understanding of the linkages between HR and marketing in the brand management and reputation building processes see also Sparrow et al., 2004.. 2004 Promoting and protect-ing corporate
Trang 1understanding of the linkages between HR and marketing in the brand management and reputation building processes (see
also Sparrow et al., 2004) Naturally enough, given their
back-grounds, education and interests, marketers have been good at using the language of branding and communications to shed new light on people management, and have produced prac-tical tools for assisting HR professionals to apply the language of branding to people management problems However, they have said little about the complex nature of employee identifi-cation with brands and organizations, other than at a general level and usually in highly prescriptive manner As befits busi-ness disciplines that are essentially normative, marketing and communications sometimes fail to deal with the realities or causes of much of organizational life, such as cynical or apathetic employee attitudes to customer service, unethical products and practices, disenchanted managers and the competing pro-fessional identities of many knowledge workers that have little connection with advancing ideas of corporateness
So, for HR professionals, the rising star of corporateness marks a watershed and a real opportunity to become corpor-ate, as well as business, partners However, it also brings signifi-cant challenges for the role of the HR function, as well as the capability of HR professionals to ‘round themselves out’, lead and deliver people strategies that support corporate reputa-tions and brand, CSR and good governance
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Trang 6Managing corporate brands and reputations
2
Making the connections between
strategy, corporateness and HRM
In the opening chapter we introduced two of the most import-ant corporate-level concepts in our model – branding and repu-tation management – and showed how these are important to the key strategic interests of organizations and nations in market economies Reputations and brands provide essential informa-tion to consumers and other stakeholders in an imperfect world Our second message was that brands and reputations, though validated on the outside by consumers and other external stake-holders, are usually driven from the inside by the quality and actions of employees In this chapter we wish to develop this last message by shedding some light on the meaning of brands, branding and reputations, especially for non-specialists in these fields, and discuss how they may be related to each other However, since all ideas in business and management are something of a contested terrain, there are different schools of thought on branding and reputation management, so we also dis-cuss and evaluate some of these This is of great practical import-ance because of confusion over what is meant by branding and
Trang 7reputations Thus we need to be clear about what we mean, how
these ideas might be related to each other and what their specific connections are with people and HRM To do this, it is first neces-sary to trace their intellectual justifications and links to the litera-ture and practice of strategic management, which deals with the highest level and most long-term decisions of organizations
Corporateness and strategic management
Strategic management as a body of knowledge and practice has been dominated by an ‘outside-in’ perspective, often simplified for students and practitioners into the ubiquitous SWOT frame-work This portrays strategy as a three-stage process of
examin-ing the opportunities and threats in external environments of organizations, considering the strengths and weaknesses of internal
resources, and bringing both into alignment The usual empha-sis and core message of this framework, however, is that it is the
external opportunities and threats that drive strategy with internal
resources needing to be brought into line with these environ-mental pressures The major figure in this outside-in approach
to strategic management is Michael Porter (1985, 1996), whose views on strategic success are characterized as being driven by fit with the external environment Porter’s original focus was
on the attractiveness of industries as the driver of strategy and
the forces that shape attractiveness of industries to firms – buyer and supplier power, the threat of substitute products/services and new entrants into the market, and the intensity of competitive rivalry Based
on this external analysis, the main strategic choice for firms was
how to position themselves competitively, either through differ-entiation in the minds of customers, cost leadership throughout the value chain or focus, niche marketing strategies
Accord-ingly, people and HRM were treated as downstream or derived decisions that followed strategic marketing, planning and branding, and were rarely considered to be of significant strate-gic importance
It should come as no great surprise that marketing and brand-ing specialists have drawn intellectual inspiration from such a model, and how they may have contributed to its dominance by
Trang 8elevating the ‘cult’ of the customer (Du Gay, 1996) and, indeed, product branding to an all-time high during the 1980s and 1990s We use the term cult here because there was some ideo-logical as well as rational reasoning used to justify outside-in per-spectives Ideology can be thought of as the use of ideas to promote certain interests, often beyond what might be justified
by the evidence or interests of society in general And there is lit-tle doubt that the interests of marketing and branding special-ists, especially the major marketing consultants, were served by promoting customers at the expense of other stakeholders in organizations
However, when developed economies began to move away from competing on the basis of tangible products and manufac-tured goods to intangible services and, increasingly, knowledge assets, strategic management began to look for alternative explan-ations of success Perhaps the best known of these ‘new strategic management’ approaches is the resource-based view (RBV) of the firm (Barney, 1991, 2002; Grant, 1991) This ‘inside-out’ strate-gic perspective has become a counterpoint to the outside-in car-icature of Porter’s perspective and speaks to the differentiation/ initiative agenda proposed by unique organizational identities
in the opening chapter Though this picture is a little unfair, since Porter has acknowledged the importance of internal resources
in driving strategy (Argyres and McGahan, 2002), his debates with Jay Barney are worth reviewing In contrast to Porter’s focus
on the attractiveness of industries, Barney’s resource-based view
on strategy and, by implication, on HRM, sees the fundamental and, indeed, only sustainable route to competitive advantage as arising from how you put together unique and enviable combi-nations of internal, usually intangible, resources, the principal justification being that everything else is open to inspection and copying The most important of these are often seen to be information and people, and their relationships to other key processes and intangible assets, such as knowledge creation and dissemination, brands and the creation and maintenance of
reputations (Boxall and Purcell, 2003; Martin et al., 2005) Since
these intangibles are, in many respects, the products of specific organizational cultures, defined by the guiding assumptions and values, attitudes, norms of behaviour and key artefacts such as structures, systems and processes, this has led some writers to
Trang 9believe it is how such cultures are managed and how people are selected, developed, rewarded and organized that differentiates firms, especially in the modern knowledge-based industries and growing service sectors of Europe and North America (Pfeffer,
1998, 2005)
So, the RBV has provided a major intellectual and empirical justification for the importance of HRM and its links to key strate-gic decisions on issues such as branding and reputations, and
we will return to it in later chapters in this book Just as the inter-ests of marketing people have been served by the outside-in approach, we have to be a little wary of any perspective that offers
a one-best-way analysis and solution This is especially so for one that promotes another sectional interest – human resources – at the expense of other key aspects of business (Porter, 1996; Argyres and McGahan, 2002) For example, as Porter (1996) has argued, internal resources – people, brands, reputations or knowledge – are of no intrinsic competitive value; it is how they are used and in what contexts they are used that create value for organizations and economies The RBV has also been criticized
for at least two other reasons (Lado et al., 2006), who state that:
■ Resources are intangible (such as organizational knowledge and reputations), so they cannot be open
to measurement, making proof of the idea a near impossibility
■ An organization’s truly valuable (human) resources are difficult to imitate because they are opaque, so how can employees and managers understand and build
on them to create sustainable advantages?
These criticisms have important practical implications for rep-utation management and branding because they have been trad-itionally seen as part of ‘soft’ management, not the numbers game that most managers understand Nevertheless, the RBV has managed to rebalance the debate, based on the rationale that you don’t move a seesaw by sitting in the middle As these two camps are beginning to recognize, however, the answer to this fundamental question on the sources of competitive advan-tage question probably lies somewhere in the middle, with both perspectives having something to offer (Boxall and Purcell, 2003) We shall examine these perspectives in Chapters 6 and 9
Trang 10Core competences and the service–profit chain
Sitting alongside the RBV is another stream of influential strate-gic management literature that has been used to explain effec-tive and sustainable strategic advantage This is based on the
notion of core internal competences (Hamel and Prahalad, 1994; Hamel, 1998) and the complementary idea of the ‘balanced scorecard’ (Kaplan and Norton, 1996, 2001) The balanced
score-card is particularly relevant to the relations between HR and branding since it makes explicit the practical links to balancing the needs and measurement of different stakeholders in an organization – satisfying customers and financial objectives with the effective management and measurement of internal busi-ness processes, including people, and individual and organiza-tional learning and growth Kaplan and Norton (2001) have also developed a strategy map or ‘theory of the business’, which
is, in effect, a cause-and-effect model designed to help managers understand the relationships between critical performance drivers and their associated outcomes A popular and impor-tant derivation of this theory of the business is an approach linking the marketing of services, customer relationship man-agement and customer satisfaction to internal markets and
human resource management – the service–profit chain, first identified by the Sears corporation in the USA (Heskett et al., 1997; Kirn et al., 1999) (see Figure 2.1).
The service–profit chain has been widely used in service industries such as retailing, the hospitality industry, airlines and financial services to explain the links between employee atti-tudes, customer satisfaction and superior business performance For example, drawing on the service–profit chain, Hemmington and Watson (2003) have argued that the service encounter pro-vides the best and probably only unique opportunity to differen-tiate service to individual customers, thereby creating higher levels of customer satisfaction and repeat business in the hospi-tality industry The reality of the delivery of employee-centred actions was more important than the marketing communica-tions literature of hotels; through promising high levels of customer service, often through vague and clichéd statements, they failed to differentiate between hotels and had the negative potential to over-promise what could not be delivered