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How Human Resource Capabilities Affect the Organisations' Performance? the Case of Electronic Industry in the Uk

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HOW HUMAN RESOURCE CAPABILITIES AFFECT THE ORGANISATIONS'

PERFORMANCE? THE CASE OF ELECTRONIC INDUSTRY IN THE UK

Azhdar Karami

School for Business and Regional Development,

University of Wales, Bangor, UK

a.karami@bangor.ac.uk

Session H-2

Abstract

The impact of the Human Resource (HR) capability on the firm's performance

and its involvement in developing business strategies are becoming increasingly

important particularly in high tech Small and Medium-sized Enterprises (SMEs).

Not surprisingly, the main debate in HRM, particularly in SMEs, is nowadays

concerned with the relationship between HR capabilities and the firm's overall

performance. This paper is exploring the above relationship in the Electronic

Manufacturing industry in the UK. The findings are based on an empirical survey

of Chief Executive Officers' (CEOs) and their perception of the HR involvement in

strategy development in high tech SMEs. The important conclusion reached is

that increasing the core competencies of the firm, in particular HR, is the key

element to the success of the firm. Moreover, it is posed that the growing

involvement of the HR in the development and implementation of business

strategy will lead to the increased effectiveness of the organisation and the

industry as a whole.

Keywords: HR Capabilities, Perception, Small and Medium Sized Enterprises

(SMEs), Firm Performance, Chief Executive Officers (CEO's), HR Involvement in

Strategy, UK.

1

How Human Resource Capabilities Affect the organisations' Performance? The

case of Electronic Industry in the UK

Dr. Azhdar Karami

Lecturer in Business and Management

School for Business and Regional Development

University of Wales, Bangor

College Road, Bangor, Gwynedd

LL57 2DG, UK

Tel: +44 1248 388350

Fax: +44 1248 383228

Email: a.karami@bangor.ac.uk

The Fifth European Conference on Organizational Knowledge, Learning and Capabilities,

Centre of Strategic Management & Leadership, University of Innsbruck, April 1-3,

Innsbruck, Austria

Track:

Leadership and HRM in knowledge-based organisation

2

How Human Resource Capabilities Affect the organisations' Performance? The

case of Electronic Industry in the UK

Abstract

The impact of the Human Resource (HR) capability on the firm's performance and its

involvement in developing business strategies are becoming increasingly important

particularly in high tech Small and Medium-sized Enterprises (SMEs). Not surprisingly,

the main debate in HRM, particularly in SMEs, is nowadays concerned with the

relationship between HR capabilities and the firm's overall performance. This paper is

exploring the above relationship in the Electronic Manufacturing industry in the UK. The

findings are based on an empirical survey of Chief Executive Officers' (CEOs) and their

perception of the HR involvement in strategy development in high tech SMEs. The

important conclusion reached is that increasing the core competencies of the firm, in

particular HR, is the key element to the success of the firm. Moreover, it is posed that the

growing involvement of the HR in the development and implementation of business

strategy will lead to the increased effectiveness of the organisation and the industry as a

whole.

Key Words:

HR Capabilities,

Perception

Small and Medium Sized Enterprises (SMEs)

Firm Performance

Chief Executive Officers (CEO's)

HR Involvement in Strategy

UK

3

INTRODUCTION

In recent years, much concern has been shown for the strategic involvement of the

Human Resource (HR) and its effect on firm's performance (Lahteenmaki et al, 1998;

Rangone, 1999; Analoui, 2000). The debate has led to the creation of a resource-based

model of HRM (Boxall, 1996), identifying HR as being responsible for increasing

organisational success (Kakabadse and Kakabadse, 2000) and a realistic indicator for the

improved organisational effectiveness (Analoui, 1999a; Analoui, 2002). The resourcebased

approach to strategic management considers HR as a unique source of

competitive advantages of the firm (Lorange and Murphy, 1984; Boxall, 1991; Lundy,

1994; Story, 1998).

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