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lity of practitioners to isolate maximally effective individual practices (Ramsay et al., 2000).
The rate of change, effects of technology, globalization, pressure to reduce costs, innovate, increase productivity, quality, and speed to market, while improving flexibility, has created a unique opportunity for HR practitioners to leverage a strategic-partnership with management for value creation (Spreitzer, Cohen, & Ledford, 1999). The ‘personnel’ approach, of HR in recent years, has seen a tendency for HR to be regarded as an overhead, a cost to be minimized or reduced through outsourcing. Becker and Gerhart (1996) suggest that HR can be a strategic asset, rather than a ‘cost’, able to give the organization a competitive advantage. Amit and Shoemaker (Amit & Shoemaker, 1993) define a ‘strategic asset’ as “the set of difficult to trade and imitate, scarce, appropriable, and specialized resources and capabilities that bestow the firm’s competitive advantage”. From a resource perspective, HR practices need to create value, and be rare and difficult to imitate, to convey a competitive advantage (Barney, 1991). Embedding HR practices in broader firm processes, policies and strategies, provides efficiencies that are difficult to identify (and therefore inimitable) and can underpin a firm’s competitive position as ‘core competencies’ (Wright et al., 2001). Embedded HR practices may be also be causally ambiguous, and path dependent, and therefore convey an advantage through competitors requiring time to decipher and imitate policies and strategies. It is also difficult for competitors to replicate socially complex systems such as culture and personal relationships that form the context for HR practice selection and operation (Pfeffer, 1994).
2.7 Corporate Performance
2.7.1 Definitions of Performance
The phenomenon of “performance” in business has been described in many ways throughout the years, ranging from effectiveness and efficiency to productivity. It has been a measure applied to individuals, groups, or organizational units, entire organizations, whole industries, and entire nations. The concept has been used interchangeably with notions such as output, motivation, individual performance, organizational effectiveness, production, profitability, cost effectiveness, competitiveness, and work quality (Pritchard, 2002).
The phenomenon appeared most readily under the auspices of “productivity” in the 1940’s, 1950’s, and 1960’s (Weber, 1947; McGregor, 1960). In the 1970’s, terms such as “effectiveness” (Steers, 1975; Campbell, 1977) were used. In the 1980’s and 2000’s, the phenomenon has been referenced as “performance” (Kotter & Heskett, 2002; Lawler, Mohrman,& Ledford, 2001). However it is used or described, it is usually some measure of output relative to goals (effectiveness) or output relative to inputs (efficiency) (Pritchard, 2002).
For the purpose of this study, the phenomenon of organizational effectiveness will be referred to as “performance” and will be measured via perceptions of top organizational members (management) within each participating company. Strong justification for the use of perceptual performance data as a measure of corporate performance is given later.
2.7.2 Performance Models
A variety of organizational performance models exist (Perrow, 1970; Katz & Kahn, 1978; Keeley, 1978; Cameron & Whetton, 1983; Quinn & Cameron, 1983; Quinn & Rohrbaugh, 1983), reflecting t