Corporate strategy and the role of HRM: critical cases in oil and chemicals

Abstract

Human Resource Management in the literature has been considered a second‐ or third‐order strategy largely related to implementation. Argues that the process of strategy formulation and evaluation has not been correctly conceptualised. The evidence that HR issues are fundamental to business is compelling at the level of unit labour costs, but whether they are fundamental to the strategy process has remained highly questionable. The paper suggests that a favourable HR environment has to be established before the various strategic choices can be analysed. Empirical research in two UK oil and chemical companies provides evidence that the effect of HR issues on corporate strategy is understated. The assumption of a top‐down, linear model of strategy formulation, whether positionally‐ or resource‐based, is questioned and an alternative conception is discussed.