Gaining competitive advantage and business success through strategic HRD: an Indian experience Biswajeet Pattanayak

Abstract: This article offers a case study of a strategic HRD initiative to enhance organizational performance. Based at a corporation in India,the initiative involved an action research component to understand factors hindering current performance and HRD interventions aligned to business strategy to address the identified factors. The case study illustrates the potentials for taking a strategic approach to improving performance through HRD.

Organizational strategy is basically concerned with the creation of missions and the setting of organizational objectives. Specific policies are then formulated and implemented to achieve those objectives, including policies, procedures, methods and programmes relating to the organization’s human resources. Those policies and practices should be linked to business objectives and corporate strategy (Pfeiffer 1998), with human resource development having a key role in ensuring the strategic alignment of training and development, career development and cultural change to the overall performance improvement of the organization. Strategic HRD therefore aims to leverage and/or align HRD practices to build critical organizational capabilities that enable an organization to achieve its goals (Ulrich and Lake 1990).

Aligning HRD to the business is an essential component of achieving HRD effectiveness (Rao 1999). One integrative framework for achieving  this (offered by Yeung and Berman 1997) used three paths through  which HR practices can contribute to business performance: building organizational capabilities, improving employee satisfaction and shaping customer and shareholder satisfaction. This framework was used in the following case study in strategic HRD in an Indian corporation.

This case study is based on the implementation of strategic HRD in the  Essar Group,one of India’s leading business conglomerates with an  asset base of over US $4 billion.The group is committed to the development of core sector and infrastructure business in India and abroad, and is involved with steel, shipping, oil and gas, power and telecommunications. One of its companies, Essar Steel, is currently the second largest in the Indian private sector, producing 2.2 million metric tons per annum (MMTPA) of hot rolled flat products in Hazira (Gujarat, India).

This case study concludes with a reflection on the situational nature of strategy formulation and its implications for generalizing the lessons from this study to other settings. Strategy formulation is generally company specific, and what might be good for one company might not be good for another. There is no one best organizational design, management style or method of working. Rather, different patterns of organization and management are most appropriate in different situations (Pfeiffer 1996), with the most appropriate strategy being determined by unique internal characteristics (organizational dynamics, culture, politics, etc.) and by environmental opportunities and threats.

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Gaining competitive advantage and business success


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