SOUTH ASIAN JOURNAL OF MANAGEMENT

HR Strategy: Creating Business

Strategy with Human Capital

By Paul Kearns

Butterworth-Heinemann, Linacre House, Jordan Hill, Oxford OX2 8DP, UK,

Pages: 229, Price: $20
ISBN: 978-1-85617-815-0

H
R Strategy – Creating Business Strategy with Human Capital, primarily
focuses on the role of CEOs and HR Professionals in developing and aligning
an HR-Business Strategy that will merely be focused on the achievement of
competitive advantage through human capital of the organization.

OVERVIEW OF THE BOOK

Paul Kearns in this book “HR Strategy – Creating Business strategy with Human
Capital” examines the prevailing HR management practices and highlights their
transactional implications considering them potentially value added only if formulated
strategically and executed with and through human capital of the organization. Author
criticizes the conventionally designed HR practices as they have become outdated in
the contemporary business world and are merely bureaucratic functions very much
indulged in day to day pursuits of managing people whereas need of the time is a
dynamic strategy to manage human capital in light of organization’s strategic moves.
In addition, organizations worldwide are exposed to increasing worst conditions such
as recession, industry downturn, layoffs and, to perform better in such chaos and
turbulent circumstances, firefighting cannot be the solution but aligning HR strategy
with the Business strategy, he proposes.
“Producing strategy is all about predicting the future or, more accurately, winning the
argument about what the future might hold”(Author of the Book ). Since the book aims to
align HR strategy with the business strategy so the process of this approach will be
initiated by knowing the people who actually strive to achieve organizational goals.
CEOs and HR professionals need to make sure that a “buy-in” for HR-Business strategy
is created among the people and everyone knows it clearly. Day to day pursuits of
HRM will become less effective over time and the only sustainable approach is to

Volume 22
200 No. 4
 BOOK REVIEWS

having built-in HR-Business strategy that will not only deal with the shortcomings of
the operational deliverables of HR function but will also support the future aspirations
and strategic moves of the organization.
Paul Kearns, consistent with Michael Porter’s competitive advantage, is of the view
that every business needs to be competitive in the industry and this could be possible
only if organization plans better than its competitors. And what makes a business
better than its competitors is its HRM capability which enables an organization to use
its people’s strengths and core competencies to achieve strategic goals better than its
competitors. Author further emphasizes on the value creation process that takes place
in organization through human capital-centered policies and practices and formulation
and implementation of business strategy that ensures the value enhancement of human
capital through effective acquisition, development, and retention strategies. The
involvement of human capital in the overall business and HR strategy formulation
and execution process also decreases the intensity of strategic failure rather it helps
organizations realize their full true potential.
After that, the author proposes a framework for the practitioners for formulation of
organization structure that will be fully aligned with HR-Business strategy. Author
introduces 20 ‘Golden Rules’ which are mainly concerned with the role of leadership,
purposes of organization, accountability, power dynamics, and value addition of newly
designed roles for the effective development and alignment of HR-Business-Structure
strategy and alignment. However, the central theme of these rules is that there is no
readymade solution so use your common sense, analyze your own circumstances, and
then develop HR-Business strategy that works best for you, regardless of the fact if it
matches with best practices or not. At this stage author discusses the role of continuous
learning and the need to becoming a learning organization that will continuously
learn and identify gaps and take corrective actions. Author also presents a model to
engineer the organization into learning organization mainly by paying attention to
training & development, professional management practices, and by adopting an
organization-wide strategic focus toward continuous learning and development.
Author also highlights the fact that there is no readymade recipe to manage the
people of the organization. Proposing readymade solutions for issues in people
management is true example of prescribing the medicines by general physician (GP)
before sitting with the patient. Human capital management is all about human
interaction and this is what makes this task the most difficult as people come from
different brought-ups, educational backgrounds, and mental frameworks. Although
the theories and models proposed by researchers for the strategic management of human
capital do contain few implications, but, as per author, they are not more than a magic
pill that at the end of day unknowingly discourages practitioners to get into their own
analysis of any particular problem and development of context-specific customized

Volume 22
201 No. 4
 SOUTH ASIAN JOURNAL OF MANAGEMENT

solution. One fine formula can’t be helpful in people management as human being is
complex and difficult to understand, moreover, diversity happens to be mushrooming
issue in the perspective of globalization so it requires more sophistication and capacity
to adapt according to the dynamic circumstances. Author recommends the concept of
Balanced Scorecard and says, “it tries valiantly to avoid designing competing and conflicting
internal measures and replaces them with a balanced combination of different perspectives”.
Balance Scorecard enables every single function of the organization pulling together
in the same direction using mutually reinforcing measures.
Author further highlights that the formulation of HR-Business strategy has always
been a tricky and risky task. There are chances that the key people involved in its
designing phase may leave at the time of implementation so the organization-wide
clear understanding of what organization will be doing in future is critical. This is the
point where the role of HR department becomes very crucial as this is the only
organization’s function that can interact with people in the organization to take them
on board with respect to organization’s strategic needs and future plans. Generally it is
assumed that HR strategy is meant to support the overall business strategy, however in
this book author is of the strong view that this understanding is no more effective and
there is a need to make sure that Business Strategy and HR Strategy are interwoven
tightly and work in a reciprocal manner. This becomes possible only when top
management i.e. CEOs and HR professional directly look after the entire process of
strategy development and execution.
In the last sections, author highlights the implications of HR-Business strategy in
“green field” and “brown field”, where by green field means new start-ups and brown
field means already running businesses. Author is of the view that it is as easier as
blind folded to device HR-Business strategy in the green fields compared to the brown
field as for running businesses it becomes always hard and risky because of changes
that take place in several areas of the organization i.e. HR philosophy, rewards, culture,
structure, people, philosophy etc.

CONCLUSION & SUGGESTIONS

For CEOs and HR professionals this book has developed substantial arguments to
justify the dire need of strategic thinking and alignment between different functions
of a business strategy with an emphasis on the people dimension. Given the rising
complexity and turbulence in environment it has become hard for organizations to
survive and grow with conventional thinking or globally best practices. CEOs and HR
professional must understand the interrelationship between business strategy, human
resources capabilities, and organization’s structural elements in developing and
sustaining competitive advantage through context-specific and customized strategies.
Understanding business and HR strategy as separate aspects is not going to give much

Volume 22
202 No. 4
 BOOK REVIEWS

competitiveness to business in future and thus there is now need to encapsulate the
ethos, principles, values and goals of the organization within an HR-business strategy.
Although this conceptualization makes much sense but for HR professionals there is a
need for supporting models, frameworks and policy toolkits to practically operationalize
this conceptualization, which this book has not much talked about. In absence of any
concrete framework it would remain be upto personal interpretation of CEOs and HR
professionals as how they will make sense about the development and utilization of
human capital which could be again conventional.
The book is more likely a notebook which provides readers insights for the analysis
and comparison of HR management approach and how to alter company overall strategy
and practices to manage its people more strategically. Since the foremost drive is to
align business strategy with the HR strategy, yet it needs more explanation to add in
the process of managing people with true human capital perspective and then its
mutual alignment with business strategy. The author shelved many related references
from the business literature to support the idea and to alter mental framework and
strategic orientation of CEOs and HR professional (especially HR Directors). Since,
the ideas presented in this book can indeed be beneficial for organization; we therefore
strongly recommend this book to CEOs, HR professionals, scholars of this field, and
especially students of the whole Management discipline.

Zafar Saeed
Manager HR & Admin
Misk Paper Mills (Pvt) Ltd.
48. Shadman Market, Nawab Plaza,
3rd Floor, Lahore, Pakistan
E-mail: [email protected]

Khuram Shahzad
Assistant Professor
Department of Management
School of Business & Economics
University of Management & Technology
Johar Town, Lahore, Pakistan
E-mail: [email protected]
[email protected]

Volume 22
203 No. 4
Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.