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How Strategic Is HRM?

Kathryn Martell and Stephen J. Carroll

This study of 115 subsidiaries of Fortune 500 companies indicates that a majority had
integrated HRM and strategic planning systems within their organizations. HRM issues
were explicitly discussed in strategic plans; HRM executives were involved in the plan-
ning process as "strategic partners"; and HRM was generally recognized as playing an
important role in implementing business strategies. The degree of integration present was
not related to short-run firm performance, however, time lags may be a factor. Implica-
tions of these findings are drawn. © 1995 by John Wiley & Sons, Inc.

INTRODUCTION

It will come as no surprise to the readers of this and other human


resource management (HRM) journals that there has been mounting
enthusiasm for awarding HRM a more strategic role in organizations.
Building upon the idea that human capital is one of the most critical
components of strategic success for many companies, managers are be-
ing encouraged to link specific HRM programs to strategic outcomes
(Martell, Carroll, & Gupta, 1992; Schuler & Jackson, 1987; Miles & Snow,
1984). By matching HRM with strategy, the critical human resource
skills, attitudes, behaviors, and performances that are needed to suc-
cessfully implement strategies can be acquired, developed, motivated,
and maintained (Wright & McMahan, 1992; Ulrich, Brockbank, & Yeung,
1989; Schuler & MacMillan, 1984).
Following this logic is the conclusion that, since strategic success is
typically measured in financial terms, in order for HRM policies to be
judged truly effective, they must contribute to the firm's bottom line
(Thornburg, 1991; Walker & Bechet, 1991; Misa & Stein, 1983). This new,
more proactive approach to HRM, linking it to both strategy and organi-
zational performance, represents a shift from the more traditional view
of personnel that focuses on micro issues such as individual worker's
performance and satisfaction. The term, strategic human resource man-
agement (SHRM), has emerged and is frequently used to refer to this
new approach to HRM.
This study explores how strategic the HRM function has become in
actual practice in US corporations. Working from a database that in-

Human Resource Management, Summer 1995, Vol. 34, Number 2, Pp. 253-267
© 1995 by John Wiley & Sons, Inc. CCC 0090-4848/95/020253-15
eludes data on HRM practices in 115 divisions of 89 Fortune 500 compa-
nies, this study seeks to answer the question: "How strategic is HRM?"
Specifically:

• How prevalent is SHRM in practice?


• Has it produced the outcomes that proponents said it would?
• Does SHRM elevate or diminish the role of HRM managers?

The effect that adopting a strategic approach to HRM has had on


managers' perceptions of the effectiveness of the HRM function and
HRM professionals will also be examined. The intention is that answer-
ing these questions will help scholars move beyond theoretical frame-
works and will provide managers with empirically based recommenda-
tions on how HRM and strategy should be linked.

WHAT MAKES HRM 'STRATEGIC"?

Despite the popularity of the term, SHRM, a consensus on a defini-


tion has not yet emerged, causing one group of researchers to lament
that nearly "every author, teacher, and consultant" seems to offer a
personal conceptual model of SHRM (Milkovich, Dyer, & Mahoney,
1983, p. 3). Certain themes have emerged from the existing literature
witb enough regularity, bowever, to differentiate tbe strategic approach
from the more traditional personnel function dominated by operational-
level HRM activities. Exhibit 1 summarizes the components of the
SHRM concept adopted in this study.
Our definition of SHRM includes the following characteristics: a long-
term focus, linkage between HRM and strategy processes, and the ex-
pectation that effective HRM policies should produce organizational per-
formance benefits. Line managers, as well as HRM professionals, may
play a role in transforming the HRM function to become more strategic
in orientation; however, the extent of that roll is, at this point, unclear.
The characterization of SHRM presented in this article has been driven
by the prescriptive literature; current empirical research does not clearly
indicate how prevalent SHRM models are in practice nor whether they
produce the desired organizational outcomes.

THE STUDY

Overview

This study is an attempt to examine the prevalence of SHRM in prac-


tice and to evaluate one of the principles that underlie a number of the
more popular models of strategic human resource management: That

254 / Human Resource Management, Summer 1995


Exhibit 1. A working definition of SHRM.

Characteristics of Strategic HRM (SHRM):

A longer-term focus — an inclusion of multiple-year strategic plans for human


resource use is often considered the first step in the evolution of a strategically-
oriented HRM function (Alpander, 1982).

New linkages between HRM and strategic planning — has emerged as a critical
element in many models of SHRM (Thakur and Calingo, 1992; Golden and
Ramanujam, 1985; Nininger, 1982). One-way linkages focus on the role of HRM
activities in assisting strategy implementation (Devanna et al, 1984), while a two-
way linkage describes a more proactive approach where HRM exerts influence on
strategy formulation as well.

Proposed linkages between HRM and organizational performance — Most


models of SHRM include the proposition that HRM plays a key role in the
achievement of strategic goals. Since the expected outcome of company strategies
is an improvement in the firm's economic value, HRM must thus directly
contribute to the firm's "bottom line" in order to be judged effective (Walker and
Bechet, 1991; Misa and Stein, 1983).

Inclusion of line managers in the HRM policy-making process — The


recognition of HRM's strategic importance may make it more of a line
management responsibility (Brewster and Smith, 1990), particularly in areas
involving the selection and compensation of managers (Martell, 1989). A CEO of
a large trucking company echoed this sentiment to us when he told us that "HRM
is too important to be \eh to the HRM department."

adopting a more strategic approach to HRM improves organizational


performance. It empirically examines the strategic importance of the
human resource function generally, the linkage (integration) between
human resource management and strategic planning systems specifi-
cally, and the extent to which HRM systems' strategic properties affect
company performance. The role of senior HRM executives within the
firm is also examined. The goal is to evaluate whether the enthusiasm
for elevating the importance of HRM is justified and whether it is rea-
sonable to recommend that companies make the investment in revamp-
ing their HRM systems to be fully integrated with the strategy process.

The Sample

The study includes 115 randomly chosen SBUs (strategic business


units, typically divisions) from 89 Fortune 500 manufacturing firms. (The

Martell and Carroll: How Strategic 7s HRM? / 255


original mailing was 450, for a 26% response rate.) Descriptive statistics
of the firms participating in the study are provided in Table I. Since data
were being gathered on strategic variables and performance in addition
to HRM unit characteristics. General Managers (GM) (the most senior
manager in the SBU) rather than HRM managers were surveyed. Gath-
ering data from managers outside of the HRM function might also serve
to improve the objectivity of measures related to the perception of the
HRM function and its management. 2 (A second survey gathered data
from Human Resource Managers to serve as a validity check on some of
the HRM measures).

Measures

Most of the SHRM measures focused on the issue of the degree of


integration between HRM and strategic planning processes. Respon-
dents were asked whether HRM data or personnel were incorporated in
different stages of the planning process. General Managers were also
asked to characterize the role of HRM executives within the SBU gener-
ally and in strategy formulation specifically, and the role of both the
firm's human resources (employees) and the HRM function in imple-
menting SBU strategy. Data were also gathered on the role of the Gener-
al Managers in HRM policy-making involving executives. Finally, data
were gathered on diverse organizational performance. A weighted aver-
age was calculated, incorporating both financial and non-financial mea-
sures.^ A copy of selected measures is included in the Appendix.*

Table I. Sample SBUs Descriptive Statistics (N = 115).

size
Mean: 4792 employees Standard Deviation: 8507
Minimum: 4* Maximum: 50,000

* only 4 participating SBUs had less than 100 employees.

Industry classification

Industry % of Samole Industry % of Sample

Food & kindred 6% Leather products 1%


Textiles 2% Primary metals 2%
Apparel & fabric 3% Fabricated metals 2%
Paper & allied 8% Nonelectrical machinery 12%
Printing & publishing 1% Electrical machinery 12%
Chemicals & allied 13% Transportation equipment 6%
Petroleum refining 1% Scientific Instruments 10%
Rubber & misc. plastic 3% Misc. manufacturing 2%
Stone, clay, glass 4% Wholesale trade 7%

256 / Human Resource Management, S u m m e r 1995


RESULTS

The following conclusions are drawn from our analysis of the data
collected in this survey:

• Conclusion 1. HRM and strategic planning processes were linked


in most companies surveyed.

Our data indicate that there is linkage between the HRM and strategy
processes in many Fortune 500 firms. As indicated in Table II, the range
of participation in various linking activities ranged from 44% to 69%.
Sixty-nine percent of companies in our sample include an explicit discus-
sion of human resource issues in their strategic plans. In 68 percent of
the companies surveyed, senior HRM executives contributed to the de-
velopment of strategic goals and plans for the coming 3-5 years. Fifty
three percent of companies based their competitive strategy, in part, on
their human resources. Human resource costs and implications were
explicitly included in the evaluation of the costs and benefits of pro-
posed business strategies in 52% of companies surveyed, and in 44% of
the companies planning documents discussing human resource issues
were distributed to planners to be taken into account when formulating
strategy.
These data, showing a pattern of clear linkage between the HRM
function and strategy formulation, suggest that HRM has become strate-
gic in perhaps the majority of Fortune 500 firms, more so than suggested
previously by other authors. Various authors propose multi-stage charac-
terizations of HRM/strategy integration that range from the traditional

Table tl. Firms Participating in Activities Linking Strategy and HRM.

YES NO

Planning documents discussing


HRM issues were distributed
to planners 43.5% 56.5%

Strategic plans include an


explicit discussion of HRM issues 68.7% 31.3%

HR costs and implications were


explicitly included in estimating
the costs and benefits of alterna-
tive strategies 52 . 2% 47.8%

SBU's competitive strategy is based,


in part, on SBU's human resources 53.0% 47.0%

HRM executives participated in high


level strategic planning meetings 67.8% 32.2%

Martell and Carroll: How Strategic Is HRM? / 257


bureaucratic approach that has no role for HRM in strategy formulation
or implementation, to a fully strategic HRM approach that has the HRM
function fully integrated with strategy processes.^ HRM/planning inte-
gration is further refined as stage 1 or one-way integration—where
HRM practices are designed to advance strategy implementation—or
stage 2 or two-way integration, where the HRM exerts influence in
strategy formulation as well (Nkomo, 1980; Golden & Ramanujam,
1985). Empirical research by the Conference Board (Janger, 1977), Al-
pander (1982), Rowland and Summers (1981), and Tichy et al. (1984)
found very low levels of HRM and strategy integration, particularly with
regard to strategy formulation. Other studies (Golden & Ramanujam,
1985; Baird, Meshoulam & Give, 1983) found some evidence of a one-
way linkage between HRM and strategy processes, although two-way
linkages were not observed.
In contrast, our data reveal both one-way and two-way linkages be-
tween the HRM and strategy processes. For example, circulating HRM
planning documents, including a discussion of HRM issues in the strate-
gic plan, and considering HRM costs and other issues when evaluating
plans fall on the "low participation" end of the SHRM scale. These
activities are easily implemented and do not require active participation
by HRM managers in the strategy process. On the other hand, basing
the company's competitive strategy partially on the firm's human re-
source situation and including HRM executives at the table when chart-
ing the company's future suggest closer integration between the HRM
and planning functions. Alternatively, this approach also allows for the
opportunity of a two-way linkage, where HRM exerts some influence
over strategy as well.

• Conclusion 2. The HRM function is important in implementing


business strategy, but not as important as other functions that di-
rectly contribute to the development, production, or sale of the
product.

Some proponents of SHRM argue that, due to the importance of


employee inputs in implementing a firm's strategy, the HRM function
should be elevated to levels of other more productive functions such as
manufacturing or R&D as is it in Japanese companies (Whitehall, 1991).
Our data suggest that while senior management does acknowledge that
HRM plays an important role in strategy implementation, other func-
tions are deemed more critical. As indicated in Table III, 37 percent of
General Managers surveyed considered HRM to be very or extremely
important in implementing SBU strategy. These numbers pale beside the
importance of other functions, however, including R&D (58% consid-
ered it very or extremely important), manufacturing (62%), or marketing
(73%). On the other end of the scale, only 18 percent considered HRM to

258 / Human Resource Management, Summer 1995


Table III. The Relative Importance of H R M in Strategy Implementation.

The Importance of
Functional Areas In Extremely Not Very
Implementing Strategy: Important Important Important

Human Resource Management 37% 46% 18%


Research & Development 58% 24% 15%
Manufacturing 62% 28% 8%
Marketing 73% 23% 2%

Percent of Respondents strongly Agreeing


With tbe Following Statements:

"Obtaining and preserving the necessary


HUMAN RESOURCES is much more important
than obtaining and preserving the necessary
FINANCIAL RESOURCES" 5.2%

"Obtaining and preserving the necessary


HUMAN RESOURCES is much more important
than obtaining and preserving the necessary
TECHNOLOGICAL RESOURCES" 7.0%.

"Obtaining and preserving the necessary


HUMAN RESOURCES is much more important
than obtaining and preserving the necessary
MARKETING RESOURCES" 8.0%

play a very small or no role in strategy implementation, compared with 8


percent for manufacturing and 2 percent for marketing.
A second set of questions further probed General Managers' percep-
tions of the HRM function. Seventy-nine percent acknowledged that the
HRM function contributed to SBU performance goals which lends sup-
port to the proposed link between HRM and organizational perfor-
mance. Once again, however, comparative measures yield less support
for the importance of the HRM function. Despite the repeated assur-
ances by management in the press and other forums that "People are
our most important resource," when compared with the types of re-
sources more traditionally emphasized in the business environment—
financial, technological, and marketing resources—only 5 percent, 7
percent, and 8 percent (respectively) strongly agreed that obtaining and
preserving the necessary human resources was more important than
obtaining these three other types of resources.
There is good news and bad news for SHRM advocates in these
results. On the positive side, the HRM function seems to be held in
higher regard today by senior management than is reflected in some
earlier writings. The importance of the HRM function, however, and
even firms' human resources relative to their other resources, falls short
of what has been advocated by some of the more enthusiastic propo-
nents of SHRM.

Martell and Carroll: How Strategic Is HRM? / 259


• Conclusion 3. Despite a relatively modest view of the importance
of the role of the HRM function, HRM executives were considered
valuable members of the top management team.

It is interesting to note that senior management appears to distin-


guish between the HRM function and HRM executives. While GMs gave
the strategic importance of the HRM function relatively low marks com-
pared with some other functions, they clearly value the input of senior
HRM managers in charting the firm's strategy. In addition to the ques-
tion on HRM managers' role in the strategy process, GMs were asked to
characterize the primary role of their senior HRM executive as an admin-
istrator focusing on operational issues, an expert providing advice on
how to implement business plans but not a full member of the top
management team, or as a full strategic partner who is an integral senior
member on the top management team actively participating in both
strategy formulation and implementation decisions.^
In response to these questions, 58 percent of GMs characterized their
HRM managers as full strategic partners, compared with 22 percent and
20 percent who considered them experts and administrators, respec-
tively. In a related question, our survey found that 66 percent of GMs
agreed that HRM managers have played a key role in designing plans to
implement the firm's strategic goals. These trends are encouraging for
HRM professionals. While valuing HRM executives is not part of our
definition of SHRM per se, including HRM executives on the top man-
agement team opens the door for many types of integration activities
that characterize SHRM. Furthermore, it helps ensure a role for HRM
professionals in the process of adopting a more strategic perspective to
HRM within the company.

• Conclusion 4. Line managers play a role in HRM policy-making,


particularly those policies that involve senior managers.

In recent years, the role of top managers in influencing companies'


fortunes has received attention in the media. The much publicized fir-
ings of a number of the CEOs of some of the largest companies in the
United States (US) reinforce the notion that the choice of men and wom-
en to fill the top executive ranks is crucial to the firm's success. Yet, with
the exception of the recent interest in CEO pay, very little attention has
been paid in the HRM literature to how senior managers are treated
from an HRM perspective. Since there is some speculation in the litera-
ture that the impact of "fit" between strategy and HRM is greatest
among top management employees and diminishes through lower orga-
nizational levels based on employees' relative susceptibility to the envi-
ronment (Schuler & Jackson, 1987; Dyer, 1984), the issue of who makes
HRM decisions that impact senior managers was included in our survey.

260 / Human Resource Management, Summer 1995


We found that General Managers were the primary decisionmakers
regarding the full spectrum of HRM policies that affect senior managers.
As indicated in Table IV, GMs had shared or full responsibility for deci-
sions regarding senior managers' salaries (90%), bonus awards (80%),
how executives were selected (93%), final hiring decisions (94%), firing
(93%), promotion (89%), how executive performance was evaluated
(95%), the design of executive training programs (84%), and senior man-
agement participation in training (92%).

• Conclusion 5. The integration of HRM and strategy processes is


not associated with improved short-term organizational perfor-
mance.

SHRM proponents claim that adopting a more strategic approach to


HRM should have a positive effect on organizational performance, and
there is some research to support this claim. (See Appendix A for defini-
tion of organizational performance.) A study by A. T. Kearney consul-
tants (Misa & Stern, 1983) found differences in the strategic orientation
of HRM in highly productive companies when compared with other,
less productive companies; Cook and Ferris (1986) reported similar find-
ings when examining high performers in declining industries. More
recently, Huselid (1993) found a positive correlation between sophisti-
cated HRM management (which includes HR involvement in business
planning) and financial performance measures.
Our data did not support such a direct relationship, however, since
none of the SHRM measures included in our study were significantly
correlated (p < .05) with organizational performance. Thus, while inte-

Table tV. General Managers' Role in HRM Decision-Making.


Percent of General Manaaers Who
Characterized Their Role As:

Shared Complete
Having Advisory Decision- Decision-
Ko Input Only Making Making

Decisions Concernina:
Executives' base salaries 3.5% 4.3% 67.0% 23.5%
Executives' bonuses 4.3% 13.9% 59.1% 20.0%
How executives are selected 1.7% 4.3% 52.2% 40.9%
Hiring executives 2.6% 2.6% 40.9% 53.0%
Firing executives 3.5% 2.6% 52.2% 40.9%
Promoting executives .9% 8.7% 56.5% 33.0%
How executive perfonnance
is evaluated 2.6% 2.6% 34.8% 58.3%
Design of executive
training programs 3.5% 11.3% 57.4% 27.0%
Executive attendance
at training programs 3.5% 3.5% 41.7% 50.4%

Martell and Carroll: How Strategic Is HRM? / 261


grating HRM and planning processes may produce some other type of
positive benefits such as improved communication, coordination, pro-
ductivity, or quality not included in this study, our statistical analysis did
not support the proposition that in the short run adopting a SHRM
policy will improve the firm's bottom line.
It would be premature to reject hypotheses of an SHRM-performance
linkage, however, based only on this study's findings. It is possible that
there is a time lag before SHRM produces performance benefits, and
given the relative newness of the strategic approach to HRM, it could be
that not enough time has passed for the SHRM practices measured in
our study to have impacted performance. Once a company adopts an
SHRM orientation and elevates the HRM function and managers in
ways discussed in this article, it still may take years before (1) HRM
programs can be linked to strategies; (2) these programs change employ-
ee behaviors; and (3) these individual behaviors affect organizational
performance outcomes. Our study may not have picked up the effects of
this time lag; longitudinal studies are needed to shed some light on the
effect of HRM/strategy integration on performance over time before
dismissing this relationship.

CONCLUSIONS AND IMPLICATIONS FOR PRACTICE

This study of strategic business units of Fortune 500 companies indi-


cates that HRM has taken on strategic properties in many large US
companies. The study also indicates that strategic HRM (SHRM), as
practiced in companies today, consists of explicit discussions of HRM
issues, costs, and resources when developing strategic plans and use of
HRM practices to implement strategies. In addition, it was found that
two-thirds of companies surveyed involve their senior HRM executives
in high-level strategy meetings and consider these executives to be per-
forming a strategic partner role as opposed to the more traditional HRM
roles of functional administrator or expert. These findings also reveal
that senior management views HRM executives more positively than
they view their companies' HRM function as a whole.
These findings suggest that SHRM has become a reality in many
leading US companies. The prevalence of SHRM provides a contrast to
earlier studies which found little integration between HRM and strategic
planning, and a minimal role for HRM in formulating and implementing
business strategy. The elevation of senior HRM executives to the role of
strategic partner also differs from the somewhat negative images of
HRM by the rest of the organization that has been documented in other
studies (Carroll, 1991).
There are several implications of these findings. First, HRM execu-
tives in firms which have not accepted SHRM can point to these findings
in promoting to senior management the desirability of making better use

262 / Human Resource Management, Summer 1995


of HRM executives in the strategic planning process. One of the major
reasons why new HRM practices become established in companies is an
imitation or modeling effect. Thus, actual practices of other leading com-
panies can add legitimacy to a proposed new approach to HRM in a
company which is lagging behind its organizational peers.
Second, senior HRM executives must now possess the skills and
knowledge necessary to perform the new strategic partner role. HRM
managers must prove that they are capable of performing these new
added responsibilities to maintain the elevation of the status of HRM
executives. The highly specialized background of many HRM execu-
tives, their lack of general business training, and the tendency of many
HRM departments to adopt a relatively passive role in relating to other
organizational units (Carroll, 1991), compound this problem. MBA-level
training or participation in general management training (which could
improve HRM professionals' understanding of the firm's internal and
external strategic environments) may in the future become a prerequisite
for selecting senior HRM managers. It may be prudent for HRM manag-
ers to retool now, in light of the trend toward strategic HRM uncovered
in this study.
In order to transform themselves into strategic partners, HRM man-
agers will need to reevaluate their priorities. Previous studies indicate
that HRM managers place a much higher priority on short-term problem
areas such as benefits administration and legal issues than on long-
range planning or other strategic issues (Bureau of National Affairs,
1990). Senior HRM executives must find a way to limit their participation
in the day-to-day operating responsibilities that currently dominate their
schedules if they are to perform strategic functions. Increased participa-
tion in senior management strategy formulation exercises may require
different structural arrangements for the HRM function with more de-
centralization and delegation. A strategic approach should also be adopted
in administering HRM programs—for example, adapting the firm's com-
pensation programs to reward contributions to strategic goals.
Just as HRM executives are now participating in more general man-
agement decisions, according to this study general managers are also
heavily involved in HRM decisions concerning executives. Since most
GMs lack the "nuts and bolts" HRM training in selection, compensation,
and evaluation techniques, this trend offers a new opportunity for part-
nership between HRM professionals and line managers. HRM managers
can use the benefit of their expert knowledge involving assessment of
individual characteristics, evaluation of performance, legal issues, and
compensation systems to advise GMs on how to select and motivate a
cadre of executives equipped to further the company's strategic goals.
Once again, accepting this new responsibility may require a shift in
orientation for many HRM managers who, historically, have focused on
employees at lower levels of the organization. There are new knowledge
and skill requirements in devising strategic HRM policies for executives

Martell and Carroll: How Strategic Is HRM? / 263


that need to be confronted if HRM professionals plan to advise senior
management on these issues.
The patterns identified in this study—the elevation of the importance
of the HRM funcfion within the firm, the role of GMs in determining
diverse HRM policies, and increasing respect for senior HRM managers—
offer an opportunity for a closer strategic partnership between HRM and
line managers. Many GMs want HRM policies that further the firm's
strategies, but lack the expertise to make this happen on their own.
HRM professionals can serve as experts fo advise senior management on
how to use HRM as a powerful tool to bolster strategic performance.
Our data on the rising influence of HRM executives in the strategy
process suggest that this window of opportunity is now wide open.
HRM professionals should make sure they have the necessary skills and
mindset to exploit it.

Kathryn Martell is Assistant Professor of Management at Southern Illinois


University at Edwardsville. She teaches primarily in the area of strategic man-
agement. Her research, which focuses on strategy implementation, incorporates
a number of HRM topics including strategic HRM, executive HRM, sexual
harassment, and the role of HRM in promoting business ethics.

Stephen /. Carroll is Professor of Management and Organization at the Univer-


sity of Maryland. His previous books and articles on HRM topics have focused
on performance appraisal, the management of compensation, management by
objectives, Asian HRM systems, HRM unit roles and responsibilities, determi-
nants of HRM practices, and individual differences in reactions to alternative
HRM systems.

APPENDIX A

Operationalization of Selected Study Measures

Organizational Performance

Please indicate (on a 1-7 scale ranging from "of little importance" to
"extremely important") the degree of importance that your superiors
attach to each of the following performance criteria as they relate to your
business unit:
sales growth rate new product development
market share market development
operating profits R&D activities
profit-to-sales ratio cost reduction programs
cash flow from operations personnel development
return on investment political/public affairs

264 / Human Resource Management, Summer 1995


In comparison with corporate expectations from your business unit,
how would you rate (on a scale of 1-7, ranging from "nof at all satisfac-
tory" to "outstanding") your business unit's performance along each of
these dimensions:
sales growth rate new product development
market share market development
operating profits R&D activities
profit-to-sales ratio cost reduction programs
cash flow from operations personnel development
return on investment political/public affairs

A single weighted average was constructed for each SBU, using the
"importance" rankings as criterion weights.

The Strategic Role of HRM Executives

Please indicate which of the following statements best describes the


PRIMARY ROLE of the senior HRM/Personnel executive within your
business unit:
[ ] FUNCTIONAL ADMINISTRATOR—maintains company and
employee programs, updates personnel files, keeps track of
government regulations affecfing labor force policies, etc.
[ ] EXPERT—when solicited contributes expert advice and de-
velops programs to help implement business plans. How-
ever, he or she is not an integral part of our strategic
management team.
[ ] STRATEGIC PARTNER—he or she is an integral senior man-
agement member on both a formal and informal basis and
plays an important role in formulating and implementing
business unit strategy.

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ENDNOTES

1. This research was funded by a grant from the Society of Human Resource
Management Foundation.
2. Of course. General Managers face severe time constraints and were expected
to be somewhat less interested in this topic than HRM managers; thus, one
"cost" of our sampling strategy was a modest response rate. However, a
comparison of industry and geographical data indicates that our participating
sample is representative of the polled sample, reducing the possibility of non-
response bias.
3. A single measure of organizational performance was calculated for each SBU
in the sample including the following performance dimensions: sales growth
rate, market share, operating profits, profit to sales ratio, cash flow from
operations, return on investment, new product development, market devel-
opment, R&D activities, cost reduction, personnel development, politi-
cal/public affairs.
4. For a complete listing of all the measures incorporated in this study, please
contact the authors.
5. Authors differ in their characterization of what constitutes a fully strategic
HRM orientation. For example, Schuler and MacMillan (1987) foresee HRM
playing a role in establishing a company's competitive advantage, which is far
more progressive integration than that suggested by Mills (1979) who consid-
ered the evaluation of the strategic implications of various HRM activities and
priorities to constitute full HRM/planning integration.
6. These roles are similar to those proposed by Holder (1986) who characterized
HRM managers either as "Types A" managers, who have a fair amount of
influence in the strategy process, have a good understanding of the firm's
business, and are proactive in serving other functional managers as clients;
and "Type B" managers, who fulfill the traditional role of being a functional
administrator focusing on operational day-to-day HRM issues. Our data indi-
cate that many HRM executives can be classified today as "Type B."

Martell and Carroll: How Strategic 7s HRM? / 267

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