Human resources as a strategic business partner

By Arijeet Krishna Srivastava & Priya Chetty on March 24, 2020

One of the major predicaments that many contemporary organizations face today, and will persistently face in the near future, are competitive forces. Securing a competitive advantage is a crucial objective for these organizations, functioning in an enterprising global market (Ananthram and Nankervis, 2013). Competitive forces develop efficient organizations, and maintaining organizational efficiency comes with efficient human resources (HR). Thus, the role of human resources becomes critical in contemporary business models. This article critically examines the role of human resources as a strategic business partner and attempts to substantiate its significance in contemporary organizations.

Different roles played by human resources

Over the last few years, human resources have become one of the staple departments in contemporary organizations. The different roles and responsibilities undertaken by human resource professionals are key in determining the productive capabilities of the workplace. According to Lawler and Boudreau (2009), these roles can be categorized as the Administrative Services, Business Partner Role, and the Strategic Role.

The administrative services entail the implementation and enforcement of company regulations and also designing policies, administrating employee benefits, insurances, leaves, etc. In its role as a ‘business partner’, the human resource department supports other departments in executing their business models. Finally, it also plays an important role as a strategic partner of the organization. This particular role, however, has given human resources an unprecedented prestige. As a strategic partner, it assists executive managers in their business strategy and serves as a partner in the decision-making process. To be specific, the role of human resources is not just limited to planning strategic activities for the organization, it also involves the formulation of those strategies (Khan, 2014). A reductionist view might not be able to see its contribution beyond the recruitment process. But the literature is overrun by claims that emphasize its role as the strategic spearheads of organizations, fit to take on management and leadership roles. (Huselid, 1995).

Empirical evidence supporting the role of human resource in financial and non-financial sectors

There are ample empirical studies to support the above claims. These studies focus on the role of human resources in the financial and non-financial sectors. For instance, Becker and Gerhart (1996), Delery and Doty (1996), Huselid (1995), Nankervis and Stanton (2010) have focused on the influence of administrative activities by the human resource management (HRM) on the performance of firms. They concluded, that the implementation of systematically sound strategies and processes by human resources can help organizations optimize the value of their human capital. Systematically sound strategies and processes involve balancing the horizontally aligned human resource management ‘processes’ with the vertical aligned ‘business strategies and functions’ (Francis and Keegan, 2006). And, therefore, the notions of ‘Human capital’ and ‘Human Investment’ are principle in defining the role of human resource in creating competitive advantage in work efficiency for firms (Wright, Mcmahan and Mcwilliams, 1994).

In the Indian context, the economic liberalization of 1991 paved the way for the influx of foreign direct investment (FDI), creating the need for momentous alterations in the human resource management fields (Budhwar and Sparrow, 1997) (Ratnam, 1998). The organizations, as a result, witnessed the evolution of the role of human resources from mere suppliers of administrative services to playing advanced roles in strategic planning and business growth (Rao, 2012). Unlike earlier, humans are now seen as invaluable ‘strategic resources’ who flourish in the presence of innovative HR practices (Ananthram and Nankervis, 2013).

 (Rao, 2012) in his research observed that Indian CEOs are increasingly adopting strategic human resource management approaches for business requirements, even more than their American counterparts. Interactions with the CEOs of top-tier Indian companies like Tata Consultancy Services and Reliance Industries revealed that the role of human resources is increasingly being recognized in developing and managing talent and multinational companies are investing in ‘employee engagement’ and ‘workforce training’ (Ananthram and Nankervis, 2013). Many senior-level executives also stress the role of human resources in stimulating strategic agility in the workforce (Roth, 1996). Moreover, when given the center stage, human resources can be immensely beneficial for contemporary organizations in reshaping their business structure internally as well as modeling ‘strategic flexibility’ on the global level (Lepak and Snell, 1999).

Propositions and oppositions to the role of human resources in strategic decision making

Literature reports various recommendations from senior-level executives who use subjective examples from their organizations on how to enhance the role of human resources as strategic business partners.

Executives emphasize on the importance of strong leadership that can actively support and back the human resource department (Doz and Kosonen, 2008). Some also recommend a flexible administrative structure. Another key recommendation talks about the significance of human resources in designing and executing the management systems through “combinative capabilities” to achieve ‘strategic flexibility’ (Ananthram and Nankervis, 2013). Some executives put forth the concept of “continuous learning” which can enhance the contribution of human resources as strategic business partners (Swan, Scarbrough and Preston, 1999). Establishing a profound understanding of “strategic and operational aspects of business” is also an important recommendation (Ananthram and Nankervis, 2013)

However, some executives are against giving human resources the central role as a strategic business partner. For example, many executives banking sectors have placed, the onus of blame on the leadership qualities of senior executives with experience in accounting and finance. The human resource is merely seen as a resource-draining department in such sectors (Ananthram and Nankervis, 2013). In addition to this, the role of human resources as a strategic business partner has been questioned citing reasons such as incapable understanding of business managers in catering the needs of business in terms of human resource and hence again placing the onus of blame on leadership qualities of senior executives (Doz and Kosonen, 2008).

A dynamic human resource team to aid in strategic decision making

Overall, the role of human resources as a strategic business partner seems unparalleled in terms of what needs to be done and the activities required to indulge in strategic decision making. There has been a general consensus that to cater to the dynamic business setups, human resources need to create flexible program designs whilst also preserving a non-discriminate and goal-oriented workplace (Ananthram and Nankervis, 2013). The recommendations provided above, despite some disagreements, strongly support the claim that establishing a strategic business partner should be an important role of human resources in contemporary organizations across the globe.  

References

  • Ananthram, S. and Nankervis, A. (2013) ‘Strategic agility and the role of HR as a strategic business partner: An Indian perspective’, Asia Pacific Journal of Human Resources. doi: 10.1111/1744-7941.12004.
  • Becker, B. and Gerhart, B. (1996) ‘The impact of human resource management on organizational performance: Progress and prospects’, Academy of Management Journal. doi: 10.2307/256712.
  • Budhwar, P. S. and Sparrow, P. R. (1997) ‘Evaluating levels of strategic integration and devolvement of human resource management in India’, International Journal of Human Resource Management. doi: 10.1080/095851997341568.
  • Delery, J. E. and Doty, D. H. (1996) ‘Modes of theorizing in strategic human resource management: Tests of universalistic, contingency, and configurational performance predictions’, Academy of Management Journal. doi: 10.2307/256713.
  • Doz, Y. and Kosonen, M. (2008) ‘The dynamics of strategic agility: Nokia’s rollercoaster experience’, California Management Review. doi: 10.2307/41166447.
  • Francis, H. and Keegan, A. (2006) ‘The changing face of HRM: In search of balance’, Human Resource Management Journal. doi: 10.1111/j.1748-8583.2006.00016.x.
  • Huselid, M. A. (1995) ‘The Impact Of Human Resource Management Practices On Turnover, Productivity, And Corporate Financial Performance’, Academy of Management Journal. doi: 10.5465/256741.
  • Khan, D. M. (2014) ‘HR as a Strategic Partner: A Critical Review’, International Journal of Human Resource Studies. doi: 10.5296/ijhrs.v4i1.5129.
  • Lawler, E. and Boudreau, J. W. (2009) ‘What makes HR a strategic partner’, People & Strategy. doi: Article.
  • Lepak, D. P. and Snell, S. A. (1999) ‘The human resource architecture: Toward a theory of human capital allocation and development’, Academy of Management Review. doi: 10.5465/AMR.1999.1580439.
  • Nankervis, A. and Stanton, P. (2010) ‘Managing employee performance in small organisations: Challenges and opportunities’, International Journal of Human Resources Development and Management. doi: 10.1504/IJHRDM.2010.031440.
  • Rao, P. (2012) ‘ The India Way: How India’s Top Business Leaders are Revolutionizing Management20121P. Cappelli, H. Singh, J. Singh, and M. Useem. The India Way: How India’s Top Business Leaders are Revolutionizing Management . Boston, MA: Harvard Business Press 2011. ’, South Asian Journal of Global Business Research. doi: 10.1108/20454451211206995.
  • Ratnam, C. S. V. (1998) ‘Multinational companies in India’, International Journal of Human Resource Management. doi: 10.1080/095851998340900.
  • Roth, A. V. (1996) ‘Achieving strategic agility through Economies of Knowledge’, Planning Review. doi: 10.1108/eb054550.
  • Swan, J., Scarbrough, H. and Preston, J. (1999) ‘Knowledge management-the next fad to forget people?’, in Proceedings of the 7th European Conference on Information Systems.
  • Wright, P. M., Mcmahan, G. C. and Mcwilliams, A. (1994) ‘Human resources and Sustained competitive advantage: A resource – based perspective Center for Effective Organizations’, International Journal of Human Resource Management. doi: 10.1080/09585199400000020.

Priya is the co-founder and Managing Partner of Project Guru, a research and analytics firm based in Gurgaon. She is responsible for the human resource planning and operations functions. Her expertise in analytics has been used in a number of service-based industries like education and financial services.

Her foundational educational is from St. Xaviers High School (Mumbai). She also holds MBA degree in Marketing and Finance from the Indian Institute of Planning and Management, Delhi (2008).

Some of the notable projects she has worked on include:

  • Using systems thinking to improve sustainability in operations: A study carried out in Malaysia in partnership with Universiti Kuala Lumpur.
  • Assessing customer satisfaction with in-house doctors of Jiva Ayurveda (a project executed for the company)
  • Predicting the potential impact of green hydrogen microgirds (A project executed for the Government of South Africa)

She is a key contributor to the in-house research platform Knowledge Tank.

She currently holds over 300 citations from her contributions to the platform.

She has also been a guest speaker at various institutes such as JIMS (Delhi), BPIT (Delhi), and SVU (Tirupati).

 

Dear Hiring Manager,

This is to express my interest for the position of Research Analyst at Project Guru. I am confident that my experience with data and research, both on and off-field can provide much value and benefit to your organization. I have decent academic experience and merit in fields like agricultural economics, environmental, Natural resource economics, Development economics, Growth economics and International Trade as well.
I am currently working on my Master’s research thesis, “Analyzing farmer’s preference over different alternatives of paddy straw management in Punjab.” I intend to calculate the cost of cultivation for paddy cultivators including their expenditure on paddy straw management to come up with a policy suggestion that takes into account farmer’s preferences. This research project has endowed me with extensive experience in dealing with primary and large amount of secondary data as well.
I have worked as a research intern at Institute of Economic Growth, where apart from assisting research associates on a daily basis, I worked on an individual research project titled, “India and the G20: An Anatomy of Migration Trends.” The project involved data cleaning and observing migration trends of G20 nations. I also interned at India Infrastructure Finance Corporation Limited, where my primary job was to study the procedures adopted by IIFCL for lending and financing various infrastructure projects and analyze their appraisals.  
I am proficient with statistical software like Stata and R, and tools like MS Excel and Powerpoint. I believe my exposure to writing literature reviews, policy briefs and critical reviews along with the econometric projects that I have worked on, makes my candidature pretty solid. 

I find immense satisfaction and joy working with a competent team where I can learn and thrive as a professional. Therefore, I request you to please consider me for this position, as I can bring a lot to your organization with my experience and skills.

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