, Second Edition. Sage Publication, New Park CA.

Remenyi .D etal (1998) Doing Research in Business and Management: An Introduction to Process and Method. Sage Publications, London.

Rubin.H and Rubin. I (1995) Qualitative Interviewing: The Art of Hearing Data. Sage Publications, Thousand Oaks,CA.

Saunders.M etal (2003) Research Methods For Business Students. 3rdEdition. Pearson Publishers, Harlow.

Scarbrough.H and Burrell.G (1996) The Axeman Cometh: The Changing Roles and Knowledge of Middle Managers, In: Clegg.S and Palmer. G (eds) The Politics of Management Knowledge, Sage Publication, London.

Stokes.D and Bergin.R (2006) Methodology or “Methodolatry”? An Evaluative Market Research: An International Journal, Vol9, No1, pp26-37.

Wengraf.T (2001) Qualitative Research Interviewing. Sage Publication, New Delhi.

Bibliography.

Berry.R (1999) “Collecting Data by In-Depth Interviewing” Being Paper Presented in BERA 99 Conference. British Education Research Association, Leeds, United Kingdom.

Chivers.G (2006) Utilising Reflective Practice Interviews in Professional Development. A Journal of European Industrial Training, Vol21, No1, pp5-15.

Cutcliffe.J and Mckenna.H (1999) Establishing the Credibility of Qualitative Research Findings: The Plot Thickens. A Journal of Advance Nursing, Vol30, No2, pp374-380.

Domenico.M and Morrison.A (2003) Social Action Research and Small Hospital Firms. A Journal of Contemporary Hospital Management, Vol15, No5, pp268-273.

Ehigie.B and Ehigie .R (2005) Applying Qualitative Methods in Organisations: A Note For Industrial/Organisational Psychologists. A Journal of Qualitative Report, Vol10, No3, pp621-638.

Horsburgh. D (2003) Evaluation of Qualitative Research. A Journal of Clinical Nursing, Vol12, pp307-312.

Hove .S .and Anda.B (2005) Experience From Conducting Semi Structured Interviews in Empirical Software Engineering Research.11th IEEE International Software Metrics Symposium, Computer and Society Journal.

Kennedy.T and Lingard.L (2006) Making Sense of Grounded Theory in Medical Education. A Journal of Medical Education, Vol40, pp101-108.

Morse.J (1994) Critical Issues in Qualitative Research Method. Sage Publication. Thousand Oaks,CA.

A REPORT ON THE STRATEGIC HUMAN RESOURCE MANAGEMENT APPROACH TO CENTRALIZING THE PERSONELL DEPARTMENT OF AMPERSTAND CLOTHING COY AND AMPERSTANDPLUS

2007-02-14T14:07:00.000-08:00

Stoik Musah,
LBS,East Midland,
United Kingdom.
25 July 2006.

TABLE OF CONTENT

Section one. Page No

1.1 Executive Summary 1

1.2 Introduction and Terms of Reference 1

Section Two.

2.1 People Management 2

2.2 Strategic Human Resource Management 3

Section Three.

3.1 Centralizing People Management in an Organization 4

3.2 Debates on Strategic Human Resource Management. 5

Section Four

4.1 Conclusion. 7

4.2 Recommendation. 8

4.3 References 9

SECTION ONE

EXECUTIVE SUMMARY
The subject of this report is to provide insight on Strategic Human Resource Management application to people management practice for Ampersand Clothing Company. The Management intends to centralize the operations of the personnel department in the two companies (Ampersand and Ampersand Plus Clothing Company).The report discuss in depth, Strategic Human Resource Management and People Management practice in organizational development. It introduced possible strategies to affect the centralization process strategic intent, with line managers saddled with the responsibility of enforcing these strategic policies on the operational level. Possible areas of conflict was identified in the process, with suggestive management tools to proffer solution to these conflicts. In understanding the ways these conflicts emerge, discussions on the latest debates on Strategic Human Resource Management (SHRM) was introduced. It is believed that, a comprehensive understanding of the idea behind each criticism and debate will help inform better judgment on the subject.

INTRODUCTION:
This report centers on the strategic change management process for centralizing the operation of Ampersand Clothing Company and Ampersand Plus. It explores the transformation process of People Management techniques and Strategic Human Resource Management policies required for this process. For this reason, after understanding what is it about people, that translate into value for the organization of which they are part with. Strategic Human Resource Management help to build the operating environment and organizational structure, to facilitate a best fit for the desired configuration process, to bring about the desired organization structure, required for Ampersand Clothing Company, to achieve this strategic organizational and people management objective.
The first section of this report discussed people management and strategic human resource management .The subsequent section provides insight on how the two companies: Ampersand Clothing Company and Ampersand Plus, can centralize their operation to operate as one organization .In the same way, to understand the complexity involve in this process, the report introduce and analyzed the conflicting views of reknown proponents of the strategic human resource management debate. In the end, recommendations on the best possible cause of action to go about the change management process was highlighted to serve as guide for individuals acting as change agent, for this organization reengineering process.

SECTION TWO

PEOPLE MANAGEMENT:
People management involves the range of methods and approaches used by employers in resourcing their organization in such a way that they can meet their key goals .This comprises of a set of management activities that facilitates the achievement of four fundamental groups of personnel and development objectives , which are : staffing, performance, administration and change management(Taylor 2005).Staffing objectives involves making certain that an organization is able to call on the services of enough numbers of staff to meet its set objectives. These staffs may be employed in a variety of different roles but one way or the other they must be able to carry out the task and duties needed for the organization to function effectively. Performance objective begins where the staffing objectives have being achieved .The purpose of performance objective is to effect all the range of methods used by employers to motivate the staffs and make them willing to perform to the best of their abilities .While administration process on its part is concerned with managing employment relationships which has being established with these staffs in accordance with the law and professional ethics. In order to achieve these aims, it is necessary for the management of Ampersand to write out personnel and development policies, accepted work procedures and other documents relating to employment of individuals like job description, offer letters, contracts, weekly expected work hours, targets and disciplinary warnings for staffs, which will serve as guideline to their work operation. The change management aspect of people management ensures that proper recognition is given to the importance of change in the organization and its management process. Basically organization management has its arguments embedded in the organizations business environment that is subject to continual change .Take for example, when two companies’s come together during merger and acquisition. In the integration stage, some certain parts of the organization structure is more open to environmental influences, and they in turn react sharply to it (Lawrence and Lorsch,1967 cited in John Walton,1999:495).This phenomenon to the organization sometimes, can be devastating. Therefore there is need to align these managerial practices and organization structures with environmental demands so that the desired work behaviors arise(Schuber and Jackson 1987).Alternatively effective people management practice by the management of Ampersand can function as an important change agent to redress this situation when the need arise(Taylor 2005).

STRATEGIC HUMAN RESOURCE MANAGEMENT:
Strategic Human Resource Management cannot be discussed comprehensively without understanding the concept of Human Resource Management studies. This is because both SHRM and HRM do have areas of convergence in their operation. In other words, Human Resource Management concerns the human side of the enterprises and the factors that determine workers relationships with their employers, it covers, among other factors: management and workers communication, element of work psychology, employee relations, training and motivation, alongside conditions of work (Hannagan,1995:294).Similarly Strategic Human Resource Management is said to be the sum part of Human Resource Management with in depth insight of the organizations direction, a study on its environmental analysis, and organizational strategy formulation , together with this organizational strategy implementation and evaluation(Bratton and Gold 1999).It is also said to be the craft knowledge of the changing nature of work, to develop new human resource policies, to involve employees at all levels in the change process, to determine the most effective work process, and to build teams with the capacity to learn and become self managed. Strategic Human Resource Management also help managers to learn how to read and analyze their organization by: understanding and explaining the organizations problems retrospectively, restructuring an organization or part of it, identifying existing and preferred behaviours in the organization in order to improve work process and relationships(Jim Grieves 2003).Understanding how an organization Human Resource Strategy links with these different aspect of the organization will help to present a strategic map intended to guide all managers and change agents in their relationship with employees(Manson 2006).In the case of Ampersand Clothing Company and Ampersand Plus , the SHRM policies should be related to the internal operations of both company’s , from the composition of its activities in terms of product line in the shop floor and service undertaken, to the technologies on which these activities are based , and the shared behaviour/culture of the people in each organization, alongside the manner in which the organization is structured and controlled. This is important, since the central objective of the strategic human resources intent is to centralize the operations of both companies. To affect this objective the strategic planning should be jointly developed by the head of the central authority and business unit managers. Planning is centralized with the central authority or Head Office having the final say. The Head office further arrange and direct the HRM strategy development by setting and coordinating organization wide priorities- here people management has already being spelt out as both companies set objective to reposition the organization .This should be followed by a corporate vision of long-term perspective which requires central coordination and control. This vision should be realistic, feasible, simple and clear in the strategic human resource management objective. And then efforts are made centrally to create cross business synergies.

SECTION THREE

ADOPTION OF SHRM AS SOLUTION FOR CENTRALIZING PEOPLE MANAGEMENT PROBLEMS IN AN ORGANIZATION.

Here, Ampersand clothing company should move from an organization based on autonomous business units to an organization based on centralized coordination aimed to capture efficiencies and combine resources in innovative ways. One resolution of this structural shift is to substitute diverse processes in functional areas such as Human Resources with policy umbrella which permits bringing under the control of a central authority (Andrew Mayo 1995).The task of the Strategic Human Resource Management unit in the central unit is to determine the frame work of the best practice of work routine , which will enable linkage with the structural process, system, and strategic issues, and also to provide consultant help built around this items from the top.
This entails focusing initially on top officials like the weekly Monday morning meetings held with the management team by the Managing Director. This top officials who then operate as coaches and guide for their subordinates, who in turn were responsible for facilitating the Strategic Human Resource Management Policies among those who report directly to them (Burack 1991).As these Strategic Human Resource Management policies are being delegated down the organizational social hierarchy, at the operational level sometimes, these policies are met with constraints which sometimes disrupts its original intent. In the process consensus will be created among key managers .In a centralized organization the balancing process of this constraints can be institutionalized through the restructuring of relationship between the people at the top and those below. This can be done using a wide variety of management tools, which must be applied from the top, and down the line management, to manage the unit heads and the roots of the conflicts. In the same vain ,for each decision these conflicting sets of tools have to be traded off against the other, depending on the decision ,while overtime, from decision to decision an overall balance has to be maintained as the process continue(Dos and Prahalad 1984).For example if the conflict is considered necessary to deal simply with organizational roles, procedures and operational process, then the management tools to be applied for this particular situations will be to specify, and then slice up into roles, definitions for persons and groups in the organization. And if on the other hand it is considered that the problem is more fundamentally behavioural in origin e.g motivation, team, relationships, leadership issues, stress related work roles. Then the management tools should be geared towards dealing with emotional behavioural issues, and this requires appropriate social – psychological expertise (Jim Grieves 2003).
A successful centralized authority blends an array of these tools into a consistent management process. A company who fails in the appropriate application of these tools consistently will face difficulties in effecting coordination of its organizational resources, process and values. Jim Grieves (2002) makes it clear that it is very much important that Strategic Human Resource Development views the organization from a pluralistic perspective which sees agreement between the various sub cultures and units as a state of permanent negotiation .It is this internal development within organizational development that has given direction to the debates in the study of Strategic Human Resource Management to recognized the importance of proactive change in the organization.

DEBATES ON STARTEGIC HUMAN RESOURCE MANAGEMENT;

Strategic Human Resource Development perspective is informed by four debates on issues relating to organizational development .First is the argument that internal changes to an organization should be considered in relation to key contingencies and possible future event and from technology in particular. This is the views of those authors in support of the contingencies theory thesis (Burns and Stalker, 1961cited in Jim Grieves 2003:93).The second conflicting view of reason is that change results from the internal movement of forces in more than one organizations in which different interest groups seeks changes that maximizes their own interest, and resist changes that minimizes their interests. This is the labour process approach .The third thesis, is the argument that change is driven by well informed consumers whose insatiable appetites have force organizations to replace mass-produced goods and services with segmented market products. This the flexible specialization thesis .While the fourth view is represented by the fact that organizations are managed by key players – which are called managers , who make decisions .These decisions appears to be rational in reality, and its very convincing and fair, but is itself circumscribed by political boundaries(Woodward,1965 cited in Jim Grieves 2003:98).
The contingency approach emphasize technology as the most important variable in any organization .Here the organization structure was seen to be determined by the requirements of technology, as it applies to its resources, which are define as tangible assets: people, money and also intangible assets: relationships, brand name e.t.c .In this context decision about resources includes staffing and retention issues (Bower2001). This is to say, the staffing and retention issues, in the integrating organization should aim at retaining the local managers at the newly acquired company (Ampersand Plus) since they are knowledgeable in the local operational issues of the firm even before the acquisition. This is ideal for the acquiring company to enable the central authority keep tab with event in this company’s operating unit at the local level. Also in the area of retention , a key factor by the Malaysian company in obtaining successful people management structure in place at Ampersand will be instituting effective mechanism of a resourced based SHRM practice to facilitate the transfer of knowledge individuals from the acquiring firm to the newly acquired firm(Jackson 2001).Here a slow assimilation process should be encourage in the integration process over time .This will go a long way to redress Ampersands difficulty in recruiting and retraining quality employees to replace the skilled machine operators retired.#

Further more the change management process emphasis on technology should be reflected in every area of the organization work operation. In other word, a re-engineering of every area of its operation will be a better alternative, from accounting and stock control unit, ordering and distribution unit to clerical services and personnel. The personnel department should move from its traditional function to getting more involved in the implementation of SHRM practices that involves organizational development. Effort from the part of the central authority would be to link the personnel department functions with the organization business strategy. This approach is also known as the Best fit school of SHRM practice. The personnel department should aim at building employee behaviour in line with the firm’s strategic objective. Broader functions as employment security, work teams, performance appraisal, incentive compensation, employee ownership, competitive strategy, and advice on organization structures, should be embedded in the personnel department work routine. In this context Bower (2001) in his work argued that for two firms to integrate successfully, they need to align their HRM strategy with their integration strategy. He stressed that it will be of great importance for the organization to have a clear understanding of the integration strategy to be able to specify the role SHRM should play.
By contrast, the labour process approach challenges the assumptions that technology determines change. Rather, organizational change was seen to result from the attempt to control the labour process. As a result management control systems emerge as direct result of management intervention in the inevitable contest between the interest of capital on one hand, and labour on the other. In this way, whereas technology was the main determinant for the contingencies debate authors as John Woodward and other researchers from the labour process perspective saw the key determinants as control of the workforce with technology viewed as a mechanism in this process. In the works of Jim Grieves (2000), he stress in support of this claim that, when new technology is used, it is used as a strategic weapon in the struggle to maximize profit, principally through the deskilling of the job content and secondly by the attempt to remove control over the execution of task by workers themselves.
While the flexible specialization thesis has its debate, viewing change as a result of transformations in markets and products .Here the use of technology was seen as enhancing design and work process. As Mcloughlin and Clark(1994) argued ,that the approach viewed technological innovation as an attempt to separate the unintended consequences of mass consumer goods, by replacing them with relatively low volume, efficient process , and segmented markets. Perhaps the central core of Mcloughlin and Clark’s position was the attempt to resolve the unfavorable politics of the work place that had emerged as a result of the era of mass production of goods, when organizations were only concern with increasing production unit output.
The assumptions of the strategic choice perspective differs from the other three perspectives, this is because of its choice of methods used in selective fields of the organization. This approach was name by John Child (1972) who according to Mcloughlin and Clark, introduced the concept of “strategic choice” as a means of emphasizing the role of managerial choice rather than technology in shaping work process and organization (Mcloughlin and Clark 1994).Child suggest that the major focus should be with the process of decision making in an organization .He draws attention to the question of – who makes the decision in an organization and why these decisions are made. Strategic choices suggests that an organizations strategic choices are made in three general areas, which are (a) the domain, e.g country of origin, alongside the limitations and the constraints facing the organization (Potter1990).(b)its structures and systems e.g. this refers to choices of how centralized and standardized an organizations activities will be.(c)performance standards, which partly determines the extent of flexibility an organization has within its economic environment.
An organizations country of origin tends to influence its organizations structure and development. Take for example when two firms of the same country of origin, come together. The Human resource management strategic fit will be far different in the integration process, than when the two merging firm belongs to two different country group (Aguilera and Denker 2004).Thus we hear distinction in organizational operational practice between Liberal Market Economies like Britain,Canada,USA,Australia and Coordinated Market Economy like Germany ,France , Switzerland and Japan , where integral re-engineering process of the organization has to take into consideration the influence of environmental contingencies from these economies . For example issues like shareholders capitalism culture, national models, customers and financial institutions, are part of the context, judgment on strategic issues will be made .Thus the market for corporate governance is such that the network of relationships among stake holders will restrict centralization in a number of ways. A recent example highlighting this differences in corporate governance of the aforementioned illustration of two company’s of different country of origin is the successful take over bid of Mannesmann(German) and Vodafone (English) in 1999.Vodafone had to deal with entirely different ownership structure influence by banks , opaque accounting and disclosure rules, different company’s laws ,German corporate culture with strong orientation towards production and engineering (Hopner and Jackson 2001).However in the case of Ampersand clothing company ,there were no such issues ,stating in precise terms, the country of origin of the newly acquired company Ampersand plus to discern if the same principle apply .
Furthermore organization structures and decision making systems maybe participative or authoritarian .This system determine the nature of strategic choice decisions in an organization .In the views of Child(1972),he emphasized his position on this subject that decision making is a political process whereby strategic choices on issues such as long-term organizational objective , the allocation of the resources and organization design are normally initiated by a “a power holding group” or “dominant coalition “ within the organization .These are a group of individuals whose interest forge the direction of an organization strategic decisions.
On the other hand, performance standards on its part relate the organization within its economic environment.It partly helps to determine the extent of flexibility the organization has within its economic environment For example, performance standard based on innovativeness will lead to organization decision relating to technological literature and research and development, while performance standard based on market share will lead to organization strategic decision relating to competitor monitoring. Similarly, an organization performance standard based on reducing costs will lead to the development of cost control systems. A better approach in understanding how strategic human resource management can add value to business performance with concentration on what constitute organization performance was introduce in the US best practice model of HRM; where the application of professional human resource techniques –if when implemented by an organization will have the potential to improve employee attitude and behaviour to work (Holden etal 2004).
Taken together, these three strategic choices constitute an organizations strategic configuration and once a particular configuration has been chosen, it will be very difficult to transform it, under this circumstances the organization tend to experience extended periods of equilibrium. Therefore a change in any of the subcomponent within the configuration will lead to the need to effect transformation of the entire configuration. It is advisable that the application of strategic human resource management should not be zero down to one approach alone. But a combined application of different model approach at every stage of Ampersands people management centralization process life cycle

SECTION FOUR

CONCLUSION.
In this report, we highlighted in depth, the understanding of the concept of SHRM, HRM and the different variables embedded in the operations of people management practice in an organizational context. Basically the central objective of this report is to highlight possibility of how both organization (Ampersand Clothing Company and Ampersand Plus) can operate as a central organization .This was discussed in details by highlighting the need to effect a top down approach of the strategic human resource management practice in the organization structural hierarchy, with line managers saddled with the responsibility of enforcing this strategic policies at the operational level. As this SHRM policies is delegated down the organization structure ,the report highlighted possible causes of conflicts in the process , and suggestions was made on the effective management tools required as solution for each possible emergent conflict. In understanding the forms these conflicts sometimes identify with, the report introduce the various debates and criticisms by scholars and researchers in the field of organization development. Individually, stating clearly, convincing assumptions based on real issues, on why they strongly belief in their position. An understanding of these different views is required by any organization change agent if the individual intends to view SHRM and organizational development from a pluralistic perspective. This will help to facilitate better judgement on strategic choices and decision.

RECOMMENDATION
The management of Ampersands Clothing Company should be aware that the coordination and integration of an expanding organization requires greater central control of its SHRM, if its determine to achieve its set objective of integrating the people management of both companys.This is because a centralized SHRM is advantageous since it can plan its own activities independently by coordinating work process and maintaining a communion of shared ideas, thereby achieving more synergy and a identity as a group. This can be done by defining broader roles to the personnel unit as succession planning and strategic staffing among staff and in relation to organization positions, since the bulk of the work for this strategic process will rest in the desk of the personnel units and the line managers. The managers at all level should be aware of the benefits - centralizing people management can provide for the organization and the techniques that are applied for this process. It is generally recommended that these processes should begin small at the onset. An initial seed project is useful for trying out the methods and demonstrating the benefits in the early stages .This is because the organization changes may take some experimenting and modifying, before a comfortable structure is found; for you can’t expect everything to run smoothly from the beginning. Starting small lets people practice and get used to the idea slowly. This is preferable to a diverse intervention that tries to uproot the existing process and organization. Such a disruptive approach will likely alienate employers and managers. By beginning slowly and making changes in small increments event will unfold to result in an efficient development process and organizational structure.

REFERENCES.

Abraham.M. et al (1999) Key Factors In Predicting Effectiveness of Cultural Change and Improve Productivity In Implementing Total Quality Management. International Journal of Quality and Reliability Management, vol16, 112-132.

Aguilera and Denker (2004) HRM In Cross border Mergers and Acquisitions. Internal Journal of HRM .8 December 2004. .Routledge Publishers.

Bird .A. and Beechler.S (1994) Links Between Business Strategy and Human Resource Management Strategy in US-Based Japanese Subsidiaries: An empirical Investigation. Being Paper Presented at the 1992 Association of Japanese Business Studies Meeting.

Burns .T.and Stalker.G (1961)”The Management of Innovation “Cited in Jim Grieves (2003) Strategic Human Resource Development. Sage Publication. Britain.

Bratton and Gold.J(1999)”Human Resource Management Theory and Practice “ Cited in Jane Mason (2006) Models and Critiques of HRM. Issues in Human Resource Management Module Handout. GCIB Programme. Leicester Business School. Leicester.

Burack.E.H (1973) Changing the Company Culture –the Role OF Human Resource Development. Long Range Planning.24 (1), pp88-95.

Bryson .J. (1998) HRM Challenges In a Bank Merger-Observation from a Case Study of Westpac Bank and Trust Bank of New Zealand. Victoria University of Wellington Publication. New Zealand.

Bower.J.L (2001) Not all Merger and Acquisition are Alike and That Matters. Harvard Business Review.

Bailey.T. (1993) Discretionary Effort and The Organization of Work: Employee Participation and Work Reform. Working Paper, Columbia University.

Bower .J. and Doz .Y. (1979) “Strategy Formulation; A Social and Political Process”. In: Dan Schendel and Charles Hofer (2000) Strategic Management; A New View of Business Policy and Planning. Boston, Little brown.

Child .J. (1972) Organizational Structure, Environment and Performance; The Role of Strategic Choice. In: Jim Grieves (2003) Strategic Human Resource Development .Sage Publication. London.

Chakravarthy B.S. (1987) On tailoring a Strategic Planning System To its Context; Some Empirical Evidence. A Strategic Management Journal.

Delaney .J. and Huselid.M. (1996) Impact of Human Resource Management Practices on Perceptions of Organisational Performance. An Academy of Management Journal 1996 Vol 39.
REFERENCES

Grieves. J. (2006) Strategic Human Resource Development. Sage Publication .London.

Gratton .L. and Ghoshal. S. (2003) Managing Personnel Human Capital: New Ethos For The Volunteer Employee. A European Management Journal Vol 21 No 1, pp1-7, 2003.

Greiner.L. (1980) “Organizational Development Values and Bottom Line” In: Burke.W. And Goodstein.L. (eds) Trend and Issues in Organization Development: Current Theory and Practice. University Associate Publishers, San Diego, CA.

Hamel .G. and Prahalad.C. (1994) Competing For The Future. Boston,
MA, Harvard Business School Publication.

Hopner .M. and Jackson .G. (2001) Political Economy of Takeovers In Germany: The Case of Mannesmann and its Implication for Institutional Change. A working Paper of Max Planck Institute For The Study of Societies, Cologne.

Huselid.M. etal (1987) Technical and Strategic Human Resource Management Effectiveness as Determinants of a Firms Performances. An Academy of Management Journal.

Holden .L. etal (2004) Human Resource Management: A Contemporary Approach, Fourth Edition, Pearson Education Publishers. London.

Hannagan .T. (1995) “Management Concepts and Practice” In: Jane Mason (2006) HRM Models and Critiques. Issues in Human Resource Management Module Handout .GCIB Programme.Leicester Business School. Leicester.

Kelliher.C. and Perrett.G. (2001) Business Strategy and Approaches to Human Resource Management – A Case Study of New Developments in the United Kingdom Restaurant Industry. A Personnel Review Journal, Vol30, No4, 2001.

Lawrence and Lorsch (1967) Organization and Environment .Boston MA: Harvard Business School Publication.

Lembke.S and Wilson.M (1998) Putting The Team Into Team Work: Alternative Theoretical Contribution For Contemporary Management Practice. Human Relation Journal Vol51, No7, 1998.

Mason.J. (2006) Human Resource Management Models and Critiques of HRM.
Issues in International Human Resource Management Module Handout. Session 4. GCIB Programme. Leicester Business School. Leicester.

Marchington .M. and Wilkinson.A. (2003) People Management and Development: Human Resource Management at Work. 2nd Edition .Cromwell Press. London.

REFERENCES

Mcloughlin.I.and Clark.J. (1994) Technology Change at Work .Milton Keynes, Open University Press.

Mintzberg.H. (1973)”The Nature of Managerial Work” In: John Walton (1999) Strategic Human Resource Management .Pearson Education Publishers. Great Britain.

Mayo.A (1995) The Pain and Gain of Devolution and Empowerment: Organization and People.Pitman.pp14-18

Potter.C (1990) What is Culture: And Can It Be Useful For Organization Change Agents? Leadership and Organization Development Journal.pp17-24.

Potosnak.K. (2000) Human Factors, Tools, Techniques and Concept to Optimize User Interface. A Human Factor Magazine. Aston Tale. California.

Prahalad and Yves Doz (1984) Pattern of Strategic Control Within Multinational Corporation. A Journal of International Business Studies, Pg55.

Rayner .C. and AdamSmith.D (2005) Managing and Leading People. CIPD Publication, London.

Rees.D. and Mcbain .D (2004) People Management: Challenges and Opportunities.Palgrave Macmillian.New York.

Sebastianelli .R. and Tamimi.N (2003) Understanding The Obstacles Of Total Quality Management Success. University of Scranton.

Snell.S. (1992) Control Theory In Strategic Human Resource Management: The Mediating Effect of Administrative Information. An Academy Of Management Journal.

Taylor.S. (2005) People Resourcing, 3rd Edition.CIPD Publication,2005.

Walton .J (1999) Strategic Human Resource Development .Pearson Publishers. London.

Woodward.J (1965)”Industrial Organization; Theory and Practice, Oxford University Press.” In: Jim Grieves (2003) Strategic Human Resource Development. Sage Publication. Britain.

Stoik Musah writes from LBS,EastMidland,United Kingdom. Email: stoik_joy@yahoo.com

The Contribution of the Resource Based View of Strategic Human Resource Management on Organisational Performance.

2007-02-08T12:42:00.000-08:00

by

Kehinde Songonuga,
LBS,East Midland.
United Kingdom.

The resource-based view to strategic human resource management (SHRM) focuses on the costly to copy attributes of the firm as the fundamental drivers of performance and competitive advantage (Cooner 1991). Linking to the understanding of the resource based view of the firm; Barney (1991) described competitive advantage as “when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors”. The task is to maintain this competitive advantage in such a way that competitors’ efforts to replicate that advantage are frustrated and eventually cease. The resource-based view focuses on the promotion of sustained competitive advantage through the development of the human capital rather than merely aligning human resources to current strategic goals (Torrington et al 2002). This essay will show various ways on how the resource-based view of SHRM in organisations can contribute to enhanced organisational performance.

Human resources can provide competitive advantage for the business, as long as they are unique and can not be copied or substituted for by competing organisations, competitive success not coming from simply making choices in the present, but from building up distinctive capabilities over significant periods of time (Boxall 1996). Torrington et al (2002) argue that the focus is not just on the behaviour of the human resources, but on the skills, knowledge, attitudes and competencies which underpin this, and which have a more sustained impact on long-term survival than current behaviour. The central theme emerging in the SHRM resource-based literature is that privately held knowledge is a basic source of advantage in competition. The resource-based view generally addresses performance difference between firms using asymmetries in knowledge. A resource based theory of a firm thus entails a knowledge-based perspective; it blends concepts from organisational economics and strategic management (Barney 1991). According to this perspective, a firm’s ability to attain and keep profitable market positions depends on its ability to gain and defend advantageous positions in underlying resources important to production and distribution (Cooner 1991). Though the field of SHRM was not directly born of the resource-based view (RBV), it has clearly been instrumental to its development (Wright et al 2001). This was largely because of the RBV shifting emphasis in the strategy literature away from external factors towards internal firm resources as sources of competitive advantage (Wright et al 2001). The RBV view of competitive advantage differs from the traditional strategy paradigm in that its emphasis is on the link between strategy and the internal resources of the firm, and it is firm-focused, whereas the traditional strategic analysis concept has had an industry-environment focus (Schuler and Jackson 1999). Boxall (1996) argues that resources are not simply understood as assets in the formal accounting sense, but include any feature of the firm with value creating properties. This means that aspects of the business that are not formally owned by it, such as the talents and interactions of the people who work in it, are not ignored but come within the area of systematic interest. This justifies Barney (1991) argument that business excellence is not just about best- practice but about the intellectual capital and business intelligence to anticipate the future.

From the resource based view, in order for an organisation’s resources to contribute to enhanced organisational performance and maintain sustained competitive advantage, four criteria must be attributable to the resources: the resource must add positive value to the firm, the resource must be unique or rare among current and potential competitors, the resource must be inimitable and the organisation needs to ensure they are organised, this is also known as the VRIO framework (Golding 2004). Therefore, given resource heterogeneity, resource immobility and satisfaction of the requirements of value, rareness, inimitability, and organisation, an organisation’s resources can be a source of sustained competitive advantage (Schuler and Jackson 1999). Barney (1991) states that RBV makes it clear that firms can not expect to buy or purchase sustained competitive advantages, in that the advantages, if they exist, can only be found in the rare, inimitable, and non-substitutable resources already present in the organisation. Firstly, in order for human resources to exist as a sustained competitive advantage, they must provide value to the firm. Firms create value through either decreasing product/service costs or differentiating the product/service in a way that allows the firm to charge a premium price. Thus the ultimate goal of any HR executive is to create value through the HR function, but the first question that an HR executive must address is “How can the HR function aid either decreasing cost or increasing revenue?” (Barney and Wright 1998). Value to customers is an essential element of competitive advantage; therefore, for a resource to be a potential source of competitive advantage, it must be valuable or enable the creation of value (Fahy 1999). The HR function must be capable of making a difference in the organisation in the sense that it adds value in some way (Marchington and Wilkinson 2002). This is where the demand for labour is heterogeneous, and where supply for labour is heterogeneous-in other words where different firms require different competencies from each other and for different roles in the organisation, and where the supply of potential labour comprises individuals with different competencies (Torrington et al 2002). The suggestion of the RBV is that if HR wishes to be a “strategic partner”, they need to know which human resources contribute the most value that leads to sustainable competitive advantage in the business, as some human resources may provide greater influence for competitive advantage than others (Golding 2004). On this basis value is created by matching individual’s competencies with the requirements of the organisation and/or the job. Barney (1991) points that a resource must permit the firm to conceive of or implement strategies that improve its efficiency and effectiveness by meeting the needs of customers. This implies that though resources may meet other conditions, if they do not enable the creation of value, they are not a prospective source of advantage. The value of resources in an organisation is not enough to create sustainable competitive advantage, because if any other organisations hold the same value, then it will only provide competitive parity (Golding 2004). Therefore an organisation needs to consider the next level of the framework: rarity.

Rarity means there must be a shortage of these particular resources in the market to the extent that there are insufficient to go round all organisations (Marchington and Wilkinson 2002). The HR executive needs to consider how to develop rare characteristics of an organisation’s human resources to gain competitive advantage (Golding 2004). In some circumstances, the first organisation in an industry to implement an HR strategy can obtain competitive advantage over other firms (Barney 1991). If the HR strategy has value but no form of rarity, other organisations may develop an identical strategy or even something more unique, thereby displacing the first mover of sustained competitive advantage. A firm enjoys sustained competitive advantage when it is implementing a value-created strategy not simultaneously implemented by large numbers of other firms. If a particular valuable organisational resource is possessed by large numbers of firms, then each of these firms have the capacity of exploiting that resource in the same way, thereby implementing a common strategy that gives no one firm a competitive advantage (Barney 1991). Torrington et al (2002) argues that due to the normal distribution of ability, human resources with high ability levels are, by definition, rare. The goal of virtually all selection programs is to ensure that the organisation is hiring only the highest ability individuals. The issues then, are the validity of the selection system and whether or not the organisation is able to attract and retain those applicants considered to be of the highest quality (Torrington et al 2002). To observe that sustainable competitive advantage only accrue to firms that have valuable and rare resources is not to dismiss common organisational resources as unimportant. Instead, these valuable but common resources can help ensure a firm’s survival when they are exploited to create parity in an industry (Barney 1991). How rare a valuable firm resource must be in order to have the potential for generating competitive advantage is a difficult question. It is not difficult to see that if a firm’s valuable resources are absolutely unique among a set of competing firms, those resources will generate competitive advantage and have potential for creating sustainable competitive advantage (Barney 1991). Valuable and rare resources can create above normal profits for the firm in the short term; however, if other firms can imitate these qualities, then over time the characteristics will provide no more than competitive parity (Barney and Wright 1998).

In order for a resource to be considered a sustained competitive advantage and enhance organisation performance, human resources must be inimitable. The inability of competitors to duplicate resource endowments is a central element of the resource based view (Fahy 1999). Also competitors will not be able to duplicate the exact resource in question, as they will be unable to copy the unique historical conditions of the first firm. Wright et al (1992) use the concepts of unique historical conditions, casual ambiguity and social complexity to demonstrate the inimitability of competitive advantage stemming from human resources. Wright et al (1992) noted that this history is important as it will affect the behaviour of the human resource pool via the development of unique norms and culture. thus even if a competing firm recruited a group of individuals from a competitor they would still not be able to produce the same outcome in the new firm as the context is different. Causal ambiguity describes a situation where the causal source of competitive advantage is not easily identified and social complexity recognises that in many situations competitive advantage stems from unique social relationships that cannot be duplicated (Mahoney and Pandian 1992). Another reason that a firm’s resources may be inimitable is that they may be very complex social phenomena, beyond the ability of firms to systematically manage and influence (Peteraf 1993). When competitive advantages are based in such complex social phenomena, the ability of other firms to imitate these resources is significantly constrained. Lastly, to ensure the HR function can provide sustainable competitive advantage, the organisation has to be organised so that they can develop valuable resources that are rare and inimitable (Golding 2004). The organisation requires having in place the systems and practices that allow human resource characteristics to bear the fruit of their potential advantages. The question of organisation focuses attention on systems, as opposed to single HR practices (Barney and Wright 1998). This means a focus on horizontal integration of HR practices, rather than viewing each in isolation and the organisation ensuring that their policies and practices in the HR functional areas are coordinated and coherent, and not contradictory (Golding 2004).it is therefore clear that the employment of highly qualified and talented people can be useless without effective processes to ensure that they work well in combination and wish to contribute to organisational goals (Lado and Wilson 1994). According to the VRIO framework aspects of human resources that are valuable, rare, inimitable and appropriate HR systems in place could bring about sustainable competitive advantage.

Although RBV is of great use in helping to understand why differences exist between firms and consequently how certain organisations may be able to gain competitive advantage, it has notable potential limitations. Firstly it neglects the forces that lead to similarities in the same industry (Marchington and Wilkinson 2002). Barney and Zajac (1994) argue that RBV is tautological and does not generate testable hypotheses, recognising that most research applying the RBV has failed to test its fundamental concepts. Critics also point out that RBV focuses strongly on the internal context of the business. Some writers have suggested that the effectiveness of the resource-based view approach is inextricably linked to the external context of the firm (Golding 2004). There have been recognitions that the RBV approach provides more added value when the external environment is less predictable (Golding 2004). Priem and Butler (2001) argue that the static argument behind RBV is descriptive: it identifies generic characteristics of rent-generating resources without much attention to differing situations or resources comparisons. How the organisational resources generate sustainable rent is still not known other than through their heterogeneity. Although applications of RBV has taken variety of forms, ranging from high performance work systems and stocks of talent, to fit between employee skills and strategy it has employed a common underlying logic: human resource activities are thought to lead to the development of a skilled workforce and one that engages in functional behaviour for the firm, thus forming a source of competitive advantage (Wright et al 2001). Becker and Huselid (1998) note that this results in higher performance, which translates into increased profitability for the organisation. While this theoretical story is appealing, Wright et al (2001) notes that it is important to note that most of the empirical studies assess only two variables: HR practices and performance. While establishing such a relationship provides empirical evidence for the potential value of HR to firms, it fails to adequately test the RBV in two important ways (Wright et al 2001). First, no attempt has yet been made to empirically assess the validity of the proposition that SHRM practices are casually ambiguous, nor whether they are actually difficult to imitate. Boxall and Steeneveld (1999) argue that while instinctively obvious and possibly supported by subjective data, the field lacks verifiable quantitative data to support these declarations. That virtually anything associated with the organisation can be a resource suggest that prescriptions of dealing in certain ways with certain categories of resources might be operationally valid, whereas other categories of resources might be inherently difficult to measure and manipulate, one example of a resource that might be difficult to measure is tacit knowledge (Lado and Wilson 1994). Some have argued for tacit knowledge-that understanding gained from experience but that cannot be expressed to another person and is unknown to oneself-as a source of competitive advantage (Lado and Wilson 1994). Lado and Wilson (1994) argue that this may be descriptively correct, but it is likely to be quite difficult for practitioners to effectively manipulate that which is inherently unknowable. Mabey et al (1998) argues that in various researches carried out, there has been no strong statistical correlation between HR programmes supported by senior management and company performance. Other authors have anticipated this evidence as confirmation that managerial policies have no significant impact on an organisation’s economic performance (Mabey et al 1998). Priem and Butler (2001) also noted that in RBV studies, researchers sometimes take a frequently research strategy subject area, relabel the independent variables as “resource” and the dependent variables as “competitive advantage” and use measures common to much cross-sectional strategy research as operationalization. Together, these issues suggest that the current high level of abstraction found in the static approach to the RBV might be one thing that could limit its usefulness for strategy (Priem and Butler 2001).

In a response to criticism from the resource-based theorists, Porter(1991) argues that resources are not valuable in and of themselves, but because they allow organisations to perform activities that create advantages in particular markets, add that it seems safe to suggest, however, that what the resource-based view has stimulated is a re-balancing of the literature on strategy in a way that stresses the strategic significance of internal resources and capabilities and their historical development. Boxall (1996) argues that those organisations which combine high levels of competence in multiple modes of strategy making appear to be the highest performers, and not only those organisations with astute leadership at the top but those that can combine this strength with deep employee involvement in strategic decision-making appear to be more effective. In this way the resource based view suggest an integration of theory on strategy process and strategic content. (Boxall 1996). RBV can provide a strong base for strategic HRM. The aim of RBV is to improve resource capacity-achieving strategic fit between resources and opportunities and also obtaining added value from the effective deployment of resources (Peteraf 1993). The RBV theory provides a rationale for strategic HRM and in line with intellectual capital theory, RB theory emphasises that investment in people add to their value to the firm (Armstong and Baron 2002).

The resource-based approach provides a framework for examining the pool of human resources that may be either able or unable to carry out a given strategy during the formulation phase of SHRM. Thus the resource-based view may demonstrate the fact that strategies are not universally implementable, but are contingent on having the human resource base necessary to implement them. RBV focuses on the analysis of internal strengths and weaknesses, paying particular attention to the ways in which firms can develop valuable resources and erect barriers to imitation of them. It is however, without conceptual weaknesses. Strategy analysts should remember that the firm exist in environments: resources are not ends in themselves but are useful when they create value markets.

REFERENCES

ARMSTRONG, M. and BARON, A. ( ) Strategic HRM: The key to improved business performance. London, CIPD.
BARNEY, J. (1991) Firm resources and sustained competitive advantage. Journal of management, 17 (1).
BARNEY, J. and WRIGHT, P. (1998) On becoming a strategic partner: The role of HR in gaining competitive advantage. Human resource management, 37 (1).
BARNEY, J. and ZAJAC, E. (1994) Competitive organisational behaviour towards an organisationally based theory of competitive advantage. Strategic management journal, 15 (5).
BECKER, B. and HUSELID, M. (1998) High performance work systems and firm performance: A synthesis of research and managerial applications. Research in personnel and human resource management, 16.
BOXALL, P. (1996) The strategic HRM debate and the resource-based view of the firm. Human resource management journal, 6 (3).
BOXALL, P. and STEENEVELD, M. (1999) Human resource strategy and competitive advantage: A longitudinal study of engineering consultancies. Journal of management studies, 36 (4).
CONNER, K. (1991) A historical comparison of resource-based theory and five school of thought within industrial organisation economics: Do we have a new theory of the firm? Journal of management, 15 (5).
FAHY, J. (1999) Strategic marketing and the resource-based view of the firm. Marketing science review, [online] (10).
GOLDING, N. (2004)
MABEY, C., SALAMAN, G. and STOREY, J. (1998) Strategic human resource management. London, Sage publications.
MAHONEY, J. and PANDIAN, J. (1992) The resource-based view within the conversation of strategic management. Strategic management journal, 13 (5).
MARCHINGTON, M. and WILKINSON (2002) People management and development: Human resource management at work. UK, CIPD.
LADO, A and WILSON, M. (1994) Human resource systems and sustained competitive advantage: A competency-based perspective. Academy of management review, 19 (4).
PETERAF, M. (1993) The cornerstone of competitive advantage: A resource-based view. Strategic management journal, 14 (3).
PORTER, M. (1991) Towards a dynamic theory of strategy. Strategic management journal, 12 (2).
PRIEN, R. and BUTLER, J. (2001) Is the resource-based view a useful perspective for strategic management research? Academy of management review, 26 (1).
SCHULER, R. and JACKSON, S. (1999) Strategic human resource management. Oxford, Blackwell publishers.
TORRINGTON, D., HALL, L. and TAYLOR, S. (2002) Human resource management. UK, Pearson education.
WRIGHT, P., DUNFORD, B. and SNELL, S. (2001) Human resources and the resource-based view of the firm. Journal of management, 27.

Stoik Musah and Kenneth Songunuga writes from LBS,United Kingdom. Email stoik_joy@yahoo.com

A REPORT ON A PROPOSED RESTRUCTURING STRATEGY FOR MARKS AND SPENCER GROUP,

2007-01-24T10:43:00.000-08:00

BECKY WASE DIOR.
FLORENCE MANU.
STOIK MUSAH.

16 NOVEMBER 2006.

.

1 EXECUTIVE SUMMARY.
The subject of this report centres on the possibility of Marks and Spencer Group to keep profit growing and its recent sign of improvement,amidst strong opposition from companies like Tesco in its core retail operations.The management intends to explore the complexities involve within , outside and internationally –of these envisaged challenges ,and requires advice on the possible strategy for the application of a change management initiative for the Marks and Spencer Group.For this reason ,since Marks and Spencer is a global company .The report discuss indepth ,literature studies in domestic and international retail operation.It explores the general management of retail expansion, strategic withdrawal,divestment,investment in non food retail areas, and complexities in the learning process of retailing formats.It is believed that a comprehensive understanding of the idea behind each critism and strategies, will help inform better judgement on the subject.

2 INTRODUCTION.
This report centres on the activities of Marks and Spencer Group within the ever changing international and domestic retail industry.It explores the activities of its competitors particularly Tesco Plc,and other major retailers.For this reason a financial comparism on both company(Tesco and Marks & Spencer) was given with insight on the international presence of both companys.Possible areas of difference was identified between the two companys operation. In understanding these differences , discussions on the wider literature and research studies was introduced on this subject.In the end ,a sustainable strategy based on internal and external analysis,using SWOT Analysis was given.And the human resource and personnel implication of the implementation process of the strategic options, from the SWOT analysis was addressed, with detail insight on the specifics inherent in every item on the strategic options given.This was followed by a short recommendation on the reengineering process for M&S.

3 MARKS AND SPENCER OVERVIEW.
Historically Marks and Spencers relationships with its customers and suppliers was admired worldwide as the UK leading retailers of food , mens,womens and childrens fashion(whitehead 1994).These products form the core business together with home furnishings, accessories and financial services, which were introduced in 1985( Smith Bearney Cited in Withead 1994).Marks and Spencer has being built on a philosophy of a top down management approach to its formal operation(Tse 1982).Until the late 1990s Marks and Spencer was hugely successful both in terms of profit and market share .The company achieved this position and maintained it by establishing a set of fundamental principles which were held as core and used in all of its business operation(Tse 1982).But today the UK retail industry has changed dramatically and traditional stores like M&S in almost every other country face similar challenges. Specifically retailers of other brand in low cost fashion, are taken business away from department stores and established chains. At the same time supermarkets have moved aggressively into selling cloths, household goods and prepared meals(pioneered by M&S).The British firm has struggled , sacrificing its legendary high quality and employee friendly culture to make the cost savings needed to keep profit growing.M&S problem began in October 1998 when it halted its expansion programme in Europe and America (Beaver 2001).However in 1998 ,the company admitted having financial difficulties worldwide, having been hampered by tough trading conditions.In November that same year M&S announced a 23 percent decline in first half profit causing its shares to fall drastically- this was blamed on a turbulent competitive environment from its competitors who were offering similar priced goods,yet more design focus with uptodate fahion,and of which comparism could be made against the more traditional M&S merchandise.(Nardine Collin 2004).To overcome these difficulties ,M&S has began implementation of various restructuring strategies from splitting the company into three: Retail Business, Overseas Business, and Financial Service. Alongside the company has embarked in a companywide strategy to breakdown the power of the traditional consumer buying perception which was established around the product line , as well as the application of current basic retailing skills in a lot of its area of operation(Economist 7/17/2004).

4 TESCOS PLC OVERVIEW
When you consider the approach tesco has taken in penetrating the UK retail industry you will discover that, the strategy of tesco developing market share for goods outside the usual supermarket arena had led to Tesco surpassing other rival retailers to become one of the biggest supermarket in the UK(Palmer 2005).Until the 1970,Tesco operated on the “Pile it High Sell it Cheap Formular” the founding fathers imported from the USA( Corporate Watch).However during this period the UK retail industry was changing , leaving the company with slim margin and a serious image problem.In the late 1970s the company decided to try something new, dramatic and different from other retailers- this early adopters approach of the company has resulted in the many reason behind the company major feat in the UK retail industry .The company launched “ The Operation Check Out” which cut prices across the board and started a price war with major rival retail giants(Julia Finch2004).Tesco decided to modernized itself, closing some unprofitable stores and extensively upgrading and enlarging others .At this time Tesco prioritised the development of large out of town stores where parking was convenient , the selection of goods broad and where a higher volume of business could be generated at increased margins while reducing overhead (Management Today 2003).Then Tesco begin to open petrol stations on the grounds of its superstores .The idea was successful and by the early 1990s according to 2000 edition of Mintels European Retail Ratings ,Tesco was among UK largest independent petrol retailer ,and by 1995 Tesco became the first supermarket to introduce a companywide loyalty card.At first the other retail giants were sceptical about the idea, but the concept caught the public imagination leaving other retailers racing to catch up.These retail giants have eventually follow suit.

5 FINANCIAL STATEMENT AND CURRENT PERFORMANCE OF BOTH COMPANIES.

LIQUIDITY POSITION:
The current ratio determine how much of the current asset exist to cover for a company’s short-term liabilities or debt. All through the five years of analysis M&S current asset was enough to cover for its immediate financial commitments compared to that of Tesco, whose Current Ratio only shows high current asset in year 2004 and year 2005. Tescos year 2001 through 2003 current asset position was too small to cover its short term debt. Consequently Tesco may not be able to meet its short-term debt as at when they fall due.However Marks and Spencer Debt liquidity position was very much higher than that of Tescos Plc. Similarly when stock was deducted from the Quick Ratio, the quick ratio figures reflect the same drop,in the current asset position for Tescos Plc, while M&S maintain high current asset over its current liabilities. In otherwords Tesco hadly have the company’s cash tied down in the bank or in near cash or liquid form-the money is always reinvested, leaving no room for idle cash.This is a reflection of the companys ambitious quest to continue its expansion programme in other areas in the retail industry. Unlike M&S tactful and calculative investment drive -the companys high liquidity position reflect the company has at its disposal funds to embark on any change process in its operation. It just need to seek viable investments that generate meaningful return for the owners of the capital invested.

PROFITABILITY POSITION:
The Return on Capital Employed(ROCE) measures the return earned from the use of the companys resources- invested on the business.It shows how much extra profit will be earned by the business.The ratio should be as high as possible to generate profit for the owners of capital invested. Tescos Plc performance in this ratio was brilliant compared to the figures behind M&S. M&S only shows evidence of improve extra profit on resources invested in the companys business in year 2003,at 22.29% increase,this continued in year 2004 with a much higher percentage increase at 31.90% .Year 2005 ROCE was also remarkable-the company came up with a 142.90% increase:the highest through out the five years of analysis-the success of the M&S womens wear division,and that of Per Una Label must have accounted for this brilliant performance in 2005.Like wise,the period of year 2003 through 2005 (of high figures)should be the years of complete restructuring of all M&S operation,when the company realize the need for improvement in the companys operation.
Moreover,the Net Profit Ratio considers the profitability of a business after taking account cost of production and expenses. With reference to the above, Tesco Plc percentage return on profit less cost of production and expenses was controllable too low over the five years of this analysis (2001=3.36%, 2002=5.28%, 2003=5.45%, 2004=5.43, 2005=5.75) .That is to say, controllable in the sense that –from year 2002 through 2005 , the company maintained on average, a 5% return on profit after cost of production and expenses was deducted from profit, compared with that of M&S whose profit was less in the first 2years (2001, 2002) of the analysis, and starts to gain momentum during the companys restructuring years of 2003 through 2005 ( 2003=8.89%, 2004=11.51%, 2005=10.99).M&S profit position between these 3years was far better than that of Tescos Plc.

EFFICIENCY POSITION.
The Stock Turnover Ratio determines,on the average –the number of days ,stock is held before it is sold . If the Stock Turnover period is high , it indicates that too much money is being tied up in stocks, which could have being released to other areas of the business to generate other profit return..Similarly ,if this is done the cost of holding stock as those of warehousing damage , deterioration and obsolescence could be saved. In the same way, M&S (2001=32.9days, 2002=28.0days, 2003=24.4days, 2004=26.36days, 2005=26.28days) indicates the business is holding much of its stock in the companys warehouses unsold in a longer period of time than Tesco PLC .Tescos always low price policy may be the reason why the company maintain less amount of stock in its warehouses-since stocks are always being sold out as a result of consumers increasing preference for product with low price and added value, which Tesco is offering.
In addition , the Fixed Asset Turnover Ratio determines in financial analysis, how efficiently the assets are working in other to generate some form of income /gain /value or turnover for the business. In other word, if there is a high ratio of turnover to assets, it implies a good application and efficient use of company’s assets by management. However if the ratio is low , this implies that the assets are not being utilized effectively enough. That is to say from the analysis , for every 1pound of asset Tescos employ in its business operation –the company generates in (2001=2.27pounds,2002=2.23pounds2003=2.01pounds 2004=2.18pounds,2005=2.19pounds). While in the case of Marks and Spencer , the company generates for every 1pound invested- a return of (2001=1.93pounds, 2002=2.37pounds,2003=2.33pounds,2004-2.27pounds,2005=2.24pounds).
Subsequently the Debtor Turnover Ratio determines if a collection period (In days) is deemed to be too slow .This will ultimately affect the cash solvency of the business, and it is an important consideration in any financial analysis of a given organisation. If the debtor turnover ratio is high , the company should review its credit control procedures. For this five years of analysis on the financial report of both company , Marks and Spencer over 40days (On the average for the five years), is a very long period of time for a company to have its funds in the hands of its debtors compared to that of Tescos Plc(4days, 6days, 7days and 8 days) for the different years respectively. Marks and Spencer needs to review its credit control systems and policies. Perhaps, the collection systems could be improved by given discounts for early settlement or preparing detail age analysis of debts and putting increasing pressure on late payers. Equally, if the creditors turnover ratio is too high, this is seen as the company –taking longer period to pay its creditors and suppliers, which on the fact ,strategically it seems a good thing .However the company should be careful not to get a reputation as a slow payer and find itself on a “Stop List”( A list kept by suppliers and Bankers of customers they will only do business with if goods are paid for –upon collection). Again M&S 121.8days (Minimum period of paying its creditors over the five years of analysis) is a very long period of time with 162.1days in 2005 ; this is just too much compared to that of Tesco Plc. Which on the average-through the five years of analysis maintains a 70days payment period to creditors. M&S should realized that delays in offsetting ones debt may put key suppliers and creditors out of business and take away valuable source of supply and finance credit.

INVESTMENT POSITION
The Earnings Per Share ratio reflects the earnings achieved by an individual ordinary share to anticipate the company’s current investment performance and pessimism in the company’s market future. As an investor, the ratio tells you how much you earn in return for 1pound of your share invested in the company. Between the two companies, M&S earnings per share in year 2001 was up 0.9 p as against Tescos 0.8p.In 2002 M&S was down with 0.4p while Tesco had 0.9p earnings to its shareholders. In 2003 both companys maintain same amount of return to their shareholders. While in 2004 M&S regain investors confidence with 0.17p return to investors as against 0.11p paid by rival TescoPlc. In 2005 Tesco Plc staged a brilliant return to maintain its lead position among investors preferred choice of investment over M&S by offering a 0.29p return on every 1pound shares held by each investor. That same year M&S struggled with a 0.18p return to investors individual share held. In the whole both companys struggled through the five years of analysis to win the confidence of their investors.
Similarly the Dividend Per Share Measures the dividend return of the companys share price and its useful prediction of incoming cash flows from holding the companys shares, if the company pursues a consistent dividend policy. From the analysis both company maintain a consistent growth increase over the five years period of the analysis. But overall M&S figures was the highest. It started with a 0.81p in year 2001, when Tesco was paying out dividend of 0.39 that same year, and closed at 0.64p in year 2005 while Tesco maintains a 0.60p that same year. In addition to the above an investor who want a regular pay out of most of the companies profit should invest in a company with high dividend cover. Notably, the dividend cover ratio shows the number of times that the ordinary dividend could be paid to shareholders out of the available earnings.It gives the investor an idea of the proportion of earnings returned to the companys shareholders.It provides a useful indication of how much profit is being retained for future growth. M&S figures in this report analysis depicts the company only began having –high earnings cover on its proposed dividend from year 2003 through 2005. Perhaps this was the period the company began a massive re-engineering process in its business processes to change public perception of M&S failing performance. This is because , there was a steady growth increase in the figures in year 2003, year2004 and year 2005 i.e (2003=1.95times, 2004=2.1times, 2005=2.89times. This implies that ,in year 2003 the earnings available could cover the proposed ordinary dividend 1.95times , and so it goes for the other years through 2005. Unlike Tescos Plc that has always maintained a high dividend cover from 2001-the companys earnings available could cover the proposed ordinary dividend paid out 2.32 times, in 2002 it was 2.12times, in 2003 it was 2.14 times, in 2004 it was 2.14times and 2005 it was 2.32times. Also from the analysis M&S lower dividend cover in 2001 and 2002 indicates the company was distributing more of its profits to shareholders at those period of time than Tesco Plc does.

LENDING AND INTEREST COVER POSITION.
The Gearing Ratio determines how a company is financed. It determines if the companys long term borrowings makeup a high or low proportion of the company’s capital and reserves. This gives the investor insight ,if the company exist off its own capital , utilize a realistic proportion of its credit potential, or its highly geared and possibly in a risky situation as it is surviving on others capital. From the above excerpt one begins to wonder if the massive expansion (Tesco) and massive restructuring exercise (M&S particularly investment in BP petrol Stations) is brought about with borrowed capital. This is because the high figures all through the five years of both company’s in the analysis, indicates TescoPlc and M&S are highly geared companies or maybe the companies are making use of their credit potentials from their financiers to finance their investment drives . In the same way, the interest cover which indicate if the company is paying more as interest to service debt – is well covered by the net profit of both companies. Come to think of it UK retailers maintain close ties with their bankers, and every aspect of business revolve around banking in the UK.For this reason it is not surprising that companies as these retailers are highly geared.

6 ANALYSIS OF THE CURRENT UK RETAIL INDUSTRY AND THE MAJOR RETAILING COMPANIES INVOLVED
Since the 1990s, the UK retail industry has undergone a profound transformation. Each retailer has adopted the nature and condition of its commercial range in other to meet with the changes in the environment.(Tordjman1994).The growth in absolute and relative size of the retailers not only replace the manufacturer dominance in the supply chain but also eliminated many wholesalers and started the trend towards backward integration of the retail business- were retailers started looking inwards to modify areas of their operations (Davis and Ward 2000).From the research and studies of Morganosky (1997),there emerge findings that suggest-when an increasing diverse array of retail format is developed , competition between all types of retailers heightens,i.e the present scrabble among the major retailers on the market for ready meals .Today ,the four major food retailers –Tesco, Sainsburys,Asda and Safeway dominates UK grocery retail, others following their lead are Morrison,Somerfield,Iceland,and the likes of M&S and Kingfisher. A brief introduction of the major and dominating retailers in the UK retail industry is discussed below.
Asda-Owned by Wal-Mart Stores, one of the leading US retailers, Asda is the second biggest supermarket chain in the UK with 17% of the market share. This includes sales of non-food items. Asda overtook Sainbury’s in July 2003 (they are now floundering with 16.2% of the market) although it is still a long way off Tesco's almost unassailable 28% market share. As of June 2004 Asda operated 259 stores and 19 depots, mainly in Scotland and northern England, and employed 122,000 staff (Mintel Retail intelligence 2004)
Sainsbury- Sainsbury was UKs biggest grocer until 1995, when Tesco aggressive Pricing strategy and rapid investment on non food retail areas overtook Sainsburys in UK grocery retail. Although Sainsbury operations in the UK reflect brilliant financial performance lately. The company is still behind Tesco in the industry today.(Mintel Retail 2004)
Morrison- Morrison is still struggling to absorb safeway.The company recently sold out 10 of the 52 stores it acquired from safeway to Tesco.There has also being ripple effect in the entire industry lately, as a result of this acquisition by Morrison.(Mintel Retail inteligence 2004)

As this big four become ever more concentrated and consolidated, their increasingly levels of power have provided them with the means to exercise substantial control over the supply chain. Dobson Etal (2003) describe this control as one in which the retailer effectively becomes the “gatekeeper” for access to the consumer ,by maintaining dominance via geographical space and multiplicity of outlet .In this situation traditional retailers continue to operate in a mature saturated market where growth is difficult .The resultant effect is a dominating drive for diversified investments in non food areas .As a result of this phenomenon , consumers are more informed of price variations and search for value retailing , especially in the food sector(Newman and Cullen 2001).The tendency therefore, is for consumers to switch stores or shops in multiple locations at will .The independent studies of (Hogarth Scoth 1999,Shannon1999) claims to have detected signs that British consumers are paying more attention to the relationship between price and performance. Consumers appear s to be shifting away from these retailers strategy of added value on product items ,under which they can automatically charge a high price for brand names, to more value for less money .An example of this can be seen with Sainsbury who was criticized for struggling to reposition this customers expectation , who are becoming more focus on price for value ,following the loss of the market leader position to Tesco- due to the application of this price swap mechanism by Tesco.(Voyle etal 1999).This singular activity and competitive strategy of Tesco has resulted in a situation in which difficult choices has to be made by some retailers to cut prices and struggle to reposition themselves as both price competitive and offering a superior service .It is not too surprising that retailers have opted to differentiate their formats and further diversify in areas seems inevitable i.e Pharmacy,Finance,and Petrol Station ( Asda , Sainsbury,Tesco and M&S has moved in this direction ).Here the struggle is not only in the area of ready meal items for consumers but in other non food areas. These new divergence from core retail business have also influenced the diversification of supermarket format ,where by existing retailers seek to reinvent themselves. Here Newman and Cullen(2001) observe a number of indentifiable retailers responses as seeking out of town outlet for massive space ,including car park for customers ,changing store image by adopting exclusive internal design-as its being done by M&S , organizing welcome greeting and choir songs for customers at the entrance door-Asda does this as well, Changing opening times –some retailers open 24hours of the day. Similarly retailers as Tesco Plc in the course of customers operation, open a new cashier till, when ever there is more than two persons waiting on a cashier till.

7 INTERNATIONAL RETAIL OPERATION OF BOTH COMPANY.

International retailing has being an important factor between supermarket giant within UK retail environment. Since the late 80s all through the 90s many major UK retailers has increasingly embraced this phenomenon in their activities amidst the ever saturated UK retail industry. While successful international activities may act as a catalyst for further international activity, it is also true to say that retail companies react in this direction as they learn particular valuable lesson from experience of other retailers in the international market(Alexandra and Quinn 2002), and they inturn follow suit to take advantage of the same opportunities.
However there are different studies in this perspective, but a common area peculiar among all international retail literature in this subject – is in the major retailers activities towards expansion, strategic withdrawal(Burt 1986;Tordman 1988) ,problems encountered in these foreign market (Alexander 1990) and diverstments(Fletcher 2001).The general management on these issue, and the understanding of international retailing activities can be only developed through the examination of actual retail case histories. Their experiences actually reflect the experience of a significant number of UK retailers in overseas markets. This report now briefly examines the international activities of Marks and Spencer Group and Tesco Plc in the context of the wider literature.

MARKS AND SPENCER
Marks and Spencer international retail activities has been marked with successful performance in the past and also relatively below industry standard in recent years.The company first attempt, at internationalisation was through exporting .As a result of its close and controlling relationship with suppliers ,which we discussed in its overview ,M&S was able to develop and export its unique private label brand: St Micheal to countries as Canada – which was its first area of international operation .In 1975, through a joint venture approach to market penetration with Cortifel : a retailer and manufacturer in Spain ,the company subsequently moved into a number of European markets(Briggs 1992).First it was France and Spain , its expanded through company owned store in Belgium,Ireland,and the Netherlands( Quinn and Alexandra 2002). Again through franchise operation the company expanded through Austria, Gibralter, Greece, Hungary, Malta, Norway and Portugal in the 1970s,1980s, and early 1990s (Alexandra 2002).During this period M&S undertook expansion from Canada to the US. In the US, the company acquired the Brookes Brothers Men’s Wear Retail Chain and the Kings Supermarket operations- a small New Jersey food retailer with 47 stores in the US ,and 21 stores in Japan(McGoldrick and Blair 1995).The Brookes Brothers 21 stores in Japan was the gateway for the companys expansion in the Asian markets of Singapore,Malaysia,Philipines and Korea. This number grew to 148 in 1999 with franchise stores in Hong Kong (Croft 1999).
In the late 90s, particularly 1997 the company took a giant step in its international operation amidst the saturation of its UK domestic market to engage in an ambitious expansion programme to increase further expansion in France, Germany, Hong Kong and the launch of a new franchise operation in Poland and Australia in response to global dictate of off shoring (Olins 1997).The result of this bold step was the weakening of the company home base operations. The company was facing harsh trading conditions as a result of poor UK clothing sales, amidst other trading clothing labels like Gap, Next,Primark,Newlooks,Acadia Group etc, subdue demands in Asia , and a disappointing sales in the Canadian market, for the St Micheals design to sufficiently understand the Canadian market(Piercy 1999). Also at this same period ,power tussle in the board of the company began to raise public concern on the management of the company. Similarly trading in Germany and other Europe market soon began to give the company cause for concern. Consumers quest for price and trendy fashion fail to see the value of the St Micheal brand. Subsequently price were cut and the company took step to improve its performance(Retail Intelligence 1999). The company began to cut down, on its international operation .The company sold off its retail chains in Canada , it reduces the companys presence in HongKong and the franchise operation in Malaysia,Korea,and Singapore. And in 2001 the management decides to effect the closure of its European subsidiaries, and its Brookes Brothers and King Supermarkets in the USA. The company indicated that its immediate focus would be on the core UK market to address the problems encountered in that market (Corporate Watch 2004).

TESCO PLC
Tesco success in recent years was brought about , mainly from overseas expansion. As the company engage in massive expansion overseas , its operations diversify to higher margin non food merchandise and at the same time regularly supporting and improving a strong UK core business, which was cultivated on low prices, building customer loyalty, and expanding into other retail services as legal,insurance,banking and telecoms services (Data Monitor 2004). Tesco initial international advancement was in 1979 when the company purchase the Irish Three Guys Retail Operation. This was subsequently divested to the Dublin based supermarket company HWilliams in 1986 due to problems of immature structural capacity for expansion of the company within their domestic market (Palmer 2005).In the works of Muskett(2000 ), his research findings on Tesco international operation reveals that towards the end of the 1980s, the company embarked on research efforts into possible international growth options and this primarily centred on the US market but also covered several European countries –the company spent several years engaging in these market analysis, in the end the product of this research effort was the Buyout of Catteau – a national retail chain in France. This move by the company serves as a platform for its future European expansion. Later in 1997,Tesco withdraw completely from France and focus on emerging markets in eastern European Countries, were strong retailing activity as in the UK was absent. The company acquired a global supermarket chain in Hungary –in total of 43 small stores (Palmer 2002). The intention of the company was not to trade the stores in the longterm like the French case : Catteau, but rather to secure a foothold in the market and learn from these businesses, while later building a larger hypermarket business based on their experiences. Through this means the company subsequently acquired in 1995 Savia SA – a retail chain 36 small stores in Poland. In 1996 the company penetrated the Slovakian market ,through the acquisition of Kmart. At the peak of the companys voyage in these emerging economies , the company re- entered the Irish Market: prior to this period the company pulled out of an Ireland Operation which was running at loss. The second attempt on the Irish market with the acquisition of ABF Irish Food retail chains became a major break in the performance of Tescos European operations. Following this acquisition the company secured a position as the largest food retailer in Ireland with 109 supermarket stores (Palmer 2005).The success of the Irish operation was followed by another international expansion programme in Asia. Tesco bought a contolling stake in Lotus ; a retail chain of 13 retail outlets stores –which presently has 64 stores in Thailand. In Korea the company formed a joint venture with Samsung ,one of the countrys largest conglomerate to maintained hold in the Korean market. Through this partnership Tesco entered the difficult Japanese market painstakingly in 2003, through equity stakes in CTwo Network- a successful retailer with 78 supermarket chain in Japan ( Corporate Watch 2004). During this period Tescos stores in Malaysia SDN BHD was also established as a joint venture with a local company SimeDarlyBehad in 2002. Although the company was placed under strict government regulation to control and curtail its expansion programme in the country, Tesco eventually has as at today 5 functional stores in Malaysia with plans to open more (Corporate watch 2006).

COMPARISM
The cases presented above clearly demonstrated that retail internationalisation is not a purely progressive process of contemporary academic principle of business operation and management. Learning about strategies in retailing, were different global markets and market conditions are involved , for expanding firm , is not just about analysing trends and anticipating what steps ahead- one get lost somewhere along the line in the process of analysis. For getting a perfect strategic fit sometimes entails : the longer you are in that direction of international global complexities the closer you get to what you need to succeed .This section provides an overview of the measurable extent of knowledge emerging from the activities of the two companies international operations. The important lessons learned are compared under the following headings.

ORGANIC STORE BY STORE DEVELOPMENT
The ambitious international expansion programme of marks and spencer group plc by penetrating several market at the same time at the height of its weakening performance in UK domestic market ,exposed the company to multiple risk of massive start up loss. Alternatively a store by store development program allows for a more strategic approach to internationalisation. The logic behind this approach by tesco is the use of such single unit stores to develop knowledge of the international competitors that has already establish there . Another reason is that , the small presence would facilitate the inplementation of an acquisition strategy by securing the necessary contacts and networks into foreign retailers and local suppliers ,especially considering the challenges associated with family owned and controlled chains .Also,retaining a direct and small operating presence in a competitors major market would lead to important insight into the competitive behavioural dynamics of competition that otherwise would not be possible without a direct presence(Palmer 2005).Strategic in terms of the choice and selection of market – some companies look at emerging economy with high income and population, also proximity in procurement and distribution as well as the store location in the overseas country. This strategic learning process allows you to have the lowest cost base. Unlike Tesco whose expansion was spatially characterised as being regional in nature and less global oriented.Tesco decision for penetration and dominance of the central and eastern European markets arises from reasons –that the chances of large retail multination companies (like Wallmat) presence was slim. The company thus incrementally entered these markets rather than entering the different eastern Europe countries market at the same time

APPLICATION OF MULTIPLE MODE OF ENTRY IN FOREIGN MARKET.
Marks and Spencer mode of entry in most cases in foreign markets was through franchise arrangements apart from the US and North America operation. Where the Brookes Brothers operations which included 47 stores was acquired by the companys Canada operation .Even at that, other similar acquisition in Europe reflect franchise characteristic with a mixture of joint venture approach. Only in the partnership with Cartifiel the Spanish retailer and manufacturer that this was not the case (Briggs 1992). Similarly this was Marks and Spencers first joint venture in the course of this study .Overall there exist in the company international operation (i)franchise(ii)joint venture(iii)acquisition of existing retail chains. Unlike Tesco whose mode of entry in the companys international operation fall under all three, alongside application of other multiple entry mode strategies within one and different countries in eastern Europe, by acquiring relatively small convenience stores in Hungary,a supermarket business in Poland and a departmental store in Czech Republic and Slovakia(Changs 1995).This was very unusual for such a large company to acquire single supermarket store in the form as above.The logic behind this approach by tesco is that , the small presence would facilitate the implementation of an acquisition strategy by securing the necessary contacts and networks into foreign retailers and local suppliers

EXPERIENCE AND THE KNOWLEDGE THAT A STRONG MARKET POSITION OF AN ACQUIRED COMPANY SOMETIMES ABSORB MISTAKE.
The advantages of a dominant market position by the acquired company for learning lie in the success that such a position implies.A small market position hardly absorb relatively small mistakes. In the course of M&S expansion it appears that M&S was just concern in establishing presence in countries of her export operations- at the initial stage emphasis was not much on dominating the market they operate in, unlike Tesco that seek not only to penetrate but establish a strong market leading position. Think about all the emerging market the company operates in –there exist evidence of aggressive expansion and dominance within a short period of time.

EXPERIENCE WITH LEARNING PROCESS AND STRUCTURES ABROAD.
Ascertaining whether a firm possesses an intent to learn is an important factor influencing their learning behaviour(Tsang 1999).Intention relates to commitment. On the surface it appears Tesco possesses a learning intent. In the studies of Tescos international operation by Tsang (1999), management was asked to discussed the structures and processes through which the international learning was disseminated back to the UK market .Critically the company’s expansion into central and eastern Europe coincided with the company’s ambition to broaden their non food merchandise in the UK market. The moving force was then on the diffusion of what the company had learned from developing a new format which accommodated non food items in overseas market. This had a catalyst effect, overtime the company began to employ personnel whose sole responsibility was to transfer the company format learning back to the UK from abroad. At the home market (UK) Tesco adjusted operational retailing activities, sometimes with minor modifications and at other times ensuring fundamental transformation of the format. Analyst believe this is an area companies could learn and experiment at the extremities of the company(Wigley2002).Even at that, internationally, the company competes directly with some of the best food retailers in the world notably Carrefour,Auchan,and Ahold, as a result the company is better informed on how to merchandise non food departments. Through this process management form more realistic perception of foreign market which they apply in the UK market ( Alexandra 1997).

HOME BASE STRENGH DETERMINE PROWESS ABROAD
This was the particular reason that prompts M&S withdrawal of its international operation. The failure of the company’s operation in its UK market to compete effectively with present day events resulted in a complete disorganization of future prospects in its international operation – for majority of its international outlets are dependent on its UK operation. Similarly a disruption of M&S UK operation tend to reflect in its overseas operation .Thus if you are struggling in your domestic market, what credibility do you have to show that you can manage a business in another country.Tescos international operations programme was driven by a relatively strong domestic position. Critically its international integration process was actually supported from earnings from the company’s core UK businesses.

INSTITUTE INTERNATIONAL LEARNING STRUCTURE.
Within the context of international retail expansion, Alexandra(1997) suggested that retailers have lacked systematic internal processes to support their decisions with respect to appropriate host market strategies.As far as internal learning structure is concerned. It is proposed that innovations and continuous improvements are more successful attained by the proactive formalisation and development of internal learning mechanisms. This learning structure M&S lacks, as a result, it failed to understand its environment of business. Every of its operation was centred on routine bureaucratic practice of age long tradition. Prior to the company’s present restructuring exercise, senior management appointment was exclusively reserved for those who grow through the organisation career path. The company looks inward for everything without looking outside the box.

8 PROPOSED SUSTAINABLE STRATEGY FOR MARKS AND SPENCER REENGINEERING PROCESS USING SWOT ANALYSIS.

Before discussing indepth the diagnosis process of a sustainable strategy for Marks and Spencer . It is important to first provide a useful conceptual framework for examining what is required for the re-engineering process. This is carried out by conducting a conceptual internal and external analysis of (i) the company (ii) its operative environment and (iii) and business strategy, using SWOT analysis.

EXTERNAL ANALYSIS

MACRO ENVIRONMENT: Presently the UK competition commission investigating UK supermarket retailing activities on behalf of the office of Fair Trade for existence ,or possible existence of monopoly situation in relation to the supply of groceries in the United Kingdom (Andrew Hollingsworth 2004). The investigation areas of focus were primarily of: barriers to competition, intensity of price, and the exercise of buying power in the supply chain. The objective of the commission is to break large supermarket chain as Tescos Plc to provide fair competition in the retail industry .The need for this objective came to the fore after the various complexities that arises as a result of the bidding for Safeway Stores retail chain. If this eventually works out as proposed perhaps, there is possibility of a new system of approval for supermarket development. All this development is aimed at reviving the ailing UK economy by encouraging retailers like M&S at the other end of the industry. Economically, although the industry is saturated there is still other related non food areas that is yet to be exploited-today the high street food chain hopes to have an extra 200 outlets in British Petroleum Garages. It will launch more into instore bakeries, restaurant and deli (The Sun Wednesday, November 8, 2006.pp44). In the same vain, income and purchasing power tend to be on the rise in the UK as a result of organisation insatiable demand to run processes to meet global dictate. And people are utilized for this process – given them opportunity to earn more and at the same time cutting them off their domestic life. There is the need for availability and convenience of ready made food items on the street to compensate for that loss of domestic cooking routine practice. What consumers require now is the convenient food items that will fit in their round the clock work schedule. Also the introduction of B2B internet exchange site and world retail exchange has helped Marks and Spencer a great deal to achieve the above excerpt (Andrew Hollingsworth 2004).

MICRO ENVIRONMENT.
Apart from Tesco and Asda whose dominant influence is felt in the UK retail industry.The only hang on major retail supermarket chain is Sainsbury , and internal problems and strategic errors have left Sainsbury struggling lately( Coporate Watch 2006).The company believes it could abandon the classic focus on price in favour of refurbishing its stores ( their own term for aesthetic design) and supply chain improvement .The company’s loss of market share to Tesco illustrate evidence of struggling performance. Infact internal boardroom issues resulted in the resignation of the chairman in July 2004(Corporate Watch 2006).The other retail giant in the picture is Morrison Stores, who is still struggling to complete fully its integration process after it acquired Safeway. If M&S reposition itself firmly in its everyday commodity food product, with calculative timing, it can compete favourably with Sainsbury in the area of geographical coverage. At this end Marks and Spencer can stand tall to face Tesco with the high street retail giant (M&S) meal solution. The company’s M&S brand in its product still enjoys wide positive appeal for value and quality, irrespective of present ailing performance. Asda parent company (Wallmat) is still indecisive to establish fully in its Asda UK operation.

INTERNAL ANALYSIS.

STRENGTH AND RESOURCE CAPABILITIES.
When it comes to business operation in organisations, brand image means almost everything to a considerable extent influences what choices –consumers make , and for a longtime now M&S enjoy this patronage. For any consumer searching for good quality need not look further than the company’s own St Michaels Brand Label (Benady D 2005).Without exception this apply to foodstuff, clothing and other non food items .Futhermore the company has the facilities and the structures in terms of asset ,chains of outlets on ground which it has acquired over the years .This can be constructively utilized to reposition the company to start a fresh. Similarly the proceeds from the sale of its international operations can also serve to suit this purpose as well .

WEAKNESS ( COMPETENCE).
From research findings it is obvious that the company possess only a handful experts and people who have the knowledge to provide specialist service at the strategic decision level of the business to improve performance . At the management level the people component appeared far less radical in thinking. They engage in strategies which on the surface appear necessary but in reality are not sufficient to deal with the magnitude of M&S problems. And this reflects in the working culture of the line management and inturn on the staffs working at the level of clerical operation and shop floor. The working culture was marked with bureaucratic and rigid procedures with a resistance to change . Other areas of weakness were in the area of its service standards, and lack of appeal of the St Micheal brand to the under 30s age bracket(Tony Grundy 2005).

From the foregoing the factors for analysis can be simply reduced to the following bullet points below.( See Appendix for figures)

STRENGTH

• High Brand Recognition (30) .
• Facilities and Resources. (13)
• Partners and Alliance (15)
WEAKNESS

• Mgt (recent take over battle ) (7)
• People (Competence) (3)
• Failure To Appeal to
the Under 30s age bracket (5)

OPPORTUINITIES

• Favourable Legislation (6)
• Consumers Changing Habit (5)
• Worldwide Retail B2B Tech (5)
• Clarify Brand Message through new
M& S Brand campaign.

• Signs of recovery in Germany which should help lift all European market.
• Falling prices for items has stimulated demand and a more impulsive driven market.

THREATS

• Activities of Competitors(Acadia)(15)
• Brand Not Trendy Perception ( 12)
• Management Incompetences (7)

STRATEGIC OPTIONS PROS CONSTRAINTS
1) Partnership and Alliance Help you to stay informed and broaden your perspective Fear of acquisition attempt.
2) Brand Repositioning The brand clearly has considerable economic value. An extension of the branch can generate cash flow Fear of not administering the right standard. i.e. Loss of public respect in the brand
3) Facilities and Resource utilization Resources can be used to affect change process.BPO,TQM,KBS processes can be use to improve business operation. Company’s credibility can facilitate credit. Inability of the management to maximize the use of M&S facilities and resources.
4)People competence Scout for change agents and drivers of change. Partnership with reputable MNE in people development program can help lay a foundation for this.i.e worldclass retailers like P&G. Management awareness of the need for strategic Human Resource Practice in the overall reengineering process.
Key words- KBS: knowledge base system, BPO: Business process reengineering, TQM: Turn Around Quality Management.

9 HUMAN RESOURCE IMPLICATION AND STRATEGY IMPLEMENTATION.

PARTNERSHIP ALLIANCE
The biggest theory in managing systems and processes in the models of Human Resource function is business partnering. This new paradigm is the future direction of the HR function using Ulrich (2005) business partnering model. The company can affect its strategy on partnership via the following components of the Ulrich model.
Shared Services:
Here the company can engage in streamlining of its systems and work process to make them more efficient. Department and units that show areas of underperformance are made redundant. And important functions that require specialist functions like data process, learning structures are outsourced to specialist consultancy units. Consider the performance of M&S relationship with George Davis (formely of Next)to form an alliance to create a new sub brand called Per Una. The result was a brilliant sales performance on that label displayed in the same store where other M&S label was displayed (Collier 2004) other partnership as this should be encouraged in other facets of the organisations operations.
Centre of Excellence.
Seek expert in various field of the organisation areas of interests in the company’s operation. Maintaining a league of resource persons, investment banks, financial advisors both internally and externally who have knowledge to provide specialist services to the business to improve performance. The HR function here is to link their expertise into every single area and level in the organisations structure.

Strategic Partners
Set the company to work very closely with worldwide leaders in retailing business. Tesco funds a partnership with Procter and Gamble leadership development program to help train Tesco’s senior management staff on Global Retailing Strategy (Mark Palmer 2005). This can act as an agent for transferring knowledge regarding the dynamics in other international markets- in effect accelerating the learning curve for a less experienced retail multinational.

Organisation Employee Involvement.
The Human Resource Function should have as its objectives in the change process of Marks and Spencer to help make employee contribution align with partnership, with institutions as(i) consultants, (ii)outsourcing organisations and (iii)investment banks.

BRAND REPOSITIONING
Developing the strength of a brand is not deemed to be easy. There is no single approach to developing a strong brand. Branding logic appears to vary for each individual brand. For example Marks and Spencer brand power is different from Tesco’s even though both are all strong brands in the global retail category. While marks and Spencer is a long established brand, Tesco emerged only recently and is as well a strong brand.Think about the sales performance of Tescos Clothing labels-cherokee,florenceand fred,and agels and heroes jeans Therefore the alternative path to consider in building a strong brand need to be better explored. Like the goal of logically creating to be different or develop what is broadly conceptualised as “brand meaning”.( C.K. Keller 1999). By this reasoning, managing the brand by creating meaningful association is the central task. The goal is to keep consumers actively engaged with the brand and to cultivate meaning. Within this perspective, managers need to find a consistent fit with all of the business decisions that could potentially affect consumer initiated brand meaning like especially the value that brands hold in being able to increase demand. Some brands are thought to be attractive due to their potential uses. This expectation and perception can alter consumers’ behaviours that affect the product. (Mark Kay 2003). By contrast if these techniques can alter behaviour, behavioural change can also be altered if marketing considerations are designed to manage these behavioural changes towards these expectations about the M&S brand. Another way is that M&S can redefine their brand by connecting it to distinct social values to appeal to customers’ perception like price or other consumers’ perception and loyalty to the brand.The sub branding by the company lately is a welcome development.These sub brands are:

WOMENS WEAR- MENSWEAR
• Look behind the label, .Blue Harbour.
• Body, .Blue harbour vIntage
• Truly you, .Collezione,
• Ceriso, .Autograph,
• Adored.,
• Per una,
• Limited collection,
• Autograph,
• Classic,plus,

MATERNITY,
• Look behind the label,
• Body,
• Truly you,
• Ceriso,
• Adored.

FACILITIES AND RESOURCE UTILIZATION.

Business Process Re engineering:
This requires taking a comprehensive view of the whole exisiting business. It involves thinking about what must be done,why it must be done,and how to go about the restructuring exercise(Gibson etal 1999).Business Process Reengineering encourages organisations to think about the acceptable processes of business operations within organisations and to question whats the alternatives to improve business operations within and between organisation.Before performing this process the HR function should perform business process management that define the process and activities of Marks and Spencers Group, and build standard process guidelines and performance benchmarking that support this process(Leonid and Alexander 1999). This it does by(i) Simplifying the organisational structure(ii) Remove unnecessary business processes(iii) increase greater flexibility and ability to change based on market condition(Leonid and Alex 1999).

Knowledge Based Systems:
This technology may be applied to a wide variety of human resource management activities to motivate employees and thus facilitate the effective use of its workforce (Donnell 1990). It can be used for manpower planning, recruitment, selection, staff development, performance appraisal and regulatory compliance. The objective is to get the right number and types of employees doing appropriate amount of work at the right time. Three basic phases are involved i.e. (i) Forecasting the future demand of a particular skill (ii)Analyzing the supply of resources and (iii) reconciling the most critical discrepancies between demands and supply by initiating or modifying the HRM activities.

PEOPLE COMPETENCE.
In the battle against competitors, the skills and motivation of the employees are important strategic aids in the realization of the company’s objectives. Strategic responsiveness in turbulent times requires individual competences and fundamental personality characteristics that are inherent in a persons action in relation to all kinds of tasks an situations (Jay.D.Jurie 2000). This involves being agile, open to the environment and capable of picking up those weak signals that are indicative of the need for change. The focus in the above excerpt is on competence necessary to perform certain duties in a superior way. As far as knowledge and skills are concerned, many people are equal as can be seen from: for instance, Diplomas, Certificates, and work experience and work results. It is precisely the employees’ effort, enthusiasm, motivation and self image that distinguish the successful employee (superior performer) from the unsuccessful one. The company should therefore consider the identification of the competences alongside the recruitment and retention of employees possessing these (buzzing) competences as one of the core objectives of the strategic staffing embedded in their strategic Human Resource Management practice. For this will help to facilitate superior work performance in the organisation work process.The appointment of Yasmin Yusuf as creative director –help the david beckham 07 label for boys.

10 RECOMMENDATION
From the foregoing, the future in the application of change management initiative for the Marks and Spencer Group, will consist of the management of M&S diagnosing the current state of the organisation from the mental framework of the paradigm highlighted in the analysis above and formulate a vision of the desired future state of the organisation. This vision must be continually and collectively constructed in the re engineering process in line with the strategic options. which is followed by a consistent upgrading of systems and structures which facilitate improvement in efficiency and effectiveness of the specifics inherent in every item on the strategic options.
Any tangible changes should be recognised and acknowledged and measured over a strategic parameter to review where the change process is in accordance with the company vision. Where there exist areas of failing performance, adjustments should be made. And automatic response to redress areas of failing performance should be instituted, when they don’t measure up to standard. To set the organisation in the direction of the vision again. This should be a continuously reviewed process until a desired balance of strategic fit is attained.
Although this is an evolutionary process,that requires a considerable time frame. A genuine commitment from organisation participants and involvement of resources constructively in line with the stated strategic option will to some extent successfully guide the organisation towards the path to recovery.

REFERENCES

Alexander, N. and Quinn, B. (2002) International retail investment. International journal of retail and distribution management, vol 30 No 2, pp. 12-25.
Alexander .N. (1990) Retailers and international markets; motives for expansion, international marketing review, vol 7, no4 pp. 75-85.
Alexander, N. (1997) International Retailing, Blackwell Publishers Oxford.
Beaver, G. (2001) Competitive advantage and corporate Governance: Shop soiled and needing attention, the case of Marks and Spencer PLC. A strategic change journal, vol 8, 1999, pp. 325-34.
Brenady, D. (2005) Will the real Marks and Spencer Stand Up? Searching For That Winning Brand. A Strategy Change Journal Vol 21. No 9.
Briggs, A. (1992), Marks and Spencer plc, international directory of company histories. St James press, Detroit, MI vol Barbour pp. 124-6.
Burt, S. (1986) The Carrefour group-the first 25 years, international journal of retailing, vol 1. No3 pp. 54-78.
Changs, S.J. (1995) International expansion strategy of Japanese firms: capability building through sequential entry, academy of management journal. Vol 38, No 2 pp. 11-27.
Data monitor (2004) food retailing analyst.
Davies, B. and Ward, P. (2000). Space allocation in the Uk grocery retailing. British food journal, vol 102, No 5/6, pp. 406-419.
Dobson, P. et al (2003) The patterns and implication of increasing concentration in European food retailing, A journal of agricultural economics. vol 54, No 1 pp. 111-25.
Donnell .O (1990) The Procedure of determining the order, Picking Strategies in a distribution centre, An International Journal of Problems Economics,Vol 60 pp301.
Economist, 2004, Has Stuart Rose seen the future of retailing 7/17/2004? vol 372,issue 8384 available: http// web.ebscohost .com/ehost/detail
Finch,J. (2004) super market wseep, the guardian 2004
Fletcher, S. and Godley, A. (2001)International retailing in Britain, 1850-1994, The service industries journal, vol 21 No 2, pp. 31-46.
Gibbson et al (1999) Enterprise Resource planning: A Business Approach to System Development: In Proceedings at the International Conference on Business Systems Science, 4-6 November, Hawai pp 161-169.
Groft, J. (1999) Marks and Spencer: Uk retailer to sell kings, Financial times.
Grundy, T. (2005) Business Strategy, reengineering and the Bid Battle for M$S. A strategic Change Journal, june july 2005, Vol 14 pp195-208.
Hammeth Steve and Mcmeikan, K. (1994) Tesco- Competitive management development. A journal of executive development, vol 7, No 6 pp. 4-6, MCB University Press.
Hamel G and Prahalad C.k, (1989) Strategic Intent, Harvard Business Review Vol 87 No 3,
Hamel G and Prahalad C.k (1990) The Core Competence of the Corporation, Harvard Business Review, Vol 68 No3.
Horgarth Scott, S. (1999) Retailer- supplier partnerships: hostages to fortune or the way forward for the millennium? British food journal, vol 101, No 9, pp. 668-82.
Hollingsworth, A. (2004) A Case Study of Increasing Retail Concentration: Evidence from the UK Food Retail Sector. A British Food Journal Vol 106. No 8 pp629-638.
Jurie, J (2000) Building Capacity Organisation Competencies and Critical Theory. A journal
Kay, M. (2005) Strong Brands and Corporate Brands. A European Journal of Marketing, Vol. 40 pp 742-700.
Keller, K. (1999) Managing Brands For The Long Run, A California Management Review, Vol 41 No.3 Spring pp102+24.
Leonard, B. and Alexander, J (1999) Component integration framework for manufacturing reengineering : agent and object approach, Robot and Autonomous systems Vol.27, pp 77-89.
Management today (2003) Tesco clean sweep.
Mcgoldbrick, P.J and Blair, D. (1995) International market appraisal and positioning. In Mc Goldbrick P, J, Davies, G. (eds) International retailing: Trends and strategies, Pitman London, pp. 168-90.
Morganosky, M.A. (1997) Retail market structure change; implication for retailers and consumers. International journal of retail and distribution management , vol. 25, No 8 pp. 269-74.
Muskett, D. (2000) Sainsbury and Shaw’s: Reflections on making an acquisition a reality. In Oldfield, B.M. Schmidt, R.A, Kirkup, M. Hart, C and Clarke, I. (Eds) Contemporary cases in retail operations management, Macmillan press, London.
Nardine Collier (2004) Marks and Spencer Case Study, In: Lecture as class discussion, Grandfield school of management.
Newman, A. and Cullen, P. (2001) From retail theatre to retail food show: The shrinking face of grocery”, British food journal, vol.103 No7, pp. 443-52.
Olins, R. (1997) Marks and Spencer sets out its stall for word domination. The Sunday times.
Palmer, M. (2005) Retail multinational learning: A case study of Tesco. An international journal of retail and distribution management. vol 33, No 1 pp. 21-48.
Piercy, N. (1999) Tales from the market place, Butterworth- Heinemann, London.
Retail intelligence (1999) Uk retail market report, November No 105, Retail intelligence London.
Shannon, J. (1999) Wal-Mart’s eyes smart shopper, Marketing week, 1st July, p 22.
Terry leafy (2004) Tesco: A new international company. A new perspective management today journal vol 2, pp. 12.
Tordyman, A. (1988), The French hyper market, could it be developed in the states? Retail and distribution management vol 4, No 2, pp. 3-16.
Tordyman, A. (1994) European retailing and distribution management. vol 22, no 5, pp. 3-19.
Tsang, E. (1999) Internationalisation as a learning process: Singapore MNC in china, Academy of management executive, vol 13, 1 Feb. pp. 91-101.
Tse, K. (1982) Marks and Spencer: Anatomy of Britain’s most efficiently managed company, Pergaman, Oxford 1985.
Ulrich (2005) Organising Shared Service Consideration. In: Armanda Thompson’s (2006) HR Service Delivery. Handout for Lecture Session. MA Personnel and Development. Leicester Business School.
Voyle et al (1999) Sainsbury counter fears of becoming a take over target; Financial times, 28 October, p. 30.
Wrigley. (2002) The landscape of Pan European Food retail Consolidation, International Journal of Retail and Distribution Management.Vol 30. No.2.pp 81-91l of organisation Change. Vol .13 No.3 MCB University Press.
Whitehead, M. (1994) marks and Spencer: Britain’s leading retailer quality and value worldwide, CORTCO case study conference, London.

APPENDIX

1 2 3 4 5 score
√ 5
√ 5
√ 5
√ 5
√ 5
Average score 25
STRENGTHS
1) Brand

-Public awareness…...……………………….
-Age and tradition……………………………
-Reflects British culture………………..........
-Quality………………………………………
- Class………………………………………..

1 2 3 4 5 score
√ 1
√ 2
√ 2

Average score 5
2) Price

-Expensive…………………………….............
-Non frequent reduction………………………
-How much to pay for M&S product
in place of another alternative……….........

1 2 3 4 5 score
√ 4
√ 4
√ 3
Average score 11
3) Value
-Quality………………………………………..
-Worth the standards………………………….
-Is it worth benefits……………………………

4) Facilities & Services (fashion, food finance)
1 2 3 4 5 score
√ 5
√ 3
√ 2
√ 3
Average score 13

-Asset…………………………………………
-Floor layout/Shop layout…………………….
-Quality of services…………………………...
-Sensitive to customers needs…………………

1 2 3 4 5 score
√ 2
√ 1
Average score 3
5) People/HR
-Creativity…………………………………….
-Autonomy as against
following procedure…………………………..

1 2 3 4 5 score
√ 5
√ 5
√ 5
Average score 15
6) Partners/Suppliers
-with George clothing…………………………
-with Next……………………………….........
-Per Una Fashion label………………………..

Key (1) poor (2) below expectation (3) above expectation (4) good (5) excellent

THREATS
1 2 3 4 5 score
√ 1
√ 3
Average score 4

1) Rival outlets clothing

-Can it withstand other cheap
clothes labels………………………….........
-Is it possible in the future? ............................

1 2 3 4 5 score
√ 3
√ 2
√ √ 2
Average score 7
2) Management
-Positive opinion about present management……………………………….
-competence positive………………………..
-can management face challenges…………...

3) Weak working culture within
1 2 3 4 5 score
√ 3
√ 1
√ 1
√ 3
Average score 8

-staff opinion about present changes…………
-are they supportive…………………………...
-still show confidence in the brand……………
-encouragement of people to think
individually outside the formal strategy………

1 2 3 4 5 score
√ 3
√ 1
√ 1
√ 3
Average score 12
4) Old Brand
-can it be changed easily?..................................
-is M7S meant for the rich?...............................
-Is M7S meant for the old?................................
-Is the brand trendy?..........................................

1 2 3 4 5 score
√ 5
√ 5
√ 5
Average score 15
5) Rural Competitors (Food & Retail)

-strong dominant market position………... …..
-strong asset capital base……………………...
-strong public awareness of product…….........

1 2 3 4 5 score
√ 1
√ 1
√ 3
Average score 5
6) Public Label Expectation
-Is public hopeful of M&S recovery?...............
-public confidence of M&S
regaining its lost glory……………………….
-Public opinion to still identify with
the brand……………………………………..
Key
(1) Strongly agree, (2) Disagree (3) Neither agree nor disagree (4) Agreed (5) Strongly agree

stoik musah writes from LBS. EMAIL stoik_joy@yahoo.com

Does Organising or Partnership Offer a Path to Trade Union Revival.

2007-01-24T09:52:00.000-08:00

By
Stoik Musah.
LBS,United Kingdom.

Labour movement revival studies is such a critical contemporary subject that, the understanding of its context will seek first, to broaden our frame of reference with the causes of union decline, and then- reflect on the circumstances given rise to these causal factors. The learning process derive from this reflective exercise will help to provide understanding on the rationale behind the strategies for union renewal debates. This essay therefore sought to obtain knowledge on the path to trade union revival within the broader framework of the organising and partnership model approach.

Studies on this subject reveals that from the 1980s through the 1990s changes in the UK domestic market exposure to globalisation, competition and multinational companies drive for continuous innovative work practice has frustrated the capacity for trade unions to either raise pay or block changes in staffing levels and working practices using collective bargaining (Heery 2002). This form of unionism based on bargaining is becoming unsustainable as organisation employ the use of HRM practice as team briefings, team working, quality circles and profit sharing schemes to promote greater levels of commitment among workers in the organisation. In consequence, rendering trade union activities less effective among employees (Kochan and Lansbury 1997).

Similarly, another factor that can contribute to the decline in unionisation (workers representation) activities is the extent and scope of legal support required for workplace union participation. The argument here is that, there is a relationship between the extent statutory provisions supplemented by legislation, supports unionisation purpose, for employees in the workplace. For example in the UK the neo-liberal policies of the conservative government was bent on weakening trade union influence in the work place and to create circumstances within which management could re assert authority among employees (Waddington 2003).In the same way the labour constitutional reform of the 1990 which was accompanied by a parallel initiative to diversify sources of funding to the union also contributed to the weakening of the scope of unionisation mobilization in the UK, as a result of the influence exerted through this mechanism, the union has failed to secure any major changes in the UK government industrial policy(Bach 2002; Waddington 2003). This was the main point of conflict between the unions and the party in Tony Blairs second term. The aftermath of this conflict of interest was the questioning of the source of financing the labour party, the eventual expulsion of the rail, marine and transport union for supporting non union labour candidates, the withdrawal of the fire brigade union and the success in union election of anti-Blair candidate to name just a few (Bach 2002).

Furthermore the works of Hoffman (1993) suggest that the difference in the rate of unionisation between men and women arising from segregation of employment, has accounted for a shift in trade union membership growth –considering the position women occupy as the mass of UK working class population. This often discourages women commitment to union activities. Similarly the decline in the rate of unionisation among younger workers tend to be much higher than among workers above 46years of age (IRS 1994).For this reason Hoffman (1997) argues that younger workers are more individualized as a result of the social changes in the 1980s and 1990s, with the consequences that they are less susceptible to the collectivism that underpins trade unionism. Furthermore, to strengthen his position Hoffman (1997) emphasis that the formalities in trade union practice, do sometimes inhibit younger people interest in its cause. These young people tend to be more attuned to the greater informality which they are used to, like those concerned with anti-racism, animal right and environment. They prefer to give much of their commitments to these issues. In addition, other contributory factor to this trend is the relative decline of trade union membership among migrant workers and workers from ethnic minorities (Waddington 2000). Above all the sectorial difference in the rate of unionisation in the UK organised private sector is also a major area of concern for union decline. In general terms, the decline in the entire UK manufacturing employment has resulted in a large scale trade union membership loss (Waddington 2000).

For the most part, these analysed causal factors have resulted in union organisation becoming less effective in the workplace and in the broader society at large. The dominating effect of this trend is that union membership has become less attractive to potential members. For this reason the extent of the decline in membership, alongside the relative absence of union representatives in the workplace has raised the profile of issues, debates and organised labour effort to identify comprehensive proactive strategies that can both broaden the perspective and reverse this decline in union activities. The most significant strategies in today’s revitalization literature are reforms of union structures, coalition-building, international solidarity, and organizing and labour management partnership (Hickey 2003; Terry 2000; Kelly 2003). Our focus therefore is not on the first three- of which there have been somuch in depth studies till date, but on the last two (Organising and Partnership), which is central to current debate on present and future directions for unions in general (Heery 2002).

The principles of the organising model entails change in union interests, such that commitment of resources to recruitment becomes the primary objective of the union over servicing of existing members (Heery 2002).This extension of unionism (Union representation) to non traditional employment groups involves stimulating activism among their own workers which allow for freedom to resolve various unions problems with or without external representation. (Heery 2002). This approach to unionism denotes a set of organising techniques that can be deployed by trained organisers in dedicated organised campaigns. Heery (2002) posit that this techniques includes(i) mapping of targeted workforce to identify potential members and activist(ii)the use of representative organising committee to draw workers into the campaign(iii)reliance on action to render the union a visible focus for work identification(iii)person to person recruitment(iv)the use of advert or the media to pressure resistant employers. Overall the concept behind the model strategy is centred on the rationale that- the strength of the union is best sustained by effective workplace organisation.

On the other hand the Partnership Model is related to an approach to employment relation that involves mutual gain relationship between management and unions. The model emphasis that there are employers who find it both ethically responsible and economically effective to share with trade union issues on strategic matters of organisational change(Miquel Martins and Stuart 2002). In the context of the trade union interest, partnership is perceived to represent an opportunity for trade union to advance their historical concern to ensure that the right of workers in terms of the working environment i.e health safety, training, and non work related matters are enhanced by the employer. This emerge from a general desire to extend the political and social position of workers at work by having them enter into a new relation with management, the one based on a legitimate and independent voice (not managerial driven involvement) that allows risks to be shared, and common approaches to challenges be developed (Miquel Martins and Stuart 2002).

From the foregoing, the political idealogical starting point for both model seek possible answers to how trade union can redefine themselves and change in the present and in the future, adopting to the new working environment. The organising model has as its core principle the questioning of managerial legitimacy and emphasises the self organisation of workers in opposition to management as its principal organising dynamic (Kelly1996;Gall 2001; Heery 2002).This involves an attempt to organize workers through a bottom up organizing, and relying on collective strength to secure recognition(Herery 2002).This attempt to organise in the workplace often extends to offering valuable service to workers to support training in their fields, career development and job search. This is done through systematic planning using specialist techniques. From a critical perspective, within the aforementioned framework on the techniques to organizing, some critics and advocates of the model argue that it’s important to look beyond the aforementioned techniques, but on strategic issues as impact of these organising processes on the unions internal structures and forms of leadership. These Critics posit that full time union officers accustomed to serving existing members may well feel threatened by such strategic shifts in their routine functions (Frege and Kelly 2003; Heery 2002).Similarly rank and file union members will have to – in some cases - be convinced of the need to redirect scarce resources away from servicing the existing membership towards organising non union members.

In this regard, Carter (2000) observation on restructuring existing practice of unions may be the key to understanding the willingness to revert this trend. Carter (2000) argues from his observation that a consciously determined change in any complex organisation is difficult to achieve- this is because these policies are suppose to confront new circumstances, mediated by complex internal process. When such internal constraints are combined with the external obstacles to organising, as noted above, it is not surprising that the scope and nature of the possible organising model vary considerably (Carter 2000). While others argued that such situations had potentially profound implications for the nature of the relationship between union members, activist and officials. For instance Moris and Fosh (2002) question the effect on the union structures and the rationale behind the service strategy of organising. They argue that the treatment of individual union members as fee paying customers of service, diminish the traditional role of the union activist in the capacity of the union being democratic. Others strengthen this stance that exchanging benefit for membership contributions would lead to the relative exclusion of the representative functions within the union(Stirling 2005).In contrast Kelly and Heery(1994) who highlighted extensively; the concept of service for recruitment- in their works, reiterated that this service function is strategically aimed at encouraging workplace representation and expansion in the short run. In the event a general consensus exists that such approaches did not prove particularly effective in terms of recruiting new members (Carter2000; Stirling 2005; Waddington and Whitson 1997) nor it seems, were they any better at retaining existing membership (Richards 2006).

Instead several authors have argued for the continued prominence of collective reason for joining unions. Stirling (2005) points a strong evidence that new members join for collective reason related to support when facing problems at work, while Waddington and Whitson (1997) concluded that the individualisation of aspects of the employment relationship(i.e service for recruitment) do not necessarily mean the abandonment of support for a collective agenda. In any case, and in a valuable critical position William (1997) cast doubt on the value and validity of the notion of individualisation amongst contemporary workers in general, arguing that the view of workers becoming less solidaristic does not discourage the historical aspiration of trade unionism in general. To Williams (1997) the strategy of treating individual members as fee paying customers is not so much evidence of less solidarity for union cause or individualism as much –compared to the extent to which employers seek to resist unions to expand organising recruitment techniques to new potential non traditional employment groups (Williams 1997). Overall the practice of services by workers is prevalent where union organisation is relatively strong. Besides information reorientation mechanism can be devised by union leaders to educated members about the existence and impact of these external pressures on union revival change process(Flecher and Hurd 2001).

Turning to the manifestation of the labour management cooperation or partnership model as a strategic response to union revitalization. Much of the debate on its basic proposition has thus being seen as central to UK new labour government approach to labour policy and modernisation of UK employment relation (Martinez Lucio and Stuart 2000). In this context, state institutions as the Department of Trade and Industries- Partnership Fund, has provided subtle support and knowledge resources to locate new management-union relations within the paradigm of a broader set of interests, such as those of the individual, those of the employer and customer as well as those of the State. By applying this mechanism of partnership the state not only act as a third party and major guarantor of partnership, but as a facilitator of network and learning processes relevant to it (Rainbird 2004). Within the UK industrial relations policies and the ongoing difficulties management face in responding to the effect of environmental changes, alongside the likely impact of a potentially more labour friendly political environment. Authors as Arkers and Payne (1998) argued that management could not proceed to progress change without bringing unions on board in terms of decision making. Partnership thus afforded the union movement a clear opportunity for increase social and economic influence. In effect unions can deepen their institutional role at various levels at the workplace-such as strategic areas as training and quality management, alongside issues on the wider society at large (Arkers and Payne 1998).

However like many process of convergence that emerges from divergent positions and interests the partnership model is open to coexistence of opposing ideologies and political reinterpretations and uses (Martinez Lucio and Stuart 2004). Moreover much of the model debates has tended to focus on the extent to which partnership diminishes union representative capacity or the extent to which it enhances it. Within this broad paradigm, the critical considerations for most of the arguments includes the model commitment to business success and the sharing of this success, employment security, employment voice, opportunities for training and development, and flexibility (Guest and Pecci 1998 cited in Martinez lucios and Stuart 2002).These considerations, it is argued that successful partnership requires a set of reciprocal commitments and obligations between the organisation and the people working in it. These principles and commitments thus influences the institutional configuration(Thomas and Wallis 1998).Yet others question the content of the model principle ability to reshape management union relationships, raising criticism on the unmanaged political risk unions face adopting the model .For example Claydon(1998) argued the justification of the result of labour management partnership relationship when comparing and contrasting partnership and non partnership firm- the former do not appear to exhibit significant difference in terms of job security and profitability. In addition Taylor and Ramsey (1998) raise doubt that partnership based arrangements may draw trade unions into management strategy of enhancing work intensification. For example in the process of engaging in partnership, trade union may end up legitimating workplace change programmes that trade off employment security with greater work intensification. Put differently and to re-emphasise this position – a critical analysis on effective practice of partnership agreement on the part of trade union with management may lead unions to downgrade their activist resistant strategies, which can lead to a long term weakening of union structures (Geary and Roche 2003). Furthermore the content of the partnership model policies reveals more of a strategic human resource management driven work place strategy, and not simply a union oriented one (Stuart and Martinez Lucio 2000). Similarly from the management perspective Oxenbridge and Brown (2004) noted that managers expressed frustration with the lengthy negotiation and balloting process among union members the model practice entail. A related challenge was the tension that arise when key union representative loose the trust of their members as a result of their relationship with management. For example key union representative can become suspicious by union members on their stance from exposure to strategic information with management (Oxenbridge and Brown 2004).

Overall within these divergent positions of political interest from the two model there are areas unions position on workplace representation are compatible to management interest on various themes, and mutual problem solving- precisely where organising model idealogical roots share common interest with labour management partnership. For example labour management partnership agreement developing often in the aftermath of a strike in which the unions agree to support the company in return for the companys acceptance of the union (Hurd, Milkwan. etal 2003). Similarly this mutual agreement can also occur in the cause of union drive to extend workplace representation in non traditional sector were membership rate are low, unions ability to reach out to these employees in this sector maybe limited when they are unable to establish bargaining rights with employers in that sector (Bryson and Gomez 2005). To reverse this situation the available option open to unions will be negotiating terms of partnership with employers if they are to make substantial membership gains in the long run from that sector.

For this reason a thorough examination of the academic literature to the study of union revitalization cannot help but reveal the political reinterpretations of many views and experiments going on with both approaches- which suggest that a one path solution is far from being clear. The majority of the studies in this essay have focused on how trade union can reinvent themselves within the critical considerations embedded in the two model approaches. The essay discussed the factors resulting in union decline, tracing the circumstances that gave rise to these factors. Its framework embraces an indepth explanation and critical analysis of the two models. It introduced critics and advocates that seek to diminish or enhance the strong points of each model .Overall it highlights conditions and areas of compatibility of both model. Consequently there is no one size fit all paths to union revitalization. Whether to choose the path of partnership, that of organising or a third way will vary depending on the nature of the workforce being represented and the industry characteristics. Whatever the circumstances union revitalization may need to be embedded in an ideology that define union purpose in broad and ambitious terms, so that unions can position themselves as more than a narrow interest group. To some extent the organising model may satisfy this requirement, however history has it that the accomplishment of deeply held political ideologies tend to be the outcome of investing in complex sets of network resources, organisation and collaborative strategies, which partnership model entails. Whatever the circumstance unions should comprehend that any new path must be that which shows results.

REFERENCES

Arkers.P and Payne.J(1998) British Trade Unions and Social Partnership: Rhetoric,Reality and Strategy. International Journal of Human Resource Management,9(3),pp529-549.

Bryson.A and Gomez.R (2005) Why Have Workers Stopped Joining Unions? The Rise in Never Membership in Britain. British Journal of Industrial Relation, Vol43,pp67-97.

Bach.S.(2002) Public Sector Employment Relations Reform Under Labour: Muddling through or Modernization?, British Journal of Industrial Relations, Vol40(2)pp319-339.

Claydon.T (1998) Problematising Partnership: The Prospects for a Cooperative Bargaining Agenda, In: Sparrow.P and Marchington.M (eds) Human Resource Management: The New Agenda, Financial Times Pitman Publishers,London.

Carter.B (2000) Adoption of the Organising Model in British Trade Unions: Some Evidence From Manufacturing Science and Finance(MSF). Work,Employment and Society,Vol14 (1),pp117-136.

Frege Carola.M and Kelly.J (2003) Union Revitalization Strategies in Comparative Perspective. European Journal of Industrial Relations,Vol9(1),pp7-24.

Fletcher .H and Hurd.R (2001) Overcoming Obstacles to Transformation: Challenges on the Way of a New Unionism. In: Waddington.J,Hurd.R etal (eds) How Does Restructuring Contribute to Union Revitalization.ILR Press,NewYork.pp 118-135.

Geary. J and Roche.W (2003) Workplace Partnership and the Theory of the Displaced Activist. Industrial Relations Journal,Vol34(1),pp32-51.

Heery.E, Kelly.J etal (2003) Union Revitalization in Britain. European Journal of Industrial Relations,Vol9(1),pp79-97.

Hurd.R, Milkman.R, etal (2003) Reviving the American Labour Movement: Institutions and Mobilization. European Journal of Industrial Relation.Vol9(1),pp99-117.

Heery.E (2002) Partnership Versus Organising: Alternative Future for British Trade Unionism. Industrial Relations Journal,Vol33(1),pp20-35.

Hamann.K and Kelly.J(2004) Unions as Political Actors. In: FregeCarola.M and Kelly.J (eds) Varieties of Unionism: Strategies for Union Revitalization in a Globalizing Economy. Oxford University Press,Oxford.

Hoffman.J (1997) Globalization: Risk and Opportunities for Labour Policy in Europe .European Trade Union Institute, Brussel.

Hickey .R (2003) Collective Bargaining Ruptures : Conflict and Control in an Oil Refinery. Cornell University Masters Thesis,NewYork.

Heery.E (2002) Partnership Versus Organising : Alternative Futures for British Trade Unionism. Industrial Relation Journal,Vol33(1),pp20-35.

IRSa (1994) European Works Councils- the Action Begins, European Industrial Relations Review,250,November.

Kelly.J and Heery.E (1994) Working For the Union: British Trade Union Officers, Cambridge University Press.Cambridge.

Kochan .T and Lansbury.R (1997) Lean Production and Changing Employment Relations in the International Auto Industry. Economic Industrial Democracy,Vol18,567-579.

Morris.H and Fosh.P (2000) Measuring Trade Union Democracy : The Case of the UK Civil and Public Services Association. British Journal of Industrial Relations, Vol 38,(1) ,pp95-114.

Martinez Lucio.M and Stuart .M (2002) Testing Times: Remaking Employment Relations Through Partnership in Britain. Employment Relation .Routledge,London.

Oxenbridge.S and Brown.W (2004) Achieving a New Equilibrium? The Stability of Cooperative Employer – Union Relationships. Industrial Relations Journal, Vol35 (5),pp389-402.

Richards.A (2006) Does Union Democracy Affect Organising Strategies? Some Evidence From Britain. In: Paper Presentation at Conference on Union Democracy. Harry Bridges Centre for Labour Studies, University of Washington , 25 february 2006.

Rainbird.H (2004) Assessing Partnership Approaches to Lifelong Learning : A New and Modern Role For Trade Unions ? In: Stuart.M and Martinez Lucio .M (eds) Partnership and Modernisation in Employment Relations .Routledge.London.

Stirling.J(2005) There is a New World Somewhere: The Rediscovering of Trade Unionism. Capital and Class, Vol (87),pp43-63.

Terry.M (2000) UNISON and the Quality of Public Service Provision: Any Lessons From the Rest of Europe? In: Heery.E, Kelly.J, etal (eds) Union Revitalization in Britain . European Journal of Industrial Relations,Vol9(1),pp79-97.

Taylor.P and Ramsay.H (1998) Union Partnership and HRM: Sleeping With The Enemy? An International Journal of Employment Studies,Vol6(2).pp115-43.

Williams .S (1997) The Nature of Some Recent Trade Union Modernization Policies in the UK. British Journal of Industrial , Vol35,(4),495-514.

Waddington.J and Whitson.C (1997) Why do People Join Union in a Period of Membership Decline? British Journal of Industrial Relation, Vol35,(4),pp515-546.

Waddington.J. 92003) Heightening Tension in Relations Between Trade Unions and the Labour Government in 2002, British Journal of Industrial Relation,Vol41,(2),335-58.
Waddington.J.and Hoffman .R (2000) Trade Unions in Europe : Facing Challenges and Searching For Solutions. ETUI,Brussels.

Stoik Musah Writes from LBS,EastMidland, United Kingdom.Email Stoik_joy@yahoo.com

The Implications of Outsourcing practice in Organisations,HR proffessionals and HR Proffession at large.

2007-01-23T15:13:00.000-08:00

By
Stoik Musah.
LBS,United Kingdom.

Human Resource Outsourcing from an organisational perspective is viewed as a form of predetermined external provision with another enterprise-mainly an outsourcing provider , for the delivery of human resource services that would previously have been offered inhouse(Elfing and Baven 1994,Finlay and King 1999).The fast changing market environment has forced organisation to redefine Human Resource department function to focus on truly strategic activities, if this unit truly desire to act in the capacity of always looking for better ways to do things.This essay will describe the reason organisations choose to take this path and also the various implications of outsoucing they face.

Outsourcing is a conscious business decision to move internal human resource work function to an external supplier. By this strategic move on the part of the organisation –it seek to rechannell human resource functions time and resources to help address the organisation top challenges. Since economically, it does not make sense for organisations to retain and develop in house capabilities to deliver human resource services that sometimes are non strategic, when outsourcing providers are in the same industry, that can provide this service more consistently and efficiently than themselves(The Organisation). Human resource services as employee services, pensions, international service personnel administration, recruitment and assessment, training administration, policy enquiries, resolutions and legal compliance, relocation services, benefit administration, payroll, forms submission, employee record keeping, HRIS, and benefit administration are human resource employment service and transactional service functions most organisations are moving out of the organisation to outsourcing providing institutions (Hesketh 2006).

This is aimed at relieving the organisation from the institutionalised inefficiency of the routine in house human resource process of these functions. Put differently, through the strategic use of an outsourcing provider, the organisation can dramatically reduce the task required to upgrade and maintained human resource systems (Handerer 2005). For example consider the benefits accrued to an organisation with access to an outsourcing providers automated technology on benefit administration as against the organisation highly administrative transactional human resource function of this service(Ashley 2006). Ashley(2006) major criticism of this traditional approach to benefit administration includes the fact that benefit enrolment cost per employee are high, this is because HR staffs are needed to process paper based enrolment documents. Besides the process requires a significant investment of time, and sometimes errors by employees in filling out forms and errors on the part of HR personnel’s. This error compromises the accuracy of this crucial data. These errors often passed to the insurers that administer these benefit plans. But an automated benefits technology solution from an independent outsourcer corrects most of these problems when they arise. Since user friendly web based forms replace multiple, difficult to use paper forms. The technology also allows the employees to enter their personal data information in one area, and all the related systems will automatically have this information. Safeguards and controls are also provided by the templates within the automated system to help prevent errors and reprocessing of enrolment. All these in built facilities help to increase the accuracy of the data, and save the HR department time and money at every step along the way. Through this process the HR department can reclaim more than half of the time that they previously devoted to these task (Ashley 2006).

Moreover, from the corporate governance perspective, another reason the organisation choose to outsource the HR function is that pressures from stakeholders, demands that management constantly streamline the way the business operates. This has forced management to reconsider how blending the services performed both inside and outside the organisation can help to contribute to the bottom line. In these evaluations, it can be argued that outsourcing has become one option on a larger menu of strategies for the search for efficiency, when you consider factors in organisational operating environments as corporate restructuring, downsizing and outsourcing (Laabs 1993).

Although the strategic literature on this subject suggest that the reason for outsourcing can be found primarily on cost disciplines (Quinn 1999).Outsourcing can provide companies with greater capacity for flexibility, core competence enhancement, and strategic repositioning especially in the purchase of rapid developing systems ( Carlson 1989; Harrison 1994).This is made possible by smaller specialised outsourcing providers who provide the organisations support, to adjust the scale and scope of their human resource service function capability upward or downward at a lower cost, to changing demand conditions and at a rapid rate(Armstrong 2006). Furthermore, Quinn and Hilmer (1994) posit that outsourcing can decrease the human resource service function design cycle time, if the client uses multiple best in class suppliers, who work simultaneously in individual components of the system. As each supplier can contribute greater depth and sophisticated knowledge in specialised areas –like in the area of complexities involve in the benefit administration process discussed previously- and thus offer higher quality inputs than any individual supplier or client .Perhaps, far greater than the above cited reasons why organisations choose the path of outsourcing will be the opportunity of full utilization of external suppliers investments, innovations, and specialised professional capabilities, which for any one organisation would require much time and effort to replicate(Currie and Willocks 1997).

Similarly following the economic postulation of Richardo(1962) on the possible effect in the organisation on the efficiency of production and resource exchanges. Four broad categories of changes emerge in the organisation activities resulting from outsourcing practice in the area of (i)Specialization in a particular HR function(ii)Clarifying configurational arrangements (iii)Flexibility and (iv)Cost savings. With reference to the aforementioned possible organisational effects, it can be asserted that having other enterprises specialist in provision of HR function allows the host organisation to concentrate on those activities in which it can establish distinctive core competence (Hamel and Prahalad 1994).Focussing on core competence and leveraging against other sourced relationship allows for the production of human resource services more efficiently while improving quality through the application of specialist knowledge (Alexander and Young 1994). It is this achievement of quality improvement through core competence focus that promotes competitive advantage (Kakabadse and Kakabadse 1999). Yet by contrast other writers criticize the hollowing effect-this excessive contracting out can result to. Considering the reduction of HR overhead cost and company size- so that the host organisation becomes a fraction of its old former self (Lambooy 1986; Davidow and Marlone 1992). British Petroleum and Marks and Spencers has being substantially moving in this direction whereby the systems integrators in almost all the HR functions are contracted out to a collaborating network of companies .For this reason, certain writers predict that this trend will continue, as companies will, in the future outsource those activities that held a commodity status and keep those that make them unique (Corring 1999). Above all, by exposing the organisation to market transactions disciplines through outsourcing practice, it is postulated that the efficiency of the current configurationally arranged enterprises are highlighted .Thereby questioning the level of changes needed for the organisations fundamental structural parameters (Domberger 1998).For this reason exposing the organisation to market disciplines assist the management to focus on configuring the organisation in a manner that sustains their competitive position, by enhancing their capability to offer goods and services at prices attractive to purchasers, which inturn promote conditions for innovative HR work practice (Grant 1995). In the same way , plausible as this may seem, it can be argued that contracting out weakened the organisation innovative capacity to facilitate efficient HR work process. To strengthen this point, Domberger (1998) posit that this situation arises as the competitive pressure to innovate is transferred to the suppliers. The writer asserted that technical progress on the part of the organisation in the longrun can therefore be compromised.

In addition organisations that will survive in competitive markets need to display an ability to appropriately adjust their infrastructure scale and scope at low cost and at a rapid rate (Upton 1995). Outsourcing permits that competitive advantage through flexibility operates on the premise that networks of small enterprises aligned with their clients, underpinned by performance related contracts- are able to adjust more quickly to changing demand conditions than large integrated corporations (Child and Faulkner 1998). In contrast Korac- Kakabadse, Korac -Kakabadse etal (1998) are of the view that flexibility in work operations require a definition of organisational boundaries, which inturn induces possible further restructuring, and dislocation of resources .Thereby inducing a variety of costs, especially when associated with loss of employment, can result in the organisation losing its HR skills, competences and collective knowledge, and weakened commitment from retained employees after downsizing. For this reason numerous literature studies abound in organisational studies of outsourcing effect on employees like survival syndrome, erosion of the social contract, and disintegration of organisation culture etc. Furthermore other emerging practice in this subject by organisations has being the growth in relationship and strategic alliance that develop between organisations who engage in providing similar outsourcing services or product (Marcceau 1992).Despite the fact that some of these organisations may be competitors, horizontal interlinkages are becoming increasingly central to many firms competing success in outsourcing process(Child and Faulkner 1998).These alliances involves a number of often competing enterprises, corporating through a central basic source of activity which supports these prime relationships (Kakabadse and Kakabadse 1998). The key objective of such arrangement therefore is to achieve economies of scale through a beneficial local source delivery to its consortium members. For example a group of companies can create a joint venture company to carry out HR functions and services on behalf of all the individual companies –and any other firms in the market that are willing to utilize this service. The rationale behind this concept emphasised by Kakabadse and Kakabadse (2000) is that, although these HR services provided by the company are essential to all the individual organisation in the consortium- higher operational efficiency can be achieved through joint ventures economies of scale, at the same time making the individual companies concentrate on other essential task(Their core competences).
Alternatively some other organisation engage in inhouse insourcing practice to re-examine the firms service portfolio, to determine what is required to maintain economies of scale. In this practice all activities are essential rather than distinguishing between essential and non essential HR core competence. This idea is driven by management view as to the nature of the portfolio configuration that improves the organisations position in the value chain. For example the Engineering based group Vickers PLC took the strategic decision to sell off two of its profitable businesses Rolls-Royce Cars and Cosworth in other to generate the investment capital for acquisition and repositioning(TheWeek 1999). As a consequence, Vickers positioned themselves as a high quality marine engineering group ready to take advantage of Europe future marine transport requirements. Bearing in mind that sea transportation capacity will need to be enhanced due to the growing congestion of road and rail(The Week 1999).

Furthermore organisations also develop particular competencies through some activities that are supportive of its primary business purpose. The organisation may choose to further develop and exploit its in house nurtured expertise through spinning of such activities as a separate subsidiary organisation(Kakabadse and Kakabadse 2000).The logic is to provide the subsidiary organisation with the opportuinity for growth through full market exposure. This is done sometimes to exploit a new line of business. By separating its activities from its parent company. The newly formed company is free to maximize on its profit seeking intentions, through the application of its capabilities outside the existing structure. For example EDS currently one of the most powerful suppliers of IT services worldwide, began as GM spin off. Similarly the Gedes Group-specifically AudiVolkswagen GMBH, is a wholly owned subsidiary of Volkswagen AG, and is one of the leading system integrator in Europe(Venkatraman 1997).

Within the parameter of the above illustrations, outsourcing relationships are often described in terms of strategic alliances which implies a positive relationship, strategically forged between the contractual parties involved. Rubery, Machington etal (2003) argues that these positive connotations not only mask the true motive and nature of the contractual relationships, but also conceal the tension and conflicts in the process of managing these relationships- which are often a major source of pressure for the HR professional as well as the workforce who are responsible for service delivery. According to Wilmot (1997), the content and organisation of managerial work is shaped and reproduced by material subjects who are sometimes HR career professionals. For this reason, HR professionals as individualized sellers of wage labour and targets of control, are rendered anxious about their performance and career prospects.Willmot (1997) emphasise that, like other employees; they are discipline by a variety of audits and performance related pay schemes which are intended to secure their cooperation and trust(Willmot 1997). Invariably this inter-independence means that the HR professional tasks is closely linked to the organisational contexts and cannot be easily abstracted from it (Whitley 1989). As Whitley(1989) pointed out that the nature of any particular role and problem is dependent upon the context in which it occurs, such that if this changes- so too does the task. However studies in recent years on Human Resource Function has also pointed to the fact that career practice in this function has been intensified with reduced job security in a period of downsizing , delayering and outsourcing of organisational structure( Scarbrough and Burrel 1996).For this reason outsourcing relationship is seen as a dynamic platform on which the nature of work and career opportunities for HR professional managers take a different turn. As part of the HR professional work routine consideration emerge in managing the contractual relationship between the organisation and the outsourcing provider. The underpinning inter-organisational relationship is essentially a cost-profit relationship which is governed by a tight financial framework involving penalty for failing to meet performance criteria (Cook 2006).Similarly interpersonal contacts between the HR professional and the management of the outsourcing provider are identified as performing vital roles in problem solving, in exchanging social values and information, and in demonstrating commitment to credibility with the other party(Nooteboom 1999). For this reasons, the HR career professional is often put in place to manage the inter-organisational relationship. To oversee the business relationship, to trouble shoot operational problems and to win new business for the organisation. By this, the HR personnel may have no authority over controlling the contract existence between the two ends, but can flag up issues identified, were changes need to be made (Snow, Miles etal 1992).

In contrast despite the significant role these HR professional play within this tight line, Cook(2006) argues that their employment may be insecured than other employees for many reasons. Their employment contract may be tied to the length of the specific business contract and my not be taken on by the new employer who takes over the business .Their career progression maybe highly dependent upon the success of the contractual relationship with the outsourcing provider. Cook(2006) noted that they(HR professionals) need to bridge the differences between the two parties especially at hard times, for which they may receive no support from other managers as they may be accused for not being on their companys side. Also if they fail to develop a workable relationship, they tend to be replace by someone else. In some cases they may be sacrificed, not necessarily through their own fault, but in other for the firm to maintain and improve relationship. Infact even when the business relationship appears to be smoothly managed at the operational level, top management may still decide to terminate the contractual agreement as part of a wider strategic move(Marchington,Grimshaw etal 2004).Other authors like Bidges(1995) and Handy(1995) celebrate the coming of the boundaryless career era in which the lucky few are well equipped to span the organisational boundaries for their successful career. The reality may not be depicted as prescribed even for those who possess tradable skills. This is because organisational forms dictates how careers are managed(Miles and Snow 1996).While the career prospects of the outsourcing provider is precariously tied to the length and nature of the business relationship, the HR career professional tend to experience significant changes in their skill profiles and career prospects as direct consequences of the emergence of the business relationship(Mulholland 1998).In the same way, the sporadic creation of new division s and diverse business nature, render career progression of HR professionals less predictable. As Miles and Snow (1996) noted that competition for promotion may come from within as well as outside the firm, as organisations are increasingly looking for the required mix of skills to manage complex transition outsourcing process. Therefore the organisations form further influence the structure of the skill portfolio of the HR professional. To revisit the argument highlighted here- it can be further emphasize that, as each organisational forms increased in complexity, the required mix of technical, commercial and governance competencies change. This new skills requirement has brought changes in the work of the HR professional. Consequently the need for control, monitoring and accountability becomes more pressing (Buchanan and McCalman 1998).For this reason ,these managers not only have to report to a vertical hierachical structure within their organisation but also have to answer to a horizontal and diagonal monitoring structure consisting of monitoring cross functional teams (Buchana and McCalman 1998).

Furthermore financial awareness, customer focus and management innovations appear to be the major changes for the HR professional work function, and as such the organisation engage them in reskilling training programme to embrace the new company management style(Du Gay 1996). In the course of work process, the HR professionals have to make sure that performance targets are meet in order to avoid penalty and where necessary, make new claims for extra work. Similarly, they have to learn to manage their unit budget and to put a cost to every item that is purchased and every task carried out (Cook 2006). The recognition for data express the trend for the HR function to be strategic. By this the HR professional needs data to show when and where it can intervene in the matter of talent (Hesketh 2006).Prior to this era, the CIPD has largely overlooked this important distinction, focussing more on trends rather than results- on what HR does, rather than what HR delivers, and how this deliveries are interpreted in datas to support HR opinions at the board. Convincingly this in most cases influences consideration for business decisions. This is one area the CIPD should immerse its members and students on financial studies training- for this will lead to a more informed grasp of the resources required to deliver impressive change result, and value proposition in relation to the business model, during outsourcing partnership. The most recent development is that the CIPD has recognized a number of postgraduate qualification in some academic institution that closely match this requirement. The institute now devolve responsibilities to this institutions to function as training centres and empowered them to award graduate membership to successful students.

With regard to the aforementioned issue of training, Sisson(2006) posit that there is a strong case for an overhaul of the CIPD training and development syllabus. This is to enable the training and course content reflect the need of HR managers, to see the skills that they need to carry out changing HR function delivery proposition. Notably in (i)Business Skills-in the area of understanding realworld political business practices, commercial awareness, management data/analytic planning, mapping and prioritising project management.(ii) Reflective Service Specific Skills-This is where the social architecture or collective ways in which people work together are critically reflected on, to know how well processes are working in relationship with resources as technology, behavioural models and budget instruments(Hesketh 2000).

For this reason a thorough examination of the corporate landscape and academic literature cannot help but reveal the increase attention paid to this new breed of organisational practice- outsourcing. The majority of the studies here have focus on cost (Quinn 1999), efficiency ( Currie and Willocks 1997), quality and value creation (Hamel and Prahalad 1994), flexibility (Child and Faulkner 1998), and how organisation react to the call of outsourcing (Korac-Kakabadse 1998). The essay discussed the economic justification of HR function outsourcing and why organisation opt for this path. It highlighted the common HR function outsourced with specific reference to benefit administration .The essay discussed the implication and effect of this decisions on the organisation. Its framework covers the emerging application of strategic alliance by organisation who engage in similar outsourcing practice. Moreover the tension and conflicts in the process of managing the contractual relationship between the organisation and the outsourcing provider as seen from the human resource function was explored. Consequently the essay has demonstrated how the required mix of skills to manage this emerging relationship, question the training and development syllabus of the Chartered Institute of Personnel Management CIPD to improve the HR professional metrics ability. Although the critical analysis in this essay must be considered in the light of the limitation of study; as word count. For this reason brief discussions have been made to many important themes and conceptualizations i.e survival syndrome, erosion of the social contract, disintegration of organisational culture etc. However the essay has great potential for providing understanding on human resource function outsourcing, its implication on the organisation and the HR profession at large.

REFERENCES;
Ashley.D (2006) Intuitive Technologies Increase Employee Adoption of Human Resource Solutions. Compensation and Benefit Review Journal. Sage Publication.

Armstrong.M (2006) A handbook of Human Resource Management Practice . 10th Edition. Kogan Page Publication. pp 382-387.

Alex.M and Young.D (1996). Strategic Outsourcing. Long Range Planning,Vol29.

Bridges.W (1995) Jobshift: How to Prosper in a Work Place Without Jobs. In: Cook.F (2006) Outsourcing of Public Services and Implications for Managerial Knowledge and Careers. A Journal of Management Development.Vol 25, No3, 2006.

Buchanan.D and McCalman.J (1988) Confidence ,Visibility and Pressure: the Effect of Shared Information in Computer aided Hotel Management. New Technology,Work and Employment.Vol3 ,No1.

Carlson.B.(1989) Flexibility and Theory of the Firm. International Journal of Industrial Organisation,Vol7,No4,pp179-203.

Currie .W and Willocks.L.(1997) New Strategies in IT Outsourcing:Major Trends and Global Best Practice Report. Business Intelligence Limited,London.December.

Child. J and Faulkner.D (1998) Strategies of Corporation: Managing Alliances,Networks,and Jiont Ventures. Oxford University Press, Oxford.

Cook .F (2006) Outsourcing of Public Services and Implication for Managerial Knowledge and Careers. A Journal of Management Development, Vol25,No3.

Corring.B (1999) The Sourcers Apprentice. Accountancy Journal,May,17-18.

Domberger. S (1998) The Contracting Organisation: A Strategic Guide to Outsourcing. Oxford University Press, Oxford.

Davidow.W and Malone.M (1992) The Virtual Corporation. Harper Business,NewYork.

DuGay. P (1996) Making up Mangers: Enterprise and Ethos of Bureaucracy. In: Clegg.S. and Palmer.G.(eds),The Politics of Managemnet Knowledge. Sage, London.

DeVries. M and Balazs. K (1997) The Downside of Downsizing. Human Relations,Vol50,No1.

Elliot. E and Tokko. D (1996) A New Management Tool or Just a Fad. Bulletin of the American Society for Information Science,Vol22, pp20-21.

Elfing. I and Baven. G (1994) Outsourcing Technical Services: Stages of Development. LongRange Planning.Vol21.

Grant. R (1995) Contemporary Strategy Analysis. Blackwell Business, Cambridge.

Hamel.G and Prahalad.C.(1994) Competing For The Future. Harvard Business School Press, Boston.

Handerer.K(2005) HR Outsourcing: Make a Place For HR at the Table. Available from:http//:www.aon.com/focus.{Accessed 4/01/2007}.

Harrison. B (1994) Lean and Mean: The Changing Landscape of Corporate Power in the Age of Flexibility. Basic Books, NewYork.

Handy. C (1995) The Future of Work, In: Cook.F (2006) Outsourcing of Public Services and Implications for Managerial Knowledge and Careers. A Journal of Management Development.Vol25,No3.

Hesketh. A (2006) Outsourcing the HR function: Possibilities and Pitfalls. A Corporate Research Forum Publication. May 2006.

Korac-Kakabadse. N, Korac- Kakabadse.A, etal (1998) The Role of IT in the Changing Physcho- Social Contracts; A Multi-Stakeholders Perspective. Knowledge and Process Management Journal. Special Issue.Vol2, June.

Kakabadse. A. and Kakabadse. N (2000) Sourcing : New Face to Economies of Scale and the Emergence of New Organisational Forms. Knowledge and Process Management. Vol7,No2.,pp107-118.

Kakabadse. A and Kakabadse .N (1998) Leadership in Government: Study of the Australian Public Service. Ashgate, London..

Kakabadse. A and Kakabadse. N (1999) Essence of Leadership. International Thomson, London.

Laabs. J (1993) Why HR is Turning to Outsourcing. Personnel Journal.September.

Marceau. I. (1992) Reworking the World Organisations, Technology and Cultures in Comparative Perspective. De Gruyter, New York.

Marchington. M, Grimshaw.D etal (2004) Fragmenting Work: Blurring Boundaries and Disordering Hierachies. Oxford University Press,Oxford.

Miles R and Snow.C (1996) Twenty First Century Careers. In:Arthur .M and Rousseau D (eds) The Boundaryless Career: A New Employment Principle for a New Organisational Era. Oxford University Press, Oxford.

Mulholland.K(1998) Survivors Versus Movers and Shakers; The Reconstruction of Management and Careers in the Privatised Utilities. In: Thompson.P and Warhurst.C (eds) Workplace of the Future. Macmillan, London.

Mishra. K, Spreitzer.G etal (1998) Preserving Employee Moral During Downsizing .Sloan Management Review.Vol39,No2,pp83-95.

Nooteboom. B (1999) Inter-Firm Alliances: Analysis and Design. Rouledge, London.

Quinn. J (1999) Strategic Outsourcing: Leveraging Knowledge Capabilities. Sloan Management Review. Vol10,No1,pp9-22.

Quinn. J and Hilmer F (1994) Strategic Outsourcing. Sloan Management Review,Vol35,No1,pp13-55.

ReLocate Extra Magazine (2006) Insufficient Training is Jopardizing the Success of Organisational Change. Issue3, April 2006, Available from:http://www.relocatemagazine.com {Accessed 3/02/2007}.

Ricardo.D (1962) On the Principles of Political Economy and Taxation. In: Kakabadse. A and Kakabadse. N (2000) Sourcing New Face to Economies of Scale and the Emergence of New Organisational Forms. A Knowledge and Process Management Journal.Vol7,No2,pp107-118.

Rubery.J, Machington. M etal (2003) Inter Organisational Relations and Employment in a Multi –Employer Environment. A Journal of Industrial Relations .Vol41,No2,pp265-289.

Scarbrough. H and Burrell. G (1996) The Axeman Cometh: the Changing Roles and Knowledge of Middle Managers. In: Cook. F (2006) Outsourcing of Public Services and Implications of Managerial Knowledge and Careers. A Journal of Management Development.Vol25,No3.

Snow. C, Miles. R etal (1992) Managing 21st Century Network Organisations. Organisational Dynamics.Vol20,No12.pp5-19.

Sisson.K.(2006) Responding to Mke Emnott: What Industrial Relations Suggest Should be at the Heart of the Employee Relation. Warwick University Publication.

The Week (1999) Rolls Royce/Vickers: Maritime Marriage. City Companies in the News. Issue 223,september,Pg33.

Upton. D (1995) What Really Makes Factories Flexible? Harvard Business Review. Vol73,No4, July-August Edition, pp74-81.

Venkatraman. N (1997) Beyond Outsourcing: Managing IT resources as a Value Center. Sloan Management Review.Vol38, No3,51-64.

Willmot. H (1997) Rethinking Management and Management Work: Capitalism, Control, and Subjectivity. Human Relations ,Vol50,No11.

Whitley .R (1989) On the Nature of Managerial Tasks and Skills: Their Distinguishing Characteristics and Organisation. A journal of Management Studies.Vol26, No2,pp265-289.

Stoik Musah writes from LBS. Leicester.United Kingdom. email:Stoik_joy@yahoo.com