Emerging issues in strategic HRM in Singapore

Khatri, Naresh . International Journal of Manpower 20. 8 (1999): 516530. Turn on hit highlighting for speaking browsers Show duplicate items from other databases
Naresh Khatri: Nanyang Business School, Nanyang Technological University, Singapore The forces of globalization are sweeping across the world and national borders are disappearing. One major outcome of this change is that competition has intensified greatly. In the past, inefficient companies could survive because they were protected by national boundaries. This may not be possible any more. In the global era, companies have to be able to take on other companies located in any part of the world. They need to be supple and adaptable to meet the competitive challenge. Naturally, the question arises of how companies can face the competitive threats posed by globalization. The premise of this paper is that people are one of the most important factors providing flexibility and adaptability to organizations. For example, a chief executive of a big company in Asia noted that, in tapping the many new opportunities in the growth corridor of the Asia-Pacific region, or even the world, it is the human matrix that determines the success of the ventures (The Straits Times, 1995). Further, one needs to bear in mind that people (managers), not the firm, are the adaptive mechanism in determining how the firm will respond to the competitive environment (Rundle, 1997). Perhaps the field of strategic human resource management has emerged mainly in recognition of the fact that human resources need to be managed strategically for the firm to enjoy sustainable competitive advantage over competition. Several scholars have noted that managing people is more difficult than managing technology or capital (Barney, 1991; Lado and Wilson, 1994). However, those firms that have learnt how to manage their human resources well would have an edge over others for a long time to come because acquiring and deploying human resources effectively is cumbersome and takes much longer (Wright et al., 1994). HR managers in Singapore and many other Asian countries are facing difficult challenges. However, with challenges come opportunities. For example, MacLachlan (1996) noted that East Asia is the best place in the world to be an HR manager because of the focus on recruiting, developing, and retaining staff. However, at present, HR managers in Singapore and other Asian countries are not up to the challenge because of the lack of strategic approach to HRM and lack of HR competencies (Cunningham and Debrah, 1995; Debrah, 1994; Khatri, 1998, 1999). For example, Debrah (1994) found that the ad hoc nature of HRM policies and practices of companies in Singapore contributes significantly to the jobhopping phenomenon. Cunningham and Debrah (1995) reported that line managers and executives took over some of the functions of HR managers because HR managers lacked the skills necessary to perform their duties competently. Khatri (1998) noted that companies in Singapore under-practice strategic HR activities in two important areas: recruitment/selection and training/development. Companies were found to use employment tests rarely and give little emphasis, if any, to the validity of selection instruments. The most common approach to selection was the use of unstructured interviews and unstructured interviews have very low, if any, validity. The author concluded that job-hopping in Singapore could be attributed to a significant extent to poor recruitment and selection practices. Further, the author found that companies in Singapore

neglect some critical aspects of training and development such as evaluation of training programs, training needs analysis, and cost-benefit analysis. In another study, Khatri and Chong (1999) found that poor management practices had much greater influence on employee turnover than bad attitude of employees. Factors under the control of management contributed a unique variance of 37.6 per cent and uncontrollable factors (bad attitude and labor shortage) a meager 5 per cent of the unique variance to the turnover model. All the above studies suggest that HRM in Singapore is not a particularly well-managed function. Given the competitive environment companies in Singapore face now, they will contribute to their own demise by ignoring the vital role of strategic HRM. The remainder of the article discusses issues critical in managing human resources in Singapore companies strategically. It suggests that business strategy, organizational culture, competency levels of HR managers, and presence of HR strategy are the four most important factors for managing HRM strategically. One other major issue, HR outsourcing, that is being widely discussed in both academic and practitioner circles is also dealt with. The arguments are organized in the form of propositions around the above five issues. Organizational strategy P1: Strategic archetypes affect the integration of HR management with organizational strategy. Following the contingency perspective, firms that achieve a tight vertical fit between strategy and HR management perform better than their counterparts who have a disjointed linkage (Baird and Meshoulam, 1988; Boxall, 1991; Truss and Gratton, 1994). While the relationship between HR practices and organizational performance has received much empirical investigation (Arthur, 1994; Terpstra and Rozell, 1993; Huselid, 1995; Youndt et al., 1996; Huang, 1998; Lahteenmaki et al., 1998; Wright et al., 1998), research on the relationship between strategy and HR practices is predominantly theoretical in nature, with efforts generally focusing on normative frameworks on how HRM should be integrated with business management processes (Miles and Snow, 1984; Baird and Meshoulam, 1988; Lengnick-Hall and Lengnick-Hall, 1988; Schuler, 1992). Surprisingly, there are few studies that look beyond what the vertical link actually comprises (Golden and Ramanujam, 1985; Buller, 1988; Ropo, 1993; Bennett et al., 1998). Thus, we know relatively little about what factors affect the degree of vertical linkage and how they do this (Truss and Gratton, 1994; Bennett etal., 1998; Wright et al., 1998). Golden and Ramanujam (1985) noted that the HR function needs to address issues which vary accordingly to the type and level of strategy and thus the HR system has to develop different degrees of linkage to deal with those issues specific to the strategy. Buller (1988) contends that firms engaging in a diversification strategy would have a looser HR-strategy linkage than firms concentrating on their core business. This is because the strategic conditions of the diversification do not allow the HR system and programs to be developed and applied company-wide. In a recent study, Wright et al. (1998) found that strategic HR involvement is more prominent when companies are pursuing product innovation strategies. Bennett et al. (1998) used Miles and Snow's (1978) typology and established that analyzers exhibit higher levels of HR-strategy integration than either defenders or prospectors. They also found that the level of HR integration between defenders and prospectors was virtually identical. This is surprisingly different from Miles and Snow's (1978) proposition that

defender and prospector exist as opposite ends of a continuum, with the analyzer in the middle. Miles and Snow's (1978) strategic typology is regarded as a relatively comprehensive model, richly describing firm characteristics and the strategy configurations of each type of organization. It is widely used in strategy literature because of its ability to generalize across a wide variety of organizations and industries. The typology is used here to illustrate how strategic archetypes may influence the link between HRM and strategy. It could be argued that different strategic archetypes differ in their approaches to acquiring and developing human resources and thus require different degrees of integration between the HR function and the organizational strategy. For example, defenders operate in a relatively stable product-market domain and focus on developing employees to create and support efficiency. Thus, HR practices are reactive, structured and well defined. Prospectors face a more unpredictable and uncertain task environment than defenders and thus desire to create and maintain flexibility in the workforce. To support this strategy, HR function works in a manner that is proactive and less structured so as to identify and develop quickly critical human resources required by the ever-changing needs. Analyzers, on the other hand, are expected to have greater integration because of the need to design HR practices to strike a balance between the two sets of skills needed by the unique array of defenders and prospectors. To fulfill the stringent requirements, The HR function is expected to establish a stronger linkage with the corporate strategy. Khatri (1999), in a sample of the 200 largest companies in Singapore, found that HR practices of companies in Singapore varied according to their strategies. However, no study in Singapore has examined the influence of organizational strategy on the integration of HR practices with organizational strategy. It is argued that the integration of HR with overall strategy in Singapore, like in the western companies discussed above, may well depend upon strategic archetypes. Organizational culture: control-based or commitment-based P2: Organizational culture (control-based versus commitment-based) determines the status of HR function and its integration with the rest of the organization. Organizational culture is one of the most important factors of the internal organizational environment that have a great bearing on SHRM (Buller, 1988; Truss and Gratton, 1994; Gennard and Kelly, 1995; Aryee, 1991). Organizational culture exists in the form of norms, values and rules used by organizational members to interpret and evaluate their behaviors as well as those of others. At the same time, culture provides a system that lets people function in a way coherent to the publicly and collectively accepted meanings operating for a given group at a given time. In examining the effect of culture, Truss and Gratton (1994, p. 675) commented that "the type of culture an organization has can exert a strong influence on the nature of its strategy (e.g. defender, prospector or analyzer) and also on its chosen HR strategy". Similarly, one would expect the characteristics of the HR department and its activities to alter following a change in organizational culture. This is because different organizational cultures emphasize varying level of "shared vision" and "understanding of organizational goals and values" (Lundberg, 1985), and thus place different needs and expectations on the HR department (Buller, 1988). With this change of needs and expectations, the HR

function would need to be transformed accordingly to reinforce or develop the organizational culture. Evans (1986) observed that organizational culture is managed partly through human resource management practices such as selection, development and reward, and employee retention (Wilkins, 1984). HR practices can be used effectively to reinforce the culture. However, little is known about the relationship between culture and HRM. Issues such as "What type of impact culture has on the HR practices and how great that impact would be" are not well-examined (Aryee, 1991; Lundberg, 1985). Likewise, it is not known what role HR function plays in different cultural contexts. Therefore, organizational culture, with regard to managing HR strategically, is too powerful an issue to be ignored. Following the globalization wave and the change in management thought, organizations are gradually moving away from the centralized, top-down, ruled-based culture (controlbased) to adopting a decentralized, bottom-up and flexible culture (commitment-based) (Walton, 1985). Walton's (1985) paper on control-based versus commitment-based HRM systems is widely regarded as the classic statement of this position (Boxall, 1996; Lundy and Cowling, 1996). The author noted that firms are experiencing a transition from imposing control to eliciting commitment when managing their workforce. This is because a model (control) that assumes low employee commitment and that is designed to produce reliable if not outstanding performance simply cannot match the standards of excellence set by world-class competitors (Walton, 1985, p. 79). Organizations employing a control-based culture differ in their basic approach to managing human resources from organizations having a commitment-based culture (Walton, 1985; Arthur, 1994). For instance, employees are required to be efficient and behave in an orderly manner in a control-based culture. To monitor and control effort, the hierarchy is tall, roles are specialized, status symbols are emphasized, prerogative lies with the management, and adversarial labor-management relations exist. In contrast, commitment-based culture concentrates on attracting, satisfying and motivating highly skilled employees. The focus of management is to minimize the status differences presented in the organization, engage in activities such as employee involvement, information sharing, job security guarantees, and extensive employee benefits. Further, the organization emphasizes joint problem solving and planning, and invests in developing harmonious relationships with employees (Walton, 1985; Arthur, 1992). In sum, the commitment model represents a shift in societal values away from the traditional authority and compliance. According to the behavioral perspective, the control and commitment cultures require different sets of HR programs and policies to elicit those characteristics, behaviors and attitudes desired (Cappelli and Singh, 1992). In a control-based culture, since the objective of the organization is to "control", the HR function takes on the "stick approach". Much of the initiative comes from the top management, and the system is characterized by stringent rules and procedures (Walton, 1985). HR practices are structured, reactive and well-defined and thereby minimize the role of HR in the organization and the need for managing HR strategically. On the other hand, the goal of the commitment-based culture is to promote mutuality of interest between employer and employee. This is achieved by increasing autonomy, responsibility and influence of employees at all levels. Employees are extensively involved in managerial decisions and formal participation programs and there is a higher

percentage of group problem solving and socializing activities than in the control-based culture (Arthur, 1992; 1994). To elicit the required behaviors, HR practices are flexible, proactive and strategically inclined (Walton, 1985). Hence, it is expected that in a commitment-based culture, the HR function plays an important role and that strategic HRM would be more widely adopted. At present, Singapore companies are relying mostly on control-based management philosophy and thus one would expect a secondary role for HRM function in the majority of the organizations (Khatri, 1999). This indeed is the case. HR function in most organizations in Singapore is performing a routine, supportive, and fire-fighting role (Debrah, 1994; Cunningham and Debrah, 1995; Khatri, 1999; Khatri and Chong, 1999). The trend now is that HR function is seen to be playing an important role and there is much emphasis on employee participation and involvement. Thus, organizations are moving toward a commitment-based philosophy. Companies in Singapore are also realizing the importance of organizational commitment because of chronic problem of jobhopping. They ignored the importance of commitment-based culture and relied heavily on monetary rewards and top-down mechanisms to tide over job-hopping only to realize that such measures have only limited impact. For instance, an essential aspect of the Singapore Government's human resource development program is to encourage managers to adopt human management techniques to build "worker loyalty" and "team spirit" (Cunningham and Debrah, 1995). It is argued that if companies had used theHR function as a tool to create commitment-based culture, companies would have been more successful in overcoming job-hopping (Khatri and Chong, 1999). Competency level of HR managers P3: The competencies/skills of HR managers determine the status of HR function and its linkage with organizational strategy. Human resource can be a potent source of sustainable competitive advantage to an organization (Barney, 1991; Wright et al., 1994). Consequently, the firm's HR function, which has much responsibility in managing this important resource, should receive more commitment from the organization. However, Barney and Wright (1998) pointed out that the real scenario is quite contrary to the above view. They observed that organizational decisions do not reflect this stated commitment to people or a respect for the HR function. They argue that the fault could lie in part with the competency level of HR managers. If the HR managers are competent enough to focus attention and activities towards those aspects that will truly develop and maintain sources of competitive advantage, the status of the HR department would be heightened (Barney and Wright, 1998, p. 37). Similarly, Kelly and Gennard (1996, p. 19), through the use of extensive interviews with the HR managers, concluded that the initial condition to enhance the status of HR managers in the eyes of other directors was that "HRM directors should be competent and have a record of achievement in their own basic field". Apart from enhancing the status of the HR department, past research also suggests that the competency level of HR managers has a major influence on the level of integration between HR management and strategy (Golden and Ramanujam, 1985; Buller, 1988; Truss and Gratton, 1994). Golden and Ramanujam (1985) commented that the demonstration of expertise by HR managers resulted in a significant uplift of HR stature and also tightened the HR management and strategy linkage. Ropo (1993, p. 51) stressed that "the internal dynamism of the HR function (in this case, the presence of competent

managers) serves as the most critical mechanism to keep the integration process going after it has been started under favorable organizational and strategic circumstances". Choosing the right HR managers is important to the strategic management of the HR function. If HR professionals do not have the right skills, and are not able to think on a macro-business level, the HR function would be relegated to a supportive/secondary role. On the other hand, if HR managers can re-evaluate their priorities and acquire a new set of professional and personal competencies, the HR function would be able to ride the wave of business evolution proudly with other functions in the organization (Ulrich, 1996; Purcell, 1989; Ulrich et al., 1995; Becker and Gerhart, 1996; Barney and Wright, 1998; Wright et al., 1998). As noted by Barney and Wright (1998), one of the reasons why HR executives are not invited to the strategic planning table is that they are unable to display the required competencies. Ulrich (1996) and Ulrich et al. (1995) have identified four sets of HR competencies needed: knowledge of HR practices, knowledge of business, personal credibility and ability to manage change. One of the most important reasons for the low status of the HR function in Singapore is the lack of competencies of HR managers (Cunningham and Debrah, 1995; Khatri, 1999). For example, Cunningham and Debrah (1995), in a study of HR managers in Singapore companies, found that when HR managers lack the necessary skills to perform their duties competently, line managers and executives take over some of the functions of HR managers. The authors observed that HR managers were excluded from the strategic planning committees and meetings because they were perceived to lack the necessary competence, authority, and influence to be involved in important organizational decision making. HR strategy P4: HR strategy or lack of it affects vertical and horizontal fits of SHRM. Apart from seeking a vertical fit between HR management and organization strategy, achieving horizontal fit among individual HR practices is equally important. This is because the full impact of HR practices on firm performance arises when HR practices exist as a coherent system within a particular system strategy (Wright and Snell, 1991; Grundy, 1998). Although past studies indicate that a coherent HR system maximizes the effectiveness of the HR practices (Wright and Snell, 1991; Lado and Wilson, 1994; Huselid, 1995; Becker and Gerhart, 1996), there are few empirical studies that looked at the factors affecting the horizontal fit. Research on SHRM fit has mostly concentrated on testing whether firms' policies are aligned with the overall strategy or whether benefits are derived (Morris and Pinnington, 1998). Baird and Meshoulam (1988) proposed that it is equally important to look at how individual HR practices can be effectively aligned. An important contribution by Grundy (1998) sheds some light on why congruency is lacking among HR practices: HR practices are viewed in segregation, and HR strategy is frequently owned by HR managers and not shared with other functional managers. The author also concluded that in the absence of a clear link between HR strategy and corporate strategy, there would be a lack of synergies among HR practices. In other words, HR strategy is important in achieving horizontal congruence among the individual HR practices.

Similarly, Tyson (1995, p. 169) defined HR strategy as being "the intentions of the corporation, both explicit and covert, towards the management of its employees, expressed through philosophies, policies and practices". In the absence of an HR strategy, HR practices are likely to be inconsistent with one another because there is no broad framework to guide individual HR practices. In other words, the presence of HR strategy, formal or informal, explicit or implicit, serves as an "over-arching" framework which guides the individual HR practices to integrate and exist as a coherent system. Hence, one would expect an organization having an HR strategy to have consistent and non-fragmented HR initiatives (Massey, 1994). The implications of the above argument fall into two areas: the presence of HR strategy, whether formal or informal, explicit or implicit, helps to manage HR strategically and organizations that manage HR strategically have consistent HR initiatives and thus their HR practices are coherent with one another. This is because a strategic approach to HR management would allow an organization to understand that its HR activities are interrelated, and recognize the synergies or conflicts among HR practices (Wright and Snell, 1991). At the same time, the presence of an HR strategy might tighten the vertical linkage between HR practices and organizational strategy. What is the Singapore scenario? Cunningham and Debrah (1995) noted that HR managers in Singapore companies may be able to deal effectively with HR problems if they assume broader and expanded roles in strategic HRM. That is, HRM needs to be included in the formulation and implementation of organizational and HRM strategies. For example, HR managers need to formulate and implement HR strategies to cope with the tight labor market that could create and sustain competitive advantage for the organization. Such an approach would help to minimize the erosion of the HRM role and the status of HR managers as a result of the intrusion of line managers in HRM issues. Properly formulated HR strategies could also curtail the ambiguity in the HRM role and increase the authority and influence of HR managers in organizations. HR outsourcing P5: The outsourcing of HR activities or programs depends on (a) organizational strategy, (b) organizational culture, (c) competencies/skills of HR managers, and HR strategy. An increasing trend in many organizations is to outsource HR work (Lever, 1997), in particular, administrative and high transaction cost activities (Grundy, 1998; Klass et al., 1998). Much of the motivation originates from organizational desire to minimize the workload of regular workers, reduce cost, reap economies of scale, improve quality and efficiency, and gain expertise from outside vendors (Laabs, 1993; Lever, 1997; Ulrich, 1996; Klaas et al., 1998). Others argue that HR outsourcing represents a strategic tool for achieving competitive advantage. Their argument is that outsourcing the transactionbased HR activities (e.g. benefit administration) frees HR managers and other managers to grapple with strategic business issues (Switser, 1997). Generally, some aspects of the HR functions are judged as cost centers (e.g. benefit administration) but other elements of an HR system create value as part of a firm's strategic infrastructure (Huselid, 1995). Decisions with respect to outsourcing might be straightforward at the two ends of the cost-value continuum, but for many elements of an HR system, the decision is not so clear. As a firm assumes a strategic perspective for its HR system, HR activities like recruiting and selection, which used to be the potential candidates for outsourcing when quantified against a cost standard, might be retained if

their fit with the remainder of the HR system is a critical source of value for the entire HR system (Becker and Gerhart, 1996). Outsourcing of these firm-specific skills would represent short-sightedness on the part of the organization (Barney and Wright, 1998) and would impede the ability of the organization to develop unique competencies within its workforce (Ulrich, 1996). There are few empirical studies on HR outsourcing, especially on factors influencing the level of outsourcing activities, to provide possible answers. A study conducted by Klass et al. (1998) used transaction-cost economies to explain why firms differ in their reliance on HR outsourcing. They found that in those firms where decision makers perceive having a unique HR, positive HR outcomes, lots of internal promotional opportunities, and comparatively fewer competitors involving in HR outsourcing, would rely less on HR outsourcing. In firms where the demand for labor fluctuates and the pay remuneration leads, reliance on HR outsourcing would increase. Firms may vary in their propensity to outsource the number, type and kind of HR activities. However, little is known about what factors cause firms to outsource more or less of their HR activities and also which HR activities are most frequently outsourced. Organizational strategy may be one of these factors. Miles and Snow (1984) match different HR strategies with the three strategic archetypes. The fact that different strategies differ in their requirements for HR practices may imply varying needs for HR outsourcing. For example, in firms that have a strategy emphasizing the criticality of the HR function, one would observe less reliance on HR outsourcing. Likewise, for a strategy that regards the HR function as administrative and relatively unimportant, one would observe more outsourcing of HR activities. Often, one of the weaknesses of outsourcing is the inability to reinforce and preserve the corporate culture (Quinn and Hilmer, 1994). In other words, there would be greater level of HR outsourcing if outside vendors are able to replicate the corporate culture. Competencies possessed by the HR managers may also affect the level of HR outsourcing. Laabs (1993) asserts that activities should be in-sourced if companies can perform them cheaper, better and in a more timely manner. And if HR managers have the critical competencies and experience to manage an outsourcing project at a lower cost and higher efficiency, most likely the project would be conducted in-house. Therefore, the presence of a competent HR manager may reduce the likelihood for HR outsourcing. The presence of HR strategy may also affect the outsourcing of HR activities. If the HR practices of an organization exist in a coherent system, the level of strategic activities would go up. Outsourcing vendors would then find it difficult to replicate those strategic HR activities and firms would also be unwilling to outsource HR activities that would have an added advantage to them (Becker and Gerhart, 1996). In Singapore, at present the state of HR function and competencies of HR managers are not satisfactory. As a result, line managers have much say in HR decisions and they want to avoid the involvement of HR function as they see it as bureaucracy or burden. So, the tendency may be to outsource a lot of HR activities/programs. However, doing so may be more expensive than organizations realize. In view of the changing role of HR function in Singapore, the strategic HR activities would be performed more and more inside and routine HR activities would be more and more outsourced. Vaidyanathan (1992, p. 34) puts it nicely:"Things are looking up . . . their (line management) attitude will change in

the coming years, simply because Singapore has no resources other than its people . . . So, if an HR manager is capable of performing effectively as an in-house consultant linking his/her people with the productivity or performance of the organization, the role he/she plays will be pretty much indispensable." Implications and conclusions Despite many theoretical and empirical studies in strategic HRM, no coherent theoretical framework has emerged in the field. This paper discussed various propositions on key strategic HRM issues. It is hoped that an understanding of these issues would go a long way in developing a coherent body of knowledge in the field. Further, all the above issues would lend themselves better to a qualitative study. A major limitation of prior work in the strategic HRM area is the lack of in-depth qualitative studies (Dyer, 1985; Guest, 1991; Boxall, 1996; Becker and Gerhart, 1996; Guest, 1997). This form of research is very much needed in strategic HRM in developing comprehensive and more valid models and frameworks. This is because the long-term, multidimensional and political nature of both business and human resource strategies require such form of research methodology (Boxall, 1993; Ropo, 1993; Kelly and Gennard, 1996; Tyson, 1995). Qualitative research also shifts focus from content to process and is consistent with the shifting focus of the field from planning to strategizing. For instance, Dyer (1985, p. 26) argued that "the immediate need is for descriptive research aimed as much as possible at providing accurate descriptions of what is in a variety of settings . . . such research, by its very nature, is exploratory and being pursued through qualitative methods, principally indepth case studies. Once the territory begins to become better known, and descriptive theories begin to emerge, attention can turn to smaller-scale measurement and hypothesis testing studies . . ." Becker and Gerhart (1996, p. 796) also suggested that "deeper qualitative research is needed to complement the large-scale, multiple-firm studies that are available in order to find out managers' HR decision making process". Guest (1997, p. 274) complemented the view by writing that "case study research can help to generate insights which can be more extensively tested". In a manner similar to Dyer (1985), Guest (1991) proposed that more detailed case study research on HRM strategy is needed. Unfortunately, response to these increasing calls for more case study research has been quite disappointing. "What is lacking is not an understanding of this need (for case study research), but the commitment of academics to take it more seriously" Boxall (1993, p. 658). Further, most of the studies in the strategic HRM field are based on the Western context and there is relatively little research in the eastern context. Boxall and Dowling (1990) noted that the seminal HRM texts are all American and the most significant critical responses to date have been British. Boxall (1993) suggested that globalization and increasing environmental complexity have called for the development of a comparative and international stance on the subject. Likewise, Guest (1997) emphasized that researchers need to ensure that the studies are not confined to the USA only. Therefore, conducting strategic HRM studies in other parts of the world, for example Asia, would help to meet the shortage of empirical work in the field in those parts of the world and also serve as a vehicle for comparative studies.

Some future directions of human resource practices in Singapore

Chew, Irene 238-244. ; Goh, Mark . Career Development International 2. 5 (1997):

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TranslateAbstract It is argued that the regionalization and globalization of companies in the Asia Pacific region is forcing human resource managers and general managers to rethink their systems of management. A survey of HRM practices and policies in Singapore was conducted recently with the purpose of enabling managers , faced with the increasing regionalization of firms, to understand better the role of HR development.

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Irene Chew: National University of Singapore, Faculty of Business Administration, Singapore Mark Goh: National University of Singapore, Faculty of Business Administration, Singapore Introduction In an increasingly competitive global economy, managers at all levels are seriously looking for practices, procedures and policies to use to gain a competitive advantage. One area of focus is the more effective management and use of human resource (Ferris, Russ, Albanese and Mortoccio, 1990). Indeed, human resource management (HRM) has increasingly become important to the organization. It has evolved from a traditional role of just handling employee welfare and compensation to the current major functions of recruiting, manpower planning, training and development. In the past, Tung (1984) asserts that HR practitioners generally are less active in the strategic planning and implementation of the organization, and are often regarded as "glorified file clerks". Traditional HR managers simply assist in the hiring function of the organization by screening applicants and handling mundane tasks like company payroll and other compensation benefits (Laurent, 1986; Lorange, 1985). Today, HRM, in many countries, is undergoing rapid development and fundamental change (Bevort, Peterson and Sundbo, 1992; Gunnigle, 1992; Papalexandris, 1992). Singapore is no exception. In Singapore, HRM development has undergone many phases in recent years (Chew and Teo, 1991). The reasons underpinning this change in HRM practices and policy are attributed to two main factors - internal and external. Regionalization of local companies and the international economic forces at work contribute to the external push factors. The tight labour market, a better educated workforce, an ageing workforce and the better quality of work life are just some internal factors. In total, these factors present new challenges to HRM. Few would dispute that companies which can overcome these challenges and harness the human resources to their fullest potential can only stand to gain from the quantum leap in productivity improvement and achieve a competitive edge over competition.

This empirical paper examines the extent to which the traditional role of HR practices are present in Singapore. It also asks if differences exist in the HR practices between organizations with and without HR departments, and the HRM practices and policies organizations focusing on. For instance, is the HR function perceived as an integral part of a company's operations and are the requisite skills and knowledge required of HR practitioners to enhance the level of professionalism? We attempt, through this study, to offer an insight into the role and representation of the HR function in organizations, current HRM practices of companies in Singapore as well as anticipated future practices. On HRM policies, the survey covers a wide range of topics, including recruitment and selection, performance appraisal, incentive schemes, labourmanagement relations, employee involvement and communications. The coverage allows for provision of information on the similarities and differences in HRM policies and practices between companies with HR departments and companies without. Research methodology The data presented in this study were collected by means of structured personal interviews. The sample was selected from the National Productivity Board's database of organizations and the Singapore Business Listing. The sample frame contained business establishments of all industry sectors but excluded establishments employing fewer than ten people. A total of 2,042 establishments were contacted. Of these, 408 companies participated in the study, yielding a response rate of 20 per cent. Of the 408 companies, 190 respondents were reported to have either a personnel or human resource department in which HR functions are carried out formally. The rest of the sample do not have a formal HR department. Further investigation on this subset revealed that either the HR function is carried out by the CEO or in an ad hoc manner mainly by the finance department. Profile of respondents Companies from the manufacturing sector constituted 30 per cent of the total sample, and those from the commerce, and finance and business services sectors comprised 25 per cent each. The majority of companies with HR departments were from the manufacturing sector (35 per cent) followed by those from the commerce sector (26 per cent). As for companies without HR departments, the majority were from the financial and business services (28 per cent) sector, followed closely by the commerce (27 per cent) and manufacturing (26 per cent) sectors. These results are exhibited in Table I. Ownership Slightly more than half of the companies were locally owned. Foreign-owned companies constituted about a third. Half the companies with HR departments were local firms, and about 40 per cent were foreign-owned. For companies without HR departments, there was a larger proportion of locally owned companies which made up 57 per cent of the total sample, and the foreign-owned ones accounted for 29 per cent. Company size About six in ten companies were small and medium-sized firms (SMEs), with less than 100 employees. Companies with 500 or more employees accounted for 12 per cent of the

sample. The majority (65 per cent) of the companies with HR departments were fairly large firms with at least 100 employees. For companies without HR departments, SMEs constituted a large proportion (81 per cent) of the total sample. Role and representation of HR functions Person in charge of HR functions The study was targeted at the person in charge of the organization's overall HR functions. About one-third of the 408 respondents identified themselves as CEOs, indicating that CEOs sometimes take charge of the responsibility of personnel or HR matters. Another 25 per cent were HR managers. Most of the respondents in companies with HR departments were HR managers (49 per cent). On the other hand, for respondents in companies without HR departments, the majority were CEOs (42 per cent) followed by administrative/finance managers (19 per cent) and executives (18 per cent). Profile of HR practitioners Of the HR managers 59 per cent were in the 36-40 age group. HR executives were relatively younger as most (57 per cent) of them were between 21 and 35 years old. On the length of service with current organization, half of the HR managers have one to five years service and 40 per cent have six years or more. As for HR executives, 40 per cent have one to five years service and 49 per cent have six years or more. In general, half of the managers and executives are university graduates and 40 per cent have either a diploma or A-level qualifications. Most HR managers have less than ten years of working experience in directing HR functions, including present and previous organizations while most of the HR executives (51 per cent) have less than five years. Personnel in HRM Overall, about 40 per cent of companies have a position of personnel or HR manager, while half of them hold executive positions. All companies have at least a position of personnel or HR clerk. Not surprisingly, companies with HR departments were likely to have designated managers or executives handling HR functions than companies without. Academic qualifications required To take up either the post of personnel or HR manager, the minimum academic qualification specified by 21 per cent of the companies was a degree. However, there was a good proportion (15 per cent) of companies that specified a diploma qualification, preferably one in HRM. For the post of executive, most companies prefer a diploma holder. As to the post of HR clerk, half the respondents would look for a person with O-level qualification or equivalent, while another 43 per cent did not specify any qualification. Companies with HR departments were more likely to specify a minimum qualification for the post of clerk than companies without. This suggests that the former were relatively more stringent in the recruitment of HR personnel. Skills and knowledge required by HR practitioners to enhance professionalism

The five major skills or knowledge that HR practitioners feel they require to enhance professionalism in the next three years were effective communication, human resource development, knowledge of employment act and industrial relations, computing and technology, and recruitment and selection. Given the continuous advance of HRM techniques and computer technology coupled with the growing emphasis on HR development in Singapore, it is likely that these major skills would continue to exert their presence on the need for the HR profession to upgrade periodically. Human resource practices and policies Before examining the various HR policies and practices, respondents were first asked to indicate the major functions currently performed, and their relative importance now and over the next three years (Table I). HR function currently performed The five most commonly performed HR functions, as cited by over 80 per cent of respondents, were recruitment and selection, welfare and benefits administration, wage administration, performance appraisal and employee communication. Among the least performed functions were industrial relations and liaison with unions (which depended on whether the company was unionized), productivity promotion, job evaluation, promotion/career planning, and manpower planning. The incidence of the functions being practised was significantly higher in companies with HR departments than companies without. More than half of the former group performed at least one of these functions. The biggest gaps - by as much as 40 percentage points - were seen in industrial relations, transfer and rotation, manpower planning, promotion and career planning, and HR policy formulation. Importance of HR functions now Considering the current tight labour market situation, it was not surprising that recruitment and selection function was, given the highest rating in terms of importance by HR practitioners. The other important HR functions were training and development, wage administration, performance appraisal and manpower planning. The pattern differed from the previous one where respondents were asked to indicate the various functions performed currently. For instance, training and development was the sixth most frequently performed function, but it was rated second in terms of importance. Similarly, although manpower planning was not as popularly practised by companies, it was nonetheless an important function for those companies which practised it. The welfare and benefits administration function, on the other hand, was given a lower priority when compared to other HR functions, even though it was one of the most widely performed HR functions. Importance in the next three years All the companies surveyed predicted a substantial increase in the importance of training and development - from the second most important ranking currently to the number one position in the next three years. During the same period, an increasing emphasis will also be placed on manpower planning which rose to third position from its current fifth position. The other three functions, viz. recruitment and selection, wage administration and

performance appraisal, will remain among the top five most important HR functions in future. Although functions such as .job evaluation, career planning and productivity promotion would maintain their relatively low popularity, more companies are however beginning to give more emphasis to them. The priority of HR functions now and in the next three years is exhibited in Table II. Written policies on HRM practices Over 80 per cent of the respondents maintained some written HR policy. Many companies tend to have written policies on welfare and benefits (69 per cent), wages (60 per cent) and performance appraisal (59 per cent). Training and development, although accorded a high priority among the various HR functions, were guided by written policies by only six in ten companies. The non-existence of written policies was also detected in the areas of promotion/career planning and transfer and rotation - functions which currently received little attention by most companies. As expected, companies with HR departments were likely to have a formalized system of dealing with HR matters. For instance, while over 90 per cent of companies with HR departments maintained some sort of HR policies, only seven in ten companies without did so. The biggest disparities were seen in the areas of training and development, recruitment and selection, and performance appraisal. Recruitment and selection The recruitment and selection function is expected to be the most pressing challenge facing HR practitioners in the 1990s. Current skill shortages and predictions of a huge drop in the number of job entrants point to rapidly deteriorating recruitment prospects. Clearly, the situation looks bleak for those employers who fail to change their ways or are slow to use a more innovative form of employment. As earlier stated, recruitment and selection was the most performed function among companies. It was considered by most HR practitioners to be one of the most important functions currently, and continue to be so. It is therefore appropriate to examine the various methods that have been adopted to identity and recruit the three major employee groups, namely the managers, supervisors, and the rank and file. In general, employers generally used a wide variety of recruitment methods. On average, a company used at least four channels. Several other points about the findings are worth noting. First, newspaper advertisements were most frequently used to identity and recruitment employees across the occupational groups, irrespective of the HR department status. Second, employee recommendations were the second most popular source of recruiting all three occupational categories. This suggests that employers relied heavily on internal sources of labour market information, and perhaps they used these sources before searching for employees in the external labour market. Third, the use of executive search firms and professional societies were more popular to recruit employees higher up the organization. For example, over half of companies use executive search firms to recruit managers as compared to only 20 per cent and 14 per cent to recruit supervisors and the rank and file respectively. Fourth, walk-ins were the third most popular source to identify and recruit supervisors and the rank and file.

Companies with HR departments tended to use them to recruit the rank and file more than companies with none. Fifth, pamphlets, sign and bus advertisements, and radio and television advertisements were among the least popular recruitment methods, with less than 20 per cent of companies using any one of these methods. Effectiveness of various recruitment methods A comparison of each employee group revealed that newspaper advertisements were considered by most companies to be effective in recruiting managers. Employee recommendations and executive search firms came in a distant second and third in the ranking of effectiveness. Newspaper advertisements and employee recommendations were also rated highly by companies for its effectiveness in recruiting supervisors. For the rank and file, newspaper advertisements, employee recommendation and walk-ins were rated highly on effectiveness. An interesting finding is that many of the companies which relied on employee recommendations to recruit the rank and file found it effective - more so for managers and supervisors. Selection procedure Respondents were asked to indicate which procedures were used in selecting job applicants for the three employee groups. Weighted application forms, reference or record checks, unstructured and structured interviews and medical examinations were among the most frequently used methods. Between 20 per cent and 30 per cent of the companies adopted these methods to select the three employee groups. However, some discernible features associated with each group can be observed. Reference/record checks were more popularly used to select manager (58 per cent), compared with supervisors (46 per cent) and rank and file (37 per cent). On the other hand, performance tests/work samples, job knowledge tests and physical ability tests were more frequently used to select the rank and file. Companies with HR departments showed a greater reliance than companies without on the following methods: personality tests on managers, reference and weighted application forms for both managers and supervisors; performance tests/work samples on the rank and file; and structured interviews and medical examination for all three employee groups. Interview procedures Respondents were also asked to indicate the methods used to interview applicants for each of the three job categories. Multi-stage interviews were most heavily used in the case of managerial jobs (40 per cent), followed by group panel interview (24 per cent) and oneto-one interviews by the prospective immediate supervisor (25 per cent). For supervisory jobs, group panel interviews were less often used compared with multi-stage interviews (28 per cent) and one-to-one interviews by either the immediate supervisor (29 per cent) or manager above immediate supervisor (25 per cent). As for rank and file jobs, one-toone interviews were the most frequently used by firms, with the interview likely to be conducted by an HR representative (31 per cent). In companies with HR departments, group panel and multi-stage interviews were more heavily used than companies without, particularly so for managerial positions.

Promotion policies and practices The study showed that seven in ten companies have a policy of promoting employees from within. About a similar proportion of companies included a promotion potential rating in the appraisal of employee performance. On promotion practices, about two of three companies filled most jobs within, and a slightly smaller proportion promoted employees with more than five years of service at least once. Also, about three-fifths of the companies informed the staff on promotion policies. When comparing companies with HR departments and those without, significant differences were observed in all promotion practices and policies except for the practice of promoting from within. This might indicate that companies with HR departments provided more structured job ladders and promotion paths for its employees than companies without. Training and development Formal training for employees A large proportion (83 per cent) of companies provided some sort of training for their employees. On the type of training, a quarter of the companies relied on external training resources and only a small proportion (2 per cent) turned to in-house facilities. The majority of companies (60 per cent) used a combination of both types. As expected, companies with HR departments provided more training opportunities than those companies without. Almost 40 per cent of the companies expended 1 to 4 per cent of total payroll on off-thejob training while another two-fifths did not expend any amount. A further breakdown showed that a significantly larger proportion (35 per cent) of companies without HR departments did not expend any amount of training as compared to companies with HR departments (16 per cent). Hours spent on training In general, the rank and file spent longer hours on training than supervisors and managers. Of 40 per cent of companies indicated that rank and file spent up to 59 hours of training a year while 17 per cent indicated they spent between 60 and 299 hours. The comparative figures for the supervisors were 31 per cent and 14 per cent, and for managers 36 per cent and 10 per cent respectively. Pay and incentive systems, and evaluation Incentive schemes implemented Many companies used some form of incentive pay to motivate their employees. Only between one-tenth and two-tenths of companies did not provide incentive payments to any one employee group. By far, individual performance pay was the most widely used type of scheme, with relatively small differences in access to such schemes across occupations and HR department status. Productivity incentive pay was the next popular scheme. The rank and file and supervisors tended to benefit from it more than managers. When it comes to

giving employees a share in the profits, a larger proportion of companies preferred to motivate their managers this way than the other two employee categories. Small-group incentive, where the pay-out depends on the performance of the whole work unit, was less used than the first three schemes. When used, they tended to be offered to the rank and file and supervisors. The least frequently used scheme was stock ownership through ESOP where only about one-tenth of companies provided them, particularly to managers. Compensation policies and practices For those companies which did not implement incentive schemes, most cited the lack of top management support as a reason. Other reasons were the difficulty in setting the formula, lack of definite and accurate measures of performance and ineffective schemes. Performance appraisal Formal appraisals were conducted for managers (78 per cent), supervisors (77 per cent) and the rank and file (83 per cent). The study showed that about nine in ten companies with HR departments indicate that managers, supervisors and the rank and file were appraised as compared to about seven in ten companies without. In general, companies appraised employee performance once a year. A few companies indicated that the rank and file, and supervisors were appraised quarterly or monthly. Methods used in performance appraisal Rating scales using standard form were the most commonly used methods for assessing employee performance for the three employee categories. The least used methods were point system and ranking or paired comparison. Further analysis of the data showed that employee goal setting or management by objective was more frequently used among higher-ranking than the lower-ranking employees. Employee relations, communications and employee participation State of labour-management relations Employee relations is an important topic in the domain of personnel and HRM. It has been a major element of traditional HRM, largely because of the central role of collective bargaining in areas such as pay setting, training and health and safety. About threequarters of respondents described their state of labour-management relations as cooperative, i.e. ones that have acceptance and teamwork between labour and management. Extent of communication Among the various factors that affect employee relations, employee communication plays an important role. The study showed that employees used a wide variety of communications channels to get their message through to employees. The most commonly used communications channels were departmental meetings, notice boards, letters to individuals and briefing groups. A breakdown by HR departmental status revealed that companies with an HR department were more likely to use some form of communications channel than companies without. Among the larger differences between the two groups

was the use of newsletters or house journals, employee handbooks, videos, tapes/slides and union representative. Importance of communication channels used Respondents were also asked to rate the relative importance of those channels being used. The three channels ranked in order of importance were notice boards, departmental meetings and letters by individuals. This pattern was different from one that was ranked in order of usage indicating that employers felt that widely used channels such as departmental meetings need not necessarily be effective in getting the information across to a wide spectrum of employees. Extent of information on HR matters being discussed Respondents were also asked to indicate to what extent the following five different HR matters: salary scales and ranges, career development, training needs and plans, performance/production issues and welfare and benefits. It was found that the first three areas were least open to employees for discussion. Over half the companies surveyed indicated they either never discussed or discussed very little the salary scales and ranges with staff. About two in five companies expressed similar comments for career development. Interestingly, given the current emphasis on HR development, career development and training needs and plans were not given high priority for discussion by employers. Employee participation programmes implemented by companies One area that can affect the quality of work life is the extent of employee participation in productivity improvement. Some of these programmes are as small group activities like quality circles (QCCs), joint consultation and suggestion schemes. The two most popular employee participation programmes, as cited by about half of the companies surveyed, were employee communication meetings and suggestion schemes. These were followed by employee attitude survey (23 per cent), QCCs (21 per cent) and work restructuring/job design groups (5 per cent). The study further revealed that more than two-thirds of companies with HR departments have implemented QCCs, autonomous work groups and labour-management consultative committees (such as Work Excellence Committees, Work Councils), as compared to less than a third for companies without. Manpower planning Manpower or HR planning was conducted by seven in ten companies. Of those that did not conduct manpower planning, a large proportion indicated the small company size as a reason. Improper company policies were also cited as a reason for not having such a practice. A small percentage of the companies did not see the necessity to do so. Of the 70 per cent that conducted manpower planning, about half of them had their manpower planning conducted jointly by the department in charge of HR functions together with other relevant departments. In addition, there was a fairly high proportion (34 per cent) of individual departments doing their planning independent of the HR department. Very often, as the study showed, manpower planning was seldom conducted solely by the HR department or senior management.

HR information systems Helping HR functions to improve productivity in a more cost-effective manner is the computer. Computerization of HR functions in companies generally encompasses two areas: HR records and payroll administration. Overall, about half of the companies surveyed had a computerized system of HR records. Companies with HR departments showed a higher incidence of usage than companies without. Seven-tenths of the former group had computerized its HR records whereas only one-third of the latter had done so. Among those companies without a computerized system of HR records, company size and the availability/knowledge of computer were cited as the two main reasons for not computerizing. As expected, most of the computerization was by the departments in charge of HR functions and to a lesser extent by departments such as administration. If there is a need to computerize HR functions, companies are more likely to do so for their payroll administration. Of the companies 72 per cent have computerized their payroll administration as compared to half for HR records. As in the case of HR record computerization, companies with HR departments were more likely to have a computerized system of payroll administration as compared with companies without. Among those companies without a computerized system of payroll administration, small company size and the lack of availability of computer knowledge were the two main reasons given for not computerizing. Most respondents, with a computerized payroll administration, cited that non-HR departments such as the account and finance departments were responsible for the computerization. Conclusion HRM occurs at all levels of the organization. In Singapore, with a tight labour market, there is a greater need to manage HR not only for operational efficiency but also for strategic effectiveness. HRM rarely emerges as a fully formed set of practices but the trend is changing. The survey results indicate a shift from the traditional or conscious economic strategy to the new techno-human paradigm. HRM is in a state of rapid development as well as fundamental change. HRM practices are changing, though slowly. The professional body, the Singapore Institute of Human Resource Management (SIHRM) changed its name in 1993. Originally, when founded, it was known as the Singapore Institute of Personnel Management. This is in keeping with assertions by McLaughlin (1983) that the field of HRM was known as Personnel Management more than two decades ago. Today, companies whose HR departments are named personnel department tend to treat HR practices and policies in the traditional sense, performing a maintenance and firefighting function. For an organization to remain globally competitive, its HRM practices have to adopt a more strategic role as Lundy (1994) has argued. Strategic human resource management is a new concept which bridges HRM and strategy. The changing role is for HR practitioners to be partners in the global business strategy of the company, i.e. to take a more proactive role in the five major HR functions of selection, manpower planning, training and development, career development and compensation. It is asserted by Pucik (1992) that the process of globalization not only brings the HR

function closer to the strategic core of business, but also changes the scope and content of human resource management. This survey has indicated that this changing role would be more forthcoming from companies which already have HR departments, where HR directors report directly to the CEO and the board of directors. The study also suggested that more foreign-owned companies will take a lead role in this than local-owned companies. Further, the trend would also change as more business graduates become interested in the HR function and regard HR as a profession. The HR positions in the past were mainly occupied by production personnel from the rank and file. Hence we conclude that companies in Singapore have a long way to go in turning the traditional HRM to the strategic HRM. Very few HR directors are involved in business strategy, although the majority of HR practitioners are becoming aware of the importance of strategic HRM. Therefore the HR function of firms in Singapore needs to shift from an administrative to a process orientation so that it can flexibly reconcile the organizational paradoxes inherent in the activities of global firms (Pucik, 1992).

Singapore in transition: from technology to culture hub

Caroline Y.L. Wong ; Carla C.J.M. Millar ; Choi, Chong Ju Knowledge Management 10. 5 (2006): 79-91. Turn on hit highlighting for speaking browsers Show duplicate items from other databases . Journal of

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This paper aims to present an approach to the knowledge-based economy that focuses on the developmental synergies between technology (especially information and communication technologies), culture and place (hub) as expressed in the innovative milieu of the inner city. This paper draws on research in city and urban planning, which emphasizes the importance of quality of a place, location or city and the more intentional emphasis given to development of human and cultural resources, which are conducive to innovation, learning, creativity and change in a knowledge-based economy. Singapore is chosen as a case study of analysis for a knowledge-based economy in transition because of its developmental approach and strategic shift from one focused on technology-intensive sectors to one focused on high knowledge-intensive companies and towards a free-spirited dynamic creative hub in the making. It displays many characteristics typical of a knowledge-based economy in which people, their ideas and capabilities are the key sources of wealth and opportunities. This paper observes a missing link in the transition from technology to knowledge to culture hub, which might have implications for Singapore's effort towards establishing itself as a cultural industries metropolis, a renaissance city using culture to re-position its international image as a global city for the arts. The originality and value of this paper lie in this analysis, which makes one conclude that, although Singapore's developmental model had created benefits in many ways, it had also negatively constrained its development, particularly in the area of knowledge creation and application to entrepreneurship, innovation and creativity.

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Knowledge Cities 2006. Professor Francisco Jaview Carrillo Introduction In the post-industrial economy, knowledge-related activities have become central to creating national wealth and sustaining economic growth in the so-called "knowledge economy", also variously known as "knowledge-based economy" (KBE), "knowledge-driven global economy", "new networked economy" or the "new economy" ([63] Ofori, 2003). The sustenance of these knowledge-related activities requires continuous renewal of human and organizational capacities and creating environments, which are conducive to creativity, innovation, learning, and change ([44] Knight, 1995, p. 226). Researchers in city and urban planning such as [28] Florida (2002), [58] Mendieta (2001), [38] Hall (1998) and [70] Saxenian et al. (2002) have emphasized the importance of quality of a place, location or city in attracting talented knowledge workers such as those in the consulting, investment banking, law, science and technology industries. Global cities such as Paris, New York, London and Sydney are increasingly viewed as crucibles in the development and utilization of knowledge as a resource, and the term "knowledge city" has been used to define cities that are purposefully designed to encourage the nurturing of knowledge ([24] Edvinsson, 2002). These cities have also been associated with an intentional emphasis on the development of human and cultural resources ([44] Knight, 1995). Singapore makes for an interesting case study for a knowledge-based economy in transition because of its developmental approach and strategic shift from the technology intensive sectors to one focused on high knowledge intensive companies ([54] Loo et al. , 2003) and towards a free-spirited dynamic creative hub in the making. It displays many characteristics typical of a knowledge-based economy such that people and their capabilities are the key sources of wealth and opportunities ([9] Chia, 2000). The World Economic Forum ranked Singapore as one of the most network-ready nations in the world in its Global Information Technology Report 2003-2004, coming in a close second to the US ([87] (The) World Economic Forum, 2003). Singapore also has a dynamic business environment that spawned a well established IT and telecommunications infrastructure and services including over 6,000 multinational companies (MNCs) and 100,000 local enterprises comprising small- and medium-sized enterprises (SMEs) and large local corporations ([18] EDB Media Releases, 2003a). In 2001, the Swiss-based Institute for Management Development ranked Singapore third in R&D in its global location attractiveness rankings. The impressive economic growth record of Singapore in the last four decades has been achieved through continuous industrial restructuring and technological upgrading ([89] Wong, 2001). The knowledge-based industries as defined by the OECD have increased their percentage of GDP from 48 percent between 1983 and 1985 to 56 percent in 2001 ([2] APEC Economic Committee Report, 2003). Singapore's commitment to knowledge-based economic development in the past decade has enabled it to make a rapid and successful transition to a newly industrialized economy. The future growth of sectors such as healthcare, information and communication technologies (ICT), education services, photonics, nanotechnology identified by the economic review committee as being crucial is dependent on Singapore's knowledge capabilities. This is where knowledge creation, acquisition, dissemination and application

interact with each other in the economy to create the main drivers of growth, wealth creation and employment across all industries ([1] APEC Economic Committee Report, 2000). Singapore's information society development trends have been shaped by its developmental state ([90] Wong, 2004) and though it has created benefits in many ways, it has also negatively constrained its development, particularly in the area of knowledge creation and its application to entrepreneurship and creativity. Creativity has been deemed important in the knowledge economy and the creative industries development strategy was developed on analyses conducted by the [23] Economic Review Committee (ERC) (2002) to enable Singapore to compete globally ([22] Economic Review Committee (ERC) Reports, 2001). Although Singapore displays many characteristics typical of a knowledge-based economy, Singapore's new economy seemingly lacks a stimulating climate conducive to imagination, innovation and adventure that will attract and retain globally mobile talent ([80] Tan, 2003, p. 403), in other words the lack of cultural and environmental institutions, which determine the quality of life and buzz of the city-state. This paper seeks to analyze the seemingly missing link in the transition from technology to knowledge to culture hub, which might have implications for Singapore's effort towards establishing itself as a cultural industries metropolis, a renaissance city using culture to reposition its international image as a global city for the arts. The challenges to the city-state were outlined in the end together with some recommendations. The role of ICT: from technology to culture hub The [64] Organisation for Economic Co-operation and Development (OECD) (1996) defines a knowledge-based economy as one in which the production, distribution and use of knowledge are the main drivers of growth, wealth-creation, and employment for all industries. An important part of the knowledge-based economy is formed by knowledge intensive business services (KIBS) which include legal services, management consulting, IT services, market research, engineering services, architectural, quantity surveying, building and appraisal services ([92], [93] Wong et al. , 2005a, b). Such services concerned with the supply and management of knowledge and intangible assets are often seen as a driving force in the spread of new knowledge through information and communication technologies (ICT) ([3] Aslesen, 2003). In that regard, many authors identify ICT and globalization as key drivers of the knowledge-based economy ([17] Economic and Social Council, 2000). The rise of ICT gives the KBE a new and different technological base that changes significantly the conditions for the production and distribution of knowledge ([9] Chia, 2000) to the extent that location and the ability to combine and manipulate new knowledge has become increasingly important ([3] Aslesen, 2003). Such a development has already stimulated considerable interest among governments and policy communities within the Asia-Pacific including Singapore, Japan, Malaysia, Hong Kong and China ([41] Hutton, 2004). In recent years, ICT has also been deployed as a key instrument of urban transformation and modernization with both substantive effects (like higher productivity and value-added production) and "symbolic" outcomes (like re-imaging of local/regional societies and economies) ([41] Hutton, 2004). Like Vancouver, Singapore exercises an explicit strategy that fosters developmental synergies between technology (especially ICT), culture (in the form of creative and design service industries) and "place" as expressed in the innovative milieu of the inner city ([41] Hutton, 2004, p. 55). Such convergence between technology, culture and place has been highlighted by [28] Florida (2002) who created a Bohemian index to illustrate the

importance of well-developed creative industries and a large pool of creative people in attracting the world's major multinational enterprises to cities. It is no coincidence that the ranking of the top ten US "Bohemian" cities also turned out to be the major hightechnology areas, including Seattle, Boston, San Francisco, Washington DC., Los Angeles and New York ([28] Florida, 2002). This finding promulgates the need to analyze labor and human capital in a more dynamic way ([94] Yeung, 2002; [14] Coe, 2000) as migration of capital and attractiveness of cities are now linked to locations of multinational corporations (MNCs). The area of labor mobility and resource-oriented analysis of individuals, knowledge workers, or human capital, has remained relatively under-researched in both international business and international economics ([94] Yeung, 2002; [40] Herod, 2001; [37] Green and Turok, 2000; [56] Martin, 2001; [86] Waterman and Wills, 2001). Singapore's economy: historical development Singapore has enjoyed a remarkably corruption-free environment, stable prices, and one of the highest per capita incomes in the world - US$25,979 in 2004 ([77] Singapore Department of Statistics, 2004). Singapore's economic strategy proved to be a success as the economy grew at an average annual rate of over 8.5 percent from 1965 to 1997 ([9] Chia, 2000). Singapore's economy is very much a product of inter-linkages between the development vision, its institutional setup and the business environment ([54] Loo et al. , 2003). This is in part due to domestic constraints on growth (small population base and lack of natural resources) and a rapidly changing external environment. The development model has taken Singapore from an industrialization strategy in the 1970s to a higher, sophisticated manufacturing one, which included computer peripherals and software packages ([54] Loo et al., 2003). The manufacturing sector continues to make an important contribution to the economy as its share of GDP remains above 25 per cent for most years in the last two decades ([91] Wong and Singh, 2004). The 1980s saw a strategic shift towards the technology intensive sectors and from the early 1990s it was focused on high knowledge intensive companies ([54] Loo et al. , 2003). By the late 1990s, the state was fully aware of the growing trend of globalization, and competition and that the ability to acquire, process and apply knowledge and information would be a key competitive advantage ([78] Sunday Times , 1998). The government acknowledged the need to forge an environment that is conducive to innovation, new discoveries and the creation of new knowledge and one that harnesses intangibles such as ideas, knowledge and expertise to add value and create new value in the knowledge economy ([59] Ministry of Information and the Arts, 2000). It is therefore not surprising that the concept of the knowledge-based economy has generated increased discussion and recognition in the late 1990s. The Committee on Singapore's Competitiveness (CSC) was formed in 1997 to address Singapore's competitiveness as a knowledge economy within the next decade. Its vision is for Singapore to become an advanced and globally competitive knowledge economy with manufacturing and services as its twin engines of growth ([15] Committee of Singapore's Competitiveness (CSC) Report, 1998). Continued growth of the Singapore economy would require growth from production, dissemination and application of knowledge ([84] Toh et al. , 2002). Substantial efforts have been made in the educational and industry sectors (especially R&D) in the last few years to link learning to knowledge creation and business creativity. The educational and cultural economic policies are tailored according to global economic restructuring and reflect the state's ideology of pragmatism and developmentalism ([47] Kong, 2000). Likewise, Singapore's model of information society development has been distinctively shaped by its MNC-leveraging economic developmental strategy ([90] Wong, 2004).

Technology Over the past 30 years, Singapore has made substantial progress within the catch-up or simple learning phase through an MNC-induced technology transfer route through the foreign direct investment (FDI) process ([53] Loh, 1998; [88] Wong, 1998). Investment by global companies is promoted and leveraged to generate direct and multiplier economic growth ([90] Wong, 2004). This involved heavy investment in public infrastructure, manpower development and relevant incentives to support the development of industries and establishing government-controlled companies (also known as government-linked corporations or GLCs) to operate in strategic sectors ear-marked by the government, such as information and communication services, tourism and bio-technology industries ([90] Wong, 2004). In recent years, Singapore's manufacturing output is mainly derived from MNCs and more than 60 percent of equity in this sector is foreign-owned ([90] Wong, 2004). This high dependence on foreign firms contributed to the lack of a critical mass of indigenous entrepreneurial firms for the global economy ([90] Wong, 2004). Singapore has hence reached a developmental stage where it decided to develop its own science, technology and innovation capabilities. The Committee on Singapore's Competitiveness (CSC) set up in 1997 was instrumental in recommending specific plans for key sectors such as manufacturing, finance and telecommunications so as to transform Singapore into an advanced and globally competitive knowledge-based economy ([15] Committee of Singapore's Competitiveness (CSC) Report, 1998). One of the strategies was to attract foreign MNCs and local enterprises to produce high value added products and to provide manufacturing-related and headquarters services to the region. The Singaporean government recognizes the need to nurture small- and medium-sized local enterprises to build up a core of world-class companies with core competencies, which can compete in the global economy ([15] Committee of Singapore's Competitiveness (CSC) Report, 1998). As such, the Economic Development Board (EDB) of Singapore launched a ten-year plan to develop Singapore into a vibrant and robust global hub of knowledge-driven industries in manufacturing and trading services with emphasis on technology and innovation capabilities, with the objective to encourage MNCs to locate more of their key knowledge-intensive activities in Singapore and for local companies to embrace more knowledge-intensive activities and become world-class players. Amongst the many recommendations to develop the manufacturing sector, the following are closely tied to [41] Hutton's (2004) exposition of an explicit strategy exercised by Singapore that fosters developmental synergies between technology (especially ICT), culture (in the form of creative and design service industries) and "place" as expressed in the innovative milieu of the inner city ([41] Hutton, 2004). Strategies recommended by the [15] Committee of Singapore's Competitiveness (CSC) Report (1998) report included: - integrating Singapore into the global economy to leverage international talent, knowledge and technology; - providing an entrepreneurial environment that tolerates business failures and allows freedom to generate ideas; - embracing innovation to generate new business and growth; - grooming world-class local and foreign companies in niche areas; and

- positioning Singapore as the premier regional hub to attract both foreign MNCs and local enterprises to use Singapore as a production base for high value added products and to provide manufacturing related services for their subsidiaries in the region. Singapore's KBE is therefore characterized by a strong knowledge acquisition capability. According to [2] APEC Economic Committee Report (2003), knowledge acquisition based on current trends will continue to grow and will remain the main source of new knowledge in the medium term. The widespread emphasis on ICT infrastructure and education means that Singapore has scored high in knowledge dissemination capability. However, although Singapore has created a stronger base for knowledge creation over the last ten years, there is still a considerable gap between Singapore's R&D outputs and that of the more advanced KBEs ([2] APEC Economic Committee Report, 2003). The following table extracted from the [2] APEC Economic Committee Report (2003) illustrates the overall structure of Singapore's KBE relative to the OECD and the US (Table I [Figure omitted. See Article Image.]). There is a lot that Singapore has to catch up in the area of knowledge application as entrepreneurship and tertiary education are found to be the weakest links ([2] APEC Economic Committee Report, 2003). For example, although Singapore's environment for entrepreneurship was ranked by experts to be above average on all dimensions in the 2004 Global Entrepreneurship Monitor (GEM) report, there is a need to address the institutional and cultural values and the mindsets of the population as many do not regard entrepreneurial activity as a good career choice and therefore do not accord high status to new business success. Statistics released by the 2004 GEM report shows that Singapore lacks behind the OECD and East Asian countries in starting a business as a career choice - 49.1 percent vs 59.5 percent ([92], [93] Wong et al. , 2005a, b). There is a need now to move away from an MNC-propelled industrialization past to one that embraces an indigenous pool of technological and entrepreneurial expertise ([45] Koh, 2000). As such, over the last few years the educational system was re-structured in order to foster greater creativity and instill higher-order (i.e. analytical, creative, and systems) thinking skills amongst its school children. There is now a substantial reduction in curriculum content and student assessment in favor of team learning, problem-solving and process skills acquisition ([53] Loh, 1998), with the aim of having a future intelligent workforce (i.e. today's school children) that is capable of advanced, continuous learning, un-learning, and re-learning ([45] Koh, 2000). This educational restructuring is beginning to pervade the entire spectrum of students ranging from elementary school right through to university level ([46] Koh and Pakir, 1999). If successful, the future workforce will be capable of advanced learning, knowledge creation, and creativity leapfrogging. Also, Singapore's research institutes are working at the forefront of technology to deliver better value for industry. In 2001, the Swiss-based Institute for Management Development ranked Singapore third in R&D in its global location attractiveness rankings. The Agency for Science, Technology and Research (A*STAR) ensures that Singapore's R&D efforts are world-class. A*STAR is building a diverse community of local and foreign researchers, and has already attracted some of the best and brightest minds from the US, Europe, Australia and Asia. Concerted efforts are being made to strengthen R&D collaboration between research institutes, universities and industry. The strong links and fluid exchanges between industry

and academia make Singapore attractive to international companies as a key location in their global R&D network ([19] EDB Media Releases, 2003b). Measures to promote enterprise formation were showing favorable results. The number of new high tech companies and businesses registered with the Registry of Companies and Businesses (RCB) grew from 3,502 in 2001 to 3,578 in 2002. Specifically, the number of foreign high tech companies doubled in 2002, signifying Singapore's growing attractiveness as a global hub for enterprise and innovation ([19] EDB Media Releases, 2003b). [61] Nonaka (1991) argues: Successful companies are those that consistently create new knowledge, disseminate it widely throughout the organization, and quickly embody it in new technologies and products. An economics survey carried out by [84] Toh et al. (2002) revealed that Singapore's knowledge-based economy was comparable to that of the OECD countries especially in the areas of knowledge creation, acquisition, dissemination and application ([84] Toh et al. , 2002). However, to achieve that Singapore has continuously relied primarily on knowledge transfers through multinational corporations and foreign talents ([84] Toh et al. , 2002). On the other hand, Singapore has demonstrated an ability to adopt a comprehensive and integrative approach to technology diffusion promotion, combining incentives to individual businesses to adopt and use the new technologies or innovations identified and ensuring the strategic use of the public sector as a lead-user or early adopter of new technologies ([90] Wong, 2004, p. 12). In recent years, many efforts have focused on enhancing the base of Singapore's knowledge economy through its national innovation system, through entrepreneurship and educational capability ([84] Toh et al. , 2002). There is a need however, to go beyond this and to address the issues of how to attract or embed mobile professionals who make up the knowledge workforce in Singapore and to turn the city-state into a quality place rich in physical and cultural amenities, generating a spontaneous combustion of ideas and creativity. This is where culture and place have to be expressed in the innovative milieu of the inner city ([41] Hutton, 2004, p. 55). The culture hub In the "new economy", culture is increasingly being supplied in the form of goods and services produced by private firms for profits in the market economy ([75] Scott, 2005, p. 1). The driving force might be linked to the higher levels disposable income, leisure time and education ([49] Lash and Urry, 1994; [62] O'Connor, 2002) including a limitless quest for new commodities to bring to the market system ([39] Harvey, 1989). Increasingly, these goods and services are consumed more for their aesthetic and sign value ([74] Scott, 2004), defined as brand image associations like status, luxury, power, or style that make a product desirable to the consumer ([5] Baudrillard, 1988). These intangible, invisible externalities enhance the image and prestige of the local area and indirectly add to the quality of life in places where such products or services are consumed ([74] Scott, 2004; p. 477). Such considerations have become crucial factors for multinational enterprises in their location decision. For example, a large number of MNCs have concentrated their headquarters in very large, global cities like London, Tokyo and New York which serve as cultural capitals for music, art and theatre besides giving access to regional, national and international markets including a highly skilled labor force and a range of sophisticated, specialist services ([60] Nakagawa, 2002). There is hence a

growing trend towards the identity and construction of places as centers of consumption rather than as centers of production. [95] Zukin (1995) maintains that culture has become more and more the business of cities and that it will form the basis of a city's tourist attractions and its unique competitive edge. The growth of cultural consumption (of art, food, fashion, music, tourism) and its related industries will become more visible ([95] Zukin, 1995, pp. 1-2) as cities continuously seek to engage in urban redevelopment strategies. In recent years, urban growth in places like London and New York has been driven almost exclusively by the importance of these cities as centers of innovation, creativity and cultural/social activity. The then Prime Minister of Singapore, Goh Chok Tong articulated the need for a culturally vibrant Singapore to attract global creative talents with a focus on expanding local creativity besides attracting global creative personnel and retaining entrepreneurs ([35] Goh, 2002). The current economic policies therefore give emphasis to human capital, talent, knowledge professionals and the role of cultural and creative endeavors aiming at Singapore becoming a renaissance "city of the arts". This reflects the pragmatic and developmental model ([47] Kong, 2000) of the city-state. As a result, the creative sector is given due prominence in the economy now as the creative industries are slated to be a growth engine of the Singapore's economy (6 percent of GDP by 2012). The Singapore government has set aside more than 200 million Singapore dollars (US$116 million) over the next five years to invest in the arts sector ([31] Forbes , 2004). The developmental strategy adopted focuses on the emergent arts and cultural scene to expand local creativity and to attract global creative personnel and retaining entrepreneurs in an effort to create a more cosmopolitan city-state ([35] Goh, 2002). For example, a number of regional and foreign firms in the creative sector have established their regional headquarters in Singapore including the production studio of Lucas Film, a company founded and owned by Star Wars director, George Lucas and Electronic Arts (EA) which is the world's largest game publisher ([20] EDB News Room, 2005). Conclusion and recommendations The impressive economic growth record of Singapore in the last four decades has been achieved through continuous industrial re-structuring and technological upgrading ([89] Wong, 2001). Many embedded models of technology innovation and their related policy programs were established within the context of stable, relatively mature industries such as in the fields of advanced manufacturing, automation, microelectronics, biotechnology and IT technology ([52] Leung, 2003). The future growth of sectors (such as healthcare, ICT, education services, photonics, nanotechnology, biomedical sciences, environmental/water technologies and interactive/digital media) identified by the Singapore government is dependent on Singapore's knowledge capabilities. So far, the knowledge-based industries have contributed to a rising increase in the GDP from 48 per cent between 1983 and 1985 to 56 percent in 2001 ([2] APEC Economic Committee Report, 2003). To a great extent, Singapore's efforts in creating an "intelligent island" through knowledge acquisition (via the MNC-led approach) and dissemination (through its national innovation system and educational capabilities) within the last decade is a very laudable effort and its developmental path provides useful guides for other developing countries ([90] Wong, 2004). There is a need to work further on capabilities such as knowledge creation and application especially when they are applied to the entrepreneurship scene in Singapore. This is where social and cultural mindsets would have to embrace individual creativity,

diversity, and community-led initiatives. Singapore's information economy is still very much dominated by ICT manufacturing with little emphasis on creative content industries ([90] Wong, 2004). The challenge is how to adapt and extend thinking about innovation systems to the creative industries and to extend technological competencies to innovative creative competencies. Some critics have pointed out that the cultural capital injected into the Singapore cultural scene is basically the "hardware" or the tangible side of the equation, which includes cultural facilities, programs and festivals. There is a lack of emphasis on nurturing the "software" or intangible and intrinsic aspects of cultural capital. This relates to the need for a multifaceted cultural environment that accepts highly divergent views within the film, art and theatre circles ([76] Sigurdson, 2000). There is also a greater need for the government in Singapore to open-up sources and flows of information into the city-state if it were to maintain its leading position in Asia. The lack of a "legitimate" or national culture means that local culture has to be repackaged and sold as a commodity in order to attract consumers. The urban cosmetic form belies a lack of network externalities ([73] Scott, 2000), which provides a platform for creative and innovative activity. Only in recent years that the creative cluster in Singapore has been recognized as an area deserving of a national policy strategy and state investment. In 1998, the economic impact of the arts (excluding the applied arts) was estimated at only 0.4 percent of Singapore's total GDP (roughly S$608 million) for both direct and indirect value-added of arts activities ([22] Economic Review Committee (ERC) Reports, 2001). Its creative cluster employs some 72,000 employees in 8,000 establishments. The Department of Statistics in Singapore has estimated the value of Singapore's creative cluster to be around 3 percent of gross domestic product (GDP) and this currently lacks behind that of the US (7.8 percent), UK (5.0 percent) and Australia (3.3 percent) ([23] Economic Review Committee (ERC), 2002). Although there is a growing trend towards harnessing the intangibles such as ideas, knowledge and expertise to add value and create new value in the new economy ([23] Economic Review Committee (ERC), 2002), these efforts are still very much driven by the state. Although efforts were directed towards heralding the economic potential of the arts, culture and the creative sectors, yet simultaneously strict boundaries of political and social exchange were enforced ([51] Lee, 2004, p. 295). There is a need in Singapore's case to create a balanced approach with lots of options to allow creativity to happen organically and by finding ways to unleash the creative energies of lots of different groups and trying lots of different things, some of which will make little difference and some of which will be successful ([30] Florida, 2004, p. 54). Urban and regional planning researchers have also analyzed the importance of the social interactions at the individual level as driving value creation and the concentration within cities of creative talent ([28] Florida, 2002) or knowledge professionals. The presence of knowledge professionals and creative talents in turn attracts innovative, technology-based industries ([28] Florida, 2002; [6] Brooks, 2000; [34] Glaeser et al. , 2001; [4] Bassett et al. , 2000). There is a greater need now in Singapore to examine and harness the social and cultural aspects of human capital to generate economic returns. Community development could be encouraged as a creative process of transforming a place in such a way that it uses its own distinctive character to fit the needs generated by a future context that is always changing ([48] Landry, 2000). The heritage of a city and the meanings attached to the past and present, also add to the foundations of social, political and cultural knowledge, which in turn can help attract such talented individuals, human capital to global cities ([13] Cochrane and Passmore, 2001; [25] Escobar, 2001; [36] Graham, 2002). The importance of ties, networks and norms needed for individuals to learn to trust

one another and engage in cooperative endeavors was highlighted in [67] Putnam's (1993) work on "Making democracy work". Social capital development would become an important strategic factor for consideration if the Singapore government wants to compete in the global marketplace characterized by complexity of organizations, scale of informational flows, external and internal volatility and the challenge of the virtual world (such as the Internet). The networks, shared values and trust people acquire through interaction bring the appropriate knowledge together in the process of shaping and shifting their selfperception or identity to actively manage learning and change ([26] Falk, 2001). Mayor puts it succinctly by stating: The new concept of development takes account not only of economic growth but also of all those parameters that reflect the quality of life, full enjoyment of creative capacity and observance of human rights, which the principal decision-makers should take into account so that development is not owned and dispensed by a few but is a common undertaking on an international, multilateral scale, with the human being as its center, its sole agent and its beneficiary. All that is needed is a new look at the world, and different premises ([57] Mayor, 1990, p. 36). [16] DiMaggio (1988) and [27] Fligstein's (1997) works on institutional entrepreneurship might throw light on the way interested actors (such as the Singapore government), influence their institutional contexts. Central to this concept is the relationship between interests, agency and institutions whereby institutional entrepreneurs are defined as actors who have an interest in modifying institutional structures or in creating new ones and who have enough resources to do so ([16] DiMaggio, 1988). Institutional entrepreneurs are deemed to posses the social skill - that is the ability to read the current level of organization in the field, in which they evolve and to respond to it by taking into account the position of other actors in the field ([27] Fligstein, 1997). They are actors who constantly attempt to size up their situations and motivate others to act cooperatively in the production and reproduction of institutions by providing them with common meanings and identities ([27] Fligstein, 1997). Singapore's long-term success hinges upon how the government plays out this role in dealing with long-standing development questions relating to economic and social sustainability, gentrification and local displacement, exclusionary practices and local identities ([82] Tay, 2005). That is a challenge for the city-state especially if Singapore seeks to reposition itself as a creative city in the knowledge based economy. Papers and Proceedings of the Regional Science Association