Business Strategy For True Fit

Human resource departments today have a more distinct, calculated position within organizations, and human resource strategy influences the bottom line. “One of the challenges for HR leaders is convincing executive leadership teams that human capital is one of the most important resources in which the company can invest” (Mayhew, 2014, p.). Subsequently, “this return on investment is an essential part of the argument for including HR as part of an overall business strategy” (Mayhew, 2014, p.). Human resource departments utilize the information given to them from company executives and leaders, coupled with their respective expertise on all things personnel, and they plan and implement staffing concerns for the betterment of the organization. From preparing job analysis, to comparing inventory and forecasting, it is the responsibility of human resources to consider the objectives of an organization and fulfill those goals while operating the specific planning relative to HR.

The ‘‘best fit’’ approach promotes the concept that strategic HR should be inextricably linked to the formulation and implementation of strategic corporate and business objectives (Wilton, 2011). This means that the HR strategy is concerned with matching the employee’s role behaviour with the company‘s mission, values and goals. Wilton (2011) explains this by giving an example whereby if a company‘s business strategy is based on delivering a high quality service, then the HR strategies and policies need to focus on the quality of its employees. This would be achieved by rewarding attitudes and behaviour that match this approach. Boxall and Purcell (2008) support this idea by highlighting that companies may fail if they do not adapt to their environment. The best fit approach therefore aims to improve organisational performance by integrating all activities in such a

Alignment between HRM practices and organizational strategy establishes a coherent system for organizations. There has to be a "fit" between the human resource planning and organizational strategy, Internal fit aligns HR practices with strategic organizational objectives while external fit aligns HR practices with the external environment. The external fit exhibits a more precise fit between quality policy and assertive performance HRM practices (Youndt,

In order to develop a human resource strategy; there must be a linkage of the entire human resource function with the firm’s business strategy in order to improve business strategy execution. The first recommendation

Labour market competition, human resources must have business plans for the future for it to differentiate from other business’s within the industry. If a business

Business environment is facing a rapid change that reminds the business management to focus on its core competencies to survive and sustain in the competitive environment. The core competencies can be developed by strategic human resource management. According to Armstrong (2006) employees are the valued assets for a company. The strategic human resource management is mainly developed in accordance to the fact that human resources need to be managed strategically for the company to enjoy sustainable competitive advantage.

Today 's fast-paced, competitive business environment has resulted in "rediscovery" of the human resource management function as a group that may be able to enhance firm competitiveness and performance by being "strategic" (Dyer & Kochan, 1995; Ulrich, 1997). Strategic Human Resource Management is a term describing an integrated approach to the development of Human Resource Strategy that will enable the organization to achieve its goals (Armstrong, 2005). Whiles strategy is an action that managers take to attain one or more of the organization’s goals. Strategy presents a general direction set for the company and its various components to achieve a desired state in the future. This results from the detailed

‘HR strategy, a ‘people plan’, that will help you ensure you have the right people in your business, at the right time with the right skills to ensure you achieve your business goals’.

Uniqlo is a retail industry which sells high quality casual wear at cheap and affordable prices under the company name of FAST RETAILING CO., LTD. It dominated the world with its presence and as of 2015 it has opened over 1’400 stores in 16 markets worldwide including big economy countries like China and The United States. Other than its flagship stores, they have delved into E-Commerce websites bringing in more profits. Due to the number of stores opened and popularity it has gained it has a big group of workforce of over 30,000 employees. (uniqlo.com, 2015)

Strategic Human Resource Management has been developed to give companies a competitive edge over other companies. Since widespread access to and the use of technology have resulted in tighter margins for maintaining a competitive edge,

The "best fit" approach to managing workers assumes that the managers and workers share a commonality; to work together for a common goal, which is the survival and prosperity of the organisation. For this strategy to work the employees must be able to convey the behaviours and ideas of the management in charge. The best fit approach understands that to manage employees effectively each organisation must be seen as a separate entity and managed accordingly, each business is to be understood as different and is to be managed in a different way. With the best fit model of HRM in place, the strategies of managing the firm's workforce should reflect that of the organisation's mission and corporate objectives, which reflects the classical approach to strategic planning, an approach which became popular during the industrial revolution and was used to tell workers how to do their job in a way that resulted in the most productivity and efficiency. The classical approach to strategy saw that employees were trained only in working their jobs in the most efficient way possible. The view of workers as machines rather than human beings is flawed as it leads to the de-motivation of employees who feel little self worth within the organisation due to having little responsibility and being asked to perform

It is necessary for human resource management to have a proper human resource planning. “Human resource planning involves planning that assure a firm’s needs for employees”, says Madura. She also includes that human resource planning consists of three tasks which are forecasting staffing needs, job analysis (Madura, 2007). Recruiting and selecting the right employee is not enough. There is a necessity to provide continuous training and development to the employees to be more productive and efficient. With great training, it enables the employees to be more innovative, creative, motivated and thus increase their working performance. Training can be through various types such as on the job training, off the job training, job rotation and scholarships.

The "best-fit" approach questions the universality assumption of the best-practice perspective. It emphasizes contingency fit between HR activities and the organization's stage of development, an organization's internal structures and its external environment like clients, suppliers, competition and labour markets (Redman and Wilkinson 2009). HR policy should be minted by the appropriate context of individual employees and therefore support the overall competitive strategy. Aligning HRM practices to strategies can enable companies to create potential competitive advantages (Schuler and Jackson 1987 in Redman and Wilkinson 2009).

Instead, human resource practices of ‘best fit’ are more effective when they are designed to fit certain contingencies in the organization’s specific context. Consequently, ‘best practice’ is perceived to improve performance within an organization when a select bundle of policies is implemented and the employees are managed more efficiently. Jeffrey Pfeffer’s (1994) work under this conception offers a list of seven practices assumed to be most beneficial to an organization for achieving competitive advantage ‘through people’. (1) The importance of employment security is emphasized because it is unrealistic to expect such hard work and commitment from employees without some expectation of security on their part. (2) Selective hiring is a source of sustainable competitive advantage through its “capturing” of particularly exceptional human talent (human capital). (3) Self-managed teams require efficient teamwork, and are seen as a route to achievement of more creative solutions. Employees deserve to be rewarded for

Hard HRM, on the other hand, stresses 'the quantitative, calculative and business-strategic aspects of managing the "headcount resource" in as "rational" a way as for any other factor of production', as associated with a utilitarian-instrumentalist approach (Storey 1992: 29; see also Legge 1995 b). Hard HRM focuses on the importance of 'strategic fit', where human resource policies and practices are closely linked to the strategic objectives of the organization (external fit), and are coherent among