Alignment between strategy and organization is critical to meeting the firm’s strategic objectives because organization and strategy are interdependent. In strategic HRM organizations seek to link human assets to the strategic needs of the organization. As a company seeks to deepen its current advantage or build a new competitive advantage, it has to change the way it deploys its resources. This implies that if the organization follows a differentiated, quality enhancement strategy then selection, promotion, rewards and so on should be oriented towards hiring and rewarding the creative and innovative members of staff while for an organization that is following a low-cost strategy its HR policies should be geared towards staff that are good at following rules, maintaining discipline and cutting costs. The firm must create an organization that supports the changes it needs to make. In this discussion, we shall compare the HR practices of Ryanair and 3M to illustrate these differences.
3M has been able to retain its market leadership through technological innovation, market responsiveness, and institutionalized entrepreneurship. Being a company that pursues a differentiation strategy, 3M manages its HR practices in a way that ensures entrepreneurs are rewarded and recognized, in both monetary and non-monetary terms. The organization also offers a dual-ladder career track. This allows 3M employees to continue pursuing their professional interests because they are guaranteed of progress irrespective of their field. Most of all, at 3M managers, are taught to support employees who are involved in failed projects by quickly moving them on to something so as not to kill their initiative. Employees are also granted “bootleg” time to spend on projects of their own interest that may not be directly related to their day-to-day activities.
On the other hand, Ryanair is an airline company that utilizes the low-cost strategy as a competitive advantage. This implies that for Ryanair to remain competitive it must provide incentives to its staff that reward implementing cost-reducing process innovations.
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