the indian perspective of strategic hr roles and organizational learning capability

The Indian perspective of strategic HR rolesand organizational learning capability

Jyotsna Bhatnagar and Anuradha Sharma

Abstract This study focuses on the empirical analysis of strategic HR roles andorganizational learning capability. Line and HR firm performance is further analysed. Thesample size consisted of 640managers in India. Standardized questionnaires were used as toolsfor the managers’ perception of the two variables and their link to data collection. Statisticalresults indicate that correlation coefficientsweremostly significant andpositive for the variablesand sub-variables of strategic HR roles and organizational learning capability. Discriminantfunctional analysis reflected that line andHRmanagers differed significantly in their perceptionof both variables. Stepwise regression analysis indicated that both the variables of strategic HRroles and organizational learning capability predict firm performance.

Keywords Strategic HR roles; organizational learning capability; HR vs. line managers;firm performance; Indian strategic HRM.

Introduction

Research on alignment of HR policies and practices with business strategies has recentlybeen the focus of management science (Brockbank, 1999; Delery and Doty, 1996;Devanna et al., 1984; Golden and Ramanujam, 1985; Martell and Caroll, 1995; Truss andGratton, 1994; Wright and McMahan, 1992). The interest of strategic management inexamining the role of human resources as value-added has evolved (Baird andMeshoulam,1988). How Strategic Human Resource Management (SHRM) leads to competitiveadvantage, specificallywith the resource-based perspective, has been dealtwith in researchliterature (Barney, 1986, 1991, 1992; Colbert, 2004; Conner, 1991; Fey et al., 2000; Grantand Baden Fuller, 1995; Reed and DeFillippi, 1990; Schuler and Jackson, 1987; Walkerand Stopper, 2000; Wright and McMahan, 1992). Practitioners and academics are both ofthe opinion that in the field of SHRM, ‘learning organization’ and ‘knowledgemanagement’ learning are a central concern in the workplace (Currie and Kerrin, 2003;Keep and Rainbird, 2000; Thite, 2004; Thurbin, 1995). However, the operatingenvironments ofmany public and private sector organizations reflect that the rhetoric is noteven an aspiration, let alone a reflection of practice, and many challenges for HR strategyare defined (Keep and Rainbird, 2000: 190; Storey and Quintas, 2001; Truss, 2001). Thecurrent study focuses on the relationship of the two variables of strategic HR roles andorganizational learning capability, and whether they predict firm’s financial performance.

The paper thus has two research aims: first, to examine the theoretical nesting of thetwo SHRM dimensions of strategic HR roles and organizational learning capability and

The International Journal of Human Resource Management

ISSN 0958-5192 print/ISSN 1466-4399 online q 2005 Taylor & Francis

http://www.tandf.co.uk/journals

DOI: 10.1080/09585190500239424

Jyotsna Bhatnagar, Management Development Institute, Sukhrali, Gurgaon, India (tel: 0124

2346760; e-mail [email protected]). Anuradha Sharma, Department of Humanities and Social

Sciences, Indian Institute of Technology, Hauz Khas, New Delhi, India (tel: 011 26591372; e-mail

[email protected]).

Int. J. of Human Resource Management 16:9 September 2005 1711–1739

second, to test empirically the conceptual links of these SHRM dimensions, HR and linemanagers’ perceptions about these variables and whether they predict firm performancevariables of financial turnover and profit. The remainder of this paper is structured asfollows. The next section presents an overview of the theoretical links between the twovariables of strategic HR roles and organizational learning capability together with firmperformance indicators. The approach suitable for this analysis is then discussed andresearch hypotheses, built on previous research work, is presented. Thereafter themethodology adopted for this study is detailed, followed by results, discussion andconclusions.

The strategic focus of HR

Recently we have witnessed the amalgamation of several streams of management intothe strategic management literature including epistemology, organizational learning, theresource based view, organizational capabilities and competitiveness and innovation andnew product development (Frost, 2003; Grant and Baden Fuller, 1995). Other streamsfocus on nature and processes and examine the internal focus, which includes impact ofstrategic management concepts and frameworks that managers use to developcompetitive strategy (Clark, 1997). Researchers have contended that the concept ofstrategic human resource management has evolved into a bridge between businessstrategy and the management of human resources (e.g. Butler et al., 1991; Lengnick-Halland Lengnick-Hall, 1988; Lorange and Murphy, 1984). On the other hand, Truss andGratton (1994) opine strategic human resource management as the overarching conceptthat links the management and deployment of individuals within the organization to thebusiness as a whole and its environment. Ulrich (1997) further distinguished betweenstrategic HR and HR strategy. He stated that strategic HR was the process of linking HRpractices to business strategy. Thus, strategic HR deals with identifying the capabilitiesrequired of a business strategy and using HR practices to develop those capabilities.On the other hand, he viewed HR strategy as building an agenda for the HR function anddefining the mission, vision and priorities of the HR function. During the last decade, thepersonnel/HRM field has shifted from a micro focus on individual HRM practices to adebate on how HRM as a more holistic management approach may contribute to thecompetitive advantage of the organization (Fey et al., 2000). Researchers drawinglargely on a behaviourist psychology perspective have addressed the link between humanresource management practices and competitive advantage (Schuler and Jackson, 1987;Schuler and Macmillan, 1984). From this perspective, researchers have argued thathuman resource management practices can contribute to competitive advantage as far asthey elicit and reinforce the set of role behaviours that result in lowering costs, enhancingproduct differentiation or both (Schuler and Jackson, 1987). This paper focuses onstrategic HRM, as defined by Ulrich (1997), and the strategic role of HR linked to theorganizational learning capabilities of the Indian managers. The study will now look atthe field of HRM/HRD and the link to organizational learning capability.

HRM/HRD and organizational learning

There is much confusion between the intermittent usage of the terms HRM and HRD.According to some researchers, the field of HRM, HRD and OD is converging into the nextgeneration field of HR (Grieves and Redman, 1999; Ruona and Gibson, 2004: 50; Sammut,2001). Learning underpins the concepts of HRM and HRD. Indeed, the field has becomequite pervasive andMegginson et al. (1993) aptly refer to the ‘fog factor’ that has developed

1712 The International Journal of Human Resource Management

in the HR world. The fields remain, like the field of personnel management generally,Drucker’s ‘dustbin’ (Drucker, in Townley, 1994: 3). When we move to the field of HR, wefind the link between learning and HR as a primary foundation stone, owing its roots to thedefinition of the field itself. While recognizing HRM’s shifting nature (Keenoy, 1999), themain characteristics can be summarized as: a concern with organizational performance asthe primary goal; the adoption of a unitarist perspective; and a corresponding belief thatemployers and employees can be beneficiaries of ‘good’ or ‘soft’ HRM (Storey, 1987) ifemployees are nurtured and developed as valuablemembers of the organizationwho help toachieve its goals (Legge, 1995a). Garavan (1991: 17), links HRD to business strategy whenhe states that ‘[HRD is] concerned with the management of employee learning for the longterm, keeping in mind the explicit corporate and business strategies’. McCracken andWallace (2000), drawing on thework ofGaravan et al. (1998), suggest that active leadershipfrom top management is critical to maximizing the returns fromHR. However, it is not justthe HR specialists who need to be able to do this. It is equally, if not more vital, that seniormanagers scan their operating environment (Maxwell et al., 2002), which can be achievedthrough organizational learning capability. As is evident, the HRM research is constantlyoscillating between HRM and HRD, and in the latter research organizational learningunderpins the construct.

Organizational learning is not just the total sum of individual learning but is also theorganizational capability to continuously enhance, the collective capacity to reflect, to learnhow to learn, to unlearn oldways of doing things and abandon old habits (Senge et al., 1999).Many authors have argued that organizational learning can be the main antecedent fororganizational well-being, the key enabler to achieving organizational change and securingcompetitive advantage (Krogh et al., 1998; Nonaka and Takeuchi, 1995; Pfeffer, 1994).A cause and effect chain between learning growth and performance has been also identifiedin some research efforts (Hasan, 2002; Kaplan and Norton, 1992, 2001).

Similarly, HR practices are a source of competitive advantage, and as Drucker (2002)and researchers like Pfeffer (1998) and Greer (2001) suggest, the success of companies inthe present competitive environment largely depends upon the calibre of their humanresources and innovative employee management programmes and practices. Recentresearch on best HR practices has shown that the HR function is indeed an importantsuccess factor (Greer, 2001; Thompson and Strickland, 2001) in an organization’seffective performance. Thus this study contributes to the theory of strategic HRM, whereit tries to prove how strategic HR roles are related conceptually and empirically toorganizational learning capabilities at the managerial level. The study now examines HRroles and the growing awareness of strategically aligning strategic HR roles to the needsof the organization.

Strategic HR roles

One of the first attempts at this categorization was made by Nadler (1970) in the USA. Heidentified two primary roles of learning specialist: administrator role and the consultantrole. American Society for Training and Development (1983) identified fifteen key rolesfor the HRD practitioner. Critical outputs for each of these fifteen roles were identified.The UK perspective in the 1970 s and 1980 s was developed under the Manpower ServiceCommission, a government body. The roles identified were mainly the trainer roles(for details, see Walton, 1999). According to Ulrich (1997), in the past few years, rolesfor HRM professionals were often viewed in terms of the transitional form such asoperational to strategic; qualitative to quantitative; policing to partnering; short term tolong term; administrative to consultative; functionally oriented to business oriented, etc.

Bhatnagar and Sharma: Strategic HR roles and organizational leading capability 1713

In order to create value and deliver results, HRM professionals must begin notby focusing on the activities or work of HRM but by defining the deliverables ofthat work. Deliverables guarantee outcomes of HRM work. In terms of deliverables,there are four key roles that HRM professionals must fulfil to make their businesspartnership a reality. These are the roles of Strategic Partner, Administrative Expert,Change Agent and Employee Champion. The summation of these four results in thebusiness partner role of HRM. In India, Venkataratnam (1992) enumerated the currentand suggested role of personnel. Later, Lynton and Pareek (2000) suggested the businesspartner role of HR. Pareek (1997) had earlier presented the partnership role of HR withdifferent stakeholders. Combining the above perspectives, Table 1 presents a matrix,which exemplifies the overlap in research on the nature of these roles.

As is evident, the table highlights the strains in the literature on strategic HR roles,which essentially say the same thing, and which are grouped into the four-role typology,with the exception of two researchers, Ulrich, and Schuler and Jackson, who refer to thebusiness partner role and innovator and strategic role respectively. Yet the strategicperspective on the HRM function leaves an array of questions unanswered relative to thecorporate HR roles (Novicevic and Harvey, 2001) and to find answers globally there hasbeen a great deal of research on strategic HR roles, for example, research from NewZealand (Cleland et al., 2000), Australia (Teo, 2003), Europe (Storey, 1992), Thailand(Chiraprapha and McLean, 2001) and the USA (Ulrich, 1997, 2003). The results of theHRPS-sponsored Center for Effective Organizations study of HR in large corporations inthe USA argue strongly for HR taking on more of a strategic partner role (Lawler andMohrman, 2000b, 2003).

Despite credible evidence in many countries, as is reported above, supporting the viewthat HR management is the key strategic issue in most organizations, HR has not been astrategic partner (Brockbank, 1999; Lawler et al., 1995; Mohrman and Lawler, 1996).The HR function has been an administrative function headed by individuals with rolesaimed at cost control and administrative activities (Ulrich, 1997). In India too, theresearch has been on the HR practices and firm performance framework (Kandula, 2002;Singh, 2003a, 2003b), while Agarwala (2003) focuses on innovative HR practices andorganizational commitment. There is a need to pursue this line of research and to firstestablish the existence of the roles and then investigate whether they add value or not.The status of these roles was the focus of recent research studies, which are sparse, suchas that of Bahl (2002), Bhandarker (2003) and Bhatnagar and Sharma (2002, 2003a,2003b). Let us examine the need for this study in an Indian context.

Need for the study in Indian context

The research literature reflects that the role of human resources and organizationallearning capability has a conceptual relationship. There has been no attempt to studyempirically the relationship of human resource roles and organizational learningcapability. Ulrich (1997: 10) mentions the link between HRM practices andorganizational capabilities, with learning capability being one of them. Further, henotes that managers should constantly ask themselves questions, such as how can HRMpractices be designed to create the needed capabilities? Specifically in India,organizational learning capability has been empirically researched (Ramnarayan,1998; Ramnarayan and Nair, 1993) referred to theoretically (Ramnarayan and Bhatnagar,1993; Rastogi, 1998, 1999; Shukla, 1997) and as mechanisms (Pareek, 1988). It hasbeen found that the link between the two variables has not been tested empirically. Thecurrent Indian literature contains arguments about the difference between personnel


Table

1H

Rro

les

ma

trix

an

do

verl

ap

inre

sea

rch

lite

ratu

re

Au

tho

rsA

dm

inis

tra

tive

role

Tra

nsf

orm

ati

on

al

role

Wel

fare

role

Str

ate

gic

pa

rtn

erro

leS

tra

teg

icH

Rro

le

Legge(1995b)

Deviantinnovator

Organizational

diagnostician

Tyson(1999)

Clerksofworks

-Contractmanager

-

Torrington(1979)

Analystsof

benevolence

-Human

bureaucrat

-

Storey(1992)

Handmaiden

Adviser

Regulator

Change-maker

Ulrich(1997)

Administrativeexpert

Changeagent

Employee

cham

pion

Strategic

partner

Businesspartner

role

BuyensandVos(1999)

Boffin

Firem

anButler

Dream

er

(extrem

eview)

Kossek

andBlock

(2000)

Transaction

Transition

Translation

Transform

ation

JacksonandSchuler(2000)

Monitoring

Changefacilitator

Enabler

Partnership

Strategic

andinnovation


management and HRM and HRD (Budhwar, 2000; Budhwar and Sparrow, 1997),

together with the re-labelling of job titles from personnel management to HRD executive

(Balasubramanian, 1995; Dwivedi, 1997; Rao, 1999: 42; Rao et al., 2001; Venkata

Ratnam and Srivastava, 1981). Saini (1997: 104) observes that a number of people from

students to managers mistakenly think that personnel management and HRM are

synonymous concepts. Further, hierarchy and inequality are entrenched in India’s

traditions and are often found in routine behaviour in the form of unequally placed caste

and class groups (Jain and Venkata Ratnam, 1994). Because of this there is a continued

dependence of one group on the other (for example, subordinates on superiors) and a

general lack of local initiatives to tackle their own problems (Sinha, 1990). There is a

strong influence of social, cultural, economic and political factors on HRM policies and

practices in Indian organizations (Budhwar and Khatri, 2001).The adoption of professionalized HRD practices in India is a recent phenomenon that

has gained momentum in the past ten years (Krishna and Monappa, 1994; Rao et al.,

1999, 2001).The general trend in Indian industry, due to the liberalization of the Indian economy,

is encouraging for the strategic human resource management practices in general.

The study is relevant due to changes in the Indian economy and the resulting effect on the

management of all resources therein. This change from a regulated environment to a free

market environment has direct implications for SHRM practices in India (Krishna and

Monappa, 1994; Rao, 1999). Since liberalization, the Indian organizations and the

managers are dealing with issues of transformation and growth. Restructuring, re-

engineering, realignment of systems, structures, tasks and technology have all become

imperative. The impact of restructuring, the economic transition to an open market, as

well as increased competition from internal and external sources has put pressure on all

functions of the organizations. There has been evidence of a general need among the

managerial cadre to build capabilities, resources, competencies, strategies, macro as well

as micro HRM activities, which translate into strategic HR roles and enhanced

organizational learning capabilities. HRM specialists and the HRM departments are

under severe pressure to bring about large-scale professionalized changes in their

organizations in order to cope with the challenges brought about by economic

liberalization (Rao et al., 2001; Som, 2002).Foreign firms, which have started operating in India since the liberalization of the

economy, do not confine their interventions to HRD, which Indian firms do, but undertake

wider programmes and strategies of HRM (see Budhwar and Boyne, 2004). Some of the

leading Indian organizations have also taken the initiative in this regard and have brought

out newer issues in the strategic management of their human resources (Saini and

Budhwar, 2004). Many experts (Ahluwalia, 1994; Das, 1996; Krishna and Monappa,

1994; Mathias, 1994; Sodhi, 1994; Thyagi, 1994) have discussed the implications of the

new economic environment for organization and management structure, strategy, culture

and values. They have suggested, for example, the need for improvement in quality, cost

efficiency, corporate ethical practices, employee development, motivation and team

functioning, strategic integration of the HRM function and greater involvement of line

management in HRM. A core of empirical studies on HRM in India relevant to the new

environment has been conducted using a variety ofmethods and theories (Amba-Rao et al.,

2000; Sodhi, 1994; Sparrow and Budhwar, 1997; Tayeb, 1988). Budhwar (2000)

highlights the need for research in the Asia Pacific region, specifically of the growing

economies of Latin America, China and India, and a strong need to research the HR

practices of these regions. Given this context, there is a need to conduct the current study.


There will now be a look at the research literature, which has helped in the development ofthe hypotheses.

Hypotheses: strategic HR roles and organizational learning capability

Keep (1989), in his definition of HRD, has linked HRM to organizational learning.Pettigrew et al. (1988: 32), also argue that ‘effecting change in training and HRD involvesthinking in broad HRM terms’. The link between the HR role and organizational learninghas beenwell established in the literature. It has been noted that those organizations, whichthink that they want to be learning organizations, will treat HRD strategically(Cunningham and Iles, 2002; Marquandt and Reynolds, 1994; Maxwell et al., 2002;Walton, 1999). Rainbird (1999) indicates the link between environmental scanning andHRM.McCracken andWallace (2000: 429), argue that ‘HRDpolicies and plans need to besupplemented by HRD strategies’. Garavan (1991) establishes the link between HR andlong-term planning while, in practice, the alignment or fit between HRM generally, andtraining and development in particular, and business plans and strategy is very variable,although there is some evidence that competency-based management development cangenerate positive benefits for organizations (Winterton and Winterton, 1997). Measuringand benchmarking the learning capability of an organization is an effective tool to initiateand facilitate a change process to building a greater learning capability (Jick, 1994;Nadler,1998). Beer (1997: 57) states the importance of institutionalizing a core action learningprogramme if the HR function is to develop into a strategic role. Scarbrough and Carter(2000), present a comprehensive review of the ways in which HRM issues could be linkedto knowledge sharing, which organizational learning capability enhances whenknowledge sharing is through horizontal and vertical boundaries of the organization.MacNiel (2003) conducted a study that focused on the line manager’s HRM role inemployee learning and development, exploring the line manager’s potential contributionto achieving strategicHRMobjectives, and in facilitating the integration of an individual’stacit knowledge by encouraging teams to share knowledge. Thite (2004), identifies somekey HR strategies for effective people-centric partnership in knowledge management,namely trusting HR philosophy, institutionalizing learning to learn, and fine tuning HRsystems in a multi-national context, again highlighting the relationship between HRstrategy and the strategic intent of organizational learning. The study by Terziovski et al.(2000), of the five Australian case studies of ToyotaMotor Corporation Australia, RamsetFasteners Limited,W.A.DeutscherMetal ProductsGroup, South Pacific Tyres and PacificDunlop Bedding, found a direct link between HR and organizational learning. Gardineret al. (2001) commented that in both the learning organization andHR focus on promotingand facilitating learning as a central activity of the organization, there are a number ofsimilarities in the way both programmes address the issue. Moreover, both approachesadvocate increased employee participation in policy making and a ‘softer’ approach to theformulation of business strategy. Thus, it is hypothesized that:

H1: The strategic HR roles and organizational learning capability will have a positiverelationship.

Role of line and HR managers In organizations the line managers’ role is important inensuring that the implementation of HRM strategy and policies are successfullyimplemented (MacNeil, 2003). The devolution of HRM activities to line managers(Brewster and Larsen, 2000; Hutchinson and Wood, 1995) is a useful means for


achieving through the implementation of HRM policies and practices that are consistentwith the desired strategic intent (Brewster and Larsen, 1992; Budhwar, 2000; Hall andTorrington, 1998; Hope-Hailey et al., 2002). The emerging concept of the ‘strategicpartner’ (Barney and Wright, 1998; Schuler, 1992; Ulrich, 1998) contends that HRdepartments should help line managers resolve business issues and align HR’s interestswith the achievement of organizational goals. Budhwar and Sparrow (1997), furtherexamined the institutional impacts through the role of HR managers in corporate strategyand line managers’ responsibility in HRM. Mitsuhashi et al. (2000), report the majorfinding that there are no significant differences between HR and line executives’perceptions of the importance of each functional area in human resource management(HRM). Strategically focused HRD functions rely on the commitment and involvementof line managers. Certainly strategic HRD advocates the involvement of manystakeholders. Lee and Chee’s (1996), work showed that amongst the characteristics of thecompanies at the top end of the training maturity scale, training was perceived assupporting business strategy and HRD specialists and line managers worked inpartnership with each other. Line managers are crucial stakeholders whose role in HRD isoften under-developed for a variety of reasons, both attitudinal and cultural. Researchstudies acknowledge the problems, which are experienced by line managers engaged inHRM activities without adequate support from senior management (or the HRMspecialist, Brewster and Larsen, 2000; Marchington and Wilkinson, 2002). Someresearch studies reflect that involvement of line managers does have a favourable effecton the achievements of the business strategy, HRM strategy and ultimately performance(Wai-Kwong et al., 2001). Line managers are important for successful policyimplementation in organizational change situations, as a vital communication linkbetween senior management and team members (McHugh et al., 1999). Cunningham andHyman (1995) andMacNeil (2001, 2003) point out that the role of the line manager in theimplementation of HRM policies and practices has frequently been overlooked, or at besttaken for granted by many organizations. Wright et al. (2001) and Bhatnagar and Sharma(2002) have conducted research on roles and the line HR perspective and the research inthis area is meagre. Ellinger and Bostrum (1999), reiterate the link between the strategicHR role and organizational learning capability, and highlight the role of the line manageras a facilitator encouraging knowledge sharing, which can be useful for developingcollective learning capability and learning as a core competence for the organization.There is sparse research on the perception of strategic HR roles and organizationallearning capability, vis-a-vis HR and line managers’ perception, as is evident from thereported research. Thus, we hypothesize that:

H2: There will be a significant difference in the perception of managers (line vs. HR)in strategic HR roles and organizational learning capability.

Strategic HR roles and organizational learning capability: predictors of firmperformance

According to Conner and Ulrich, (1996: 39): ‘Many drivers have led to the reinvention ofhuman resources, including cost pressures, increased attention to customer satisfaction,emphasis on well-being, productivity, and commitment of the employee, and usingpeople and organizations as a source of competitive advantage’. This is reiterated by thestudies of Pleval et al., 1994; Towers Perrin, 1992; Ulrich and Lake, 1990; Ulrich andYeung, 1987 and Walker, 1992. As far as organizational learning and performance isconcerned, Ellinger et al. (2003), have established a link between financial indicators of


performance and organizational learning, through empirical research. Scholars contendthat adopting learning organization strategies should promote individual, team andorganizational learning and that such enhanced learning should yield performance gains(Baker and Sinkula, 1999; Day, 1994; Hunt and Morgan, 1994; Pettigrew and Whipp,1991; Slater and Narver, 1995). However, few concrete studies exist that clarify how thelearning organization concept works to achieve performance improvement (Goh andRichards, 1997; Henderson, 1997; Jacobs, 1995; Kaiser and Holton, 1998). HRMpractices and firm performance links are well established in literature. Researchers in thefield of strategic human resource management (SHRM) have increasingly relied on theresource-based view of the firm to explain the role of human resource practices in firmperformance (Mello, 2003; Wright et al., 2001). Huselid’s (1995) study on therelationship between HRM practices and corporate financial performance is the landmarkwork in this area. This was soon followed by similar research conducted by MacDuffie(1995), Delaney et al. (1996), Delery and Doty (1996), Huselid et al. (1997) and Guthrie(2001). Numerous authors have suggested the need to understand better the processesthrough which HR practices might have an impact on performance (Becker and Huselid,1998; Dyer and Reeves, 1995; Hutchison et al., 2002; Wright and Gardner, 2002). Whilea number of models have been proposed (e.g. Becker and Huselid, 1998; Dyer andReeves, 1995; Truss and Gratton, 1994), very little empirical research has examinedmultiple potential links (Wright and Gardner, 2002). Gardner and Wright (2003)presented executives and graduate students with fictitious descriptions of high and low-performing companies and found evidence that their reports of HR practices can beinfluenced by knowledge of the company’s past performance. Ostroff (2000) found somesupport for a HRM practices and performance. In this study, we have extended this linkto include strategic HR roles, which are a reflection of the implementation of HRpractices within organizations. Wright et al. (2003) reveal that both organizationalcommitment and HR practices are significantly related to operational measures ofperformance, as well as operating expenses and pre-tax profits. Thus, it is posited that:

H3: Strategic HR roles and organizational learning capability will be predictors offinancial turnover and firm’s profit indicators of firm performance.

Research design and sampling

We used a survey-questionnaire approach to gather data. The study is based on two-stagesampling design. In the first step, fifty Indian organizations were chosen randomly fromthe national capital region of India. In the second step, among these fifty organizations,1,000 top, middle and senior level managers in HR or who were line managers wererandomly selected to fill in the questionnaires. From this sample of 1,000 managers atotal of 640 questionnaires were filled in. A total of 360 questionnaires returned wereeither incomplete or the managers refused to oblige. The response rate to the survey was64 per cent. The scope of the study has been limited to managers from the industries inthe national capital region of India. The organizations from which the managersresponded spanned the public sector, private sector and multinational companies. Thesize of the sample was 218 government managers, 265 private sector managers and 157multinational managers. Organization size, reflected in employee numbers, ranged fromless than 499 to 50,001 and above. It was found that 20.8 per cent of the managers in thesample were from small organizations, while 58.4 per cent were from mediumorganizations. The remaining 20.8 per cent were from large organizations with between10,001 and 50,000 employees. The financial turnover ranged from Rupees 10 crores to


over 5,000 crores. Fifty-three per cent of the managers were from organizations with afinancial turnover of more than Rupees 500 crores, while 26 per cent of the sample werefrom organizations with a financial turnover of between Rupees 200 crores and 500crores, while 13 per cent belonged to organizations with a turnover ranging from Rupees50 to 200 crores. The remaining 8 per cent of the managers were from organizations thatrecorded a financial turnover of below Rupees 50 crores. The profits ranged from belowRupees 5crores to over 500 crores. A total of 15.2 per cent of the managers came fromorganizations which had profits over Rupees 500 crores, while 33.4 per cent of thesample were in organizations that had profits ranging from 100 crores to 500 crores. Theremaining 24.4 per cent of the managers were in organizations that recorded profits ofRupees 30 to 100 crores. The remaining 29 per cent of the managers were fromorganizations that recorded profits below Rupees 30 crores.

Research instruments Human Role Assessment Survey Questionnaire (Conner andUlrich, 1996) was administered on the sample. This has 40 items that have to be rated ona five-point Likert scale. On the scale, 1 represented low and 5 represented high.Participants were asked to refer to the HR professionals in their business entity and ratethe current quality of each activity. The Cronbach alpha was .97.The sub-variables werethe four roles of strategic partner (SP alpha .92), administrative expert (AE alpha .92),employee champion (EC alpha .94) and change agent (CA alpha .93). The businesspartner (BP alpha .85) role is the summation of the four roles.

For measuring organizational learning capability, we selected the organizationallearning capability (OLC) questionnaire (Ramnarayan, 1996, 1998; Ramnarayan et al.,1993) for this study. In the current study the scale has been adapted to a 40-item scale, therepetitive questions were deleted, based on the feedback of the respondents. Therespondents were to rate their responses on a five-point Likert scale, where 1 ¼ does notmatch at all; 2 ¼ matches to a small extent; 3 ¼ matches to a moderate extent,4 ¼ matches to a large extent and 5 ¼ matches perfectly. The Cronbach standardizeditem alpha was .87. This was run using the statistical package SPSS w, 11.5 version. Thevariables, which were measured by a 40-item scale, were: Clear focus on objectives andplans for internal and vertical integration, (alpha .83). The other five variables were:Sensitivity to people potential and needs (alpha .84); Concern for long-term planning andsuccess (alpha .53); Support for learning from others and creativity (alpha .52);Environmental scanning (alpha .63); Concern for development of capabilities (alpha.80). (See Appendix A for the framework that was used for developing the organizationallearning capability framework and to Appendix B for an illustration of select items of thetwo instruments.)

Results and discussion

Results indicate that correlation coefficients were mostly significant and positive butwere not very high. As is evident from Table 2, all the correlations between the sub-variables of strategic HR roles and the sub-variables of organizational learningcapability, range from .10 to .44 and are significant at .01 and .05 level. Thus, we acceptthe H1, that there is a positive relationship between the strategic HR roles andorganizational learning capability. However, the correlation value is not very high but wecan safely conclude that the level of strategic HR roles and organizational learningcapability is of a moderate level. These results support prior research of Bhatnagar andSharma (2003c), on OLC and Bhatnagar and Sharma (2002), on strategic HR roles.


Table

2C

orr

ela

tio

nco

effi

cien

tso

fS

tra

teg

icH

Rro

les,

(BP

_R

ole

)w

ith

the

sub

-va

ria

ble

so

fS

tra

teg

icp

art

ner

(SP

);A

dm

inis

tra

tive

exp

ert

(AE

);E

mp

loye

e

cha

mp

ion

(EC

);C

ha

ng

ea

gen

t(C

A),

an

dO

rga

niz

ati

on

al

lea

rnin

gca

pa

bil

ity

(OL

C)

an

dth

esu

b-v

ari

ab

les

of

clea

ro

bje

ctiv

es;

Sen

siti

vity

top

eop

lep

ote

nti

al

an

d

nee

ds

(PO

T_

NE

ED

);C

on

cern

for

lon

g-t

erm

pla

nn

ing

an

dsu

cces

s.(L

ON

G_

PL

G)

Su

pp

ort

of

exp

erim

enta

tio

na

nd

crea

tivi

ty(C

RE

AT

E);

En

viro

nm

enta

l

sca

nn

ing

;(E

NV

_S

CA

N);

Co

nce

rnfo

rd

evel

op

men

to

fca

pa

bil

itie

s(D

EV

T_

CA

P)

SP

AE

EC

CA

CL

_O

BJ

HO

R_

INT

EV

ER

_IN

TE

PO

T_

NE

ED

LO

NG

_P

LG

CR

EA

TE

EN

V_

SC

AN

DE

VT

_C

AP

OL

CB

P_

RO

LE

SP

1AE

.82**

1EC

.79**

.79**

1CA

.80**

.83**

.82**

1CL_OBJ

.10*

.14**

.04

.09*

1HOR_IN

TE

.12**

.12*

.10**

.12**

71**

1VER_IN

TE

.14**

.14**

.11*

.10**

.56**

60**

1POT_NEED

.42**

.39**

.42**

.37**

.24**

.23**.26**

1LONG_PLG

.26**

.28**

.27**

.23

.05*

.07*

.08**

.62**

1CREATE

.31**

.30**

.32**

.30**

.18**

.17**.13**

.70**.57**

1ENV_SCAN

.27**

.27**

.27**

.23**

.22**

.20**.18**

.62**.47**.54**

1DEVT_CAP

.39**

.39**

.42**

.35**

.18**

.17**.18**

.77**.68**.68**

.64**

1OLC

.38**

.39**

.37**

.34**

.57**

.56**

.51**.36**

.58**.73**.70**

.81**

11

BP_ROLE

1.92**

.93**

.92**

.94*

.10**

.13**.14**

.44**.28**.34**

.29**.42**.41**

Note

s

*Correlationissignificantat

the0.05level

(2-tailed).

**Correlationissignificantat

the0.01level

(2-tailed).


The highest correlation is for Sensitivity to people potential and needs and the businesspartner role (.44), while Concern for development of capabilities and Employeechampion role indicate a correlation of .42, and Sensitivity to people potential and needsand strategic partner role shows a correlation value of .42. This indicates thatdevelopment of capabilities and potential development is an activity, which managerscorrelate highly to the strategic HR roles of employee champion, strategic partner andoverall business partner role. Further, the results of this study support the studies ofUlrich (1997), which state that organizational competitiveness will spring fromorganizational capabilities, such as speed, responsiveness, learning capacity andemployee competence, and that the human resource department will be responsible forgenerating these capabilities. Further, the results support the research of Massey andWalker (1999) who found the role of consultants can influence organizational learning.London and Smither (1999) draw out the implications for human resource managementpractices within the organization by looking at the role of supervisors in creating a non-controlling environment, which supports empowerment and self-development.

Kemske (1998) presents the results of a study that asked ten leading US humanresource directors and consultants about the way that the profession will develop over thenext ten years. The study sets out their predictions concerning flexible working, the needsof globalized business the future of work, organizational learning and training, the futureof jobs and the strategic role of human resource management. Further, the findingssupport the study of Mohrman and Lawler (1997). They identify the main challenges thatface US human resource managers as: maintaining employees’ performance; being ableto identify and deploy the employees with the right skills for project teams; managingorganizational competencies; developing organizational learning; and defining the newpsychological contract between employees and the organization. They also identify arole for human resource management (HRM) at an organizational level – contributing tobusiness strategy, designing organizational structures, implementing change andintegrating performance management practices. The results of the study further supportthe studies of South Pacific Tyres (SPT) by Terziovski et al. (2000), where it was foundthat another factor in the effectiveness of the project team was the decision to recognizeand send an operator and a foreman to Japan to learn and work as part of the cross-functional team. The operator and the foreman were given an opportunity to share whatthey had learned in Japan with the entire SPT workforce which was very well received.The shop floor employees saw this particular operator as the ‘champion of the changeprocess’ who was able to bridge the gap between management and the shop floor. Thisperson’s ability to communicate with the ‘top floor’ and the ‘shop floor’ enabled clearidentification of the agendas of both groups. Team learning was evident at South PacificTyres when management decided to send their employees overseas to facilitateknowledge, oversee the development of the tyre building technology development andassist with the implementation of the pilot project.

This finding is in agreement with earlier research. Beckhard and Pritchard (1992) statethat the encouragement of taking risks, giving feedback and learning lessons are the softerside of HRM to support the change strategies and the values of top management. AccordingtoSenge’s (1992) approach, theHRpractitioners have a key responsibility in developing andsustaining the processes that support the exercise of the disciplines as well as facilitatingindividual and group learning activities and opportunities to develop ‘mastery’ in them.Oneof the features of Pedler et al’s (1989) approach is the integration of structural and HRMfeatures into the model, focusing on process and practices. They identified a list of elevendimensions on features of a learning company under five headings of ‘strategy’, ‘looking in’,‘structures’, ‘looking out’ and ‘learning opportunities’. This is similar to the sub-variables of


OLC tested by the current study. Jeris’s (1997) study of eight organizations emphasized thatskilled HRD practitioners can provide help in the unpacking process, but only if they havesufficient knowledge about the dimensions and supporting criteria on the one hand and therealities of the organization and its readiness and capacity for change on the other.

Discriminant functional analysis, togetherwith a t-testwas performed to find the differencein the perception of HR and line managers. We found that line and HR managers differedsignificantly in their perception of the strategic partner role and organizational learningcapability, but the results were reversed for each variables in terms of HR and line managerperception. Results in Table 3 highlight that the t-test between type of manager and strategicHR roles, (BP_ROLE) and organizational learning capability, are highly significant at the .01level. The mean for the BP_ROLE is highest for HR managers (157.60). The discriminantfunctional coefficient for the strategicHR role (1.04) is the highest forHRmanagers.While thecoefficient forOLC is the highest for linemanagers (.98), we findHRmanagers have themostsignificant impact on the strategicHR role and self-report it to be higher than the linemanager.Thus H2 is accepted. This result supports prior research studies of Conner and Ulrich (1996),Bhatnagar and Sharma (2002, 2003b), where HR managers report higher values forthemselves than their line counterparts. Further, it supports theworkofMitsuhashiet al. (2000)who report in their research study that there are predominantly positive differences betweenHR and line executives’ perceived effectiveness (HR minus line), indicating that lineexecutives comparedwithHRexecutives considermost of theHRMfunctional areas to be lesseffective. The HR service providers seem to have overestimated their own performance.Bradley (1978) and Kidd and Morgan (1969) pointed out that ‘self-serving’ bias often lead‘individuals toview themselvesmore favourably than seemsobjectivelywarranted’ (O’Reilly,1983: 128). Perhaps HR executives overrate their performances in order to validate theimportance and effectiveness of the HR function within the organization. Based on thesetheoretical predictions, it is not surprising that line executives’ perceptions ofHReffectivenessare different from HR executives’ perceptions. In addition, the results indicate that the linemanagers in Indian organizations differ from HR managers in terms of their learningcapability, and that line managers have a higher organizational learning capability.

Tables 4a and 4b confirm that strategic HR roles are predicted by both the firm’sfinancial turnover and firm’s profit, as all the beta values are significant at the .05 level ofsignificance. While organizational learning is not predicted by financial turnover, it ispredicted by firm profit at .05 level.

Table 3 One-sample t-test, means, SD discriminant functional coefficients for type of manager (H

TYPE), i.e. HR manager and line manager and strategic HR roles, (BP_ROLE) and organizational

learning capability

HR MGRS Line MGRS

T test Mean SD Discriminant

functional

coefficients

Discriminant

functional

coefficients

Mean SD

Variables df ¼ 639

H TYPE 138.81**BP_ROLE 109.83** 157.60 26.36 1.04 2 .08 136.75 32.17

OLC 157.42** 130.44 17.86 2 .25 .98 121.65 20.86

Notes

**t-test is significant at the 0.01 level (2-tailed). N ¼ 640.


Thus H3 is partially accepted. The results support some prior research in this area.

A developing body of research has reported positive associations between firm-level

measures of HRM systems and organizational performance (Arthur, 1994; Huselid,

1995; Huselid and Becker, 1996; Ichniowski and Shaw, 1999; MacDuffie, 1995). The

organizational context (e.g. fit) and goals (e.g. outcomes) may influence, whether

particular human resource practices have synergistic or independent effects on firm

outcomes (Delery, 1998). Huang (2000) found in his study of 315 Taiwanese firms, and

found support for the assumption that human resource strategies and organizational

performance are significantly related. On the other hand, Som (2002) reported in his

study of fifty-four organizations in India that the role of the HR department is positively

correlated with organizational performance and the HR department plays a significant

role in the adoption of ‘best practices’ within the organization. This study extends the

theory of strategic HRM to include strategic HR roles and the results imply that a better

fit of strategic HR roles with the organizational learning capability lead to better

performance. The result for organizational learning capability partly supports the study

of Ellinger et al. (2002) who found a positive association between learning organization

practices and firms’ financial performance. Their findings give support to the business

case of organizational learning. It also implies that these strategic HR roles and

Table 4a Stepwise regression model of strategic HR roles, organizational learning capability as

predictors of firm’s financial turnover

Model Unstandardized

coefficients B

Std. Error Standardized

coefficients beta

t Sig

1 (Constant) 9.35 .19 79.35 .000

BP_ROLE 3.82 .001 .17 4.58 .000

2 (Constant) 9.569 .17 54.78 .000

BP_ROLE 3.22 .001 .15 3.52 .000

OLC 2.28 .001 .06 1.62 .104

Notesa Predictors: (Constant), BP_ROLE.b Predictors: (Constant), BP_ROLE, OLC.cDependent Variable: FINANCIAL TURNOVER.

Table 4b Stepwise regression model of strategic HR roles, organizational learning capability as

predictors of firm’s financial profit

Steps Variables Unstandardized

coefficients B

Std error Standardized

coefficients beta

t Sig.

Step 1a (Constant) 9.24 .129 71.77 .000

BP_ROLE 3.75 .001 .161 4.12 .000

Step 2b (Constant) 9.51 .191 49.95 .000

BP_ROLE 2.96 .001 .127 2.97 .003

OLC 3.00 .002 .084 1.95 .005

Notesa Predictors: (constant), BP_ROLE.b Predictors: (constant), BP_ROLE, OLC.

Dependent variable: FIN PROFIT.


organizational learning capabilities are nested in a context of a high involvement worksystems (HIWS) (Edwards and Wright, 2001; Guest, 1997). As to what HIWSs do, Guest(1997) describes most clearly the causal path that other writers assume. Systems such asteamwork are established; they influence workplace practice; employee attitudeschange, with increased satisfaction or commitment; there is a consequent effect onbehaviour; and this in turn feeds through to the performance of the work unit andeventually the company. Thus, the results may be implying that Indian managers areworking in high involvement work systems, which have become a reality due toincreasing pressures of competitiveness from the global economy. In support of theabove statement, economic trends in the Indian economy picked up in the year 2003, withthe private sector reporting a GDP growth of 18 per cent for the second quarter ofthe current fiscal year (2003–4: Economic Times, p. 3). The results were well supportedby the feel good factor of the Indian economy, where India Incorporation posteda dramatic turnaround in financial performance in the year 2003 (Economic Times, 2004).

Conclusion and implications

Strategic HR roles and organizational learning capability are positively related toeach other and the business partner role of HR does associate positively with thelearning capability of the managers, thus establishing an empirical link for variableswhich had only a conceptual relationship. Further, the results of the study conclude thatin India, line and HR managers differ significantly in their perception of strategicpartner role and organizational capability, where the organizational learning capabilityis higher for line managers and strategic HR role perception is higher for HR managers.The study provides evidence of the involvement of line manager’s role in HR althoughthat was not directly measured. In terms of the quality of the role of HR, it does notconform to high quality of a mean score of 160 and above as stated by Ulrich (1997),but is currently close to high quality (mean ¼ 157.60). Further, from the sample of 640managers we conclude that strategic HR roles are predicted by both the firm’s profit andfinancial turnover while organizational learning capability is predicted by the firm’sprofit and not by financial turnover. This theoretically and empirically proves that abetter fit with the organizational variables of HR leads to better performance and hencecompetitive advantage. The results support the theory of the human resource-basedview of the firm (Paauwe and Richardson, 1997). The results of the study providefurther support to the performance prediction of the Indian economy (Budhwar, 2001,2003), wherein the second-generation reforms are being incorporated in the Indianeconomy, which seems to be responding positively to these. On the other hand, theWorld Bank prediction of India emerging as the fourth largest economy of the world by2020 also gets credence from the results. Finally, using multiple employees asrespondents in this study provided a psychometrically sound measure of the strategicHR role – something that has rarely been observed in the past (Gerhart et al., 2000;Wright et al., 2001).

Thus, this studyfindsempirical support that strategicHRroles are significant, togetherwithorganizational learning capability, in determining their impact on the organization’sperformance, and these are positively correlated and are better perceived by HR managers.This implies that HRmanagers should be equal partners in the business strategy formulation,with representation of HR on the board of directors of the organization, which is nothappening in India. HRmanagers in India must now let go of the re labelling from personneltoHRand should take onmore responsibilities with linemanagers tomake the functionmorestrategic. Practical implications of HR being the ‘nerve centre’ of the organization thus


remains strong, especially against the backdrop of continuous change and competition fromthe global and transnational firms. With the radical change in the environment a shift in therole was imperative for the HRM function, which the current study provides. However, thetheoretical implication and challenge lies in institutionalizing the strategic roles in theworking processes of the organization in which the managers are working. HR strategicinterventions should be given more visibility and constant efforts must be made within theorganization to benchmark against the best practices or better still to set benchmarks if notavailable. Therefore there is a practical need for continuous environmental scanning, bothinternal andexternal, to facilitate thisprocess.HRdeliverables becomecrucial to thefirm, andthe role of HR metamorphoses to line managers, with practical implications for HRIS,emerging as an enabler of the HR function, which would lead to better efficiency of the HRrole and free HR managers for strategic roles. Theoretical implications are present to gobeyond these four roles and explore newer roles, which may be customized according to theorganizational prototype. Finally, linemanagers in India also perceive these twovariables to acertain degree of significance, and their organizational learning capability is better than theirHR counterparts. There are practical implications for the organizational learninginterventions that need to be designed and there is a need to look constantly within and askquestions to find out whether the learning that is taking place at the individual, team and thesystem level is drivenby a coalition of line andHRmanagers or not. This implies a need for anHR audit that examines the nature of this initiative and whether it is always affecting thefinancial performance or not.

Limitations

There is of course, the notion of reverse causality (Paauwe and Richardson, 1997) whichthe study has not looked into, i.e. financial performance in turn may be responsible formoderate levels of correlation between strategic HR roles and organizational learningcapability. In addition, there may be more than the four roles which the study could havepursued which future studies can focus on. Further research can refine the study to includethis factor and can further refine the sampling technique because the sample size collectedfor the study is not homogenous in size. Single respondents who were managers were thepoints for data collection. Their biases and perceptions may have affected the ratings ofthe questionnaires (Whitener, 2001). The study focuses only on the managerial cadresof the organization. Further research in this area may include non-managerial employeesin different units and functions of the organizations. A dynamic co-relational studycomparing organizations in time period 1 and time period 2 would have given interestingresults, and further research can examine this. In this survey firm performance indicatorsof return on equity (ROE), return on assets (ROA), Tobin’s q, and market value added(MVA) (Ellinger et al., 2003) could not be used, which further studies can pursue.Moreover, the strategic HRM dimensions analysed the role of HR, but unique andcustomized HRM practices of each organization could not be studied which would haveclarified the role of HRM further and made the study more interesting. The conclusions ofthis thesis would not yield generalizations. Larger sector wise studies would be requiredfor further validation.

Appendix A. Theoretical framework of the development of the OLC (Ramnarayan,1996) questionnaire based on inhibitors to the learning process in Indianorganizations


Table

1A

Blo

cks

tole

arn

ing

inIn

dia

no

rga

niz

ati

on

s(R

am

na

raya

n

an

dB

ha

tna

ga

r,1

99

3;

Ra

mn

ara

yan

an

dN

air

,1

99

3)

Lea

rnin

gch

all

eng

ere

sult

an

tin

dev

elo

pin

gle

arn

ing

cap

ab

ilit

yN

=1

68

6In

dia

n

ma

na

ger

s

Th

eore

tica

lsu

pp

ort

Functional

myopia

1.

Cle

ar

focu

so

no

bje

ctiv

esa

nd

pla

ns

for

inte

rna

lin

teg

rati

on

System

sperspectiveonshared

vision(Senge,1990)

†clearfocusonobjectives

†attentionto

integrationand

amongdepartm

entsand

functions

System

sthinking(Leonard-Barton,1992;Stata,1989)

†attentiontoverticalintegration

System

icthinking(M

cGill

eta

l.,1992);System

sperspective

(Nevis

eta

l.,1995)

Commandandcontrolorientation

2.

Sen

siti

vity

top

eop

lep

ote

nti

al

an

dn

eed

s

Facilitativeleadership

(SlaterandNarver,1995);Shared

priorities

andvalues

(O’Brien,1990)

Team

learning(Senge,1990)

Preoccupationwithday-to-day

routines

3.

Co

nce

rnfo

rlo

ng

-ter

mp

lan

-

nin

ga

nd

succ

ess

Consciouseffortsto

developmentoflatentorintangible

efforts

(Itam,1987);Integrationofinternal

knowledge(Leonard-

Barton,1992)

Excessiveform

alization

4.

Su

pp

ort

for

exp

erim

enta

tio

n

an

dcr

eati

vity

Creativityrequires

deliberateandtemporary

relaxationofrules

(March,1971);Opennessandexperim

entationandopennessto

new

ideas(Stata,1989);Opennessandcreativity(M

cGill

eta

l.,

1992)

Insufficientexternal

orientation

5.

En

viro

nm

enta

lsc

an

nin

gAbsorptivecapacity(Cohen

andLevinthal,1990);Environ-

mentalresponsesareinterpretedbyindividualswholearnby

updatingtheirbeliefs

aboutcause

–effect

relationships(Lee

eta

l.,1992);Processingofinform

ation(H

uber,1991)

Lackofurgeforchange

6.

Co

nce

rnfo

rd

evel

op

men

to

f

cap

ab

ilit

ies

Old

successdoes

notlead

tosuccessin

thefuture

(DeG

eus,

1988;McG

ill

eta

l.,1992;Nam

anandSlevin,1993;Nonaka,

1994;NonakaandTakeuchi,1995;SlaterandNarver,1995)


Table

1A

(Co

nti

nu

ed)

Blo

cks

tole

arn

ing

inIn

dia

no

rga

niz

ati

on

s(R

am

na

raya

n

an

dB

ha

tna

ga

r,1

99

3;

Ra

mn

ara

yan

an

dN

air

,1

99

3)

Lea

rnin

gch

all

eng

ere

sult

an

tin

dev

elo

pin

gle

arn

ing

cap

ab

ilit

yN

=1

68

6In

dia

n

ma

na

ger

s

Th

eore

tica

lsu

pp

ort

Continuouslearningandexperim

entationculture

(McG

ill

eta

l.,

1992);Experim

entationandlearningfrom

pastexperience

and

from

others(G

arvin,1993);Continuousexperim

entationand

learningfrom

pastsituations(Slocum

eta

l.,1994)

Sourc

e:Bhatnagar

(2004).


Appendix B

Some select items of human role assessment survey (40 items) (Conner and Ulrich, 1996).

Strategic partner (SP)

HR helps the organization accomplish business goalsHR participates in the process of defining business strategiesHR makes sure that HR strategies are aligned with business strategyHR effectiveness is measured by its ability to help make strategy happenHR spends time on business planning

Administrative expert (AE)

HR helps the organization improve operating efficiencyHR participates in the process of delivering HR processesHR makes sure that HR processes are efficiently administeredHR effectiveness is measured by its ability to efficiently deliver HR processesHR spends time on operational issues

Employee advocate (EA)

HR helps the organization take care of employees’ personal needsHR participates in the process of improving employee commitmentHRmakes sure that HR policies and programmes respond to the personal needs of employeesHR effectiveness is measured by its ability to help employees meet personal needsHR spends time listening and responding to employees

Change agent (CA)

HR helps the organization adapt to changeHR participates in the process of shaping culture change for renewal and transformationHRmakes sure thatHRprocesses andprogrammes increase theorganization’s ability to changeHR effectiveness is measured by its ability to help an organization anticipate and adapt tofuture issuesHR spends time on supporting new behaviours to keep the firm competitive

Business partner role 5 SP 1 AE 1 EA 1 CA

Some select items of organizational learning capability questionnaire (Ramnarayan, 1996)Five-point scale (R refers to reverse the score, for instance 1 ¼ 5)Clear focus on objectives and plans for internal integration

Clear focus on objectives:

Most of our senior officers are so busy with the routine day-to-day work and fire fightingthat they have no time for anything else (R).Divisions/groups with the task of planning lack sufficient influence.


† The senior officers do not back up the innovative ideas with visible support and energeticaction (R).

† The organization adopts administrative systems and programmes withoutcarefu examination of skill, abilities, beliefs, and values of personnel at the operatinglevels (R).

Attention to integration and among departments and functions:

† Officers of the different functions/divisions consider their own functional areas asthe only important ones.

† It is difficult to learn about new ideas and developments that other divisions/functionsare working (R).

Attention to vertical integration:

† Plans do not take into account constraints and problems at operating levels (R).† Operating personnel feel very little commitment to organizational plans (R).† The senior officers rely too much on formal performance reports and miss the

critical concerns at the operating systems (R).

Sensitivity to people potential and needs

† Officers and staff have a great deal of trust in the senior management.† The senior management recognizes the importance of obtaining ideas from peopleat the operating levels.

† The senior officers genuinely believe that they can learn from their colleagues andsubordinates.

† Management scans the internal climate and has a good ‘feel’ of the problems ofemployees at lower levels.

Concern for long-term planning and success

† Officers at all levels participate extensively in periodic reviews of strengths,weaknesses, opportunities and threats.

† Officers and staff are clear about the priorities of the total organization.† New administrative systems are adopted without careful preparation.Dialogue and discussion are used extensively to develop understanding of new plansand programmes of the organization.

Support for experimentation and creativity

† Officers are encouraged to experiment with new methods and approaches.† Suggestions and innovations are handsomely rewarded.† Participative forums are available to officers for introducing new ideas.† Management acts quickly on innovative ideas.


Environmental scanning

†Most national and global trends are quickly picked up and the important informationreaches the concerned personnel.

† We are aware of the latest developments in the work being done by similarorganizations within and outside the country.

Concern for development of capabilities

† Regular attempts are made in the organization to develop awareness oforganization-wide issues among officers to different functions/divisions.

† Knowledge outsiders are invited to share their ideas with officers and staff.† The senior officers genuinely believe that they can learn from their colleagues andsubordinates.

† Employee development receives a high priority in the organization.

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