Research Korner: Management Case Study Examples

Management and Organizational Behavior of Panasonic

Organizational Behavior: Panasonic   Impact of the Event in Group Dynamics             Groups are considered as a vital element in the development and performance of a given organization. Dieterly (1978) defined a group or team as a distinguishable set of individuals who function together in order to accomplish a specific objective. In more specific term, it can be defined as the distinguishable set of two or more people who interact, dynamically, interdependently and adaptively toward a common and valued goals/objective/mission; each of whom has been assigned specific roles or functions in order to perform and who have limited life-span membership (O’Neil & Drilliings 1994, p. 143).              In the case of Panasonic, there are three vital teams which are the sales, marketing and administration. They are considered as the most important groups that focus on the most important aspects of the organization. However, it can be seen that the three groups are having problems in terms of communication and relationship.             The central theme or core meaning of team based on the definition given by O’Neil & Drillings focuses on the most vital aspect in any group or team – task orientation. And that is considered as the primary problem of the three groups.             The case shows that the inventory control for the products was very poor managed by the marketing team in terms of meeting the demand of the market. As a result, it will reflect on the performance of other department. This is important because of the fact that different groups or team in the organization are considered as connected due to the fact that the output data or information from one group will serve as an input to another, thus if the first team gathered and processes wrong information, it will create a domino effect, to the next teams.             It is important for each and every team member as well as each and every team to have a dynamic exchange of information and resources (O’Neil & Drilliings 1994, p. 144). This is opposite on what the marketing team, due to the fact that they are sometimes keeping back information about marketing campaign to their advantage that leaves the members of the sales team answerable to the retailers and distributors in time of price drop or better campaign payout that resulted for the members of the sales team to lose the trust of the partner business. The said aspect also shows one of the most important aspects in the organizational relationship – the coordination of different tasks.             Aside from the relationship between the groups, it will also be important to consider the important of management or leadership in managing the group. In the case of the after sales department, the failure of the team was due to the failure of the division head to manage and control. This is important because the leaders are the one who are responsible in guiding the team members towards the common goals. In addition, the leader can help to manage any misunderstanding inside the organization by managing emotions, feelings and attitudes, use the strengths and weaknesses of each and every member in order to achieve their desired plan.   Recommendation             Based on the said observation, it can be said that the organization is facing different problems regarding the internal communication and relationship. This is important due to the fact that it can great affect the individual performance of each and every employee in the company, as well as the performance of the company as a whole, that can affect the competitive and strategic advantage of the company, together with their position in the said market. The following are the actions that can be taken in order to manage the different issues and problems that are related to the attitudes and perceptions, motivation as well as group dynamics with connection to the entire behavior of the organization: 	 		 			 			 			Actions 		 		 			 			 			 			1. Clarify goals, mission, visions and objectives 		 		 			 			 			 			2. Proper assigning of areas of roles and responsibilities of each 			group 		 		 			 			 			 			3. Use Appropriate Appraisal 		 		 			 			 			 			4. Promote Trust 		 		 			 			 			 			5. Encourage Participation 		 		 			 			 			 			6. Promote Team Spirit and Social Support 		 		 			 			 			 			7. Foster Communication and Cooperation 		 		 			 			 			 			8. Reward Vital Contribution 		 	   1. Clarify goals, mission, visions and objectives             One of the primary problems of the company is their lack of the organizational or corporate goals and objectives. This is due to the fact that it can be observed that each and every department or team are competing with each other, primarily the sales and marketing team. Having a corporate goals and objectives aside from the team or departmental goals and objectives is important due to the fact that when the members and teams have a well-defined mission, they are likely to pull in the same direction at the same time attempt to reach the same goals. Thus, the goals must be articulated clearly (). 2. Proper assigning of areas of roles and responsibilities of each group             Another important problems of the company, is that the roles and responsibilities of each group or team are not clear. That is why if one of the actions had failed, each of the team are blaming other team. Thus, proper assigning of areas of roles and responsibilities of each group will help each team to know their boundaries that will help them to focus on a particular task. 3. Use Appropriate Appraisal             As have mentioned in the first part of the paper, Mr. Ng shows unfairness and favoritism inside the organization. In connection to that, Mr. Ng is always taking the side of the marketing and administration team, and not appreciating the effort of the sales team. In order to solve the said problem, it will be important for the company to use appropriate and balance mode of appraisal that will measure the effectiveness and efficiency of each and every individual, as well as each team. This will encourage motivation. 4. Promote Trust             Each and every member must trust each other in order to support their mutual understanding. On the other hand, this must also be implemented in the relationship of each and every group. 5. Encourage Participation             It is important to consider that the more group members participate in the process of decision-making, the more likely they will feel committed to the said decisions. This must be applied by the organization by asking the opinions and recommendations of each and every group. 6. Promote Team Spirit and Social Support Each member and team in the organization must lend their interpersonal and task support to other team, at the same time, the top management, Mr. Ng must focus on giving support to the groups in fair manner. 7. Foster Communication and Cooperation             Communication is a vital aspect inside the organization because it can help to lessen different uncertainties that can cause misunderstanding and chaos. Thus, each and every member and group must communicate and cooperate with each other, in order to coordinate and connect their efforts towards the common goal. 8. Reward Vital Contributions It is important to understand that rewarding does not only focus on monetary manner. It can also be award or honor that will help to motivate the employee. This is due to that fact that it will encourage the desired behavior in order to be repeated in the future performance of each and every individual.   References   Hill, New York, NY cited in Lee, S. 2007 “Vroom’s expectancy theory and the public library customer motivation model”, Library Review, Vol. 56 No. 9 P.788-796.   Nadler, DA and Lawler III, E.E. (1977),”Motivation: a diagnostic approach”, p. 128 in Steers, R.M. and Porter, L.W. (Eds),”Motivation and Work Behavior, McGraw   Osland, JS, Kolb, DA and Rubin IM 2001, “The Organization Behavior Reader”, Prentice Hall, Upper Saddle River New Jersey.   Pinder, CC 1998, “Work Motivation in Organizational Behavior”, Prentice Hall, Upper Saddle River New Jersey.   Silverthorne, C 2001,”A test of the path-goal leadership theory in Taiwan”, Leadership & Organization Development Journal, p. 151-158, California.   Sims, R (2002). Managing Organizational Behavior. Westport CT: Quorum Books.   Sydanmaanlakka, P 2002, “An Intelligent Organization: Integrating Performance, Competence and Knowledge Management”, Capstone Publishing Limited, Oxford, United Kingdom.   Vroom, V.H. (1964) “Work and Motivation”, p. 14-15, New York, Wiley cited in Pinder, CC 1998, “Work Motivation in Organizational Behavior”, Prentice Hall, Upper Saddle River New Jersey.

Management and Organizational Behavior of Panasonic

Organizational Behavior: Panasonic Impact of the Event in Group Dynamics Groups are considered as a vital element in t...

The Role of Management in Enhancing the Performance of Employees: The Case Study of Barclays and HSBC Banks

“The role of management in enhancing the performance of their employees”       The role of management has played a vital part in enhancing and developing their employees to be successful whether personally or through team effort. Thus success of their employees contributes largely to the success of the company and it show that the management has done their part to the business. The role management simply cannot be overemphasize they are the father of the family or simply the driving force in every individual performance.  The effectiveness of management to motivate their employees to work according to their standard or cultural manifestation is in their hand. Although each and every person has their own motivation for working management still inspire to be the role model of the company.       An effective management team is well respected by their employee while on the other hand they are hated by others and this has been their struggle if this occurrence ever happened. They have a recognizable authority over their employee to maximize their potential or they have power to discourage them. Their behavior can be a strong driving force to change or develop the personality of their employees.       In a certain company of multi cultural diversity that caters to service industry like HSBC bank which is widely known all over the world, world class leadership management style has been practiced. They aim to develop world class individual that will cater to the quality services that is envisioned by the company. Thus complete personality development and training is available to each and every employee that is up front to the customers demand since the company’s morale is at stake.       The management including the Human Resource only handpicked the most qualified individuals to be their employees and teach them harder to become better. They want them to be hard-working and a team player. They give them confidence to handle task smoothly and they train their people to become detail oriented and analytically customer oriented. By doing so they are properly rewarded through the means of promotion in their career, to advance and excel individually they recognize the potentials of employees according to their performance aside from the high standard salary and perks they are receiving.  Thus in return they have unlocked potentials of their employees without force or push but proper guidance and motivation.       When employees are in need they have dedicated relationship culture to get the problems resolved before it comes to worst. This means that problems are handled not just by management but the people who are involved.  In General the corporate character defines the values and principles inherent in all their everyday dealings.        Generally the management has maintained a universal approach to take good care of their employees a “carrot and stick method management style”. ·         They have the ability to communicate their orders in systematic manner. This way the transfer of information is easily passed on. And they have the ability to openly listen to their employee especially the good ideas, questions and suggestion that may have contribute to the welfare of the company and employees. ·         The management has a regular meeting or interaction to regularly maintain the smooth day to day operation. This involves the principles of management by walking around. Discuss concerns, share ideas, bonding etc. ·         Inspire their employee to achieve more than what they already have by setting standard examples. The written rules and regulations are performed by the management religiously so the employees themselves takes is seriously because of the reflection guided by the management themselves. ·         Develop the personality of their people, personality development have become subconsciously motivated by great leaders of the company by training them to become highly respected individual. Wear a dress code appropriate to the industry, well mannered behavior, a standard toned voice and speech, proper employee relation or good customer relation. And good moral character even to the point of resignation.   ·         The employees desire to high salaries and wages are their common motivational factor that affects their work performance that is why in this company (HSBC) they are offered what they deserved. ·         And most of all high motivation standards through overall excellence in their performance are being inculcated in the minds of every employees.       Therefore the role of management to enhance their employee is necessary       because the most precious possession of the company could ever have is not just their asset or financial stability but the people who have made a difference and tremendous contribution to achieve their common goals.

The Role of Management in Enhancing the Performance of Employees: The Case Study of Barclays and HSBC Banks

“The role of management in enhancing the performance of their employees” The role of management has played a vital par...

Writing a Proposal on Quality Management Planning Framework

Quality Management Planning Framework Bank services the employee’s role and behavior take on even greater importance. This is partly because of the presence of the customer within necessity of high level of contact between customer and service employee, in the delivery of many types of service. New services continue to emerge in response to requirements for a high level of customization, achieved through intensive use of labor in their delivery. Also, when face-to-face encounters between customer and employee become less frequent it can be more important to “capitalize” on the few occasions when meetings do occur[22], particularly as these infrequent face-to-face encounters may be occasioned by failure of the routine system and, hence, be even more sensitive to good or to poor execution. The placing of control on bank’s employee attitudes and performance and in the overall banking service organizations in approximate equivalence to product quality control in manufacture. There noted that banking services depend on customers gaining favorable impressions as a result of services which are well performed. To be able to do good job, the service personnel who are in customer contact need not only to be well trained, but also to be happy about their work.   -          The need to provide information about bank supervisor effectiveness as well as bank employee preference -          The need to help to pay attention to client needs in the actual banking transactions -          The shaping of banking accountability expectations and provide motivation stimulus on both parties   The strategies are probably becoming more important as services evolve into larger organization, particularly relevant in the banks on which Berry focuses, smaller service firms, which are still the major employers, it may also be desirable to supplement informal methods, and personal relationships. The provision of explicit banking services can be recognized in three forms: self-services, which require roles such as drinks making in hotels, and self-service in restaurants and supermarkets: services to other consumers, for example participation in a seminar or syndicate group; and services provided for the organization, like returning supermarket trolleys or library books. Banking customers need to specify their requirements and provide feedback about their level of satisfaction, and even to show when the service has been completed. Johnston argued that service firms need to manage these customer roles using similar approach to the management of employees. This, he claimed, will probably include deciding what sort of customer is wanted and how to go about customer selection.   Haywood-Farmer discussed a model of service quality which recognizes: - Physical facilities and processes - People’s behavior - Professional judgment   An important aspect of Haywood-Farmer’s discussion of the model was the recognition that the characteristics of professionalism, judgment, advice, autonomy, diagnosis, self-motivation, knowledge and discretion are present to a variable extent in the activities of the employees of most organizations, not just the professions, e.g., law, medicine, education etc. The relative position of each of the attributes in this model was used by Haywood-Farmer to explain firms’ positioning in respect of some of the classifications of service, including contact, labor intensity and customization. Services which are low in terms of customer contact, customization and labor intensity, for example, are closer to the physical facility attribute of Haywood-Farmer’s model, whereas services high in all three will be positioned in the centre of the triangle. Responsiveness Concerns the willingness or readiness of employees to provide services. It involves timeliness of service like: posting a transaction slip immediately; returning phone call quickly; giving prompt service; setting up appointments quickly. Access Involves approachability and ease of contact. It means: the service is easily accessible by telephone; queuing time is not excessive; convenient hours of operation; convenient location.

Writing a Proposal on Quality Management Planning Framework

Quality Management Planning Framework Bank services the employee’s role and behavior take on even greater importance. This is partly bec...

Will the strategic fit between business and HRM strategy influence HRM effectiveness and organizational performance?

Will the strategic fit between business and HRM strategy influence HRM effectiveness and organizational performance? Abstract Purpose – The purpose of this research is to examine how the fit between the strategy of business and HRM would affect HRM effectiveness and organizational performance. The paper aimed to find whether a better fit between firm’s strategy and HRM strategy would strengthen HRM effectiveness and organizational performance. Design/methodology/approach – The literature was reviewed from both the theoretical and empirical perspectives. Four hypotheses were formulated. Top 1,000 manufacturing companies in Taiwan were sampled, yielding valid questionnaire data and objective performance indexes from 181 firms. Multiple regressions and LISREL was employed to test the four hypotheses empirically. Findings – The main findings were: the strategy fit between a firm’s business and HRM strategy has a positive and direct impact on HRM effectiveness and labor productivity after analyzing by hierarchical multiple regression. HRM effectiveness could directly increase labor productivity while strategy fit strengthened the relationship between HRM effectiveness and labor productivity. Practical implications – This study found that the alignment between the business and HRM strategy was the key factor of success for organizations. When the HRM strategy and business strategy were aligned, the effectiveness of HR practices and organizational performance were better than “that of not aligned” by contingency perspective. This study also estimated the practical significance through calculating the impact of HRM effectiveness and strategy fit on labor productivity by each standard deviation increase, respectively. Originality/value – This study confirmed that a firm’s competitive advantage can be enhanced by HRM practices and strategy fit. Strategy fit could also moderate the relationship between HRM effectiveness and labor productivity. Keywords Human resource management, Management strategy, Human resource strategies, Organizational performance Introduction In recent years, human resource management (HRM) has been integrated as the process of strategic management, through the development of a new discipline denominated strategic HRM (Wright and McMahan, 1992). Linking HRM to organizational strategy was accentuated with the rise of resource-based view of the firm currently (Amit and Schoemaker, 1993; Barney, 1995; Grant, 1991; Peteraf, 1993). The growing interest produced in this domain was owing to the idea that human resource should be considered as a strategic factor, not only for the role it plays in putting managerial strategy into effect, but also for the potentiality it becomes a source of sustainable competitive advantage. So, there was a growing consensus about the idea that HRM strategy operated appropriately could increase organizational performance significantly. The impact of HRM strategy and practices on organizational performance was an important topic in the field of HRM, industrial relations, and industrial and organizational psychology (Boudreau, 1991; Jones and Wright, 1992; Kleiner, 1990). Human resource management practices can help to crate a source of sustained competitive advantage, especially when they aligned with organization’s competitive strategy (Begin, 1991; Butler et al., 1991; Cappelli and Singh, 1992; Jackson and Schuler, 1995). While organizational human resource strategy is properly configured, it will provide a direct and economically significant contribution to organization performance. The aim of this study was to examine the impact of strategy fit between firm’s business and HRM strategy on HRM effectiveness and organizational performance. Simultaneously, the impact of interaction of HRM effectiveness and strategy fit on organizational performance was also examined. Literature review Wright and McMahan (1992) defined strategic human resource management (SHRM) as “the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals”. SHRM studies had focused on explicating the strategic role that HR could play in enhancing organizational effectiveness. Therefore, fit and integration were the important issues in SHRM. The concept of fit had received considerable attention in the field of strategy. Strategy fit and HRM The concept of strategy fit began with the research of Skinner (1969). He suggested that companies should tailor their production systems to perform the tasks that were vital to corporate success and consistent with the corporate strategy. A variety of authors had claimed that consistency between business strategy and HRM practices was an important component in the success of organization (Buffa, 1984; Fine and Hax, 1985; Kotha and Orne, 1989; Miller and Roth, 1994; Wheelwright, 1984). Competitive strategy implies a series of systematic and related decisions that gives a business a competitive advantage relative to other businesses (Schuler and Jackson, 1987). The concept of business competitive strategy was derived primarily from Porter’s (1985) classifications of generic strategies: cost leadership, differentiation, and focus. However, Bird and Beechler (1995) borrowed the name and ideas from the viewpoint of Miles and Snow (1984). They classified the business strategies as the following three types: defender, prospector, and analyzer. In the perspective of Bird and Beechler (1995), defenders cerate a secure market share with moderate, steady growth, narrowed its product-market domains, and limit their search for new opportunities and, instead, focus on internal ways to enhance organizational effectiveness. Given a narrow product market domain and an orientation toward efficiency, organizational requirements gravitate in favor of maintaining stability and focusing on internal operation. As a consequence, central control, high degrees of formalization, and elaborate control systems are hypothesized to promote organizational effectiveness (Bird and Beechler, 1995). Basic strategies have been aggressively maintained prominence within its chosen market segment, and ignored developments outside of this domain, not penetrated deeper into current markets, and growth occur cautiously and incrementally. Therefore, these firms tend to focus on cost leadership. The second strategy is the prospector. Firms employing this type of strategy are characterized by rapid growth and continue resource deployment/redeployment, particularly of management and technical personnel. These firms almost continually search for market opportunities, and they regularly experiment with potential responses to emerging environmental trends. They often are the creators of change and uncertainty. Constant product-market innovation reflects a response to this dynamic domain, requiring the capacity to closely monitor external events (Bird and Beechler, 1995). Additionally, the ability to develop new products and enter new markets requires creativity. Decentralized control system and rapid deployment of resources further characterize firms employing Prospector strategies. Hence, these firms focus on innovation and the introduction of new products and services. The third strategy is the analyzer. Firms with this strategy can compete not only in the early phase of product development when the emphasis in on uniqueness, but later on as well, when efficient mass production becomes necessary to be competitive. In the stable domains, they operate routinely and efficiently through using formalized structures and processes. Consequently, these firms must identify and pursue new product-market opportunities while simultaneously maintaining a presence in existing domains. The pursuit of effectiveness in both areas necessitates an ability to be efficient yet flexible in production technologies. Accommodation of both stable and dynamic areas of operations requires similar differentiation with regard to human resources (Bird and Beechler, 1995). Finally, these firms tend to share characteristics of both prospectors and defenders. Since the 1980s, HRM strategy has become an increasingly important HRM topic (Terpstra and Rozell, 1993) because it provides a means by which firms could enhance their competitiveness and promote managerial efficiency (Dyer, 1984). Effective HRM strategy systematically coordinate all individual HRM measures and implement them so as to directly influence employee attitude and behavior in a way that help a business to achieve its operational goal. Dowling and Schuler (1990) integrated the HRM strategies as utilization, facilitation, and accumulation. Dyer (1984) reclassified them as inducement, investment, and involvement, respectively. Firms adopt the accumulation strategy have been found to fill their job vacancies internally, to adopt multiple methods for promotion, and to offer a broader career path. Furthermore, they pay careful attention to employee training and all-around development, stress internal pay equity, and provide many types of employee incentives. On the other hand, firms adopt the utilization strategy have been found to assess performance on a short-term and individual basis, and to provide lower base pay and poorer job security. As for companies adopt the facilitation strategies, their HRM practices are mostly midway between those of firms adopting a utilization strategy and those of firms pursuing an accumulation strategy. In the field of strategy fit, Bird and Beechler (1995) combined business strategy of Miles and Snow (1984) and HRM strategy of Dowling and Schuler (1990) and Dyer (1984), they indicated business should combine its competitiveness and HRM strategy to increase operational performance. In their paper, they suggested the appropriate match between business strategy and HRM strategy type as: prospector business strategy with utilizer HRM strategy, defender business strategy with accumulator HRM strategy, and analyzer business strategy with facilitator HRM strategy. In the SHRM field, one major issue concerns whether HRM practices were universally superior to traditional, bureaucratic practices or if, rather, the employment system should be contingent upon organizational operating strategy or other contextual conditions (Huselid, 1995). The universalism perspective has taken a “best practices”, the central argument is the contemporary environment confronting most organizations is turbulent and uncertain. As a consequence, such a highly competitive, globalize marketplace and rapidly changing technologies make the contributions of motivated and empowered employees at all levels of the firm critical to its ability to cope with environment hostility. In contrast, the contingency perspective argued that it was important that there would be an appropriate fit between HRM strategy and the external environment in which the organization operated. The absence of external fit would lead, in this perspective, to sub-optimal performance. In order to manage human resources effectively, firms nurture the type of employee behavior that was essential to the success of their competitive strategy (Dowling and Schuler, 1990; Grundy, 1998; Schuler, 1987; Schuler and Jackson, 1987). HRM strategy facilitated the development of a work force that meets the requirements of business strategy, so that organizational goals and missions would be achieved (Guest, 1987). In addition, another theoretical model, the “behavioral perspective” (Jackson et al., 1989) also supports the contingency perspective linking competitive strategy and HRM. It believes that behaviors of employee role are the fundamental to the effective implementation of competitive strategy. Firm’s business strategy must be matched with the specific HR policies and practices, which will elicit particular sets of employee attitudes and behaviors to foster success. For example, organizations attempt to be more innovative than their competitors in the marketplace. Their employees must be willing to experiment with new ideas and take risk. Hence, the innovative organizations would be expected to own necessary personnel practices to supply the required behavioral styles. No wonder Guthrie et al. (2002) indicated that business strategy had a significantly impact on HRM practices. Besides Jackson et al. (1989) explored the relation between business strategy and HRM practices. They found that firms pursuing an innovation strategy tended to use compensation practices consistent with these needs (e.g., less reliance on incentives, more employment security) for the hourly employees, although no significant finding for their managerial employees. Besides, Arthur (1992) explored the relation between business strategy and workplace industrial relation system in a sample of American steel minimills. He found that the type of industrial relations system adopted by the mill is related to the mill’s business strategy. Consistent with the strategic choice perspective, these results suggest that understanding diversity in industrial relations practices and outcomes requires a broader and deeper understanding of business strategy in firms. The type of industrial relations policies and practices in place is strongly related to the business strategy choices made by different minimills. He also indicated that strategy fit between firm’s business strategy and industrial relations policies would increase its operation performance. In addition, the results suggest how unions in the steel industry and elsewhere that have bargained for influence over some aspects of these business strategy choices might use this influence to encourage the type of business strategy that fits with their membership’s interest in increased shop-floor discretion, participation, training, and relatively high wages. According to contingency theory (Miles and Snow, 1984; Porter, 1985; Schuler and Jackson, 1987) and behavioral perspective (Jackson et al., 1989), HRM strategies must be combined with specific business competitive strategies, if they were then this alignment will enhance organizational performance or HRM effectiveness. The concept of the strategic fit refers mainly to the close linkage between HRM and business strategy will help retain and motivate employees. As stated previously, we used the contingency approach to obtain our first hypothesis: H1. The better fit between a firm’s competitive strategy and HRM strategy would increase the firm’s HRM effectiveness. HRM and organizational performance Many studies had discussed the relationship of HRM effectiveness and organizational performance (Arthur, 1994; Dalton, 2005; Datta et al., 2005; Gollan, 2005; Huselid, 1995; Whicker and Andrews, 2004). They discovered that HRM could be a source of sustained competitive advantage. HRM influences employee skills through the acquisition, development of a firm’s human capital, and contributes to the achievement of business objectives. Thus, the second hypothesis is: H2. HRM effectiveness had a positive and direct impact on organizational performance. Strategy fit and organizational performance A firm’s HRM practices encouraged employees’ behavior consistent with its business strategy was able to achieve superior performance (Delery and Doty, 1996). Moreover, application of the strategic fit concept help firms to manage their resources more efficiently, so that they can reduce operational costs as well as respond effectively to environmental threats and new opportunities (Bird and Beechler, 1995). In addition, Guthrie et al. (2002) based on behavioral perspective to examine the different organizational performance impact on the differentiation competitive strategy aligned with greater use of high involvement work practices (HIWPs) and misalignment. They found a moderate association between an orientation toward competing on a differentiation basis and the use of HIWPs. They also indicated that utilizing higher levels of HIWIPs was particularly beneficial to firms pursuing a differentiation strategy and less so far firms competing more on the basis of cost and a strong association between HIWPs and firm performance for the differentiators and no such relationship for the cost leadership group. It means strategy fit between business and HRM strategy could affect organizational performance. Consequently, according to contingency theory and behavioral perspective, effective linkage between business strategies and HRM strategies may enhance organizational performance. Thus, the third hypothesis is: H3. The better fit between a firm’s competitive strategy and HRM strategy would increase the firm’s performance. The result of effective HRM activities in achieving a competitive edge was broadly argued in the past (Arthur, 1994; Becker and Huselid, 1998; Gollan, 2005; Huang, 2001; Huselid, 1995). Scholars of contingency had found both organizational performance and HRM effectiveness would increase significantly while a firm’s HRM strategy aligned with its competitive strategy (Guest and Hoque, 1994; Hoque, 1999; Huang, 2001; Rodriguez and Ventura, 2003). However, very few studies had explored the interactive effect of strategy fit and HRM effectiveness on organizational performance. Hence, we tried to submit the hypothesis as follows: H4. The better fit between a firm’s competitive and HRM strategy would strengthen the relationship between HRM effectiveness and organizational performance. The conceptual model of this study could be shown as Figure 1. Methods Sample and data collection In order to test the above four hypotheses, top 1000 manufacturing companies in Taiwan were sampled. The questionnaires were answered by firm’s HRMexecutives in 2003. Finally, 181 valid questionnaires had returned, the response rate was 18.1 percent. Becker and Huselid (1998) reviewed studies showed that response rates ranged from 6 to 28 percent with an average of 17.4 percent, our response rate was acceptable in the survey-based HRM studies. Besides, labor productivity in 2003/2002 and other organizational characteristics were obtained from the secondary data set by the Magazine of Common Wealth in 2004 and 2003. Measurement Labor productivity. While a number of outcome measures (e.g., turnover, absenteeism, profits) have been used to ascertain the effectiveness of HRM, we focused on labor productivity for a number of reasons. First, labor productivity was a crucial organizational outcome. At a general level, labor productivity, defined as total output divided by labor inputs (Samuelson and Nordhaus, 1989), indicated the extent to which a firm’s labor force was efficiently creating output. Second, because connections between human capital and productivity – especially labor productivity – were relatively direct, the face validity of this measure of firm success was also relatively high (Dyer and Reeves, 1995). Finally, productivity has been the most frequently used outcome variable in a large body of work in the SHRM literature. We measured labor productivity as the logarithm of the ratio of firm sales to number of employees. In order to measure labor productivity in 2003, data had been obtained from the Magazine of Common Wealth in Taiwan in 2004. Besides, in order to increase the accuracy of inferring the impact of strategy fit on HRM effectiveness and labor productivity, we controlled their last year (2002) labor productivity in the analytic procedures. Business strategy. Based on the classification of Bird and Beechler (1995), we divided competitive strategy into three types: defender, prospector, and analyzer. We used it to measure responder’s business strategy and classify them into nominal categories. HRM executives read brief descriptions of strategy types and were asked to identify the one that closely resembled their firm’s strategy. The descriptive analysis results revealed that “analyzer strategy” businesses (104 firms, 57.5 percent) accounted for a majority of our samples. The second largest group was the “defender strategy” (42 firms, 23.2 percent). “Prospector strategy” occupied only 16.6 percent (30 firms) of the respondents. HRM strategy. This study adopts the theoretical definitions of Dowling and Schuler (1990), Huang (2001), Schuler (1989), and Schuler and Jackson (1987). This scale includes 13 items designed to assess the nature of human resource practices followed by surveyed firms. They included the degree of participation of employees in HRM planning, content of job descriptions, resources of recruit, the status of employee’s promotion, the orientation of performance appraisal (focused on individual or team), the standard of performance appraisal (short-term or log-term), the foundation of performance appraisal (process or result perspective), the rate of bonus, the tendency of compensation design (internal or external equity), the orientation of employees training and development, the rate of employees training, the degree of job security, and labor relation. Respondents answered this on five-point Likert-type scales ranging from 1 ¼ “very much disagree” to 5 ¼ “very much agree”. The higher score is more tended to the HRM strategy of accumulation, and lower score is closer to the HRM strategy of utilization. Then, we applied the K-means cluster method to classify the responding firms into different HRM strategy groups. Next, discrimination analysis was employed to examine the results of the classification. The cluster analysis results indicated that the HRM strategy of accumulation (92 firms, 50.8 percent) accounted for a majority of the samples. The second largest group was the HRM strategy of utilization (52 firms, 28.7 percent), “HRM strategy of facilitation” accounted just 17.1 percent (31 firms) of the respondents. The results from discrimination analysis revealed that 13 HRM practices were significantly different across the three strategies (Wilks’ L values among 0.395 to 0.920), and the correct discrimination rate was 93.1 percent (163/176). It means our classification had a sufficient discriminative effect. Strategy fit. Strategy fit had occurred when firm’s HRM strategy aligned with its competitive strategy. According to the theoretical model of Bird and Beechler (1995), when a firm adopts a prospector competitive strategy and HRM strategy of utilization, a defender competitive strategy and HRM strategy of accumulation, or a analyzer competitive strategy and HRM strategy of facilitation, firm’s HRM strategy and competitive strategy were consistent (the above 3 strategy matches were strategic fit, other matches were not fit). The results indicated that 40.6 percent (71 firms) of the firms were strategic fit, and 59.4 percent of firms were not fit. We also found “defender competitive strategy vs. HRM strategy of accumulation” accounted for a majority of the strategy fit firms (32 firms, 45.07 percent), “analyzer competitive strategy v. HRM strategy of facilitation” accounted for second largest group (25 firms, 35.21 percent). “Prospector competitive strategy v. HRM strategy of utilization” firms occupied just 19.72 percent (14 firms) of the respondents. HRM effectiveness. Based on intellectual capital perspective, HRM effectiveness was recognized as organizational intellectual capital management practices in this study. After reviewing the relevant literature, we concluded structural capital and relation capital as two dimensions of intellectual capital. The 23-item scale was developed and revised by Huselid et al. (1997), Huang (2001), Lee (1999), Wang and Gau (2004). The structural capital of HRM effectiveness was measured by 14 items to assess the effectiveness of performance appraisal, employee skill, training and development of employee, job performance, status of HRM rule, the design of team corporation, the degree of endowment, HRM activities, management development, job rotation, job descriptions and rules, the design of employee appeal, information management of HRM, and the control mechanism of the labor cost that facilitate to build up human capital of the organization. And the relation capital of HRM effectiveness (9 items) measured the procedure of recruitment and selection, labor relation management, career development of employee, job environment, compensation and incentives management, the degree of jib security, employee benefit, job orientation, and training and development of employee that facilitate to remain and increase human capital of the organization. All items of HRME were used five-point Likert-type scales. The composite reliabilities of this scale were 0.94 and 0.90 in two dimensions which were estimated based on confirmatory factor analysis (CFA). According to the standard of Wortzel (1979) and Fornell and Larcker (1981), the internal consistent within these two dimensions were acceptable. In order to assess the convergent and discriminate validity, we also performed CFA on these scales. The results of CFA indicated that value of the x2/df, goodness of fit index (GFI), comparative fit index (CFI), and the root mean square error of approximation (RMSEA) were 2.53, 0.92, 0.94, and 0.65, respectively. They were fit and consistent with the standard of Bollen (1989), Browne and Cudeck (1993), Joreskog and Sorbom (1993), and Medsker et al. (1994). Factor loading of each item were above 0.50. The t values of factor loading of each item were above 2 and greater than twice its standard error. Thus, the convergent validity of HRM effectiveness was very sound. Besides, we also assessed the discriminate validity by testing the x2 difference for the constrained (estimated correlation parameter was constrained to 1.0) and unconstrained (correlation parameter was estimated free) model (Anderson and Gerbing, 1988). The results indicated that x2 difference between 2 models was significant (ex2 ¼ 177:64, edf ¼ 1, p , 0.001). Moreover, the confidence interval (^2 standard errors) around the estimated correlation was not included 1.0 (between 0.49 and 0.61). Thus, the discriminate validity of this scale was good enough. Control variables. Reviewing the previous studies, we used firm’s age, firm’s capital, scale of firm, number of employees in HR department, industrial sector, and market competitive degree as control variables in our analysis. Firm’s age was measured as the number of years the firm had operated. Firm’s capital was measured by the logarithm of the firm’s total capital. Firm scale was measured by the logarithm of the total employees. Besides, we used dummy variables to treat both variables of industrial sector and market competition. We classified our sample into traditional sector (as the reference group) and high tech sector; the lower and middle market competitive degree (as the reference group), high, and very high degree of competitive market. Analyses and results Table I presents the means, standard deviations and zero-order correlations among all variables in this study. Hierarchical generally least squares (GLS) regression analysis was used to test 4 hypotheses mentioned previously. Table II presents the analyzing results. In the analysis, strategy fit was dummy-coded as 1 for fit and 0 for not fit. The dependent variable was HRM effectiveness in model 1 and 2, and was 2003 labor productivity in model 3-6. Because HRM effectiveness, strategy fit, and labor productivity might exist relationships causally. We tested these causal relationships by analyzing the impact of HRM effectiveness and strategy fit on labor productivity in 2002. Findings indicated that HRM effectiveness, strategy fit, and interaction between HRM effectiveness and strategy fit had no significant impacts on labor productivity. Thus, we controlled 2002 labor productivity in model 3-6, while not controlled it in model 1 and 2. In model 1, which included the control variables, explained nearly 12 percent of the variance in HRM effectiveness ( p , 0.01). We added the strategy fit into model 2. Consistently with the past research (e.g., Bird and Beechler, 1995; Porter, 1985; Schuler and Jackson, 1987), results indicated that strategy fit had a positive and direct impact on HRM effectiveness (t ¼ 4:41, p , 0.001). This has supported our first hypothesis. The variable of strategy fit variable could explain an additional 11.9 percent of the variance in HRM effectiveness. In model 3-6 (dependent was labor productivity in 2003), we found control variables explained nearly 14 percent of the variance in labor productivity ( p , 0.001). The strategy fit variable could explain an additional 12.9 percent; HRM effectiveness variable would explain an additional 9.9 percent of the variance in labor productivity ( p , 0.001). We also found both the strategy fit and HRM effectiveness had positive and direct impact on labor productivity (t ¼ 4:89, 3.47; p , 0.001). This provided strong support for the hypothesis 2 and 3. We used moderated multiple regression to test for the expected interaction between strategy fit and HRM effectiveness. The effect of interaction was plotted by separate equations for the high and low (1 SD) conditions of HRM effectiveness, as recommended by Aiken and West (1991) and showed in Figure 2. To test for statistical significance, we examined both the beta weight of the interaction term and theeR 2 of the cumulative mod suggested by Aiken and West (1991). To address the issue of multicollinearity arising from the interactive terms being highly correlated with its original variables. Thus, we assessed whether multicollinearity was a problem by computing the variance inflation factors (VIFs). None of the VIFs in this study approached the threshold value of 10 suggested by Myers (1990). So there is no serious multicollinearity problem for the study data. As indicated in Table II, the beta weight for the interaction of strategy fit and HRM effectiveness was significant in the regression model (t ¼ 2:11, p , 0.05), theeR 2 was also significantly (t ¼ 2:01, p , 0.05). It suggested that strategy fit moderated the relationship between HRM effectiveness and labor productivity. Firm’s HRM strategy aligned with business strategy would strengthen the relationship between HRM effectiveness and labor productivity, which support our fourth hypothesis. Conclusions and discussion In this study, our findings have also supported by the previous research findings which suggested that firm’s competitiveness can be enhanced by HRM practices (Arthur, 1994; Bracken, 2006; Dalton, 2005; Datta et al., 2005; Gollan, 2005; Guthrie, 2001; Huselid, 1995; Ozcelik and Ferman, 2006; Whicker and Andrews, 2004). Although there were few studies explored the impact of strategy fit between firm’s business and HRM strategy on HRM effectiveness and organizational performance. And, most often, previous researches explored the fit effect might be in one out of six or eight different analyses in a study. The impacts of strategy fit on HRM effectiveness and organizational performance were ambiguously.We tried to examine this effect based on contingency perspective.We found strategic fit would increase both the HRM effectiveness and organizational performance that consistent with the previous findings as summarized in Table III.We have also found the impact of strategy fit on labor productivity was higher than the impact of HRM effectiveness on labor productivity. In Table III, we found the previous researches had confirmed the contingency effect of strategic fit and organizational performance through both direct and interactive effects. Adopting interactive approach, most research had examined the interactive effect between HR practices and business strategy on organizational performance. This approach tended to examine the moderation effect among HR practices, business strategy, and organizational performance (moderation perspective). They often divide HR practices and business strategies into n categories before examining the effect of fit. Therefore, the approach also analyzed the significant difference between business strategy and organizational performance across HR practices. They would hardly examine the impact of fit (match effect) on the organizational performance. Same as Delery and Doty (1996), Guest and Hoque (1994), Smith and Reece (1999), our study assessed the direct effect that organizations took the appropriate HRM strategy for their business strategy (match perspective). We examined the actual impact of fit between HRM strategy and business strategy on organizational performance. Besides, we also found a significant contingency effect, the strategy fit between a firm’s business and HRM strategy would moderately increase the relationship between HRM effectiveness and labor productivity. Following the advice of the previous SHRM scholars (e.g., Becker and Gerhart, 1996; Huselid, 1995), we estimated the practical significance of our results by calculating the impact of one standard deviation (1s) increase in HRM effectiveness on labor productivity. Holding all controlled variables as their means, the estimated main effects showed that each 1s increase in HRM effectiveness is associated with 27,772 NTD productivity increase per employee. This represents there is 7.31 percent gain in labor productivity over the average productivity per employee (379,931 NTD). Compared with the calculations reported by Huselid (1995) and Becker and Huselid (1998), their gains were 16 and 4.8 percent, respectively. Thus, our estimation was reasonable. For the average sized firm in our sample, the effect of HRM effectiveness on labor productivity would generate an additional 32.85 million NTD in total revenue. We also found the strategic fit could influence the relationship between HRM effectiveness and labor productivity. While the strategy between HRM and business were fit, each 1s increase in HRM effectiveness will increase 47,331 NTD productivity per employee. This means there is 9.51 percent gain over the average productivity per employee of 497,701 NTD (it increases an additional 55.99 million NTD in total revenue). In contrast, while the strategy between HRM and business were not aligned, each 1s increase in HRM effectiveness will increase just 12,748 NTD productivity per employee. This tells us that 5.21 percent gain over the average productivity per employee of 244,691 NTD (it would increase an additional 15.08 million NTD in total revenue). A variety of researches had indicated that the alignment between a firm’s business and HRM strategy was the key factor of success for organizations. HRM practices could provide a source of sustainable competitive advantage. HRM research has generally ignored the influence of strategy fit on the relationship between a firm’s HRM effectiveness and labor productivity. Although we have confirmed when a firm’s HRM strategy and business strategy were aligned, the effectiveness of HR practices and organizational performance were better than “that of not aligned” by contingency perspective. But, we examined the fit effect accord to Bird and Beechler (1995) theoretic model. Our fit model is not a general and unique way to do the strategy fit between business and HRM strategies. Further studies might be able to identify and confirm the robustness of our strategic fit findings. Whenever the enterprises want to promote their organizational performance, they would better adopt the suitable operating strategy based on the conditions of their organization structure, environmental, and context firstly. Then, align their competitive strategy with HRM strategy secondly. 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Will the strategic fit between business and HRM strategy influence HRM effectiveness and organizational performance?

Will the strategic fit between business and HRM strategy influence HRM effectiveness and organizational performance? Abstract Purpos...