OUM BUSINESS SCHOOL

SEMESTER SEPTEMBER (2014)

BMHR 5103

HUMAN RESOURCE MANAGEMENT

ASSIGNMENT 1

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LEARNING CENTRE :
 HUMAN RESOURCE MANAGEMENT
(BMHR5103)

CASE STUDY OF STRATEGIC HUMAN

RESOURCE MANAGEMENT IN IKEA

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TABLE OF CONTENT

BA PERKARA MUKASURAT
B

TAJUK

PENGAKUAN ii

PENGHARGAAN iv

ABSTRAK v

ABSTRACT vi

KANDUNGAN vii

SENARAI JADUAL x

SENARAI RAJAH xii

SENARAI SINGKATAN xiii

SENARAI LAMPIRAN

1 PENGENALAN 1

1.1 Pendahuluan 1

1.2 Pernyataan Masalah 1

1.3 Objektif Kajian 9

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1.4 Skop dan Limitasi Kajian 9

1.5 Metodologi Kajian 10

1.6 Kepentingaan Kajian 11

1.1 Introduction

BCI Media Group is the leading provider of building and construction

information across the Asia Pacific region. Dr. Matthias Krups in Australia have
established BCI Media Group in 1998. The company has an experience in providing
clients with quality project leads across a multitude of construction projects in each
country. Dedicated team researches and reports on construction projects within the
public and private sectors, from concept design and planning stages to documentation,
tender, the awarding of contracts and commencement of construction. Our
complimentary business services combined with our core project leads product aims to
provide marketing and sales alignment for clients by giving them the opportunity to
find and engage with their target audience easily and at the right time. We provide the
avenues, services and tools for our members sales and marketing teams to work
together efficiently and to take a collaborative and strategic approach to building their
business.

with 23 offices across 10 countries and reporting on construction projects

across 13 countries

1.2 Pernyataan Masalah

In todays dynamic and high tech environment it is very important for a

business or an organisation to keep up with the pace and manage its resources in the
most effective and efficient manner. It is not one man's job to run the show but
requires a workforce and to utilise this resource in the most successful manner, some
sort of management is required. This defines the need of Human Resource

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Management in any organisation. Further to manage the workforce well derives the
need of thinking and planning. This essay discusses Human resource management, its
importance, defines strategic thinking, examines the need of strategic thinking in
human resource management and also discusses the key aspects of strategic Human
Resource management. Also, through a case study on IKEA, to analyse how strategic
human resource management can be a competitive advantage.

Firstly analysing what is human resource management and its need in an

organisation. (Byars and Rue, 2006) defined human resource management as a system
of activities and strategies that focus on successfully managing employees at all levels
of organisation to achieve organisational goals. Managing people is an important task
and is of great strategic relevance as employees are the most valuable asset of an
organisation. The goal of any organisation is to achieve success through its employees
by developing good relations with them and working towards common goals. This is
where thinking and planning to effectively manage human resource comes into the
picture. (Therith, C.T , 2009) states 'HRM is the main department which push the
organization to meet the goal because it work with line manager, have a good
communication with all department in organization, know clear about organization's
goal and objective. So HRM is very important to gain success and can be making
Human Resource a competitive advantage.' It includes tasks like keeping the right
employees in the organisation, increase productivity by training and development
programmes, improving job satisfaction, creating employment opportunities etc. Thus,
this implies to have a win win situation for any organisation it is important to have a
well-built human resource management and to do so a strategic approach is most
needed.

Further, for Human resource management to administer a large workforce need

to think strategically. This brings in the need of Strategic Thinking in Human
Resource Management. In Wotton S. & Horne T. (2000) states 'Stratetegic Thinking
involves gathering information, formulating ideas and planning action.' Strategic
thinking is purely a concept of having a plan of action for goodwill of a firm. Human
resources tend to plan, arrange and apply strategy from the hiring of employees. While
creating a human resources plan it is important to consider employees wants and needs
and what can company deliver. Flourishing management of people requires such
planning for a company to meet requirements of employees which affect the way
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things are done at a business place, beginning from hiring practices , trainings ,
assessments & technique. Being able to plan for the needs of employees by thinking
ahead can help to improve the rate of skilled employees who chose to remain working
for a company or are considered as an asset to a company for their smooth operations.
And that is where a strategic thinking takes place for human resources better
management.

There are various approaches for managing Human resources; however the
most important aspect of human resource management is strategic thinking which is
applied over employees which acts as the most important element for a company to
stand in market. Taylor, S., Beechler, S., & Napier, N. (1996, pg 960) states that
'Strategic Human resource Management is used to explicitly link HRM with the
strategic management processes of the organization and to emphasize coordination or
congruence among the various human resource management practices.' Human
resource management department becomes a factual business partner by helping
achieve strategic objectives with employee growth leading heighten the business
competitive advantage. Analysing the strengths and weaknesses of human resource
management can prove to be helpful in classifying the characteristics of which help or
hinder the achievement of strategic objectives (Dr Chaneta, I., 2010, pg 5).
Organizations that adapt strategies of Human Resources and practice their internal and
external environment consistently surely out-perform their stability in market. Since
Human Resources Management set their objectives and strategies by overlooking
organizations mission or purpose, and objectives. While recruiting and selection
human resources keep organizations strategies in concern and rather work as one of
their strategy for selection. Such approach like strategies produce more informed and
purposeful Human Resource Management. Thus, Strategic thinking and human
resources play hand in hand for successful operations in organization.

Strategic Human resource management is a broad approach to study but has

certain key features which are to be kept in mind by the department at all times in
order to reach the competencies. However , another important aspect discussed by
Gravan,T.N. (1991, pg 22) 'The strategically oriented HRD function must have
continuous knowledge of its external environment.' Many scholars have discussed
various aspects of human resource management strategies. Dr. Fan, D.(2013) have
explained the key aspects as Long Term Focus ; New Linkages between Human
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Resources and Strategic Planning ; Proposed linkage between HRM and

organisational performance ; Inclusion of line managers in HRM policy making
process. Firstly discussing, Long Term Focus , which focuses on long term planning of
all human resource strategies. Gravan T.N. (1991, pg 27) states 'Strategic decisions are
usually concerned with the whole organisation and their ability to affect the long term
direction of the organisation'. Strategic human resource management requires a long
term planning , goals and involvement among the top management. Second, New
Linkages between Human Resources and Strategic planning has come out to be the
most important element in strategic HRM. Baker, D. (1999, pg 52) explained one of
the major key aspects as 'SHRM requires a holistic approach, with not only an internal
integration between personnel systems (recruitment, selection, rewards mechanisms,
appraisal performance management), but also an integration between those systems -
summarised in an HR strategy - and the organisation's strategy overall. It can be two
sort of linkage, First One way linkage which takes place when Human resources
involves in the organization from the time of implementation. Second Two way
Linkage takes place when HR takes place right from the point of formulation and acts
as a support by applying there strategies with organization for its betterment. The third
aspect is Proposed Linkages between HRM and organisational performance. Katou,
A.A (2008, pg 120) explains this aspect as 'the literature points out is that the link
between HRM and organisational performance is considered like a 'black box', i.e.,
lack of clarity regarding 'what exactly leads to what.' This means the HR strategy
should be always be aiming towards organisational performance. There should be a
direct link between the two. Last but not the least the fourth key aspect is Inclusions of
line managers in the HRM policy making process. Where Strategic Human resources
involves line managers actively by conducting training sessions involves in coaching
and analysis of inferiors. They are held responsible on fulfilling and considering
Human resources needs within their respective departments. And more importantly
plays an active role in making sure that operations run on Human resources policies,
planning and processes. Such involvement of line managers evident itself in the set
strategies and helps in achieving targets. ' Martell K. & Carroll S.J. (1995, pg 255)
states 'A CEO of a large trucking department echoed his statement saying Human
resources management is too important to be left in Human resource department.'.
Three proportions of the line manager's role are Analysing skills, Coaching skills, and
share learning style.

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Further to analyse the importance of strategy human resource management,

discussing a case study on IKEA's strategy. (Maxwell, G. , 2008, pg 11-13) IKEA is
one of the largest Swedish retailer companies dealing into well designed furniture and
at the low or affordable prices. IKEA also had its vision and mission which was 'to
create a better every day life for many people'. According to IKEA their vision always
depended on the business idea and human resource idea which deliver their employees
a motivation to excel both as individuals and professionals so that they can get
together and work on one mission which was to make a better life for themselves and
their customers. Human resources of IKEA has surely provided facilities to their
employees like flexible timings, part time and full time hours, emergency leaves, sick
leaves, casual leaves, leaves for caring of dependent or kids, employee assistance
programs, information , advices on work life balance and health promotion. While
talking of IKEA's example one of their phase in the journey of the industry was when
they did health promotion programme in IKEA Glasgow ,which was not expected to
be a particular priority. However, in addition to provide healthy meals and large public
cafeteria all employees could take an advantage of free medical footcare and massage
session during work time. Offering such service and activities was to relax their body
and mind since they invest their so much time on sop floor.

On an individual level, it becomes sometimes a very hectic phase of life when

the try to balance their profession and personal life. And IKEA human resource
department realizes and tend to work on their strategies for making their employees
feel relax even at the work environment where at the same time they also work
efficiently on the organization's mission or goal. The idea was to make them enjoy
their work. So, this is surely one of the successful example for importance of role of
HR which made appositive impact upon co-workers , they felt that the company cares
about them as an individuals and insisted them well to feel loyal towards the company.
Such arrangements resulted a positive and improved effect up on attendance and staff
retention, raised the profile of fitness and health and insisted staff to feel that there is
an investment on them.

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Therefore, Human Resources and their set strategies play a crucial role in order
to make a considerable involvement to the success of organisation. Since they
participate majorly in how closely the skills of the organisation are aligned with its
strategic mission and plans, individual performance and productivity, quality amongst
the employees of decision making which is a very important aspect for an HR to judge
amongst people to people before hiring more specifically amongst line managers.
Adapting SHRM approach requires the alignment of HR strategies and overall
business strategy. Hence, HR involves into various theories to live up to the
organisation's mission and vision which is the overall strategy of any organisations.
While explaining the importance of a strategic human resources in an organisation it
concludes fairly that no matter how small and large scale firms are there, the role of
human resources cannot be played by any department as a secondary responsibilities.
Since one department of one skilled employee cannot work on strategies of a business
and their responsibilities at the same time. Since every firm have different departments
or areas, highly skilled employees, with categorized responsilities within one firm to
achieve a common goal. Human resources strategies involve regular training,
counselling and guidance for the employees and also involve people to extra activities
which take care of the employee's stressful environment.

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REFERENCE

Maja, Z. (2008). IKEA mulls joint venture with Bosnia furniture maker. Bloomberg.
Retrieved 21 June 2016.

Patrick C. and Robert L. (2013). "Europes Richest Person Kamprad to Move Back to
Sweden". Bloomberg. Retrieved 24 July 2013.