Relationship between corporate strategy, structure, and the personnel function

Abstract

More and more organizations are feeling the need for a more effective utilization of their human resources. One thus sees that the personnel function has moved from a maintenance role and the line function to a corporate function. However, some organizations have been successful even though the personnel function his been performing a maintenance role. Could it be that there is a lifecycle and milestones in the growth of the personnel function as there has been found to be a life cycle in the growth and development of organizations as a whole. This research was aimed at seeing whether 1. There was a relationship between the personnel function and the style of functioning of the top management; 2. As the company changes its strategy and structure to cope with its changing needs and to meet newer requirements and challenges, the personnel function too changes and grows in its scope and degree of formalization. Based on an in-depth study of four Indian-based diversified companies, the following were the conclusions arrived at: Proposition I The personnel function in the first stage of development of the organization follows the informal structure and style of the top management. Proposition II Depending on the degree of formalization in the style of management of the top executive and the philosophy of the top managements regarding the management of human resources of the company, the personnel functions get developed and gain importance in a stage II functionalized organization. Proposition III Whether formally or informally the personnel function in a divisionalized structure gets broader in scope and takes on a more integrated approach. Proposition IV The personnel function follows the company's strategic style and structure. As the company moves from an informal strategy, structure and management style to a formalized strategic planning and divisionalized structure with semi-autonomous units, the personnel function to moves from an informal maintenance function to a formalized integrated function involved in planning for, as well as maintenance of, in company personnel.