Hr. strategies and practices in crisis timesHuman resource strategies and practices in crisis times

Abstract

This dissertation examines from a contextual perspective the human resource (HR) strategies and practices adopted under organizational decline situations. In order to study this research objective, the first theoretical study deeply analyzes the literature on organizational decline and turnaround strategies to better comprehend the internal and external sources of decline and the retrenchment and recovery turnaround strategies and the interrelations among them. Subsequently, we bring this rich analysis from the corporate strategy literature to the strategic human resources management (SHRM) field of study to propose a contextual model of HR strategies and practices in crisis times. The second study specifically focuses on the relationship between internal sources of decline, turnaround strategy and SHRM. Through a case study analysis of an important legacy airline company that has been immersed in successive organizational decline periods, we aim to better comprehend this relationship and build theory. The results show that in situations of firm-based sources of decline, a HR strategy based on flexibility-oriented staffing, compensating, planning, and training practices will contribute to the demanded recovery strategy and, moreover adopted retrenchment measures have to be in line with this demanded recovery strategy to target firm-based sources of decline. The third study aims to expand and build upon our understanding of the relationship between sources of decline, turnaround strategies, HR strategies and practices, and the limiting effect of national institutions. So, it is a further step on the comprehension of the pressures that impact on the companies in tough situations. This research incorporates the institutional pressures not in a single external-pressure label, but it separates external sources of decline from the institutional pressures. We elaborate a comparative study in two legacy airlines companies set in two different institutional environments. Our results show that when national institutions grant a number of rights to employee representatives, an innovative HRM strategy will facilitate the demanded recovery strategy under internal sources of decline and when national institutions grant fewer rights to employee representatives, a deviant HRM strategy will contribute to the demanded recovery strategy under internal sources of decline. In addition, a conformist HRM strategy towards external-institutional pressures such as trade unions will delay the turnaround process. This dissertation contributes to the organizational decline and turnaround strategy and the SHRM fields of research in several ways. Firstly, it contributes to the literature on strategic human resource management (SHRM) as it brings the rich analysis from the sources of the decline and turnaround strategies to the SHRM field of study. Secondly, it enriches the turnaround strategy with the incorporation of the efficient management of HR in this research field. Thirdly, it studies the HR strategies and practices in decline situations and it considers the recovery responses and not just the retrenchment or downsizing responses, as usual. Fourthly, it enriches the decline and turnaround literature as it considers the institutional context to explain the differences in turnaround decisions. The results of this dissertation could help managers to realize on the importance of detecting the causes of decline and the competitive position when proposing appropriate HR strategies and practices. Even if it may seem counterintuitive, SHRM in declining organizations is not just a matter of pay cuts, hiring freezes, layoffs, or reducing hours. HR professionals can increase their strategic value, and therefore the value of HR practices, by tailoring their response to the source of decline.