Introduction
Research on alignment of HR policies and practices with business strategies has recently
been the focus of management science (Brockbank, 1999; Delery and Doty, 1996;
Devanna et al., 1984; Golden and Ramanujam, 1985; Martell and Caroll, 1995; Truss and
Gratton, 1994; Wright and McMahan, 1992). The interest of strategic management in
examining the role of human resources as value-added has evolved (Baird and Meshoulam,
1988). How Strategic Human Resource Management (SHRM) leads to competitive
advantage, specifically with the resource-based perspective, has been dealt with in research
literature (Barney, 1986, 1991, 1992; Colbert, 2004; Conner, 1991; Fey et al., 2000; Grant
and Baden Fuller, 1995; Reed and DeFillippi, 1990; Schuler and Jackson, 1987; Walker
and Stopper, 2000; Wright and McMahan, 1992). Practitioners and academics are both of
the opinion that in the field of SHRM, learning organization and knowledge
management learning are a central concern in the workplace (Currie and Kerrin, 2003;
Keep and Rainbird, 2000; Thite, 2004; Thurbin, 1995). However, the operating
environments of many public and private sector organizations reflect that the rhetoric is not
even an aspiration, let alone a reflection of practice, and many challenges for HR strategy
are defined (Keep and Rainbird, 2000: 190; Storey and Quintas, 2001; Truss, 2001). The
current study focuses on the relationship of the two variables of strategic HR roles and
organizational learning capability, and whether they predict firms financial performance.
The paper thus has two research aims: first, to examine the theoretical nesting of the
two SHRM dimensions of strategic HR roles and organizational learning capability and
Jyotsna Bhatnagar, Management Development Institute, Sukhrali, Gurgaon, India (tel: 0124
2346760; e-mail jyotsnab@mdi.ac.in). Anuradha Sharma, Department of Humanities and Social
Sciences, Indian Institute of Technology, Hauz Khas, New Delhi, India (tel: 011 26591372; e-mail
radha@hss.iitd.ernet.in).
The International Journal of Human Resource Management
ISSN 0958-5192 print/ISSN 1466-4399 online q 2005 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/09585190500239424
1713
in the HR world. The fields remain, like the field of personnel management generally,
Druckers dustbin (Drucker, in Townley, 1994: 3). When we move to the field of HR, we
find the link between learning and HR as a primary foundation stone, owing its roots to the
definition of the field itself. While recognizing HRMs shifting nature (Keenoy, 1999), the
main characteristics can be summarized as: a concern with organizational performance as
the primary goal; the adoption of a unitarist perspective; and a corresponding belief that
employers and employees can be beneficiaries of good or soft HRM (Storey, 1987) if
employees are nurtured and developed as valuable members of the organization who help to
achieve its goals (Legge, 1995a). Garavan (1991: 17), links HRD to business strategy when
he states that [HRD is] concerned with the management of employee learning for the long
term, keeping in mind the explicit corporate and business strategies. McCracken and
Wallace (2000), drawing on the work of Garavan et al. (1998), suggest that active leadership
from top management is critical to maximizing the returns from HR. However, it is not just
the HR specialists who need to be able to do this. It is equally, if not more vital, that senior
managers scan their operating environment (Maxwell et al., 2002), which can be achieved
through organizational learning capability. As is evident, the HRM research is constantly
oscillating between HRM and HRD, and in the latter research organizational learning
underpins the construct.
Organizational learning is not just the total sum of individual learning but is also the
organizational capability to continuously enhance, the collective capacity to reflect, to learn
how to learn, to unlearn old ways of doing things and abandon old habits (Senge et al., 1999).
Many authors have argued that organizational learning can be the main antecedent for
organizational well-being, the key enabler to achieving organizational change and securing
competitive advantage (Krogh et al., 1998; Nonaka and Takeuchi, 1995; Pfeffer, 1994).
A cause and effect chain between learning growth and performance has been also identified
in some research efforts (Hasan, 2002; Kaplan and Norton, 1992, 2001).
Similarly, HR practices are a source of competitive advantage, and as Drucker (2002)
and researchers like Pfeffer (1998) and Greer (2001) suggest, the success of companies in
the present competitive environment largely depends upon the calibre of their human
resources and innovative employee management programmes and practices. Recent
research on best HR practices has shown that the HR function is indeed an important
success factor (Greer, 2001; Thompson and Strickland, 2001) in an organizations
effective performance. Thus this study contributes to the theory of strategic HRM, where
it tries to prove how strategic HR roles are related conceptually and empirically to
organizational learning capabilities at the managerial level. The study now examines HR
roles and the growing awareness of strategically aligning strategic HR roles to the needs
of the organization.
Strategic HR roles
One of the first attempts at this categorization was made by Nadler (1970) in the USA. He
identified two primary roles of learning specialist: administrator role and the consultant
role. American Society for Training and Development (1983) identified fifteen key roles
for the HRD practitioner. Critical outputs for each of these fifteen roles were identified.
The UK perspective in the 1970 s and 1980 s was developed under the Manpower Service
Commission, a government body. The roles identified were mainly the trainer roles
(for details, see Walton, 1999). According to Ulrich (1997), in the past few years, roles
for HRM professionals were often viewed in terms of the transitional form such as
operational to strategic; qualitative to quantitative; policing to partnering; short term to
long term; administrative to consultative; functionally oriented to business oriented, etc.
Storey (1992)
Ulrich (1997)
Buyens and Vos (1999)
(extreme view)
Kossek and Block (2000)
Jackson and Schuler (2000)
Adviser
Change agent
Fireman
Transition
Change facilitator
Transaction
Monitoring
Clerks of works
Analysts of
benevolence
Hand maiden
Administrative expert
Boffin
Tyson (1999)
Torrington (1979)
Transformational role
Deviant innovator
Administrative role
Legge (1995b)
Authors
Translation
Enabler
Regulator
Employee champion
Butler
Contract manager
Human bureaucrat
Welfare role
Transformation
Partnership
Change-maker
Strategic partner
Dreamer
Organizational
diagnostician
-
Strategic HR role
1717
There will now be a look at the research literature, which has helped in the development of
the hypotheses.
Hypotheses: strategic HR roles and organizational learning capability
Keep (1989), in his definition of HRD, has linked HRM to organizational learning.
Pettigrew et al. (1988: 32), also argue that effecting change in training and HRD involves
thinking in broad HRM terms. The link between the HR role and organizational learning
has been well established in the literature. It has been noted that those organizations, which
think that they want to be learning organizations, will treat HRD strategically
(Cunningham and Iles, 2002; Marquandt and Reynolds, 1994; Maxwell et al., 2002;
Walton, 1999). Rainbird (1999) indicates the link between environmental scanning and
HRM. McCracken and Wallace (2000: 429), argue that HRD policies and plans need to be
supplemented by HRD strategies. Garavan (1991) establishes the link between HR and
long-term planning while, in practice, the alignment or fit between HRM generally, and
training and development in particular, and business plans and strategy is very variable,
although there is some evidence that competency-based management development can
generate positive benefits for organizations (Winterton and Winterton, 1997). Measuring
and benchmarking the learning capability of an organization is an effective tool to initiate
and facilitate a change process to building a greater learning capability (Jick, 1994; Nadler,
1998). Beer (1997: 57) states the importance of institutionalizing a core action learning
programme if the HR function is to develop into a strategic role. Scarbrough and Carter
(2000), present a comprehensive review of the ways in which HRM issues could be linked
to knowledge sharing, which organizational learning capability enhances when
knowledge sharing is through horizontal and vertical boundaries of the organization.
MacNiel (2003) conducted a study that focused on the line managers HRM role in
employee learning and development, exploring the line managers potential contribution
to achieving strategic HRM objectives, and in facilitating the integration of an individuals
tacit knowledge by encouraging teams to share knowledge. Thite (2004), identifies some
key HR strategies for effective people-centric partnership in knowledge management,
namely trusting HR philosophy, institutionalizing learning to learn, and fine tuning HR
systems in a multi-national context, again highlighting the relationship between HR
strategy and the strategic intent of organizational learning. The study by Terziovski et al.
(2000), of the five Australian case studies of Toyota Motor Corporation Australia, Ramset
Fasteners Limited, W.A. Deutscher Metal Products Group, South Pacific Tyres and Pacific
Dunlop Bedding, found a direct link between HR and organizational learning. Gardiner
et al. (2001) commented that in both the learning organization and HR focus on promoting
and facilitating learning as a central activity of the organization, there are a number of
similarities in the way both programmes address the issue. Moreover, both approaches
advocate increased employee participation in policy making and a softer approach to the
formulation of business strategy. Thus, it is hypothesized that:
H1: The strategic HR roles and organizational learning capability will have a positive
relationship.
In organizations the line managers role is important in
ensuring that the implementation of HRM strategy and policies are successfully
implemented (MacNeil, 2003). The devolution of HRM activities to line managers
(Brewster and Larsen, 2000; Hutchinson and Wood, 1995) is a useful means for
1719
.38**
1
1
.82**
.79**
.80**
.10*
Notes
*Correlation is significant at the 0.05 level (2-tailed).
**Correlation is significant at the 0.01 level (2-tailed).
SP
AE
EC
CA
CL_OBJ
HOR_INTE
VER_INTE
POT_NEED
LONG_PLG
CREATE
ENV_SCAN
DEVT_CAP
OLC
BP_ROLE
1
.79**
.83**
.14**
.12**
.14**
.42**
.26**
.31**
.27**
.39**
.39**
.92**
1
.82**
.04
.12*
.14**
.39**
.28**
.30**
.27**
.39**
.37**
.93**
SP
AE EC
CREATE ENV_SCAN
1
.09*
.10**
.11*
.42**
.27**
.32**
.27**
.42**
.34**
.92**
1
.12**
.10**
.37**
.23
.30**
.23**
.35**
.57**
.94*
71**
.56**
.24**
.05*
.18**
.22**
.18**
.56**
.10**
CA
CL_OBJ
DEVT_CAP OLC
1
60**
.23**
.07*
.17**
.20**
.17**
.51**
.13**
1
.26**
.08**
.13**
.18**
.18**
.36**
.14**
1
.62**
.70**
.62**
.77**
.58**
.44**
1
.57**
.47**
.68**
.73**
.28**
HOR_INTEVER_INTE
BP_ROLE
1
.54**
.68**
.70**
.34**
LONG_PLG
1
.64** 1
.81** 11
.29** .42** .41**
POT_NEED
Table 2 Correlation coefficients of Strategic HR roles, (BP_Role) with the sub-variables of Strategic partner (SP); Administrative expert (AE); Employee
champion (EC); Change agent (CA), and Organizational learning capability (OLC) and the sub-variables of clear objectives; Sensitivity to people potential and
needs (POT_NEED);Concern for long-term planning and success. (LONG_PLG) Support of experimentation and creativity (CREATE); Environmental
scanning; (ENV_SCAN); Concern for development of capabilities (DEVT_CAP)
1723
OLC tested by the current study. Jeriss (1997) study of eight organizations emphasized that
skilled HRD practitioners can provide help in the unpacking process, but only if they have
sufficient knowledge about the dimensions and supporting criteria on the one hand and the
realities of the organization and its readiness and capacity for change on the other.
Discriminant functional analysis, together with a t-test was performed to find the difference
in the perception of HR and line managers. We found that line and HR managers differed
significantly in their perception of the strategic partner role and organizational learning
capability, but the results were reversed for each variables in terms of HR and line manager
perception. Results in Table 3 highlight that the t-test between type of manager and strategic
HR roles, (BP_ROLE) and organizational learning capability, are highly significant at the .01
level. The mean for the BP_ROLE is highest for HR managers (157.60). The discriminant
functional coefficient for the strategic HR role (1.04) is the highest for HR managers. While the
coefficient for OLC is the highest for line managers (.98), we find HR managers have the most
significant impact on the strategic HR role and self-report it to be higher than the line manager.
Thus H2 is accepted. This result supports prior research studies of Conner and Ulrich (1996),
Bhatnagar and Sharma (2002, 2003b), where HR managers report higher values for
themselves than their line counterparts. Further, it supports the work of Mitsuhashi et al. (2000)
who report in their research study that there are predominantly positive differences between
HR and line executives perceived effectiveness (HR minus line), indicating that line
executives compared with HR executives consider most of the HRM functional areas to be less
effective. The HR service providers seem to have overestimated their own performance.
Bradley (1978) and Kidd and Morgan (1969) pointed out that self-serving bias often lead
individuals to view themselves more favourably than seems objectively warranted (OReilly,
1983: 128). Perhaps HR executives overrate their performances in order to validate the
importance and effectiveness of the HR function within the organization. Based on these
theoretical predictions, it is not surprising that line executives perceptions of HR effectiveness
are different from HR executives perceptions. In addition, the results indicate that the line
managers in Indian organizations differ from HR managers in terms of their learning
capability, and that line managers have a higher organizational learning capability.
Tables 4a and 4b confirm that strategic HR roles are predicted by both the firms
financial turnover and firms profit, as all the beta values are significant at the .05 level of
significance. While organizational learning is not predicted by financial turnover, it is
predicted by firm profit at .05 level.
Table 3 One-sample t-test, means, SD discriminant functional coefficients for type of manager (H
TYPE), i.e. HR manager and line manager and strategic HR roles, (BP_ROLE) and organizational
learning capability
HR MGRS
T test
Variables
df 639
H TYPE
BP_ROLE
OLC
138.81**
109.83**
157.42**
Mean
SD
157.60
130.44
26.36
17.86
Line MGRS
Discriminant
functional
coefficients
Discriminant
functional
coefficients
Mean
SD
1.04
2.25
2 .08
.98
136.75
121.65
32.17
20.86
Notes
**t-test is significant at the 0.01 level (2-tailed). N 640.
(Constant)
BP_ROLE
(Constant)
BP_ROLE
OLC
Unstandardized
coefficients B
Std. Error
9.35
3.82
9.569
3.22
2.28
.19
.001
.17
.001
.001
Standardized
coefficients beta
.17
.15
.06
Sig
79.35
4.58
54.78
3.52
1.62
.000
.000
.000
.000
.104
Notes
a
Predictors: (Constant), BP_ROLE.
b
Predictors: (Constant), BP_ROLE, OLC.
c
Dependent Variable: FINANCIAL TURNOVER.
Thus H3 is partially accepted. The results support some prior research in this area.
A developing body of research has reported positive associations between firm-level
measures of HRM systems and organizational performance (Arthur, 1994; Huselid,
1995; Huselid and Becker, 1996; Ichniowski and Shaw, 1999; MacDuffie, 1995). The
organizational context (e.g. fit) and goals (e.g. outcomes) may influence, whether
particular human resource practices have synergistic or independent effects on firm
outcomes (Delery, 1998). Huang (2000) found in his study of 315 Taiwanese firms, and
found support for the assumption that human resource strategies and organizational
performance are significantly related. On the other hand, Som (2002) reported in his
study of fifty-four organizations in India that the role of the HR department is positively
correlated with organizational performance and the HR department plays a significant
role in the adoption of best practices within the organization. This study extends the
theory of strategic HRM to include strategic HR roles and the results imply that a better
fit of strategic HR roles with the organizational learning capability lead to better
performance. The result for organizational learning capability partly supports the study
of Ellinger et al. (2002) who found a positive association between learning organization
practices and firms financial performance. Their findings give support to the business
case of organizational learning. It also implies that these strategic HR roles and
Variables
Unstandardized
coefficients B
Std error
Step 1a
(Constant)
BP_ROLE
(Constant)
BP_ROLE
OLC
9.24
3.75
9.51
2.96
3.00
.129
.001
.191
.001
.002
Step 2b
Notes
a
Predictors: (constant), BP_ROLE.
b
Predictors: (constant), BP_ROLE, OLC.
Dependent variable: FIN PROFIT.
Standardized
coefficients beta
.161
.127
.084
Sig.
71.77
4.12
49.95
2.97
1.95
.000
.000
.000
.003
.005
1725
Limitations
There is of course, the notion of reverse causality (Paauwe and Richardson, 1997) which
the study has not looked into, i.e. financial performance in turn may be responsible for
moderate levels of correlation between strategic HR roles and organizational learning
capability. In addition, there may be more than the four roles which the study could have
pursued which future studies can focus on. Further research can refine the study to include
this factor and can further refine the sampling technique because the sample size collected
for the study is not homogenous in size. Single respondents who were managers were the
points for data collection. Their biases and perceptions may have affected the ratings of
the questionnaires (Whitener, 2001). The study focuses only on the managerial cadres
of the organization. Further research in this area may include non-managerial employees
in different units and functions of the organizations. A dynamic co-relational study
comparing organizations in time period 1 and time period 2 would have given interesting
results, and further research can examine this. In this survey firm performance indicators
of return on equity (ROE), return on assets (ROA), Tobins q, and market value added
(MVA) (Ellinger et al., 2003) could not be used, which further studies can pursue.
Moreover, the strategic HRM dimensions analysed the role of HR, but unique and
customized HRM practices of each organization could not be studied which would have
clarified the role of HRM further and made the study more interesting. The conclusions of
this thesis would not yield generalizations. Larger sector wise studies would be required
for further validation.
Appendix A. Theoretical framework of the development of the OLC (Ramnarayan,
1996) questionnaire based on inhibitors to the learning process in Indian
organizations
1. Clear focus on objectives and Systems perspective on shared vision (Senge, 1990)
plans for internal integration
clear focus on objectives
attention to integration and
Systems thinking (Leonard-Barton, 1992; Stata, 1989)
among departments and
functions
attention to vertical integration Systemic thinking (McGill et al., 1992); Systems perspective
(Nevis et al., 1995)
2. Sensitivity to people potential Facilitative leadership (Slater and Narver, 1995); Shared
and needs
priorities and values (OBrien, 1990)
Team learning (Senge, 1990)
3. Concern for long-term plan- Conscious efforts to development of latent or intangible efforts
ning and success
(Itam, 1987); Integration of internal knowledge (LeonardBarton, 1992)
4. Support for experimentation Creativity requires deliberate and temporary relaxation of rules
and creativity
(March, 1971); Openness and experimentation and openness to
new ideas (Stata, 1989); Openness and creativity (McGill et al.,
1992)
5. Environmental scanning
Absorptive capacity (Cohen and Levinthal, 1990); Environmental responses are interpreted by individuals who learn by
updating their beliefs about cause effect relationships (Lee
et al., 1992); Processing of information (Huber, 1991)
6. Concern for development of
Old success does not lead to success in the future (DeGeus,
capabilities
1988; McGill et al., 1992; Naman and Slevin, 1993; Nonaka,
1994; Nonaka and Takeuchi, 1995; Slater and Narver, 1995)
Functional myopia
Excessive formalization
Table 1A
Table 1A (Continued)
1729
Appendix B
Some select items of human role assessment survey (40 items) (Conner and Ulrich, 1996).
Strategic partner (SP)
HR helps the organization accomplish business goals
HR participates in the process of defining business strategies
HR makes sure that HR strategies are aligned with business strategy
HR effectiveness is measured by its ability to help make strategy happen
HR spends time on business planning
Administrative expert (AE)
HR helps the organization improve operating efficiency
HR participates in the process of delivering HR processes
HR makes sure that HR processes are efficiently administered
HR effectiveness is measured by its ability to efficiently deliver HR processes
HR spends time on operational issues
Employee advocate (EA)
HR helps the organization take care of employees personal needs
HR participates in the process of improving employee commitment
HR makes sure that HR policies and programmes respond to the personal needs of employees
HR effectiveness is measured by its ability to help employees meet personal needs
HR spends time listening and responding to employees
Change agent (CA)
HR helps the organization adapt to change
HR participates in the process of shaping culture change for renewal and transformation
HR makes sure that HR processes and programmes increase the organizations ability to change
HR effectiveness is measured by its ability to help an organization anticipate and adapt to
future issues
HR spends time on supporting new behaviours to keep the firm competitive
Business partner role 5 SP 1 AE 1 EA 1 CA
Some select items of organizational learning capability questionnaire (Ramnarayan, 1996)
Five-point scale (R refers to reverse the score, for instance 1 5)
Clear focus on objectives and plans for internal integration
Clear focus on objectives:
Most of our senior officers are so busy with the routine day-to-day work and fire fighting
that they have no time for anything else (R).
Divisions/groups with the task of planning lack sufficient influence.
1731
Environmental scanning
Most national and global trends are quickly picked up and the important information
reaches the concerned personnel.
We are aware of the latest developments in the work being done by similar
organizations within and outside the country.
Concern for development of capabilities
Regular attempts are made in the organization to develop awareness of
organization-wide issues among officers to different functions/divisions.
Knowledge outsiders are invited to share their ideas with officers and staff.
The senior officers genuinely believe that they can learn from their colleagues and
subordinates.
Employee development receives a high priority in the organization.
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