Relationship between Business strategy and Human resource strategy

This report discusses the relationship between business strategy and human resource strategy and the impact on organizational success. It also explores different models and practices of strategic human resource management.

HRM 325 STRATEGIC
MANAGEMENT HUMAN
RESOURCES

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
Relationship between Business strategy and Human resource strategy......................................3
Vertical Integration and Horizontal Integration...........................................................................4
Strategic Human Resource Theory and Model............................................................................6
Contingencies, Universalist and Resource based view approach................................................7
HR practices for Performance Management and Reward............................................................8
TASK 2............................................................................................................................................9
Nature of employment relations...................................................................................................9
Theoretical perspectives of employment relations....................................................................10
Recommendation.......................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic human resource management is a connection between an organization strategy,
objectives and goals with company’s human resource. It is the process of identifying the current
and future needs of manpower requirement in an organization to achieve its goal. Its aim is to
advance flexibility in the company, accounts to innovation and to get competitive advantage of
winning over the competition. Sainsbury is the second largest chain of supermarket in UK which
provides varied range of groceries product, clothing to home-wares electrical products and
others. Present report will address to various models and practices of SHRM. It will give a brief
description on the relationship between business strategy and human resource strategy and will
also address to theoretical perspective of employment relations and roles of the actors within the
employment relationship building.
MAIN BODY
TASK 1
Relationship between Business strategy and Human resource strategy
Business strategy refers to the decisions and action taken by an organization in order to
achieve the desired goals and objectives. These objectives are mainly in terms of high sales
volume resulting in high profitability which in turn accounts to growth and development of the
organization. Key component of linking business strategy and human resource strategy is culture
of clear communication and trust within the company. Relationship between the above two
strategy exist when the employees of Sainsbury are encouraged to be involved in various aspects
of business strategy which develops higher level of respectability and trust between management
and employee’s of the company.
Human resource strategy is a part of Business strategy which refers to the overall plan of
managing human capital to align it with different business activities. These strategies set the
directions for all the key areas of HR such as recruitment, hiring, performance appraisal,
compensation and many others. This is the strategy which helps Sainsbury in achievement of its
objectives because it has realized that most viable resources are its employee's which are under
the control of HR. These strategies helped the company in alignment between different HR
function which in turn helped Sainsbury for effective achievement of its goals. (Gupta,2016).

It is simply said that HR strategy is Business strategy as without human capital no
Business can turn out to be successful. Human dimension of the company's strategy represents
the potential value of its workers for gaining organizational success and achieving the goals of
organization.
Vertical Integration and Horizontal Integration
Vertical integration refers to the integration wherein Sainsbury can take full control over
more than one stages in production and distribution of raw materials or can be understood as
company taking full control over the supply chain of its product. Usually company opt for
vertical integration to ensure that it has full control over supply of raw materials to manufacture
its products. This integration can help Sainsbury in integrating with the units from where its raw
materials are supplied which is termed as backward integration or with the distribution channels
that carries its product and services to the end customers which can be termed as forward
integration. Mix of both forward and backward integration by a company is termed as balanced
integration. Company can wish to implement vertical integration when it feels suppliers and
distributors are unreliable in terms of charging high fees, margins and are unstable.

Vertical integration.2018 [Online]. Available
through;<https://www.mbacrystalball.com/blog/strategy/vertical-
horizontal-integration-strategy/>
Horizontal integration refers to the integration or acquisition of a similar or competitive
business. It is the process of the company for increasing the production of goods and services
within the same part of supply chain. This kind of integration can lead to acquiring monopoly if
the company is successful in capturing the vast market for the same product and service.
Horizontal integration arises when a business grows by acquiring a similar company in that same
industry at the same point of supply chain. This kind of integration is suitable when the industry
is growing, when economies of scale can be achieved which relates to higher production and
when it is felt that competition lack the expertise which the company has already achieved
(Pérez-Lara,2018).

Horizontal integrtaion.2018[Online]. Available
through;<https://www.mbacrystalball.com/blog/strategy/vertical-horizontal-integration-
strategy/>
Strategic Human Resource Theory and Model
Organizational Human Capital and change Theory
This theory helps in assessing the evidence for the value and importance of the people
towards organizational success. The theory suggests that education and continuous training
increases the productivity and efficiency of workers by imparting useful skills and knowledge,
which in turn helps in raising worker’s future income by increasing their lifetime earnings. This
theory asserts that human capital is the key determinant of economic success in all kind of
industries. This theory is closely linked up with Human Resource Management. Human capital
defines set of personality attributes, knowledge, habits and many others considered in labor
performance to contribute to economic value. This theory has given different approach to human
capital and how it contributes towards productivity of the organization. This theory has viewed

as a source of value in effective organization which states the development of human resource
for achievement of organizational goals (Uysal, 2020).
Change theory states that company pass through a series of steps as they go into the
process of changing. When certain steps are being recognized by Sainsbury, companies strategies
are made which can be matched to promote change on various points. It states that each step
requires certain strategies which are adopted by Sainsbury to implement and sustain with the
changes prevailing in the marketplace.
Basic concept of this theory is the company should be aware of the problems which can
come in future and what are its possible solutions. It includes decision required to adapt to
change and modifying the organizational structure to accommodate with change. This theory
helps in controlling various costs related to management, helps the company in reducing the
stress level of its employees and also help in aligning organizational values with the operations
to achieve company's objectives.
SHRM Models-Models of SHRM are approach to manage people of the company that support
long term goals of company with overall planning and coherent framework. It includes:
Standard Casual model of HRM-
It states that the casual chain in the company that start with the business strategy and ends
through the HR processes with improved financial performance. This model thus shows that how
Sainsbury HR activities are aligned with organizational strategy in order to achieve its goals. It
says that HR practices include hiring, training etc which lead to certain outcomes that are quality
output, commitment and many others which in turn lead to improvement in internal performance
resulting in the productivity of the company.
The HR value chain model-
It states that everything in the HRM of the company can be divided into HRM activities
and outcomes as Sainsbury HRM activities can be measured using HR metrics which says
cheaper the company hire, faster it trains better. Outcome says the goals which the company tries
to achieve with its HR activities which includes employees satisfaction, motivation, retention and
others which lead to achieving goals of the company like profits, market value,share,customer

satisfaction and others where HR activities defines the efficiency of company, outcomes defines
effectiveness and objectives defines the impact of activities and outcomes.
Contingencies, Universalist and Resource based view approach.
Best fit/ Contingency approach states that HR strategies of Sainsbury become more
effective when it is linked with surroundings of the company which can be internal as well as
external. This approach seeks to align employee's of Sainsbury with the competitive strategies of
business to generate increased performance. This theory says one-size-fit approach of the
company is inappropriate as effectiveness of companies HR practices are successful in the
context in which they are applied.
Benefit of this approach is it is dynamic in nature which changes according to the
situation where the management of the Sainsbury can change policies according to the situation.
Limitation of this approach is it is a complex approach as the suggestion of this approach is very
simple but when it comes to practical it becomes more complex in nature.
Best practice/Universalist approach states that certain bundle of HR activities exist which
are universally supported in improving the performance of the company in reaching a
competitive advantage. This are the activities adopted by Sainsbury irrespective of company
unique nature which it possesses.
Benefit of this approach is it helps the company in reducing the cost which can be in term
of not adopting to new practices and becoming more efficient with the existing processes.
Limitation of this approach is it is monotonous approach that follows the same HR practices with
no innovation resulting in the situation where company cannot adapt to change resulting the loss
of the company in marketplace.
Resource based approach is approach which focus on internal resources of the company.
This approach explores the ways in which company's human resource provides sustainable
competitive advantage which is best explained under VRIO framework by knowing how human
resource can create Value, rarity, Inimitability and an effective organization.
Benefit of this approach is it identifies characteristic which can create competitive
advantage of the company in terms of value, rareness of the products of the company. Limitation

of this approach is it assumes that the product market is stable and ignores the real value of the
resources. It is also difficult to determine the actual level of analysis as resources of the company
are broad in nature
HR practices for Performance Management and Reward
Today organization are showing high degree of commitment towards reinforcement of
performance management and reward which are being aligned with other HR practices and the
goals of the organization in order to attract, retain and motivate its employees.
The practices adopted by Sainsbury includes defining and communicating company goals and
determining performance objectives of employees which company clearly outlines as it helps its
employee know what actually is to be done. Includes providing continuous performance
feedback to let its employees know what are the areas lacking and need to be improved upon.
One of the best HR practices adopted by Sainsbury to foster effective performance
management& reward is by utilizing peer reviews also known as 360-degree reviews as this
reviews helps to praise the co-workers and highlight positive aspects of their performances as
well point out areas of improvement (Atman,2017).
Company also provides recognition as it believes that the best way to guarantee results in the
workplace is to implement reward and practice preemptive management as it simply means that
its employees clearly know what is being expected out of them.
Sainsbury sets up regular meeting for its employee where the company discusses the outcome
and results achieved where the senior team members meet up with the subordinates and see how
things are going in accordance with the desired or set goals and objectives. Company can
improve upon its performance management by preparing and training its employees to fullest,
which can be through proper performance planning and creating an ongoing process to achieve
the goals.

TASK 2
Nature of employment relations
There must be strong employment relations in a business which wants to have a strong
base and reputation for themselves in the market. The focus of the business must be on the
employees so that the productivity and standards of the business overall can be improved
accordingly. The managers and leaders of the business work on this factor so that there is going
to be a common ground for all the employees and employers in the company and there is a trust
bond which is going to make the organization benefit from it (Diagnose, King and Tienanmen,
2017). The employees have to understand one another so that there is going to be better
functioning and for that the company will only have to try their best so that there is going to be
good understanding. The managers and leaders have to be helpful in the company so that there is
going to be good functioning and the company will be able to operate effectively.
The company works in the market efficiently because there is a trust relationship which is
maintained with the employees of the company which makes the functioning effective. The
competition in the market is increasing which is why it is very important for the company to be
able to operate effectively in the market and without the employees support the organization will
not be able to do so. The training is also provided to the employees and without good relations
the employees will also not take the training and development seriously and the company is not
going to benefit from this factor (Jabber and Hussein, 2017). There are a lot of benefits which the
employees of the organization are also provided by Sainsbury so that the relationship is going to
be maintained in the organization for a longer run.
There are a lot of conditions which are present in a business and they have to be followed
so that there would be good functioning and the organization will be able to operate effectively.
The existing performance of Sainsbury is very effective and good for a long run but with the
changes which are coming in the market be it regarding the technology or any other aspect the
company will have to find ways to be able to maintain the balance there (LAJEVARDI,
MOLLAJAN and Shakespeare, 2016). The workplace of the organization has to be healthy so
that the organization will be able to operate effectively in the market so that there is going to be
good increase in the relationship maintenance. There are a lot of rights which have to be

obligated to Sainsbury to follow so that the company can have higher reputation in the market
and the organization will be functioning effectively in the market as well.
Theoretical perspectives of employment relations
Marxist theoretical perspective of employment relation is on the unending struggling of
the class which is not a good factor for the organization. The businesses in the market must have
a balance in the internal working in the organization. There has to be strong values and beliefs
which the organization must follow so that there is going to be better operations which can take
place (Hire and eternal., 2016). There are a lot of conflicts which rise in the organization and
they must be controlled so that there is going to be better operations which can take place and the
business will be able to operate effectively. The capitalism in organizations must stop so that
there is going to be better operations and more the involvement of the employees more ideas and
creativity which can come out of the organization adding unique identity for themselves in the
market. There is a lot of pressure on business to increase their profits so that the costs rise can be
cut off by the business in market.
The promotions have to be done of the employees and also there has to be good
communication which needs to be present so that there is going to be good functioning and
higher results. The conflicts in the business have to be resolved very quickly in the market so that
there is going to be good functioning and clarity in work will also be present which is very good
for a long run. There are high objectives and goals which are present in the market for the
businesses which need to be achieved making the functioning better of the company. The
employees of the organization have to give their feedbacks and also their take on the decisions so
that there are better outcomes which can be moulded according the employees as well. The
pressure must reduce on the employees who are going to result in higher profits since they will
be able to focus and make the organization have higher functioning. The company should always
have ways to be able to survive in the market even after so much of competition which is coming
up in the market (RAJABI, 2018). Employees with good relationship are going to make the
working environment healthier and the company will be able to operate effectively even after all

the conflicts. There has to be good focus and for that they have to have good surrounding in the
business.
Recommendation
At all the levels of decision making the organization in the market must consult the
employees and take feedbacks from them. This is going to be very helpful for Sainsbury to be
able to maintain their reputation in the market because till the employees are not going to be
satisfied then how will the products be improved and maintained as well. Sainsbury has
developed a brand image for them in the market by providing the customers with the best of
products and services and it is very important for the company to maintain that so that there
would be good sales and profit margins. Employees have a different take and new ideas as well
which can generate and that would be very good for a long run of the organization in the market
(Pavlova and Orlova, 2016). There has to be fair and equality which needs to be present in the
organization so that the employees can feel accepted and motivated for working in Sainsbury
which is going to be good for competing in the market as well.
The employees have to feel motivated enough to be able to function effectively in the
market which is going to make the economic factor of the company increase. The services of
Sainsbury are very good for the customers because the employees are very much motivated and
they want to operate effectively with the right management in the company as well. Labour of
Sainsbury will have to be paid according to the efforts and their working in the organization is so
that there is going to be higher performance which would be present (Baumgartner and Rauter,
2017). Workplace does not need to have a lot of conflicts otherwise the productivity and
operations of the company are going to reduce which is not good for a long run. There has to be
good explanation of the actions which would be taking place in the company with the employees
so that there is going to be transparency and the expectations of the management can be fulfilled
by the employees.
The contracts of Sainsbury has to improve according to the change in market because the
employees have to put in their personal best and if the organization will not be thinking for their
profits then this is not going to function effectively. There are systems which have to be followed

to be able to make the employees have the best as well and not always does an employee’s has to
get everything (Natroshvili, 2019). There must be a good balance which needs to be present in
the company so that there is going to be better operations. The distribution of roles and
responsibilities has to be done effectively so that there is going to be better working and the
employees will know what they have to do and what they must work upon so that the company
would reward them effectively.
CONCLUSION
From the above report it can be concluded that there is a need for business to have a
balanced and well maintained internal environment so that it would impact on the outside with a
good satisfaction level and brand image for the company. There is going to be blind trust and
good productivity which would be present in the company making the organization is able to
adapt to changes very quickly and make the organization have better functioning. The
performance of the company must improve so that they can have higher profitability in the
market and the competition is also rising therefore the organization will have to maintain this
factor. There are a lot of methods which companies in the market can use to be able to make the
performance and internal relationships healthier for the employees and the risk factors will also
reduce to be able to operate in the market effectively and efficiently.

REFERENCES
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Jabbar, A.A. and Hussein, A.M., 2017. The role of leadership in strategic
management. International Journal of Research-Granthaalayah. 5(5). pp.99-106.
LAJEVARDI, S.J., MOLLAJAN, A. and Keshavarz, S., 2016. System Modeling of Human
Resources Strategic Management.
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Pavlova, V.A. and Orlova, V.N., 2016. Human resources in the system of enterprise strategic
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Pérez-Lara, M.,and et.al., 2018. Vertical and horizontal integration systems in Industry
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RAJABI, F.H., 2018. The Impact of Knowledge Management on Organizational Performance
with Regard to Mediating Role of Strategic Activities of Human Resource.
Uysal, G., 2020. Gürhan Model for SHRM: Explorative Study. Uysal, G.(2020). Gürhan Model
for SHRM: Explorative Study. Management Studies.8(1). pp.39-42.
Zehir, C and et.al., 2016. Strategic human resource management and firm performance: the
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Online(S)
Performance Management and Reward Practices. 2020 [Online]. Available
through;<https://www.managementstudyguide.com/performance-management-and-
reward-practices.htm>