The Role of Corporate Culture in Strategic Human Resource Management

This article examines the impact of corporate culture on the adoption and implementation of strategic human resource management in Chinese enterprises. It discusses the relationship between corporate culture, SHRM, and firm performance.

Journal Article Reviewed
Wei, L., Liu, J., Zhang, Y. and Chiu, R.K. (2008). The Role of Corporate Culture in The Process
of Strategic Human Resource Management: Evidence from Chinese Enterprises. Human
Resource Management, 47 (4). Pp. 777-794.
The article addressed the importance of organization culture that aligned the process of human
resource management with organization strategies, with a special focus on Chinese firms. As
organizations increasingly adopted strategic human resource management, it became
indispensable to account for the factors that played crucial roles in the adoption and
implementation of strategic human resource management process (Carroll and Wagar, 2011).
The article addressed the research gap between existing research focused on human resource
management, their practices and significance in firm’s performance and no organized research
for the factors contributing to the SHRM process and firm performance. Two hypotheses were
proposed and tested. The authors considered group, developmental and hierarchical culture as the
elements of the corporate culture.
It was found that corporate culture facilitated SHRM adoption and implementation which had a
further positive influence on firm performance. There were variations in the degree of the
significant impact of various cultural dimensions (group, developmental and hierarchical) on a
firm performance. The second hypothesis was not supported by the model fit indices.
The findings of the research were in alignment with the proposed hypotheses. Human resource
management, when aligned with organizational strategy, developed competitive advantage
(Harrison and Bazzy, 2017). Research in the recent past supported the fact that organizational
culture plays an important role in the successful implementation of SHRM (Denison and Mishra,
2013). It is the culture and values of the organization that motivates the employees to excel and
perform in calibration with the organizational strategies for better firm performance and
productivity (Kang and Kim, 2011). Another important factor is the leadership style which
greatly influences the organizational culture and firm performance (Schein, 2011).
This was a very extensive study. It was written in an organized way. The literature review is
exhaustive which could clearly identify the research gap. There was a definite requirement for
identifying the research objectives and a research framework. There should have been a mention
of the sampling technique. Data analysis was done using the appropriate statistical tools. The
findings were later supported by other researchers also. Overall the article added value and
significant contribution to the field of research.

REFERENCES
Carroll, W.R., Dye,K. and Wagar, T.H. (2011). The Role of Organizational Culture in Strategic
Human Resource Management. The Handbook of Organizational Culture and Climate, Pp.
423-438.
Denison, D.R. and Mishra, A.K.(2013). Toward a Theory of Organization Culture and
Effectiveness. Organization Science, 6 (2). Pp. 204-213.
Harrison, T. and Bazzy, J.D.(2017). Aligning Organizational Culture and Strategic Human
Resource Management. Journal of Management Development, 36 (10). Pp. 1260-1269.
Kang, M. and Kim, H.(2011). Influence of Strategic Human Resource Management on
Organizational Culture and Organizational Citizenship Behavior of Private Facility Security
Guards. The Journal of Korea Contents Association, 11 (4). pp. 389-403.
Schein, E.H. (2011). Organizational Culture and Leadership: A Dynamic View. Human
Resource Management. 24 (3). pp. 370-375.

Journal Article Reviewed
Cretu, R.F. (2012). Corporate Governance and Corporate Diversification Strategies. Review of
International Comparative Management, 13 (4). Pp. 621-635.
The article addressed the causal relationship between corporate governance and diversification
strategies of a firm. The author identified that with reference to diversification strategies, many
elements of corporate governance and organization value are interlinked. The author elaborated
the concept of corporate governance by mentioning the major factors responsible for the failure
of an organization. The theories of corporate governance, the principles and advantages were
explained. The diversification strategies at a transnational level were discussed. There was a
mention about the classification of organizations based on the diversification strategies,
distinguishable features of diversified firms and concentrated firms.
The article also gave insights about the role of organization value and corporate governance
structure in relation to diversification. The hypotheses explored the major drivers leading to the
strategy of diversification with respect to agency conflicts, governance structures, and
diminishing firm value. The conclusion summarized the reasons by grouping them under the
factors namely economic synergy, market dynamics, financial growth and stability, and overall
growth of the organization.
The study explored the relationship between corporate governance and an organization’s
diversification strategy. It was a theoretical study which discussed the existing theories and
principles. Many empirical studies validated that unrelated diversification is the result of internal
organization governance structures and mechanisms (Shen and Gentry, 2012). The author
mentioned Friedman’s theory of no governance, as profit-making is the right of the businesses.
But diversification did not always violate governance principles as, in dynamic environment
firms opted for diversification for sustenance (Song and Wang, 2011). It was also empirically
proved that degree of ownership, the structure of corporate governance, size of the organization
board have a significant negative influence on diversification prospects (Song and Wang, 2011).
Another empirical study found a negative relationship between diversification and state
ownership (Nguyen, 2018). Diversification prospects were enhanced when firms had
independent boards compared to insider-dominated boards (Gleason et al, 2011).
The research definitely added value and made a significant contribution to the field of research in
the context of corporate governance and diversification. Since this is a theoretical paper with no
empirical validation, the literature review should have been more extensive. Many researchers
added credibility to the findings of this research with empirical studies. Overall the article was
structured nicely and written in a comprehensive manner.

REFERENCES
Gleason, C., Inho, K., Yong, K. and Young, K.(2011).Corporate Governance and
Diversification. Asia Pacific Journal of Financial Studies. Vol. 41.
Nguyen, T.X. (2018). Corporate Governance and Conglomerate Diversification Strategy:
Evidence From Vietnam. International Journal of Emerging Markets, 13(6). Pp. 1578-1596.
Shen, W. and Gentry, R.J.(2012). A Cyclical View of Relationship between Corporate
Governance Structure and Strategic Management. Journal of Management and Governance,
16(4). Pp. 727-735.
Song, H. and Wang, F.(2011). Research on Relationship Between Corporate Governance
Structure and Diversification Strategy. International Conference on Management and Service
Science, Wuhan, 2011. pp.1- 4.

Journal Article Reviewed
Grundy, T. (2006). Rethinking and Reinventing Michael Porter’s Five Forces Model. Strategic
Change. 15. Pp 213-229. Available at: http://www.interscience.wiley.com [April 24, 2019].
The article critically examined the scope and practical utility of Porter’s Five Forces Model in
real time business environment. The author emphasized that though the model had been an
integral part of the business management curriculum all over the globe since its inception, in real
scenario it never found a meaningful application. The author also mentioned that compared to
Porters’ five forces model other analysis like SWOT analysis or PESTLE analysis gained more
popularity and had a higher level of awareness and application. This model was positioned as a
theoretical model based on microeconomic theory which made it highly prescriptive and rigid.
This further reduced the scope of its practical implementation. Many academics criticized
Porter’s model because of the lack of empirical validation and consistency (Colvin, 2012).
Porter’s model failed to close the gaps between PEST and SWOT analysis. The article stated that
Porter assumed the five forces to be inter-related and dependent on each other. Other literature
works contradicted to this stating that Porter assumed that the forces were not related and did not
interact (Hubbard and Beamish, 2011).
The author had discussed the interdependence among the five forces in detail. The relationships
between some of the forces were elaborated in relation to niche industries like the funeral
industry and health club industry. This did not add much credibility to the author’s claim as the
scope of generalization is limited for these two industries.
Some academics questioned the choice of the five forces due to lack of empirical validation and
no consideration of ‘time’. This increased the necessity to create new models with due
consideration of time which would help the managers with better decision making in the
dynamic environment (Dulcic, et al. 2012). Empirical studies found that only twenty percent of
the market fluctuations pertaining to growth, market share and profitability, could be accounted
for by these five forces (Grant and Butler, 2011).
The article gave in-depth insights and the discussions added value to the existing criticisms of
Porter’s Model. The author suggested how the model could be redefined for a wider scope of
implementation by the managers. Though it was not an empirical study, yet it provided the
scope for further investigation in the field of research.

REFERENCES
Colvin, G. (2012). There Is No Quit in Michael Porter. Fortune, 166(7). Pp. 162-166.
Dulcic, Z., Gnidic, V. and Alfirevic, N.(2012).From Five Competitive Forces to Five
Collaborative Forces: Revised View on Industry Structure –Firm Interrelationship. Procedia-
Social and Behavioral Sciences, 58. Pp. 1077-1084.
Grant, R. and Butler, R.(2011). Contemporary Strategic Management: An Australian
Perspective. Australia: John Wiley and Sons.
Hubbard, G. and Beamish, P. (2011). Strategic Management: thinking, analysis, action.
Australia: Pearson Education.