Strategic Human Resource Management TABLE OF CONTENTS

In the IKEA.|| |Level of |There are 2,08,000 workers|There are 74,400 employees | |Engagement|in the company, because of| |fun and passionate that|organization |, because of| |are most essential values |theory |transparency and integrity | |to workers in IKEA. In the IKEA.|| |Level of |There are 2,08,000 workers|There are 74,400 employees | |Engagement|in the company, because

Strategic Human Resource
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
A. Operations of NIKE and IKEA.........................................................................................1
B. Types of HRM strategies in IKEA and NIKE...................................................................2
C. HRM practices...................................................................................................................4
D. Barriers in HR....................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic Human Resource Management can be determined as the linking of human
resources with important objectives in relation to improve execution and develop organizational
culture that foster invention and competitive advantage (Armstrong and Taylor, 2014). This case
study is based on IKEA and NIKE. IKEA is the multinational group which design and sells
ready-to-assemble furniture, kitchen appliances and home accessories. NIKE is multinational
firm that is manufacturing and selling of footwear and other apparel equipment. These reports
will comparison between operations, HRM strategies of both organization.
MAIN BODY
A. Operations of NIKE and IKEA
Operations IKEA NIKE
Key Stakeholders Shareholder, employees,
government, competitors,
suppliers and consumers etc. in the
IKEA.
It involves social society, industry,
consumers, government and
shareholder.
Level of
Engagement
There are 2,08,000 workers in the
company, because of fun and
passionate that are most essential
values to workers in IKEA. The
employees of IKEA are engaged
who are all working with passion
and feeling connected to their
company as well.
There are 74,400 employees
working in the organization,
because of transparency and
integrity which are most important
values to employees in Nike. The
employees of Nike are highly
engaged as they are given free
platform where they could express
themselves with innovation and
productivity.
Legal and regulative
Areas
Company has faced some cases of
tipping over and death caused by
their furniture. So due to this trade
union is pressurising management
of company to lay down strict
The National Minimum Wages
regulations affected on company
(Boxall and Purcell, 2011).
1

regulations against it.
Political System Company produced some furniture
goods for prisoners, however the
revelation affected its international
brand image and reputation. IKEA
will be making more number of
products in UK to lower down
impact of Brexit in country.
Nike tries to enter into Asian
market, so that it government
policies and taxes directly affected
on profitability of their brand. Nike
will also be feeling the burden and
pressure within macro environment
after Brexit.
Nature of employees
work.
There are highly skilled employees
are worked by fun and passionate
in the company.
There are high skilled employees
are worked by transparency and
integrity in the firm.
B. Types of HRM strategies in IKEA and NIKE
1) Theory of Soft HRM:
In soft HRM, employees are treated as essential resources and as source of competitive
advantage in the business. Workers are proofed as single and their needs are planned
accordingly. The direction of soft HRM is to concentrate on wants, their roles, rewards and
motivation of employees. There is strong and regular two way communication and also focus on
long duration manpower planning. Nike is following soft theory of HRM theory as all employees
are been managed as considering very important resources for growth of company.
Theory of Hard HRM:
In hard HRM, workers are treated as resources like machinery, buildings etc. in the
organization. The focus of hard HRM is to determine manpower needs. According to this, they
are hiring, moving and firing (Bratton and Gold, 2017). There is limited communication from top
down and little management or delegation. In this context, there is short terms modification in
employee numbers. They are following taller structure of organization.
In order to that, IKEA adopt hard approach to HRM, because this can expect to outcome
in more cost-effective manpower where decision making is quicker and directed on senior
manager. Firm adopting truly hard theory expect to suffer from large absenteeism and staff
turnover and lower successful hiring. As compared to that, NIKE follow soft theory to human
2

resource management that make good business case for theory that rewards employees execution
and motivates them more effectively.
2) High Commitment (HC) HRM:
High commitment is also known as high performance working system, high involvement
HRM. The high commitment human resource management raised effectiveness of company by
making conditions. In this, workers become highly engaged in the company and work hard to
achieve the goals of organization.
Criteria IKEA NIKE
Employee involvement,
participation
Employee is highly involved by
passion and fun in the IKEA.
As compared to, workers are
involved by transparency and
integrity in the NIKE.
Self-managed and team
work.
Worker is self-managed and
highly passionate for their work
(Wright and McMahan, 2011).
As opposed to, employees are
working team by transparency in
the workplace.
Extensive training,
learning and
development
There are limited needs to give
extensive training and
development of employees of
IKEA.
As compared to, Nike's employees
more requires for training and
development for working self-
managing work.
Work life balance In the IKEA, employees are
easily balanced their job role,
their personal responsibility and
family life, because they do not
dependent upon their superior
and managing their itself.
As opposed to, it is difficult to
balance job role, family life to
employees of NIKE, because, they
are highly dependent on overall
team work.
3) Best human resource management fit for organization
Nike and IKEA adopt Porter's competitive advantages model in relation to cost reduction
and enhancement of quality of product and services of each firm.
Basis IKEA NIKE
3

Cost Advantage IKEA need to focus on quality of
furniture and other product that aid to
improve their reputation. This help to
reduce cost and competitive
advantage.
Nike requires directing on
quality of footwear and other
accessories that assist to
improve reputation and
competitive advantage
(Brewster, Chung and
Sparrow, 2016).
Differentiation
Advantage
Company also focus on target
consumers on broad and narrow
segment by more invention.
Firm also directs on target
customers on broad and
narrow segment by more
innovation.
C. HRM practices
1) Level of functioning of HRM
IKEA adopt strategic human resource management, because it is based on soft HRM. HR
manager only focus on high commitment and involvement by employees in the competitive
advantage. Therefore, strategic human resource manager operates at higher level of management
of employees. Thus, employees are more committed and involved by clear transparency and
integrity in the IKEA.
On other side, the level of functioning of human resource management is very low in the
Nike. In this context, HR manager follow hard HRM approach for focusing on HR level
outcomes (Jiang and et.al., 2012). They are treated their employees as resource such as
machinery, buildings etc. the function of HR manager at relatively lower level of organization.
2) Organised function in Nike and IKEA
Ulrich’s model:
Nike follows Ulrich’s model to focus on people and roles. Human resource manager
build functions but rather than around roles. There are four roles determined as key elements of
HR division such as
HR Business Partner: The human resource business partner is the HR point-of-contact
for these individuals and channels that most internal members of Nike. It utilises to communicate
with HR department as included by Fitz-Enz and Davidson, (2012). They give feedback to inside
4

consumer about quality of their experience, recognise top talents within company. This assists in
promoting overall productiveness in the firm.
Change Agent: It is needed to expand, evolve and any kind of change its objectives, so
that change agent in HR role that interacts those changes internally in the Nike. This person
manages training chances, so that workers learn new skills which are necessary for changing
goals of business or job roles.
Administration Expert: The administration role within human resource is responsible
for number various kinds of tasks. According to Pay, (2018) these people follow changes in
legislation, rules, occupational health and safety regulations and trade law. This help to adapt in
order to stay complaint with those legislations in the Nike.
Employee Champion: HR department is also responsible for staying aware of interest of
workers and making sure of their protection in Nike. Employee Champion is the role in charge of
standards of employee morale and satisfactions as well as utilizing the info to make positive firm
where person want to work.
Three-legged model:
IKEA follow three legged models for achieving the strategic goals and objectives of
business. There are three functions into three parts which are following such as:
Centres of expertise: This specialize of high level advice and services on key human
resource activities in the provision of IKEA. The most common expertise fields are training and
development, recruitment, rewards and employees relations in the company.
Strategic business partner: This work with line manager to aid them reaches their
objective by effective strategy for simulation and performance in the IKEA. They are rarely
integrated in business unit or divisions said by Bamberger, Meshoulam and Biron, (2014).
Shared service centres: These handle all the everyday transactional services across the
business. These involve some actions as hiring, absence monitoring and advice on dealing with
employee issues like discipline and absenteeism in the IKEA. A centre utilise call-centre
technology and give self service facilities for line manager and workers though an intranet
system.
HR outsource activity
Human resource outsourcing is the procedure in which certain human resource activities
are outsourced to outside partners that aids to get advantage of specialized abilities, reduce cost
5

and allow human resource to direct on strategic initiatives. In this context, NIKE and IKEA are
not outsourced any kind human resource activities (Boxall and Purcell, 2011).
3) Role of line manager in Nike and IKEA
The role of line manager in human resource department is to supervise different
functional areas such as employee relations, compensation, training and development, health and
safety etc. in the Nike and IKEA. Line manager is responsible for managing the labour union
contact, explaining clauses in agreement in the both organization. They are also managing
company’s benefits like health insurance coverage and short as well as long term disability. They
also help in providing proper details in context to inventory management in way of ensuring
minimum wastage. If all these roles are performed by line managers then it will be possible for
company to successfully compete within markets.
4) Measuring contribution of HR in Nike and IKEA
The human resource is highly contributed in motivation, productivity and performance of
employees. But, it is necessary to measure contribution of human resource in the NIKE and
IKEA. This help to success of business and retention of employees (Bratton and Gold, 2017). If
HR manager is giving training and development appropriately, so that employees are worked
long term duration and effectively in the workplace. In order to that, HR manager is highly
motivated to their employees and planning of workforce that help to develop skills and
knowledge as well as increase the productivity of business.
Along with this, both the companies have stable human resource department which
contributed for smooth running of all the operational activities. The managers focus on
recruitment processes and try to establish it on basis of transparency and reliability. This led to
hire skilled and knowledgeable people who in return contribute in improving the profits'
generation and revenues management (Bailey and et.al., 2018). Moreover, they implemented a
reward system and unbiased communication channels to maintain the engagement of employees.
Additionally, it emphasized on performance management of all the employees, staff and others
to bring consistency in performing the operations at all the levels.
D. Barriers in HR
There are many barriers in human resource and implementation of project such as lack of
knowledge, lack of identification with management goal, disdain for HR work and so on.
Lack of Identification with management goal by Nike:
6

It is necessary to identify goals of management in the workplace. If the NIKE does not
identify the management objectives, so that, HR do not plan manpower, implement HR strategies
and practices in the workplace. It is the largest barrier of human resource that directly impact on
execution of business (Brewster, Chung and Sparrow, 2016).
Therefore, HR manager of Nike needs to identify management goals for effective
planning of workforce, their recruitment, training and development in the workplace. This help
to improve execution and develop skills as well as knowledge for working in the organization.
Competing priorities and workload by IKEA:
It is also barrier for human resource to manage and compete priorities and workload in
the IKEA. Therefore, HR manager needs to plan workforce effectively and giving the best
training and development to them, so that employees are working effective in relation to compete
priorities and workload by effective time management (Jiang and et.al., 2012).
Through motivation and developing skills, employees make efforts to compete priorities
and workload in the IKEA. Therefore, company's human resource manager tries to motivate and
improve their performance in the workplace.
CONCLUSION
This report has summarised that IKEA follow hard approaches to increase motivation of
employees and Nike adopt soft theory for focusing on business objective. It can be concluded
that comparison between high commitment HRM that involves Employee involvement,
participation, Self-managed and team work and Extensive training, learning and development as
well as Work life balance by NIKE and IKEA. Furthermore, report has completed that IKEA
more focus on strategic human resource management for achieving strategic goals of business.
As compared to, Nike increases their level of functioning of human resource management for
accomplishing their objectives.
7

REFERENCES
Books and Journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bailey, C. and et.al., 2018. Strategic human resource management. Oxford University Press.
Bamberger, P.A., Meshoulam, I. and Biron, M., 2014. Human resource strategy: Formulation,
implementation, and impact. Routledge.
Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Macmillan
International Higher Education.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Brewster, C., Chung, C. and Sparrow, P., 2016. Globalizing human resource management.
Routledge.
Fitz-Enz, J. and Davidson, B., 2012. How to measure human resources management. Prenada
Media.
Jiang, K. and et.al., 2012. How does human resource management influence organizational
outcomes? A meta-analytic investigation of mediating mechanisms. Academy of
management Journal. 55(6). pp.1264-1294.
Wright, P. M. and McMahan, G. C., 2011. Exploring human capital: putting ‘human’back into
strategic human resource management. Human Resource Management Journal. 21(2).
pp.93-104.
Online
Pay. B., 2018. Human Resources, Dave Ulrich Model, and Document Management.
[Online]. Available through. : <https://www.efilecabinet.com/human-
resources-dave-ulrich-model-and-document-management/>.
8