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  The New HRM 

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In today´s rapidly changing environment, firms have to find new ways of competing. To do this, they have to develop new ways of organizing their activities. How has this affected the way they manage their human resources? What are the implications of the new forms of organizing (NFOs) for human resource management? That is the question addressed in this paper by Professors Carlos Sánchez-Runde and Javier Quintanilla of IESE and Professor Richard Whittington of Said Business School (Oxford University). Building o­n preliminary results from a European research project, the authors focus o­n how HRM is called upon to facilitate the operation of the new organizational arrangements.

The first task is to determine what are the characteristics of the new forms of organizing. Based o­n existing research, the authors identify a number of key features: unlike traditional organizations, which grow by exploiting economies of scale and scope and by diversifying, NFOs seek to develop economies of depth and focus o­n narrower areas, while subcontracting peripheral activities and entering into alliances with other firms; also, NFOs eliminate the traditional divisions between line and staff functions, strategy formulation and implementation, and the vertically and horizontally differentiated roles of divisions and headquarters; they rely o­n downsized and delayered structures, interunit integration and interdependence through multifunctional teams; open communication across levels; horizontal coordination mechanisms such as cross-functional research and development teams; mutual support and involvement through total quality management; flexible work arrangements; and self-discipline rather than hierarchical supervision and enforcement.

A systemic view of the firm suggests that such changes in strategy and structure must necessarily be accompanied by changes in the way the firm manages its personnel. The authors review the main differences between the traditional and the new approach to job design and control, leadership, teamwork, managerial roles, selection, careers and development, and reward systems.

Finally, they cite preliminary evidence from the "Organizing for the 21st Century" research project, showing how European firms are starting to innovate in the way they manage their personnel.

This article is based on:  Human resource management implications of new forms of organizing
Publisher:  IESE
Year:  2000
Language:  English