AN INVESTIGATION INTO STRATEGIC HUMAN

RESOURCE MANAGEMENT IN INDONESIA:

A GROUNDED RESEARCH APPROACH

Arif Hartono

This thesis is presented for the degree of

Doctor of Philosophy of Murdoch University

Murdoch University
2010

DECLARATION

I declare that this thesis is my own account of my research and contains as its main
content work which has not previously been submitted for a degree at any tertiary
education institution

Perth, 7th October 2010

Arif Hartono

ii

ACKNOWLEDGEMENTS
In the name of Allah, The Most Gracious, The Most Merciful
First and foremost, I would like to extend my greatest gratitude to God, Allah SWT.
Only His will helped me to complete this thesis. It was a long and tiring journey and
there was a stage when I almost gave up.
A number of people have contributed to the completion of my thesis and I wish to
acknowledge my appreciation for their support. Most importantly, I would like to
acknowledge and express my deepest thanks to Professor Lanny Entrekin and Professor
Brenda Scott-Ladd for their continuous guidance, inspiring ideas, thoughtful
suggestions, priceless critical comments, and kind understanding throughout the doctoral
journey.
I would also like to thanks the Universitas Islam Indonesia (UII) for providing
scholarships to achieve the PhD degree. Thanks also go to Murdoch University for
providing a PhD completion scholarship, while I was in a financial emergency stage.
I am grateful to sixty-three HR managers for sharing their experiences in managing
people at their companies. Without their information, this study would not have been
possible. I am also thankful to Professor Niki (Padang), mas Hamid (Medan), Salim
(Makasar), Sarno and Wahyudi (Banjarmasin), and mas Rofiq (Jakarta) for providing
accommodation during the interviews in their cities.
Special thanks should go to Dekar and his family (Tifa, Igo, Nia, and Atha) for
providing accommodation and a friendly family environment during the critical time for
completing the thesis in Perth. I am sorry for disturbing your family life.
I am also grateful to Dr. Hakim and Roman for their support in Perth. For Warsono, Dr.
Sobirin, and Al Hasin; thanks for being warm friends during a difficult and lonely period
in Yogya.
Special appreciation should also go to Dr. Ghiali for acting as proof reader for this
thesis. Her sincere support is an invaluable contribution to the perfection of this thesis.
I am particularly indebted to mbah Pang and mbah Kat for taking care of my father
while I was away. I am also grateful to mas Har for his understanding of my situation.
Further thanks go to mbak Nis and her family, and also mas Agus for helping take care
of my sons.
Last, but never least, my heartfelt thanks to my beloved wife Lilis and my dearest sons
Dzoel and Aik, for your prayers, support, encouragement, patience, and understanding.
Without your love, affection, and sacrifices this study could not be accomplished. I am
so sorry for making your life miserable during my PhD journey.

iii

DEDICATION

To My Loving Family:
Wife: Lilis Ummi Faiezah
Sons: Muh. Luthfi Taufik Dzulfikar and Muh. Fakhri Taufik Ghiffari
I can never accomplished this without your unconditional love and support

In Loving Memories:
Mother: Hj. Mutiatun
Father-in-law: H Ismakoen

With Love and Respect:

Father: H. Badarudin Mawardi
Mother-in-law: Hj. Umi Mudawamah Solikhah
My entire family

iv

ABSTRACT
This thesis reports on a study investigating the role of strategic human resource
management (SHRM) within the Indonesian context. This study is significant for two
important reasons. The first is that the link between strategy and HR management in
Indonesia appears to have excited little interest from researchers, despite that SHRM has
a great deal to offer in assisting organizations manage one of their most valuable assets.
The second is that greater understanding of this relationship will enable more strategic
formulation and implementation of SHRM. The research has three main foci. The first
is to examine how Indonesian organizations align their human resource management
(HRM) practices to the business or organizational strategies. Second is to explore the
factors that link the HR department to the strategic decision process. The third is to
identify key determinants of successful implementation of HR strategy.

No apparent studies so far provide a clear picture of how strategic HR management is

implemented in Indonesian organizations; therefore, a grounded theory methodology
was used. Data was collected by interviewing sixty-three HR managers from the
industry sectors of hotels, hospitals, agriculture and textile manufacturing. Participants
were drawn from eight states across Indonesia. Consistent with grounded research
principles, data was analyzed using five stages of coding procedure; open coding, axial
coding, selective coding, conditional matrix, theoretical proposition, as described by
Strauss & Corbin (1998).

The findings of the study fall into three themes. First, is the approach Indonesian
organizations use to align HRM to business or organizational strategies, which usually
follows one of two approaches; a best practice or universalistic approach, or a best fit or
contingency approach. The best practice perspective confirms a general pattern for
managing Indonesian employees and this relates to organizations working within the
three following conditions: the organizational process is simple; they have a captive
market; and the organization is in a mature life stage.

The best fit or contingency

domain is adopted by organizations when business or competitive strategy is the major

variable for determining the HR strategy. Other factors influencing HR strategy include
v

internal (organizational) and external (environmental) factors such as the organizations

size, structure, life cycle, access to capital, market competition, technological changes,
government rules, global changes, economic condition, culture, and the unions. The
interactions among these influence HR strategy, either directly or indirectly by
influencing the business strategy.

In addition, SHRM occurs through an integrative or two-way linkage. The integrative

linkage is where the HR department is involved throughout the whole process and
included in formulating strategy, decision-making and implementing strategy. In twoway linkage, the HR department participates in formulating and implementing strategy
but is not involved in the decision making process. The choice for each approach
depends on the fit with the organizational mindset, the organizational structure, and
informal strategic decision process. Finally the determinants of HR strategy
implementation match the central determinants of credibility, organizational support and
the role and skills of the HR professional, as found in Western or international
organizations.

Understanding which factors are being utilized or adapted offers not

only a significant contribution to our knowledge of the strategy HR link, but will also
have significant implications for practice in Indonesia and ample opportunity for further
testing of this link.

Keywords:
Strategic human resource management, Indonesia, grounded research, best practice, best
fit, two-way linkage, integrative linkage, credibility HR strategy, organizational support,
role of HR people.

vi

TABLE OF CONTENTS

DECLARATION

ii

ACKNOWLEDGEMENTS

iii

DEDICATION

iv

ABSTRACT

TABLE OF CONTENS

vii

LIST OF TABLES

xiii

LIST OF FIGURES

xv

LIST OF ABBREVIATIONS

xvi

CHAPTER I: INTRODUCTION TO RESEARCH

1.1.

Introduction

1.2.

Background to the Research

1.3.

Research Setting: An Overview of Indonesia

1.3.1. Demographics of Indonesia

1.3.2. Socio-Cultural of Indonesian People

1.3.3. Economy of Indonesia

1.3.4. Politics and Government of Indonesia

12

1.4.

HRM in Indonesia

15

1.5.

The Purpose of the Study

18

1.6.

The Significance of the Study

19

1.7.

The Overview of Methodology

20

1.8.

The Overview of the Thesis Structure

23

1.9

Conclusion

25

CHAPTER II: LITERATURE REVIEW

26

2.1.

Introduction

26

2.2.

The Evolution of HRM

27

2.2.1. The Origins of HRM

32

vii

2.2.2. From Personnel Management to HRM

34

2.2.3. The SHRM Era

38

2.3.

The Foundation of SHRM

40

2.4.

The Approaches into SHRM

45

2.4.1. The Best Practice or Universalistic Approach

46

2.4.2. The Best Fit or Contingency Approach

57

2.4.3. The Configurational Model

69

2.4.4. The Approaches into SHRM: A Summary

69

2.5.

The Role of HRM in the Organization

70

2.6.

The Implementation of HR Strategy

83

2.7.

Conclusion

93

CHAPTER III: RESEARCH DESIGN

94

3.1.

Introduction

94

3.2.

Selecting a Research Design

95

3.3.

Selecting a Research Paradigm

105

3.3.1. Research Paradigm Selected: Interpretive

111

3.3.2. Research Ontology Selected: Constructivist

114

3.3.3. Research Epistemology Selected: Subjective

116

Selecting a Research Methodology

118

3.4.1. Research Methodology Selected: Qualitative Research

119

3.4.2. Qualitative Methodology Selected: Grounded Study

123

Research Method: Grounded Theory

126

3.5.1. Data Collection Method

127

3.4.

3.5.

3.5.1.1. Sample Technique: Theoretical Sampling

129

3.5.1.2. Preliminary Interviews: Unstructured Interviews

131

3.5.1.3. Main Interviews: Semi Structured Interviews

133

3.5.1.3.1. Designing Semi Structured interview

134

3.5.1.3.2. Access to Site

134

3.5.1.3.3. Venue of Interviews

135

3.5.1.3.4. Duration of Interviews

135

viii

3.5.1.3.5. Language Used

136

3.5.1.3.6. Interview Process

136

3.5.2. Data Analysis Method

140

3.5.2.1. Data Transcription

144

3.5.2.2. Data Coding

145

3.5.2.2.1. Open Coding

146

3.5.2.2.2. Axial Coding

148

3.5.2.2.3. Selective Coding

149

3.5.2.2.4. Conditional/ Consequential Matrix

151

3.5.2.2.5. Theoretical Proposition

152

3.5.2.3. Manual Analysis

152

3.6.

Establishing Trustworthiness

154

3.7.

Ethical Considerations

155

3.8.

Conclusion

157

CHAPTER IV: RESEARCH FINDINGS

158

4.1.

Introduction

158

4.2.

Background of Participants

159

4.3.

Research Findings

162

4.3.1. The Approaches to SHRM

163

4.3.1.1. The Best Practice or Universalistic Approach

163

Organizational Process

164

Market Condition

166

Organizations Life Cycle

166

4.3.1.2. The Best Fit or Contingency Approach

167

4.3.1.2.1. Business Strategy

168

4.3.1.2.2. Internal or Organizational Context

171

Organizations Size

171

Organizations Structure

172

Stage in Organizational Life Cycle

173

Access to Capital

174

ix

4.3.1.2.3. External or Environmental Context

174

Market Competition

175

Technology

176

Government Rules

178

Global Changes

179

Economic Condition

180

Culture

182

Union

185

4.3.2. The Role of HRM and Its People in the Organization

186

4.3.2.1. The Two-Way Linkage

187

Organizational Mindset

188

Organizational structure

189

Informal Strategic Decision Process

190

4.3.2.2. The Integrative Linkage

190

Organizational Mindset

191

Organizational structure

194

Informal Strategic Decision Process

196

4.3.3. The Determinants of HR strategy Implementation

4.3.3.1. The Credibility of HR Strategy

197
198

Level of Understanding of Business Strategy

198

Compatibility with the Condition of Organization

200

Involvement of Organizations Members

201

4.3.3.2. Organizational Support

203

Top Management Support

204

Partnership among Departments

206

Organizational or Corporate Culture

210

4.3.3.3. The Role of HR Departments Staff

215

The HR Staff Capability

215

The HR Staff Autonomy

217

The HR Staff Commitment

220

4.4. Conclusion

222

CHAPTER V: DISCUSSION AND CONCLUSION

225

5.1.

Introduction

225

5.2.

The Approaches to SHRM

226

5.2.1. The Best Practice or Universalistic Approach

226

5.2.2. The Best Fit or Contingency Approach

230

5.2.2.1. Business Strategy

232

5.2.2.2. Internal or Organizational Context

233

Organizations Size

234

Organizations Structure

236

Stage in the Organizational Life Cycle

237

Access to Capital or Quality of Business Funding

238

5.2.2.3. External or Environmental Context

239

Market Competition

239

Technology

240

Government Rules

241

Global Changes

243

Economic Condition

244

Culture

247

Union

250

5.2.2.4. The Adoption of the Best Fit in

251

the Indonesian Organizations

5.3.

The Role of HRM and Its People in the Organization

253

5.4.

The Determinants of HR strategy Implementation

258

5.4.1. The Credibility of HR Strategy

258

Understanding of Business Strategy

259

Compatibility with the Conditions of Organization

260

Employee Involvement

260

5.4.2. Organizational Support

261

Top Management Support

261

Partnership among Departments

262

xi

Organizational Culture

263

5.4.3. The Role of HR Department Staff

264

The HR Staff Capability

265

The HR Staff Autonomy

266

The HR Staff Commitment

267

5.4.4. The Determinant of HR Strategy Implementation

267

in the Indonesian Organizations

5.5.

Characteristics of Each Industry

270

5.6.

Limitations, Conclusions and Recommendations

274

5.6.1. Limitations

274

5.6.2. Conclusions and Recommendations

275

5.6.2.1. The Approaches into SHRM

275

5.6.2.2. The Role of HRM in the Organization

278

5.6.2.3. The Determinants of HR Strategy Implementation

279

REFERENCES

281

APPENDICES

323

Appendix 1a

Introduction Letter to Potential Respondents

323

Appendix 1b

Covering Letter from the Rector of

Universitas Islam Indonesia

324

Appendix 1c

Ethical Approval from Murdoch University

325

Appendix 2

Translation of Finding Themes

326

Appendix 3

Characteristics of Best Practices

380

Appendix 4

Prototype of SHRM across Industries

382

Appendix 5

List of Publications

384

xii

LIST OF TABLES
Table 2.1:

Five Stages of HRM

28

Table 2.2:

Stereotypes of Personnel Management and HRM

35

Table 2.3:

Perspectives of Personnel Management and HRM

37

Table 2.4:

Emergent Directions in HR Practice:

From HRM to the New HRM

39

Table 2.5:

HRM Links to Strategy and Structure

42

Table 2.6:

The Supporters of the Best Practice Approach

47

Table 2.7:

The Supporters of the Best Fit Approach

59

Table 2.8:

Business Strategies and HR System

62

Table 2.9:

Business Strategy and HRM Choices

63

Table 2.10:

HR Strategy: Two Different Scenarios

66

Table 2.11:

Phases in SHRM

72

Table 2.12:

Competency Framework for HR Professional

82

Table 3.1:

Alternative Choices in Each Stage

of Selecting a Research Design

100

Table 3.2:

Alternative Knowledge Claim Position

101

Table 3.3:

Theoretical Perspectives in the Social Sciences

109

Table 3.4:

Basic Belief of Alternative Inquiry Paradigm

111

Table 3.5:

Dimension for Comparing Five Research Traditions

in Qualitative Research

122

Table 3.6:

Data Collection Activities in Grounded Theory Research

128

Table 3.7:

Semi-structured Questionnaire

138

Table 3.8:

Data Analysis and Representation in Grounded Theory

144

xiii

Table 4.1:

Profile of HR Respondents

160

Table 4.2:

Profile of Industry Respondents

161

Table 4.3:

Findings Related to the Approaches to SHRM

163

Table 4.4:

Findings Related to the Best Practice Approach

164

Table 4.5:

Findings Related to the Best Fit (Contingency) Approach

168

Table 4.6:

Findings Related to the Role of HRM in the Organization

186

Table 4.7:

Findings Related to the Two-Way Linkage

187

Table 4.8:

Findings Related to Integrative Linkage

191

Table 4.9:

Findings related to the Determinants of

HR Strategy Implementation

197

Table 4.10:

Findings Related to the Credibility of HR Strategy

198

Table 4.11:

Findings Related to the Organizational Support

204

Table 4.12:

Findings related to the Role of the HR Staff

215

Table 4.13:

Distribution of Indonesian SHRM

223

Table 5.1:

Indonesian Cultural Dimensions

248

xiv

LIST OF FIGURES
Figure 1.1:

The Distribution of Interviews Location

22

Figure 2.1:

The Matching/ Michigans Model of HRM

41

Figure2.2:

The Harvards Model of HRM

43

Figure 2.3:

A Theoretical Framework of SHRM

45

Figure 2.4:

Involvement of HRM in Decision-making Processes

75

Figure 2.5:

Interaction of Strategy Formulation and Implementation

85

Figure 2.6:

The Basic Implementation Process

86

Figure 2.7:

HR Strategy Implementation

88

Figure 2.8:

The Obstruction Processes in Strategy Implementation

91

Figure 3.1:

A Scheme for an Analyzing Assumption about

the Nature of Social Science

97

Figure 3.2:

Crottys Model of Selecting a Research Design

98

Figure 3.3:

Basic Principles of Creswells Research Design Model

100

Figure 3.4:

Creswells Research Design Model

102

Figure 3.5:

Sarantakos (1998) Research Design Model

104

Figure 3.6:

Sarantakos (2005) Research Design Model

104

Figure 3.7:

Four Paradigms for the Analysis of Social Theory

107

Figure 3.8:

Steps in Data Coding

146

Figure 4.1:

The Summary of Research Findings

224

Figure 5.1:

A Model of SHRM within the Indonesian Context

277

xv

LIST OF ABBREVIATIONS

AFTA

ASEAN Fee Trade Area

APEC

Asia-Pacific Economic Cooperation

ASEAN

Association of South East Asia Nations

BPS

Biro Pusat Statistic (Statistics Central Bureau)

CAFTA

China-ASEAN Free Trade Agreement

CIA

Central Intelligent Agency

DPA

Dewan Pertimbangan Agung (Supreme Advisory Council)

DPD

Dewan Perwakilan Daerah (Regional Representative Council)

DPR

Dewan Perwakilan Rakyat (Council of Peoples Representative)

GDP

Gross Domestic Product

HCM

High Commitment Management

HPWS

High Performance Work System

HR

Human Resource

HRM

Human Resource Management

ILO

International Labor Organization

ISO

The International Organization for Standardization

KKN

Korupsi Kolusi Nepotism (Corruption Collusion Nepotism)

KPK

Komisi Pemberantasan Korupsi (Corruption Eradication Commision)

KY

Komisi Yudisial (Judicial Commision)

MK

Mahkamah Konstitusi (Constitutional Court)

MPR

Majelis Permusyawaratan Rakyat (Peoples Consultative Assembly)

xvi

OCB

Organizational Citizenship Behaviour

SBU

Strategic Business Unit

SHRM

Strategic Human Resource Management

SPSI

Serikat Pekerja Seluruh Indonesia (Indonesian Workers Union)

UMK

Upah Minimum Kabupaten (Regency Minimum Wage)

WTO

World Trade Organization

xvii

CHAPTER I
INTRODUCTION TO RESEARCH

1.1. Introduction
Human Resource (HR) scholars emphasize that the essence of Strategic Human
Resource Management (SHRM) is how organizations link Human Resource
Management (HRM) to their business or organizational strategy (note: for practical
reason, the acronyms of HR, HRM and SHRM will be used throughout the thesis). This
means that business strategy is the main determinant factor of HR strategy, followed by
other internal or organizational and external or environmental factors (e.g. Armstrong,
2009; Beer et al., 1984; Boxall & Purcell, 2000, 2008; Delery & Doty, 1996; Fombrun,
Tichy & Devanna, 1984; Miles & Snow, 1984; Schuler & Jackson, 1987, 1999).

Overall, this thesis investigates the pattern of SHRM and how it has been practiced by
Indonesian organizations. Factors that determine HR strategy and the HR strategy
formulation process will be explored, including the role of the HR department and its
people. This thesis also discusses the determinant issues that are key factors in
implementing HR strategy.

This chapter provides an introduction to and overview of the thesis. The first section
explains the research background, which emphasizes the rationale of why a study of
SHRM was necessary within the Indonesian context. The next section provides detail
information related to Indonesia including demography, social-cultural life, economy,

politic and government. More importantly this section also provides a brief picture of
HRM transition within Indonesian context and this is followed by a discussion of the
purpose of the study and an explanation of the significance of the study. As the study
uses a grounded research methodology this is also explained briefly. Finally, the chapter
concludes by providing a brief description of all chapters in the thesis.

1.2. Background to the Research

During recent decades significant changes have affected the world economy forcing
companies to adapt to a new global economy. The underlying forces driving
globalization can be classified into four drivers, namely, macroeconomic, political,
technological and organizational drivers. Organizations worldwide recognize that they
need to be more adaptable and flexible to compete effectively and survive in this
turbulent, changing environment (Compton, 2009; Harvey, Novcevic & Kiessling, 2001;
Lansbury, Koh & Suh, 2006; Zanko, 2003).

The pioneer studies by Fombrun et al. (1984) and Beer et al. (1984) identify that the
global competition, the increasing size and complexity of organizations, stronger
government interventions and demands for changing values in the workplace, have been
changing the face of business significantly. They emphasize that the link between
business strategy and HRM must be considered when determining what a HRM
prototype should be. The synergy of the relationship between business strategy and
HRM subsequently receive strong support through numerous studies (e.g. Ackerman,

1986; Bae & Lawler, 2000; Dyer, 1984a, 1984b; Lengnick-Hall et al., 2009; Leopold &
Harris, 2009; Jackson & Schuler, 1995, 2007; Schuler, 1987a, 1987b, 1992).

The importance of business strategy shows a dramatic shift away from HR as merely an
administrative role. In the strategic paradigm, people are a very important source for
organizations to gain sustainable competitive advantage (Pfeffer, 1994; Prahalad, 1983;
Wright, McMahan & McWilliams, 1994). HRM needs to play a strategic role in
aligning the people activities with the business strategy. This is the essence of SHRM
and where HRM has a central function it promotes organizational success (Golden &
Ramanujam, 1985; Guest, 1990, 1992; Petterson, West, Lawthorn & Nickell, 1997;
Walker, 1992; Werbel & DeMarie, 2005). The early period of the SHRM literature was
dominated by the United States (US) Scholars, such as Beer et al. (1984), Dyer (1984a,
1984b), and Fombrun et al. (1984). This is not surprising because the link between
strategy and HRM originated in the US. The US scholars explained that HRM needs to
go beyond the functional-administrative, and adopt the more critical role of aligning and
matching people with the organizations strategies. Moreover, they also proposed a role
for HRM in improving company performance and designed a model of interaction
among various contextual and HRM elements to establish the link between HRM and
company performance.

In the 1990s the focus of analysis for US researchers moved beyond modeling SHRM
into SHRM processes and practices. Researchers focused their analysis on how HRM
could be integrated with business strategy to give added value in the contribution to
company performance (e.g. Becker & Gerhart, 1996; Delery & Doty, 1996; Huselid,
3

1995; Huselid, Jackson & Schuler, 1997; Macduffie, 1995; Youndt et al., 1996). The
concept of HRM was well accepted in the US and Guest (1990: 48) suggested HRM
can be seen as the contemporary manifestation of the American dream. In fact, another
scholar Brewster (1993) doubted whether HRM could be adopted outside the border of
the USA. Although SHRM was well accepted in the USA, European scholars (e.g.
Brewster, 1993, 1999; Guest, 1990) raised questions about how applicable the model
was in Europe. The core rationale behind this question was that European enterprises
operate in a different contextual setting, with a different culture and traditions, a stronger
role for the state, and need to deal with the influence of trade unions and public sector
enterprises

In the second half of 1990s, European research into SHRM gained momentum and
proposed a new perspective of SHRM as embedded in various national contexts. This
means that research extended beyond the internal focus prescribed by the US research to
take a much broader external focus as well (Boxall & Purcell, 2000, 2003; Guest, 1997;
Tyson, 1997).

Following the rigorous studies in US and UK, studies of SHRM were also conducted in
other countries, such as Australia and Asia (Bowen, Galang & Pillai, 2002a, 2002b),
Italy (Camuffo & Costa, 1993; Siranni, 1992), Ireland (Gunnigle & Moore, 1994),
Netherland (Jaap, 1996), Spain (Saborido, Randon & Castro, 1992), and Mexico
(Teagarden, Buttler & Von Glinow, 1992). This phenomenon gave new energy to HR
scholars to contribute to country specific theory building of SHRM.

Although numerous studies of SHRM have been conducted the majority of these have
been in western societies or developed countries, especially Europe and US. In the AsiaPacific rim, most SHRM studies have been conducted within Australia and Japan. Few
studies of SHRM have been conducted in eastern societies or developing countries;
moreover there have been no apparent studies so far that provide a clear picture of
SHRM within Indonesian organizations (Bennington & Habir, 2003; Gunawan &
Nankervis, 2006; Habir & Larasati, 1999; Habir & Rajendran, 2007; Prijadi &
Rachmawati, 2002; Singleton & Nankervis, 2007).

Indonesia has some unique

characteristics that present challenges for modeling SHRM practices that fit specifically
to the Indonesian context. To explain these, the following section discusses the research
setting.

1.3. Research Setting: An Overview of Indonesia

Indonesia has a large population and is a strategically located country with a very
diverse, complex, and unique social-cultural life. Unfortunately, the country was not
well recognized by the international community prior to the Asian crisis in 1997. This
viewpoint is further stressed by Singleton and Nankervis (2007: 308) claim there is no
country of such vital strategic importance that is less understood than Indonesia.
Bennington and Habir (2003: 373) also mention that until about 1997, Indonesia is one
of the least known countries, but since that time, the country has become known for
almost a continuous political and economic crisis

Indonesia is a democratic-republic that proclaimed independence from the Japanese,

who had occupied this country for 3.5 years, on the 17th August 1945. This followed
350 years of Dutch colonization. The nations capital city is Jakarta which is located in
Java Island (CIA 2010, Cribb, 1999; Wikipedia 2010). Indonesia consists of more than
17 thousand islands (about 6000 islands are inhabited), making it the worlds largest
archipelagic state. The five largest and most populated islands are Java, Sumatra,
Kalimantan, Sulawesi, and Papua. The Indonesian archipelago lies between mainland
Asia and Australia, and the Pacific and Indian oceans. This country extends 5,120
kilometers from (east to west) west to east, and 1,760 kilometers from north to south
(CIA, 2010; Wikipedia, 2010).

1.3.1. Demographics of Indonesia

Current reports suggest that the population of Indonesia was 234.2 million people in
June 2010 (BPS, 2010). Indonesia is considered as the worlds fourth most populous
country after China, India, and US (CIA, 2010; Wikipedia, 2010). It also has the worlds
largest population of Moslems, although officially it is not an Islamic state. Six religions
are officially recognized by the government: Islam, Protestantism, Roman Catholic,
Hinduism, Buddhism, and Confucianism. The distribution of the religious followers is
Muslim 86.1%, Protestant 5.7%, Roman Catholic 3%, Hindu 1.8%, other or unspecified
3.4% (CIA, 2010; Wikipedia, 2010). The country has more than 300 ethnic groups, each
with cultural differences which have been developed over centuries and influenced by
Arabic, Chinese, Malay, and European sources. The distribution of the main ethnic
groups can be described as Javanese 40.6%, Sundanese 15%, Madurese 3.3%,
Minangkabau 2.7%, Betawi 2.4%, Bugis 2.4%, Banten 2%, Banjar 1.7%, other or
6

unspecified 29.9% (CIA, 2010; Wikipedia, 2010). There are communication challenges
among people in the ethnic groups, as Indonesia has around 742 different languages and
dialects; however the most widely spoken language is Javanese (Bishop & McNamara,
1997; CIA, 2010). The national language is called Bahasa Indonesia (Singleton &
Nankervis, 2007; Wikipedia, 2010).

Although Indonesian people live with a diversity of religions, ethnicity, and languages,
they live under the national motto Bhinneka Tunggal Ika which literarily means
many, yet one, where the general meaning is unity in diversity. This motto was
adopted from a Javanese phrase meaning they are one, they are many (Singleton &
Nankervis, 2007; Wikipedia, 2010).

1.3.2. Socio-cultural of Indonesian People

The Indonesian culture is a product of a long interaction among local customs, religious
values and other foreign influences. Most Indonesians believe in the spirit (spiritualism)
and are highly influenced by local culture, values and beliefs; no matter what their
religion (Grant, 1996). In the very famous book The Religion of Java, Geertz (1960)
emphasizes that even Santris (devout Moslems) are affected by traditional and local
beliefs. This condition illustrates that local customs (Indonesians call it as adat), with
their racial or tribal memories, are not easily released from the imagination.

From a religious perspective, Islam has a very strong influence on cultures such as Aceh,
Banten, Minangkabau, and Java. Balis culture is highly influenced by Hinduism. Batak,
Manado, and Papuas lives are colored by Christian and Catholic influences. While
7

Indonesian Chinese customs are supported by Buddhist and Confucianism teachings.

Indonesians modern life style is highly influenced by western cultures such as television
shows, movies and songs. As a result, there is a complex configuration of indigenousreligious-western values, or this can also be seen as the influence religion-rationalismspiritualism-and traditional values in the daily life of the Indonesian people (Geertz,
1960, 1967; Gunawan & Nankervis 2006; Grant, 1996; Hill, 1996; Kingsbury, 2005;
Singleton & Nankervis, 2007, Wikipedia, 2010). It should be mentioned, however, that
the educated younger generation is less influenced by spiritualism and local beliefs.
Overall, Javanese culture is to be the most influential culture in Indonesias daily life:
Javanese life, which sets the pattern in Indonesia, especially in official circles, is
disciplined by a set of ideals and stylized behavior patterns which are sophisticated as
any of the great aristocratic fashions of Western civilization (Grant, 1996: 131).

To provide a clearer picture, Kingsbury (2005) identifies the characteristics of Javanese

culture as follows:

Because of a long standing syncretism tradition, Javanese culture has been identified as
having a strong spiritual base. Another consequence of this syncretism tradition, Javanese
are popularly believed to be tolerant people, in that they easily accept or incorporate that
which is different (p. 19).
Javanese culture is also popularly regarded as having a high awareness of politeness and
associated deference demonstrated through various forms of communication (p.19-20).
Within the traditional Javanese context, the metaphysical was seen to form a nexus with
external forms of behavior, both reflecting and enhancing each other through continuum
(p.20).
The Javanese are constrained, in particular by their political and material circumstances. The
tendency to internalize anger, frustration, even happiness (though public exceptions are
common) is based on the historical construction of Javanese political society, in which
outward manifestations of emotions were regarded at best as uncivilized or at worst as a
threat to the political status quo. This tendency towards the normative qualities of
internalization, politeness, deference, and respect (p.21).
In the traditional Javanese sense, power is neither legitimate nor illegitimate and is without
moral as such. Power tends to rely on charisma and traditional authority (p.21)

In addition, Grant (1996) mentions five Javanese values that have been widely accepted
by Indonesian people as Indonesian customs; they are mutual co-operation or gotong
royong, mutual discussion or musyawarah, consensus or anonymous agreement or
mufakat, harmony or kecocokan, and paternalism or bapakism. Mutual cooperation or
gotong royong is based on the need of planting, irrigating, and harvesting when
cultivating the paddy or sawah. The village chiefs are not elected, but they are chosen by
mutual discussions or musyawarah which results in a consensus or mufakat as an
expression of harmony or kecocokan. In daily life, the village chief has a dominant role
to decide every single problem in the community, which is determined as paternalism or
bapakism (also see Adnan & Nankervis, 2003; Gunawan & Nankervis, 2006; Singleton
& Nankervis, 2007)

The complex and unique characteristics of Indonesian people are unfortunately quite
often misunderstood by Westerners:
Many Westerners feel they cannot trust Indonesians. What an Indonesian may regard
as flexibility and common sense, or proper deference, a Westerner may define dishonest
or indefinite. The Indonesian will almost certainly say the Westerners principles are
harsh and arrogant (Grant, 1996: 130).

1.3.3. Economy of Indonesia

Current data shows that the Indonesian economic profile has the following
characteristics:

Gross Domestic Product (GDP) in 2009 was estimated at US$ 969.2 billion or
around US$ 4,000 per capita, contribution to this area from industry is 47.6%,
services 37.1%, and agriculture 15.3%. Furthermore, Java Island contributes 57.8%,
9

Sumatra 23.6%, Kalimantan 9.5%, Sulawesi 4.4%, Bali and Nusa Tenggara 2.8%,
and Maluku and Papua 1.9%.

From year to year, the Indonesian GDP growths can has been 2005 (5.7%), 2006
(5.5%), 2007 (6.3%), 2008 (6.0%) and 2009 (4.5%).

The Indonesian inflation index was 2005 (17.11%), 2006 (6.60%). 2007 (6.59%),
2008 (11.06%), 2009 (2.78%), and 2010 (2.42%) (data per June 2010).

The value of exports in 2009 was US$116.5 billion, imports were US$96.8 billion.

The Indonesian labor force is estimated around 116 million people, and the
unemployment index is 7.40% (data per February 2010).

The number of Indonesians living below property is estimated at 31.02 million

people; it is around 13.33% of the nations population (data per March 2010)
(Data compiled from BPS, 2010; CIA, 2010; and Wikipedia, 2010)

The above portrait of the Indonesian economy shows an up and down journey, that can
be divided into three stages; these are under the new order, the Asian crisis of 19971998, and the post Asian crisis as explained below.

Under thirty-two years of Soehartos New Order government (1965-1997), Indonesia

experienced continuous economic growth. The indications of this are the growing per
capita GDP from US$70 to more than US$1,000 by 1996; inflation was held between
5%-10%; and the exchange value of the Rupiah was stable and predictable. To maintain
the economic growth, the government tightly controlled almost all aspects of Indonesian

10

life. There was no freedom of speech of the media and press (Basri, 2002; CIA, 2010;
Prasetiantono, 2000; Sitorus & Budwar, 2003; Wikipedia, 2010).

As the financial crisis hit Asia in mid-1997, the Indonesian economy radically changed.
The rupiah had fallen from Rp 2,600/US$1 in August 1997 to Rp 11,000/US$1 in early
1998. The rupiah was devaluated by more than 80% against the US dollar. Further
negative impacts of the Asian financial crisis on Indonesias economy were seen in
consumer prices increasing dramatically, the economic growth rate declined
significantly from an average of 8% to 0.6% during 1997-2002; many (local) companies
went bankrupt or collapsed, exports declined, there were significant increases in the
unemployment level and poverty, and many multi national companies withdrew their
staff and operations. Furthermore, these difficult situations provoked massive
demonstrations and social riots, especially in the cities. There was growing
dissatisfaction with Soehartos authoritarian leadership, especially from students. As a
result, Soeharto stood down from the presidency and named vice president Habibie as
his successor. It can be said, Indonesias financial crisis triggered multiple crises in the
economy, society, and politics (e.g. Basri, 2002; Eichengreen, 2004; Kim & Haque,
2002; McCawley, 2004; Pincus & Ramli, 1998; Prasetiantono, 2000; Tayeb, 1997).

Moving beyond difficult this crisis, economic, social and political reformation became
the priority of the governments policies. The Indonesian government set up a series of
economic and institutional reforms including, prudent macro economic management,
the restructure of the banking sector, the resolution of corporate debts issues, promoting
good governance, addressing the social impact, and maintaining political stability
11

(Tayeb, 1997: 1). The implementation of these agendas, in tandem with success in
maintaining political and social dynamics, had brought Indonesia back to the right track
which was indicated in economic growth around 6%, manageable inflation under 10%,
increased exports, and reduced poverty and unemployment (BPS, 2010; Gunawan &
Nankervis, 2006; Manning & Roesyad, 2006; Singleton & Nankervis, 2007).

More recently, Indonesia has become a quite stable economy that was little affected by
the 2009 global economic crisis and it is now considered a growth nation. This can be
seen clearly in the following extracts:
Indonesia, a vast polyglot nation, has weathered the global financial crisis relatively
smoothly because of its heavy reliance on domestic consumption as the driver of
economic growth. Although the economy slowed significantly from the 6%-plus growth
rate recorded in 2007 and 2008, expanding at 4% in the first half of 2009, Indonesia
outperformed its regional neighbors and joined China and India as the only G20
members posting growth during the crisis (CIA, 2010: 8).
The unemployment rate in February 2007 was 9.75%. Despite a slowing global
economy, Indonesias economic growth accelerated to a ten-year high of 6.3 percent in
2007. This growth rate was sufficient to reduce poverty from 17.8 to 16.6 percent based
on the Governments poverty line and reversed the recent trend towards jobless growth,
with unemployment falling to 8.46 percent in February 2008. Unlike many of its more
export-dependent neighbors, it has managed to skirt the recession, helped by strong
domestic demand (which makes up about two-thirds of the economy) and a government
fiscal stimulus package of about 1.4 percent of GDP, announced earlier this year. After
India and China, Indonesia is currently the third fastest growing economy in the Group
of Twenty (G20) industrialized and developing economies (Wikipedia, 2010: 2).

1.3.4. Politics and Government in Indonesia

The economic crisis that lead to the resignation of Soeharto, albeit under pressure, has
significantly contributed to the changes in Indonesias political and government system,
which is widely known as the reformation. Habibie, as the caretaker president,
introduced liberal political policies including withdrawing the restrictive press laws and

12

granting permission to release new media, political prisoners, and new political parties
and removing the military from political roles (Emmerson, 1999; Kim & Haque, 2002;
Liddle, 1999; Shiraisi, 2001). Since this change, a more democratic environment has
arisen in Indonesian society. Since then Indonesian presidents have been elected
democratically; they are in succession order Abdurrahman Wahid, Megawati Soekarno
Putri, and Susilo Bambang Yudhoyono.

The first freely held general election after forty years was conducted in June 1999. This
general election resulted in a parliament that progressively made constitutional reform.
These changes were continued by the parliament that was elected in 2004. The major
reformations in political and government structures were:

Establishing a Regional Representative Council (DPD), which together with the

Council of Peoples Representative (DPR) acts as the Peoples Consultative
Assembly (MPR).

Abolishing the Supreme Advisory Council (DPA).

Establishing a Constitutional Court (MK) and Judicial Commission (KY).

The president is to be elected directly by the Indonesian people, and must have at
51% supporters. Prior to 2004, presidents were chosen by the Peoples Consultative
Assembly (MPR).

The president serves a maximum of two consecutive five-year terms.

The president has the flexibility to appoint a council of ministers, who might not be
members of the elected legislature.

The freedom to release new political parties.

13

The addition of ten entirely new articles concerning human rights.

The representation of the armed forces and police in the Peoples Representative
Council ended in the 2004 election, while their representation in the Peoples
Consultative Assembly ended in 2009.

Military domination of regional administration is gradually breaking down.

Active-duty officers are prohibited from holding political offices.

(Ghoshal, 2004; Shiraishi, 2000; Sitorus & Budwar, 2003; Tan, 2006; Wikipedia, 2010)

As fundamental political changes have been achieved, it is not surprising that these
periods (1999 and 2004) are viewed as the turning point of the Indonesian political
system, from an authoritarian military regime to a democratic nation (Ghosal, 2004;
Singleton & Nankervis, 2007; Tan, 2006). Nowadays, Indonesian people are living in a
more free and democratic nation; president, parliament and other commissioned
members are elected by a free and transparent process.

Now, people also have the right to speak out and join organizations freely. Nonetheless,
there are still problems, among the most crucial and serious are corruption, collusion and
nepotism (Indonesia, KKN: Korupsi, Kolusi dan Nepotisme). The Indonesian corruption
index is 2.8 and ranked number 111 from 180 internationally (Transparency
International, 2009). While the Corruption Eradication Commission (Indonesia, KPK:
Komisi Pemberantasan Korupsi) has been working very hard (Habir & Rajendran,
2007), unfortunately, there are many corruption cases that have not been solved yet as

14

many elite political members and senior government staff are involved. As Transparency
International highlights:
Indonesia still has a long way to go to eradicate corruption but the recent tough
approach by the Corruption Eradication Commission (KPK) is encouraging. The KPK
has reported a 100 percent conviction rate for corruption cases involving some of the
country's highest-ranking officials. A crucial task for the new administration is to
continue support of the KPK. The local anti-corruption advocate must ensure that this
agency is not weakened (Tranparency International, 2009: 2).

In terms of an administrative government, a significant change has also been achieved

by Indonesia. Since the enactment of Law Number 22 in 1999 regarding Local
Government, the local governments have more authority to administer their own
regions; however, foreign politics, defense, the legal system and monetary policy remain
the domain of the national government. Furthermore, since 2005 heads of the local
government has been elected directly by people in their own region (see such as Guess,
2005; Seymour & Turner, 2002; Wikipedia 2010).

1.4. HRM in Indonesia

Managing Indonesian people is not easy because of the complex cultural, geographical,
historical, ethnic, religious, economic, political and administrative systems. Singleton
and Nankervis (2007: 341) proposed an interesting question about HRM: how do
Indonesian companies organize these activities? in such a diverse nation. This question
refers to the three HR activities; first, HR planning, recruitment and retrenchment;
second, orientation, development, and training; and third, performance appraisal, career
development and industrial relations. They suggest the answer will vary depending on
the type of company. Some large companies are likely to adopt international HRM
15

practices, whereas smaller companies will tend to manage their people by using an ad
hoc approach.

Historically HRM has not played an important management role in Indonesian

organizations. HRM is considered a personnel function, which merely plays a
traditional-administrative role (Habir & Larasati, 1999; Habir & Rajendran, 2007). For
example Budiharjos study (1996) cited in Habir and Larasati (1999: 1) identified that:
Human resource management, however, has historically not had an important role in
Indonesian management. It has traditionally been regarded as personnel function, almost
totally administrative in orientation. Even in this capacity, human resource management
is not regarded highly. A survey undertaken in 1995 showed managers perceptions of
the human resource audits, human resource development and planning, employee
orientation, and salary system of their companies were negative.

Habir and Larasati (1999) analyzed three leading Indonesian companies and their study
indicates a changing orientation for HRM in Indonesia, which is more strategic and
focused on how HRM strategies and processes align with the business imperatives. The
three leading companies in their study (Sinar Mas Group, Astra group, and PT Rekayasa
Indonesia) provide considerable evidence that modern HRM practices can be
successfully integrated with complex Indonesian social, cultural, economic and political
dynamic by innovative and charismatic business leadership (also see Singleton &
Nankervis, 2007).

Another study was conducted by the high reputation management magazine SWA in
2006. This study reported that forty-nine major companies, comprised of eleven state
enterprises and thirty-eight Indonesian private companies, showed a growing orientation

16

toward managing their people more strategically. These organizations believed that
employees were not merely production factors, but were human capital to be developed
to provide the best contribution and value to the organization (SWA, 2006).

Indonesian HRM scholars (e.g. Gunawan & Nankervis, 2006; Habir & Rajendran, 2007;
Singleton & Nankervis, 2007) strongly agree that following the impact of globalization
and the recovery from the financial crisis of the late 1990s, there has been a growing
awareness among Indonesian companies, especially big companies, that they need to pay
more attention to implementing HRM strategically to achieve organizational goals (also
see Budiharjo, 1996; Ciptono, 1998; Rhodes, Walsh & Lok, 2008). This paradigm shift
for Indonesian HRM is illustrated by Habir and Rejendran:
Nevertheless, since the 1997 crisis, business organization have moved towards
improvements in their HRM system; currently, personnel departments are known as HR
department and personnel managers are re-designated as HR managers. More companies
are adopting strategic HR by highlighting the role of HR departments in their annual
reports. Some companies have set up HR committees at the governance level, in line
with good corporate governance practices. These developments indicate a growing
realization of the importance of HRM in Indonesia today (2007: 30-31).

Because of the dynamic and environmental setting, the complexity and paradox of the
society, and as the response to globalization, SHRM practices need to make continuing
adjustments if they are to be appropriate to Indonesians needs. Unfortunately, little
attention has been given to studying HRM practices in Indonesia, even though a number
have studied HRM in other developing countries across Asia and the Asia-Pacific (see
such as Budwar & Debrah, 2001; Kidd, Li & Richter, 2001, Roley, 1998). There is also

17

a considerable lack of English language literature as is borne out in this following

comment:
Despite the major issues facing this country and the significant international concern
about its future, reports on HRM are limited mostly to labor economics and macro-level
human resource development. The English language journals have included articles on
the developing countries in Europe, Africa, and Asia (countries such as Hong Kong,
China, Singapore, Korea, Japan, and India), but surprisingly little has been reported on
Indonesia. Even Industrial relation book on Asian and East Asian countries have failed
to provide chapter Indonesia. Similarly, the Teagarden/Von Glinow research
consortium, which has included Indonesia as one of the target countries, has not yet
reported significantly (Bennington & Habir, 2003: 374).

Given the limited articles and research, more consideration and attention to studies about
HRM within the Indonesian context are warranted. This call is not only related to the
complex setting of Indonesian life, but to the global impact. The dynamic or even
contradictive interactions that exist among internal and external aspects of HRM within
the Indonesian context are considered an interesting opportunity for study (Bennington
& Habir, 2003; Budiharjo, 1996; Ciptono, 1998; Gunawan & Nankervis, 2006; Habir &
Larasati, 1999; Habir & Rajendran, 2007; Huo, Huang & Naphier, 2002, Jackson, 2002;
Rhodes et al., 2008; Singleton & Nankervis, 2007).

1.5. The Purpose of the Study

This study aims to investigate SHRM practice within Indonesia and seeks to develop an
understanding of the operational links between HRM and business or organizational
strategy.

The fundamental question guiding this study is; How do Indonesian

organizations link their HR strategy to organizational or business strategy. Within this

broad question, the following issues will be explored:

18

1. What are the common approaches to SHRM employed by Indonesian

organizations?
a. How do organizations link HR strategy to organizational strategy?
b. What factors determine HR strategy and how do those factors influence
HR strategy?
2. What is the role of HRM and HRM practitioners in Indonesian organizations?
This includes the following sub-questions:
a. What role do HR managers play to link HRM and the organizations
strategy and how do they play this role?
b. What is the role of HR managers in strategy formulation and strategic
decision-making and how do they play this role?
3. How do Indonesian organizations implement HR strategy? This question raises
the following issues:
a. Which organizational factors do managers associate as credible
precursors of human resource strategy?
b. What factors do human resource managers associate with the successful
implementation of human resource strategy and how do these factors
influence SHRM in practices?

1.6. The Significance of the Study

This study is significant for a number of reasons. Firstly, Indonesian companies are
currently viewed as having a cheap and dispensable labor supply; however, increases in
the standard of living locally, followed by the increasing minimum wage, the stronger

19

role of local government and labor unions, global exposure and competition demands,
are causing a shift that warrants a more strategic focus. So far, the link between strategy
and human resource management in Indonesia appears to have excited little interest
from researchers. It seems pertinent to question if western practices or models are being
applied in the Indonesian business context and if so, whether such practices are
transferable and appropriate in such a politically, economically, culturally and socially
different setting.

Secondly, understanding the role human resources play in Indonesian organizations will
allow a much greater understanding of the factors influencing the success of strategic
human resource formulation and implementation. It is important to know whether
western models may be adapted or applied within the Indonesian context, or indeed if
they are even being adopted. If they are not, there is also a possibility that Indonesian
organizations have been developing and implementing their own strategic human
resource models. Understanding which factors are being utilized offers not only a
significant contribution to our knowledge of the strategy human resource link, but will
also have significant implications for SHRM practice in Indonesia.

1.7. The Overview of Methodology

As described earlier, there is a considerable lack of references related to HRM studies in
Indonesia and so the extent of SHRM practice and uptake is unclear (Bennington &
Habir, 2003; Gunawan & Nankervis, 2006; Habir & Larasati, 1999; Habir & Rajendran,
2007; Prijadi & Rachmawati, 2002; Singleton & Nankervis, 2007). Based on this

20

rationale the most suitable methodology for this study is a grounded research approach.
This is because this methodology best suits phenomena that are not well understood or
have not been studied before (Charmaz, 2000; Glaser & Strauss, 1967; Lee, 1999;
Strauss & Corbin, 1994, 1998).

Under the grounded research approach, data are collected using theoretical sampling
(Charmaz, 2000, 2006; Creswell, 2003; Glaser, 1992, 1995a, 1995b, 1998; Glaser &
Strauss, 1969; Patton, 2000; Strauss, 1987; Strauss & Corbin, 1998). The basic concept
underlying theoretical sampling is to collect data continuously so that all emerging
issues are captured and a saturation point is reached. In theoretical sampling, the number
in the sample is not necessarily counted and the data collection continues until no more
categories or new information arises.

This study collected data from sixty-three HR managers across four type of industries
(hotel, hospital, textile, and agriculture), from eight cities in different states or provinces
in Indonesia; these were Solo in Central Java, Yogyakarta in the Special Territory of
Yogyakarta, Jakarta in the Indonesian Capital Territory, Denpasar in Bali, Padang in
West Sumatra, Medan in North Sumatra, Banjarmasin in South Kalimantan, and
Makassar in South Sulawesi. The locations of these cities can be seen in figure 1.1.

Two phases of interviews were used. Open-ended semi-structured interviews were

developed based on information gathered from preliminary open ended unstructured
questions. The unstructured interviews provided information on the approaches to
SHRM, the role of the HR department in strategic decision-making and the determinants
21

of HR strategy implementation. The open-ended semi-structure questions allow

interviewees to express their knowledge and experiences so that a wide range of
interrelated issues and multi dimensional features common to a complex problem can be
captured. This method provides guidance to the interviewer to ensure that interviews
keep on track to investigate the variables related to the subject being studied, yet allows
the richness of relevant data to be obtained.

Figure 1.1: The Distribution of Interviews Location

Legend:
02: Medan (South Sumatra)
12: Jakarta (Indonesian Capital Territory)
15: Yogyakarta (Special Territory of Yogyakarta)
23: Banjarmasin (South Kalimantan)

22

05: Padang (West Sumatra)

14: Solo (Central Java)
17: Denpasar (Bali)
28: Makassar (South Sulawesi)

Based on the interviews, data was transcribed from voice recordings into writing to
be analyzed. The audacity software program was employed during transcription to
control the tempo of interviews, so the dialogue could be captured clearly and
completely. Data was analyzed using the coding procedure described by Strauss and
Corbin (1998). In brief, the data analysis procedure consisted of five main stages: (1)
Open Coding: which is the analytical process where concepts are identified and their
properties and dimensions are discovered; (2) Axial Coding: the process

relating

categories to their sub categories and linking categories with related properties and
dimensions; (3) Selective Coding: the process of integrating and refining the theory; (4)
Conditional Matrix: this elucidates the social, historical and economic conditions
influencing the central phenomenon; and finally (5) the last process is to develop
theoretical propositions.

1.8. An Overview of the Thesis Structure

This thesis is presented over five chapters. Chapter one introduces the thesis and
explains the background, purpose, significance, and methodology of the study. These
topics provide fundamental arguments on what the study is about, why the study is
needed, how the study will be conducted and the benefits it will bring. The chapter also
provides an overview of research to date about HRM practices in Indonesia and an
overview of the demographic, cultural and political environment in Indonesia to provide
a deeper understanding of the country where the study is conducted and some of the
challenges that SHRM practitioners face.

23

Chapter two discuses the literature related to SHRM and starts with a description of the
paradigm shift occurring in HRM, from an administrative role to a more strategic role.
Various approaches to SHRM from key HR scholars are presented. The roles of the HR
department and its people in strategy formulation and decision making are explored.
This chapter also discusses other factors associated with successful implementation of
HR strategy.

Chapter three explains the research design that guides each stage of the study. The
rationale behind the choice of research design, the paradigm, ontology, epistemology,
methodology and method for this thesis are clarified. The interview, transcription and
data coding processes used are described. This chapter concludes with a presentation of
importance of trustworthiness and ethical conduct, and how this was employed
throughout the study.

Chapter four presents the research findings. Three main topics have emerged from the
research field and these are explained; they encompass the approaches to SHRM, the
role of HRM in the organization, and the determinants of HR strategy implementation.
In terms of approaches to SHRM, the findings related to best practice and best fit
approaches are described. In relation to the role of HRM the study provides two
findings, these being that HRM adopts either a two-way or integrative role. The
successful implementation of HR strategy was found to depend on the credibility of the
HR strategy, organizational support, and the role taken by the HR department and its
people.

24

Chapter five provides a discussion based on the research findings presented in chapter
four. In this chapter, the dialectic between the literature and research findings are
discussed to clarify how and where SHRM is positioned in the Indonesian context and
existing SHRM literature. This chapter also provides a discussion that explains the
specific prototype of SHRM that has emerged within manufacturing and services
industries in Indonesia. Next, the conclusions, recommendations, and limitations of the
study are discussed. Directions for further study of SHRM within the Indonesian context
are also presented to conclude the thesis.

1.9. Conclusion
This chapter has introduced and presented the rationale for the research. The changing
business climate of recent decades and the implication this has for SHRM, particularly
within Indonesia were presented. The purpose of the research was described, followed
by a justification of the contribution this research makes. The little that is known from
research into HRM in Indonesia has also been described briefly, to provide a context for
the study. This chapter also provides a brief description of the methodology and
structure of the thesis. The next chapter explores the literature in relation to the evolution
of SHRM.

25

CHAPTER II
LITERATURE REVIEW

2.1. Introduction
This chapter covers the relevant literature related to Strategic Human Resource
Management (SHRM). This consists of five main topics; the evolution of Human
Resource management (HRM), the theoretical foundation of SHRM, the approaches to
SHRM, the role of HRM and its people, and the implementation of HR strategy.

The first section describes HRM development from the past to the present. Four
different scenarios of HRM development are presented to illustrate how HRM scholars
determine the stages of HRM from different perspectives. The discussion also covers
the transition of personnel management to HRM. The second section discusses various
schools of thought on the SHRM and how these developed from the Harvard and
Michigan models. The more recent theoretical frameworks proposed by Wright and
McMahan (1992) show how SHRM can be viewed from four different perspectives,
namely from a resource-based view, a behavioral view, as a cybernetics system, and as
an agency/transaction cost.

The next section of this chapter presents more in-depth discussions about the main issues
relating to SHRM and debates the contradictions between the best practice and best fit
approaches as well as discussing the alternative configurational approach. The various
roles SHRM can adopt in practice, from the perspective of an administrative to a

26

strategic partner are considered. The involvement of HR people in strategic decision

making and the implications of this are also discussed more comprehensively. Finally,
the literature review on SHRM concludes with a discussion of the factors associated
with successful HR strategy implementation. A summary is provided at the end of the
chapter.

2.2. The Evolution of HRM

There are many different perspectives, among HRM scholars when describing the route
the HRM movement has taken from the past to the present. However, it can be said that
the main discussions lie in the transition from personnel management to HRM. Schuler
and Jackson (1999) claim that the evolution of HRM can be divided into two stages
only; the first from personnel management to HRM, and the second from HRM to
SHRM. Other scholars (e.g. Baird & Meshoulam, 1984; Ehrlich, 1997; Langbert, 2002;
Langbert & Friedman, 2002; Nankervis, Compton, & Baird, 2008; Torrington, 1989)
provide other perspectives on this route of evolution, that are also useful to re-trace the
development of HRM.

Baird and Meshoulam (1984) identify the development of HRM by characterizing

certain HR activities as representing each stage of the development. These five stages
allow for various HR practices, depending on the requirements of the organization. The
five stages range from basic HR, functional growth, controlled growth, functional
integration, through to cross-functional integration. The complete stages and their
characteristics can be seen in table 2.1.

27

Table 2.1: Five Stages of HRM

Stage
1. Basics

Characteristics
Focusing on paying, hiring and firing people

2. Functional
Growth

Have programs for recruitment, compensation and benefits,

affirmative action, labor relations, training and development, etc.
Lack line in management involvement

3. Controlled
Growth

4. Functional
Integration

HR programs are integrated

Programs are related to problems areas rather that specialized
functions
Involved in organizational development, productivity improvement,
change and planning
HR programs are fully integrated into the plans; and activities of
other corporate areas such as marketing, finance, production, etc.
Line managers become the driving force behind HR programs
Corporate HR function responsible for development, policy and
strategy
A total evaluation system determines the effectiveness of HR
practices

5. CrossFunctional
Integration

HR programs and activities being evaluated

HR programs are focused on the organizations needs
Line managers are aware of the HR programs
Programs are often specialized and decentralized

Source: Baird & Meshoulam, 1984.

From another perspective, Torrington (1989) describes that a major shift of direction in
the HRM development is moving away from the traditional of personnel management on
conciliation, propitiation, and need to motivate employees as a potentially uncooperative
cost, to seeing employees as a benefit. The new direction of HRM is that people need
less goading and supervision, but should be given more scope and autonomy; people
should not be seen as a cost, but as an asset in which to invest to add their inherent
value. Torrington (1989) provides six main stages of evolution from the nineteenth

28

century to the present that track this development. The first stage was the social
reformer, next was the acolyte of benevolence, then the humane bureaucrat, followed by
the consensus negotiator, the organization man, and the manpower analyst.

The social reformer is characterized by early reformers such as Lord Shaftesbury and
Robert Owen who criticized employer behaviors in the industrial revolution, in an era
where organizational work caused degradation to human life. Accordingly, the attention
of some reformers can be determined as the earliest stage of people management. The
second stage, referred to as the acolyte of benevolence, was manifest by welfare officers
whose role was to dispense benefits, such as sick pay and housing subsidies to deserving
and unfortunate employees. The third stage, the humane bureaucrat, was defined by the
personnel manager learning to manage people within a bureaucracy as the result of
increasing organizational size and specialization of work. Many of the technologies of
personnel were developed in this period. This era was strongly influenced by the
scientific management (Taylor, 1911), the human relations movement (Mayo, 1933),
and administrative management (Fayol, 1949).

The fourth stage, the consensus negotiator, featured the expertise of personnel managers
in bargaining skills. This phenomenon was the result of the stronger position of labor
unions as employee representatives of in bargaining with employers on some matters.
The fifth stage, the organization man stage is identified by the changing focus of
personnel specialists from dealing with the rank-and-file of employees on behalf of
management, to dealing with the management and integration of management activities.
The last stage, manpower analyst, is characterized by the employment of manpower
29

planning. The basic idea of manpower planning is how to manage different concerns
among human bureaucracies, trade unions, technological changes, and forecasting the
future so it will be in harmony with the changes. Manpower planning has an essential
role to ensure the closest possible fit between the number of people and skills required
and what is available.

Another way of categorizing the history of HRM was used by Langbert (2002) and
Langbert and Friedman (2002), who suggest there have been four broad periods: preindustrial, paternalist, bureaucratic and high performance era.

The Pre-industrial

period occurred between the seventeenth to eighteenth centuries. This was a period of
inequality, inflexibility, and misalignment. A servant and slave treaty was employed and
physical punishment was legally sanctioned. The Paternalist period of the late
eighteenth to early twentieth century was an era characterized by the expansion of
markets and industrialization. Due to rapid economic growth and political shifts,
flexibility was enhanced through the growth of employment, the abolition of slavery
(free labor ideology), and the early development of modern management practices, such
as incentive plans.

Next was the Bureaucratic period, leading up to and after the First World War. In this
era, management experts, labor unions, economists, and reformers pressured companies
to reform the low quality practices that had come from the earlier paternalistic period.
The early evolution of modern personnel department saw the increasing practices of job
analysis, job evaluation, job classification, employee selection techniques, and training
and development. In this period, unionization was becoming more common as a
30

representation of labor power in interactions within industries. The High Performance

period saw the growth of a free market ideology. In this highly competitive
environment, organizations work hard to use their resources, including HR, to gain high
performance. This period is also characterized by numerous managerial experiments to
improve engagement, such as organizational citizenship, an empowered workforce,
customer focus, commitment, and motivation. Accordingly, this era is learning through
experimentation. To adapt to this situation, a wide range of HR techniques have been
developed to meet goals of flexibility and alignment.

Based on Australian HRM practices, Nankervis et al. (2008) divide the development of
HRM into four stages. Stage one, 1990-1940s was about welfare and administration.
Personnel management practices were performed by supervisors, line managers, and
early specialists. In stage two, the 1940s mid-1970s HRM extended to include welfare,
administration, staffing and training (personnel management and industrial relations).
This stage was the beginning of a specialist and more professional approach to personnel
management. Stage three, was the mid-1970s to late 1990s which saw the transition
from HRM to SHRM. Personnel management was becoming HRM as can be seen in the
integration of the personnel function to a strategic role and more focus on overall
organization effectiveness. Stage four, refers to the 21 st century, or SHRM in the new
millennium. The earlier concepts of HRM and the role of HR professional need to be
strategic and change for the knowledge era.

Ehrlich (1997), using the term changing scripts explains that HRM was originally
created as an employment function and the responsibilities of HR were to deal with
31

employee legislation and achieve effective employee management. In this early stage,
HRM related to administrative functions to provide control, compliance, and
consistency. However, over time HRM has been influenced by behavioral researchers,
the rise of the service industry, global competition, the importance of knowledge
workers, and a proliferation of legislation; therefore HRM needs to be more flexible,
resourceful, and creative. Nowadays, HRM is continuously dealing with a dynamic and
changing business environment.

To anticipate the future, Ehrlich (1997: 87) emphasizes that the ability of HR staff to
adapt and contribute will be enhanced if they focus on six principles; (1) the HR strategy
must be anchored to business strategy, (2) HRM is not about a program, it is about
relationships, (3) the HR department must be known as a group that anticipates change
and understands what is necessary to implement it, (4) HR should be an outspoken
advocate of employee interests, yet must understand that business decisions have to
balance a range of often conflicting factors, (5) the effectiveness of HR depends on it
staying focused on issues, rather than personalities, and (6) HR executives must accept
that constant learning and skill enhancement are essential to their ability to contribute to
the business.

2.2.1. The Origins of HRM

HRM has a very long history. Leopold and Harris (2009) and Leopold et al. (2005)
explain that the nature of HRM can be illustrated by examining how a prehistoric family
group distributed jobs among members to survive and to get a better life in the early
stages of human civilization. This required supervision in the family, the need for
32

hunting skills, notions of knowledge (such as the location for wild crops), leadership (in
the family, group, and tribe). In simple words, the basic principles of HRM are intuitive
and were informally adopted into human society a long time ago. Although the very
basic principles of HRM have been implemented for a long time, many HRM scholars
(e.g. Anthony, Perrewe, & Kacmar, 2005; Bach, 2005; Bamberger & Meshoulam, 2000;
Beardwell & Claydon, 2007; Hartel et al., 2007; Nankervis et al., 2008; Reilly &
Williams, 2006) tend to agree that the origins of HRM lie within the early stages of
industrialization. The traditional concept of personnel management can be traced to after
the First World War and is allied to the welfare capitalism tradition (also see Barley &
Kunda, 1992; Foulkes, 1980; Jacoby, 1997).

The welfare tradition is basically concerned with the basic needs of employees. This
appears an ideological opposition to unionization and collective employment relations
(Foulkes, 1980; Jacoby, 1997), as the concept emphasizes that organizations should
provide adequate security and welfare for workers. This would aid production so that
absence and grievances problem can be controlled. Based on Frederick Taylors 1920s
welfare secretary concept; personnel management was grounded in Taylorism
principles. This emerging paradigm of industrial psychology was viewed as a possible
solution for worker inefficiency and worker unrest (Barley & Kunda, 1992).
Taylorism emphasized the importance of matching individuals and jobs, and ensuring
fair pay, thus this approach to personnel primarily had a problem solving technical
focus.

33

Later developments in personnel maintained this problem focused approach. Shifts in

managerial thought and discourse about managing people at work meant new functions
and technologies were added (Barley & Kunda, 1992). During the 1930s-1950s at the
height of the human relations movement, personnel management activities focused on
management development (as a conflict avoidance mechanism), collective bargaining,
industrial due process, and labor management collaboration. In the 1960s and 1970s,
personnel management led to an upsurge in operational research and systems
rationalization. During this stage, personnel management offered new technical services
in the field of work redesign, job evaluation, personnel needs forecasting and planning,
as well as performance appraisal system design, yet overall it maintained an
administrative role.

2.2.2. From Personnel Management to HRM

Guest (1987) identifies six factors relating to the transition from personnel management
to HRM, (1) the search for competitive advantage through better utilization of HR, (2)
models of excellence, (3) the failure of personnel management in promoting the
potential benefits of effective management of people, (4) the decline in trade union
pressure, (5) changes in the workforce and the nature of work with better education and
the demand of more flexible jobs, and (6) the availability of new models. These six
factors, individually or together, have motivated scholars and practitioners to promote
and adopt new and better models for managing people.

To demonstrate the key differences between personnel management and HRM, Guest
(1987) provides a comparison model that can be seen in table 2.2.
34

Table 2.2: Stereotypes of Personnel Management and HRM

Time and planning

perspective

Personnel Management
Short-term, reactive, ad, hoc,
marginal

HRM
Long-term, proactive,
strategic, integrated

Psychological contract

Compliance

Commitment

Control system

External control

Self control

Employee relation
perspective

Pluralist, collective, low trust

Unitarist, individual, high

trust

Preferred
structures/systems
Roles

Bureaucratic/mechanistic,
centralist, formal defined roles
Specialist/professional

Organic, devolved,
flexible roles
Largely integrated into
line management

Evaluation criteria

Cost-minimization

Maximum utilization
(human asset accounting)

Source: Guest, 1987: 507.

Contrasting the characteristics in this table shows that HRM provides clearer direction
for managing people. However, Guest (1987) warns this just a generalization:
Implicit in the contrasting stereotype is an assumption that human resource
management is better. However this fails to take account of variations in context
which might limit its effectiveness. For example in public service bureaucracies
conventional personnel management might more successfully contribute to the
achievement of organizational goals (Guest, 1987: 508).

Although there is considerable evidence that HRM is distinctive from personnel

management, Guest (1987) identifies three different ways to operationalize this, (1)
simply re-title personnel management with HRM without changing the roles and
contents, (2) use HRM to re-conceptualize and re-organize the roles of personnel and

35

describing the new role of the personnel department, and finally (3) offering a new
approach to manage people.

Legge (1995) suggests the transition from personnel to HRM falls into three criteria: (1)
a shift of focus from human resource processes and procedures to the development of
HR and development skills for managers and their teams. (2) HRM operates proactively
with a focus on developing core business, not merely supporting it, and (3) HRM will
generate an emphasis on defining and shaping organizational culture.

Moreover, Legge (1995) analyses the similarities and differences between personnel and
HRM. As a result, he identifies four fundamental similarities, which are, an emphasis on
the importance of integration, linking employee development with organizational goals
and achievements, ensuring the principle of the right people in the right job, and
distributing people management to line managers. In a study, he found three differences
between personnel and HRM: (1) the focus of activity: personnel management activities
are performed on subordinates by manager, while HRM pays more attention to the
management of managers; (2) the role of line managers: ones role is the implementation
of personnel procedures whereas in HRM they are responsible for devising and driving a
business oriented HR strategy; (3) perception about organizational culture: culture is a
central element in HRM models but not in personnel management models.

More comparatively, Beardwell and Claydon (2007) based on the work of Beer and
Spector (1985), Guest (1987), and Storey (1992) provides a four categories to determine

36

between personnel management and HRM, namely planning, people management,

employment relations, structure, and role perspective (see table 2.3).

Table 2.3: Perspectives of Personnel Management and HRM

Personnel Management
Planning Perspective:
Beer & Spector, 1985

HRM

Reactive
Piecemeal interventions in response
to specific problem

Proactive
System-wide interventions with
emphasis on fit

Guest, 1987

Short-term, reactive, ad hoc,

marginal

Long-term, proactive, strategic,

integrated

Storey, 1992

Piecemeal initiatives
Marginal to corporate plan

Integrated initiatives
Central to corporate plan

People management
perspective:
Beer & Spector, 1985

People as variable cost

People are social capital capable of

development

Guest, 1987

Cost minimization
Compliance

Maximum utilization (human asset

accounting)
Commitment

Monitoring
Mutually

Nurturing
can-do outlook

Self interest dominates; conflict of

interest between stakeholders
Seeks power advantages for
bargaining and confrontation

Coincidence of interest between

stakeholders can be developed
Seeks power equalization for trust
and collaboration

Guest, 1987

Pluralist, collective, low trust

Unitarist, individual, high trust

Storey, 1992

Pluralist
Institutionalized conflict
Collective bargaining contracts

Unitarist
Conflict de-emphasized
Towards individual contracts

Storey, 1992

Employment relations
perspective:
Beer & Spector, 1985

To be continued in the next page.

37

Table 2.3 continued

Personnel Management

HRM

Control from top

Control of information flow to
enhance efficiency, power

Participation and informed choice

Open channels of communication to
build trust and commitment

Guest, 1987

Bureaucratic/mechanistic
Centralized, formal, defines roles
External controls

Organic
Devolved, flexible roles
Self-control

Storey, 1992

Procedures
High standardization
Restricted flow of communication

Business need
Low standardization
Increased flow of communication

Role perspective:
Guest, 1987

Specialist/professional

Largely integrated into line

management

Storey, 1992

Personnel/IR specialist

General/business/line managers

Structure/systems
perspective:
Beer & Spector, 1985

Source: Beardwell & Claydon, 2007: 13

2.2.2. The SHRM Era

As suggested by Schuler and Jackson (1999), the most recent transition is the shifting
from HRM to SHRM. This transition was influenced by the upsurge of globalization
during the 1980s, when HRM moved from an administrative to strategic paradigm
(Boxall & Purcell, 2008; Bamberger & Meshoulam, 2000; Beer et, al., 1984; Fombrun et
al., 1984; Lundy, 1994; Truss & Gratton, 1994).

In the 1980s HRM changed

dramatically in response to global competition and demands for both cost-efficiency and
quality.

In this strategic paradigm people are considered an important source of

sustainable competitive advantage (Pfeffer, 1994; Wright, McMahan, & McWilliams,

1994; Prahalad, 1983). This was driven by the need to go beyond the functionaladministrative role to a more critical role of aligning and matching people with the

38

organizations strategies. This is the essence of SHRM, and in this way, HRM has a
central function in gaining organizational success (Armstrong, 2009; Fombrun et al.
1984; Golden & Ramanujam, 1985; Guest, 1990; Kepes & Delery, 2007; Petterson et
al., 1997; Walker, 1992). Bach (2005) provides an excellent picture of the transition of
HRM to the new HRM as can be seen in table 2.4.

Table 2.4: Emergent Directions in HR Practice: From HRM to the New HRM
Dimension
Context:
Internationalization

HRM

The New HRM

Product market competition

Focus on attracting capital
investment
Managers as heroes

Globalization
Focus on attracting labor
investment (migration)
Managers as villains

Strengthen management
prerogatives

Enhance competitiveness

Methods

Restrictive labor law

Re-regulation and legal

compliance

Employment

Union exclusion

Shallow partnership

Organizational

Single employer

Multi employer: networks

HR Practice:
Values

Commitment/loyalty

Engagement

Focus of HR Practice

Job

Person

Orientation

Employer

Customer/brand

Legal
Goals

Relations

Source: Bach, 2005: 29

39

2.3. The Foundation of SHRM

SHRM is defined as the linking of HR functions with business (organizational) strategy
in order to improve business performance and develop an organizational culture that
fosters innovation and flexibility (Lengnick-Hall et al., 2009; Truss & Gratton, 1994;
Tyson, 1997). More detail is provided in the following two definitions:
Strategic human resource management is largely about integration and adaptation. Its
concern is to ensure that: (1) human resource management (HR) is fully integrated with
the strategic needs of the firm; (2) HR policies cohere both across policy areas and
across hierarchies; (3) HR practices are adjusted, accepted, and used by line managers
and employees as part of their everyday work (Schuler, 1992: 18).

We can thus most usefully define an organizations human resourcing strategy as the
general direction followed by an organization in how it secures, develop, retains and,
from time to time, dispenses with the human resources it requires to carry out work tasks
in a way that ensure that it continues successfully into the long term. And, thus strategic
human resourcing is to be understood as the establishing of principles and the shaping
of practices whereby the human resources which an organization, seen as a corporate
whole, requires to carry out work task that enable it to continue successfully in the long
term (Leopold et al., 2005: 21).

According to Guest (1989), the key difference between HRM and strategic HRM is how
organizations integrate strategic decisions into the HRM policies and practices to cope
with the environment. In the strategic HRM perspective, employees are considered a
strategic resource that should be employed collectively with other resources (e.g.
patents, reputation) to enhance organizational success (Barney, 1991).

There is a general consensus that studies from Michigan Business School (Devanna et
al., 1984; Fombrun et. al., 1984; Tichy et al., 1982) and Harvard Business School (Beer
et al., 1984) were the pioneers of SHRM study. The Michigan model emphasizes the
necessity of a tight fit between business strategy, organizational structure and HRM, and
40

acknowledges these are also influenced by economic, political, and cultural forces. The
model underlines the deployment of HRM is to achieve business objectives.
Accordingly, this model recognizes that various styles in managing people depend on
the organizational context and assumes that everyone in the organization should have the
same orientation with the purpose of achieving organizational goals (see figure 2.1).

Figure 2.1: The Matching/ Michigans Model of HRM

Source: Devanna et al. (1984); Tichy et al. (1982: 48)

Tichy et al. (1982) provide an excellent illustration of how to achieve the fit among
business strategy, organizational structure, and HRM in table 2.5

41

Table 2.5: HRM Links to Strategy and Structure

HRM
Strategy
Single Product

Structure
Functional

Selection
Functional
oriented:
subjective
criteria used

Appraisal
Subjective
measure via
personal
contact

Rewards
Unsystematic
and allocate in
paternalistic
manner

Development
Unsystematic
largely
through job
experiences:
single function
focus

Single Product
(Vertically
Integrated)

Functional

Functional
oriented:
standardized
criteria used

Interpersonal
based on cost
& productivity
data

Related to
performance
& productivity

Functional
specialists
with some
generalists;
largely
through job
rotation

Growth by
Acquisition
(holding
company of
unrelated
business)

Separate, self
contained
business

Functionally
oriented, but
vary from
business to
business

Interpersonal:
based on
return on
investment &
profitability

Formulabased &
includes return
on investment
& profitability

Crossfunctional but
not crossbusiness

Related of
Diversification
of Product
Lines through
Internal
Growth &
Acquisition

Multidivisional

Functionally
& generalist
oriented:
systematic
criteria used

Interpersonal:
based on
return on
investment
productivity,
& subjective
assessment of
contribution to
overall
company

Large
bonuses:
based on
profitability &
subjective
assessment of
contribution to
overall
company

Cross
functional,
cross
divisional, &
cross
corporate:
formal

Multiple
Products in
Multiple
Countries

Global
orientation
(Geographic
center &
world-wide)

Functionally
and generalist
oriented:
systematic
criteria used

Interpersonal:
based on
multiple goals
such return on
investment,
profit tailored
to product &
country

Bonuses:
based on
multiple
planned goals
with moderate
top
management
discretion

Cross
divisional &
cross
subsidiary to
corporate:
formal &
systematic

Source: Tichy et al. (1982: 49)

The second foundation model of SHRM, the Harvard model, recognizes that HRM is
influenced by a wide range of stakeholder interests and contextual factors. The

42

interaction between these factors allow the organization to identify the most suitable
HRM policy choices, such as those relate to employee involvement, HR flow (including
recruitment and selection, training and development, and performance management),
reward systems, and work systems. This process illustrates that HR activities need to be
integrated with the broader organizational strategy. The outcome of implementing HR
policies is organizational commitment, competence, congruence, and cost effectiveness
that return long-term consequences for individuals, enterprises and society. A more
complete diagram of the Harvard model of HRM can be seen in figure 2.2.

Figure2.2: The Harvards Model of HRM

Stakeholder
interests:
Shareholders
Management
Employee groups
Government
Community
Unions

Situational factors:
Workforce
characteristics
Business strategy
& conditions
Management
pdilosophy
Labor market
Unions
Task technology
Laws & societal
values

HRM policy
choices:
Employee
influence
HR flow
Reward system
Work system

HR outcomes:
Commitment
Competent
Congruence
Cost
effectiveness

Source: Beer et al. (1984: 16)

43

Long-term
consequences:
Individual
wellbeing
Organizatinal
efectiveness
Societal
wellbeing

To provide a more comprehensive view of the conceptual foundation of SHRM, Wright

and McMahan (1992: 298) define SHRM as the pattern of planned human resource
deployment and activities intended to enable an organization to achieve its goals. Based
on this definition, they proposed a theoretical framework of SHRM which can be viewed
from four different perspectives (also see De Cieri & Kramar, 2003). These four
different perspectives are: (1) the resource-based view, which focuses on how HRM is
able to provide competitive advantage; (2) the behavioral view, which assumes that
HRM is designed to control and influence attitudes and behaviors (the contingency
approach); (3) the cybernetics system, which emphasizes the adoption of HRM practices
resulting from feedback on contributions to strategy; and (4) the agency or transaction
cost view, that underlines the role of HRM as a control system.

Wright and McMahan (1992) mention that HRM also can be viewed from non-strategic
perspectives; these are resource dependence and power theories, and institutional theory.
The resource dependent and power theories relate to power and political influences in
HRM, such as legislation and unionization. While institutional theory mentions the
existence of organizational inertia in HRM practices, rather than rational decision
making. The illustration of Wrights and McMahans theoretical model of HRM can be
seen in figure 2.3

44

Figure 2.3: A Theoretical Framework of SHRM

Institutional/ Political
Forces

Firm Strategy

Resource Dependence
Institutional
Resource-based
View of the Firm

HRM Practices
Behavioral Approach
Cybernetic
Agency/
Transaction Costs

HR Capital Pool
(Skill, Abilities)

HR Behaviors

Firm-Level Outcomes
(Performance,
Satisfaction,
Absenteeism, etc.)

Source: Wright & Mc Mahan (1992: 299)

2.4. The Approaches into SHRM

HR scholars (e.g. Armstrong, 2009; Boxall & Purcell, 2000, 2008; Purcell, 1999;
Youndt et al., 1996) see two underlying approaches to determining SHRM; they are best
practice or universal, and best fit or contingency approaches. Other HR scholars (e.g.
Baird & Meshoulam, 1988; Delery & Doty, 1996; Doty & Glick, 1994; Lengnick-Hall et
al., 2009; Ostroff & Bowen, 2000; Martin-Alcazar, 2005) also mention another domain
in the configurational approach. These three are accepted as the most well known
approaches for formulating SHRM.

45

The basic idea of best practice is universalism; this means there is a general pattern that
can be adopted for managing human resources. The best fit school argues that HR
strategy will be more effective when it is appropriately integrated with its surrounding
context, especially the business strategy. It means that different business strategies will
need different HR strategies. The core assumption of the configurational model is that
successful HR strategy relies on the business strategy to take account of external factors,
but is also adapted to the internal environment. There are particular combinations sets of
mutually reinforcing factors that have greater affect than the sum of individual effects.

2.4.1. The Best Practice or Universalistic Approach

The best practice approach to managing people is based on Universalist principles that
assume some HRM practices are appropriate for all organizations (Armstrong, 2009;
Boxall & Purcell, 2008; Huselid, 1995; Osterman, 1994; Pfeffer, 1994, 1998; Telpstra &
Rozell, 1993). This means there is a universal prescription or one best way or a general
pattern that can be adopted by various organizations to manage their people, regardless
of the organizations circumstances (Bolman & Deal, 1997). This model has received
considerable support in the literature, as can be seen in the summary of authors
supporting this model, shown in table 2.6

46

Table 2.6: The Supporters of the Best Practice Approach

Pioneers of Best Practice:
Eilbert (1959)
Crichton (1968)
Most Cited Best Practice Models:
Appelbaum et al. (2000): High Performance Work Systems (HPWS)
Delery & Dotys (1996): Strategic HR Practices
Ostermans (1994): Innovative Work Practices
Pfefers (1998): 7 Management Practices
Wood (1996): High Commitment Management (HCM)
Supporters
Appelbaum et al. (2000)
Armstrong (2000, 2009)
Aydinli (2010)
Becker & Gerhart (1996)
Becker & Huselid (1998)
Bolman & Deal (1997)
Borman (1991)
Boselie et al. (2005)
Brewster et al. (2004)
Carr & Pudelko (2006)
Combs et al. (2006
dArcimoles (1997)
Datta et al. (2005)
Delery & Dotty (1996)
Dyer & Reeves (1995)
Farias & Varma (1998)
Gerhart & Milkovich (1990)
Ghong et al. (2010)
Gooderham et al. (2004)
Gould-Williams & Mohamed (2010)
Guerrero & Barraud-Didier (2004)
Guest (1997)
Guthrie (2001)

Guthrie et al. (2002)

Huselid (1995)
Ichniowski et al. (1997)
Lee et al. (2010)
Legge (1995, 2001)
MacDuffie (1995)
Mayrhofer et al. (2004)
McGaughey & De Cieri (1999)
OReilly & Pfeffer (2000)
Osterman (1994)
Paauwe & Boselie (2005)
Petterson et al. (1997)
Pfeffer (1994, 1998)
Razouk & Bayad (2010)
Russel et al. (1985)
Stavroua et al. (2010)
Storey (1992)
Sun et al. (2007)
Telpstra & Rozell (1993)
Vanhala et al. (2006)
Varma et al. (1999)
Wood (1996)
Youndt et al. (1996)

Note: some the best practice supporters also become the best fit supporters because they
found both approaches in their studies.

Rzouk & Bayad (2010) describe HRM practices are considered as assets behind the
development of certain organizational competencies; consequently HRM practices

47

significantly contribute to defining organizational or corporate strategy. Whereas Hamel

and Prahalad (1994) emphasize organizations should be able to define their core
competency; therefore dArcimoles (1997), Pfeffer (1998), Guerrero and Barraud-Didier
(2004), and OReilly and Pfeffer (2000) suggest HRM best practices can also be
classified as a competitive advantage of the organizations.

The belief in universalistic principles or a best practice approach in managing people is

supported by considerable empirical researches. Gould-Williams & Mohamed (2010:
654) state with reference to the universal versus contingent approach, it appears that
there is more empirical evidence in support of the universal or best practice approach.

Although there is no definitive list of practices in the best practice approach (Boselie et
al., 2005; Boxall & Purcell, 2008; Paauwe & Boselie, 2005), however there is a
considerable similarity among scholars that HR practices should promote autonomy,
commitment and opportunities to participate especially through team-working
(Appelbaum et al., 2000; Armstrong, 2009; Ichniowski et al. 1997; MacDuffie, 1995).
Scholars in this school (e.g. Appaelbaum et al., 2000; Delery & Dotty, 1996; Pfefer,
1994, 1998; Osterman, 1994; Wood, 1996) propose a general practice of HRM, as
summarized by Youndt et al. (1996: 839):
At their root, most (models) focus on enhancing the skill base of employees through
HR activities such as selective staffing, comprehensive training, and broad
developmental efforts like job rotation and cross-utilization. Further, (they) tend to
promote empowerment, participate problem solving, and teamwork with job redesign,
group-based incentives, and a transition from hourly to salaried compensation for
production workers.

48

Studies of the best practice approach have a very long tradition in the HRM literature
(Armstrong, 2009; Boxall & Purcell, 2000). In the early stages, studies focused their
analyses on individual work practices such as selection, training and appraisal. Eilbert
(1959) and Crichton (1968) were pioneers of this school of thought. Their study
emphasized that organizations should find the best practice, for officer selection, training
and motivation to improve their performance.

The discipline of industrial psychology played a significant role in this era as the focus
moved to individual work practices. Industrial psychologists play a significant role in
analyzing many aspects of human behavior to predict and develop human performance.
Studies have produced many categorizations of what constitutes bad, stupid good or
recommended practices for managing people. Although not all agree, the best practice
approach is widespread and acknowledged among researchers and practitioners (Delery
& Dotty, 1996; Youndt et al. 1996).

Improvement to the best practice approach has led to a more comprehensive model. This
complies with the request of more complexity when dealing with multiple problems in
the HR area. The result is an enormous variety in the number and types of model or
system of best practice that are suitable for different organizations and different
situations (Becker & Gerhart 1996). On the other hand the universalistic approach
merely focuses on certain HRM practices to increase employees ability; such as
rigorous recruitment and selection (Telpstra & Rozell, 1993), comprehensive training
(Russel et al., 1985), comprehensive performance appraisal (Borman, 1991), variable

49

compensation (Gerhart & Milkovich, 1990), and commitment, participation and job
redesign (Youndt et al., 1996).

The universalistic or best practice HRM model most frequently cited in the literature on
SHRM are Ostermans (1994) Innovative work practices, Pfeffers (1994 & 1998) 16
management practices, Woods (1996) high commitment management models, Delery
& Dotys (1996) strategic HR practices, and Appelbaums (2000) high performance
work systems (HPWS). Based upon Dertouzos et al. (1989) and the Cuomo Commission
report (1988); Osterman (1994) conducted a study to examine the incidence of
innovative work practices (teams, job rotation, quality circles, and total quality
management) and investigate what variables were associated with the adoption of these
practices. This study confirmed a number of variables were positively associated with
the adoption of flexible work practices; they were international competition, a high skill
technology, worker-oriented values, and a high-road strategy (emphasizing service,
quality, and variety of products rather than low costs). Osterman (1994), moreover,
proposed a set of HRM practices to underwrite the adoption of flexible work systems,
these consist of innovative pay systems, extensive training, and efforts to induce greater
commitment.

Based on the assumption that there is a certain set of HR best practices, Pfeffer (1994)
recommends 16 management practices to achieve higher productivity and profit. These
16 management practices are: employment security, selectivity in recruiting, high wages,
incentive

pay,

employee

ownership,

information

sharing,

participation

and

empowerment, teams and job redesign, training and skill development, cross-utilization
50

and cross-training, symbolic egalitarianism, wage compression, promotion from within,

a long-term perspective, measurement of practices, and an overarching philosophy. By
implementing these prescriptions, Pfeffer (1994) strongly believes that the competitive
advantage of the organization through people can be achieved and organizational
performance can be promoted. Later, Pfeffer (1998: 64-65) re-conceptualized these to a
simpler formula which called as Pfeffers seven practices for a successful organization,
this includes (1) employment security, (2) selective hiring of new personnel, (3) selfmanaged teams and decentralization of decision making as the basic principles of
organizational design, (4) comparative high compensation contingent on organizational
performance, (5) extensive training, (6) reduced status distinctions and barriers,
(including dress, language, office arrangements) and wage differentials across levels,
and (7) extensive sharing of financial and performance information throughout the
organization.

Another popular best practice model is Woods (1996) High Commitment Management
(HCM) which basically draws upon Beer et al. (1984), Guests (1987), Waltons (1985)
and Wood and Albaneses (1995) works. Walton (1985) and Beer et al. (1984) recognize
that a high commitment strategy is necessary to adopt team working and flexible job
descriptions. Whereas Guest (1987) assumes that behavior is predominantly selfregulated rather than controlled by sanctions and external pressure, Wood and Albanese
(1995) and Wood (1996) contend that HCM is associated with certain HRM practices,
including team work, functional flexibility, and employee involvement. More
comprehensively Woods (1996: 59-60) universalist model of HCM has fourteen steps;
these include (1) trainability as a major selection criterion, (2) commitment as a major
51

selection criterion, (3) career ladders and progression as an objective for all employees,
(4) the predominant work system is formally designated team working, (5) quality circle
that meet regularly, (6) training budgets that are set with at least a two years financial
horizon, (7) an explicit policy for designing jobs to ensure the full use of workers skills
and abilities, (8) production workers are responsible for their own quality, (9) a system
of regularly planned team, or cascade, briefings which extend down to the shop-floor
even if it involves stopping the production line, (10) flexible job descriptions which are
not linked to one specific task, (11) a policy of no compulsory redundancy, (12) formal
assessments for production workers on an annual or bi-annual basis, (13) the use of
temporary staff with the primary purpose being to protect the security of the core
workforce, and not to meets fluctuation in demand, and (14) single status terms and
conditions of employment.

Delery and Dotty (1996) also prescribe seven strategic HR practices which are
consistently considered as universal HRM practices, they are, internal career
opportunities, providing extensive training opportunities, result-oriented appraisal or
performance-based

compensation,

employment

security,

employee

voice,

job

descriptions are tightly and clearly defined, and profit sharing. Employing these
universal HRM practices allow organizations to achieve organizational performance as
they are, theoretically or empirically related to overall organizational performance
(Delery & Doty, 1996: 805).

More recently and becoming more widespread in discussions about best practice is the
term High Performance Work Systems or HPWS (Armstrong, 2009). A HPWS is a
52

system of HR practices designed to enhance employees skills, commitment, and

productivity in such a way that employees become a source of sustainable competitive
advantage (Datta et al., 2005: 136). A HPWS is also about having an internally
consistent and coherent HRM system that is focused on solving operational problems
and implementing the firms competitive strategy (Becker & Huselid, 1998). More
operationally, they mention three main characteristics of an HPWS; they are linking
selection and promotion; providing support for the skill demanded; and enacting
compensation and performance management to attract, retain and motivate highperformance employees. While, Armstrong (2009: 233) summarizes HPWS as having
three underpinning themes, including:
1. An open and creative culture that is people-centered and inclusive, where
decision taking is communicated and shared through the organization.
2. Investment in people through education and training, loyalty,
inclusiveness, and flexible working.
3. Measurable performance outcomes such as benchmarking and setting
targets, as well as innovation through process and best practice.

A recent study from Ghong et al. (2010) describes HPWS are positively related to
collective organizational citizenship behaviour (OCB) through collective affective
commitment. Many studies report that HPWS have many different positive impacts on
performance, whereas, Combs et al. (2006) simply conclude that the HPWS is positively
related to various indicators of organizational performance.

According to Armstrong (2009) a widely cited understanding of HPWS is based on the

work of Appelbaum et al. (2000). This basically draws on five main HR practices; work
is organized to permit front line workers to participate in decision that alter
53

organizational routines; workers require more skills to do their job successfully, and
many of these skills are firm-specific; workers experience greater autonomy over their
job tasks and methods of works; incentive pay motivates workers to extend extra effort
on developing skills; and employment security provides front-line workers with a longterm stake in the company and a reason to invest in its future

Strong support for the universal approach was also found in recent studies by GouldWilliams and Mohamed (2010) who analyzed the effects of best practice HRM on
worker outcomes in local government Malaysia and England., and Aydinlis (2010)
comparative study of HRM between Hungary and Turkey. Furthermore, these studies
strengthened the assumption that a general formula of HRM can be implemented across
industries and across nations, in international HRM this is considered a convergenct
approach (also see Boselie, 2005; Carr & Pudelko 2006; McGaughey & De Cieri 1999;
Paauwe & Boselie, 2005; Vanhala et al., 2006).

The convergent approach, is derived from Max Webers theory of bureaucracy and
rationalization (Gooderham et al., 2004). The convergence followers believe that market
forces give rise to the similarities of managing people (or HRM) in organizations across
different countries (Mayrhofer et al., 2004). In other words, the convergent approach
views, HRM as becoming more uniform as business becomes more global (Aidinly,
2010; Gooderham et al., 2004) as companies in different countries adopt similar
organizational structures, processes, and practices. They argue, moreover, that the issues
faced by managers throughout the world are similar, thus managements response and
practices will also be similar.
54

Armstrong (2000) emphasizes that implementing a general pattern of HR leads to

superior organizational performance, which is why Becker and Gerhart (1996) describe
best practice and HPWS as HR methods and systems that have universal, additive, and
positive effects on organizational performance. This view is highly supported by Huselid
(1995) who emphasizes that HPWS result in high-level organizational outcomes, but not
necessarily outcomes resulting from a particular strategy. Organizations that practice
comprehensive recruitment and selection procedures, extensive employee involvement
and training, and formal performance appraisals are likely to have a lower employee
turnover, higher productivity and enhance financial performance. Other studies from
Delery and Doty (1996), Lee (2010), and Pfeffer (1994, 1998) also support this point of
view.

More specifically, many studies provide strong support for HPWS having a significant
impact on performance. Appelbaum et al. (2000) found that HPWS produces strong
positive effects on both organizational and individual performance. Organizational
performance has significant increase on financial performance, production efficiency,
and product quality. Although related to individual issues HPWS enhance employees
trust, intrinsic reward, organizational commitment, and job satisfaction (also see
Armstrong, 2009; Sun et al., 2007).

HPWS has a significant impact on operational and financial performance (Farias, 1998).
It creates a positive culture and positively influences how work should be designed and
improves communication processes within organizations (Varma et al., 1999). This
55

meant the HPWS has implications for enhancing employee retention (Guthrie, 2001) and
positively associated with performance in firms competing on the basis of differentiation
(Guthrie et al., 2002).

Pfeffer (1998: 34) underlines that the effects of high performance management
practices are real, economically significant and general and thus should be adopted by
organizations". In other words it is claimed that the performance effects of best practice
HRM are universal (Pfeffer 1994, 1998; Huselid 1995; Delery and Doty 1996).

Although the best practice approach has considerable support, this approach is also
criticized from different perspectives in the literature. Becker and Gerhart (1996), Dyer
and Reeves (1995), Youndt et al. (1996) argue for varying desirable practices.
Marchington and Grugulis (2000) claim the best practice model lacks the collective
issues of work organization, such as an employee voice. Legge (2001) and Purcell
(1999) found that, in reality, a vast number of organizations across industries have not
chosen best practice as an approach to manage their people.

From the resource based view, Purcell (1999) argues that organizations should cultivate
their (exclusive) resources, including intangible assets such as human resources, to
promote their overall model and to be better than their competitors. Further, he argues
that there is an inconsistency between a belief in best practice and the resource-based
view. In the extreme view, it can be said that every single organizations has different
resources (including human), and therefore they should not be managed in the same
way.
56

The contingency school has also criticized best practice, as Becker et al. (1997) remarks:
organizational high-performance work systems are highly idiosyncratic and must be
tailored carefully to each firms individual situation to achieve optimum results.
Cappelli and Crocker-Hefter (1996: 12) also mention:
There are examples in virtually every industry of firms that have very
distinctive management practices. We argue that these distinctive human
resource practices help to create unique competencies that differentiate products
and services and, in turn, drive competitiveness. Distinctive human resources
practices shape the core competencies that determine how firm compete.

Another criticism from Boxall and Purcell (2008) encompasses to national, sectoral and
organizational context. The reality of labors laws, cultural practices and management
style vary from country to country (Appelbaum & Batt, 1994; Wever, 1995) and the
interaction between these and HRM practices cannot be avoided. Basically, there is no
universal prescription of HRM practices that should be employed in each different
context. In terms of sector and organizational contexts (also see Gittleman et al., 1998;
Weinsten & Kochan, 1995) Boxall and Purcell (2008: 88) explain,
Research on what do descriptive research- makes life very difficult for the more
extreme advocates of best practice. It demonstrates that methods of labour management
are inevitably influenced by context, including range of economic and socio-political
factors. And it also shows that there are very good reasons for adaptation to context
including the needs to fit in with social values and to adapt to industry characteristic.

2.4.2. The Best Fit Approach

In contrast to the universalistic or best practice approach, the best fit approach adopts a
contingency approach, which focuses on the fit to the surrounding context, especially the

57

business strategy (e.g. Baird & Meshoulam, 1988; Boxall & Purcell, 2000, 2008; Wright
et al., 2001). This linkage between strategy and HRM has received extensive attention
from contingency school of thought and the extensive support for this approach can be
seen in the list of supporting authors shown in Table 2.7 below. The contingency
approach also claims that the impact of SHRM practices depend on contextual variables
as well as strategy (e.g. Jackson & Schuler, 2007; Roehling 2009; Wright & Snell,
1998). Sisson and Storey (2000) links these contextual to business strategy and HRM fit
into three areas. The first links HRM to different stages in the business life cycle; the
second relates HRM to different strategies or structural configurations; whereas, the
third links HRM to different business strategies.

Linking HRM to different stages in the business life cycle makes a link between HR
policy choices and the varying requirements of the firm at different stages of its life
cycle, such as, start up, growth, maturity, and decline. In each stage, a business will
have different priorities that require different HRM strategies (Baird & Meshoulam,
1988; Milliman et al., 1991; Schuler & Jackson, 2007). Linking HRM to different
strategy and structure configurations focuses the analysis on the choice of appropriate
HRM strategies for these. Fombrun et al. (1984) emphasize that the choice of HRM
strategy, such as, selection, appraisal, rewards, and development should differ and be
appropriately matched to the needs of specific configurations of structure and strategy
(also see Baron & Kreps, 1999; Ulrich et al., 2010). For example, a single product
business with a functional structure will have quite different requirements to a
diversified multi-product organization operating globally. Matching business strategy
and HRM analyses the link between HRM choices and the different types of business
58

strategy. Drawn from Porters model (1985), this approach argues that HRM is only
strategic if it fits with the organizations product market strategy and is proactive in this
regard. The popular examples of this approach are studies from Miles and Snow (1984)
and Schuler & Jackson (1987).

Table 2.7: The Supporters of the Best Fit Approach

Pioneers of Best Fit:
Beer et al. (1984): The Harvards Model of SHRM
Fombrun et al. (1984): The Michigans Model of SHRM
Most cited busines strategy and HRM relationship model:
Miles & Snow (1984)
Schuler & Jackson (1987)
Supporters of Best Fit
Ackerman (1986)
Andersen (2007)
Armstrong (2009)
Arthur & Hendry (1990)
Aycan (2005)
Baird & Meshoulam (1988)
Balkin & Bannister (1993)
Bannet et al. (1998)
Baron & Kreps (1999)
Bartlett et al. (2002)
Becker & Gerhart (1996)
Bhattacharya et al. (2005)
Bowen & Lawler (1992)
Boxall (2003)
Boxall & Purcell (2000, 2008)
Budhwar & Sparrow (2002)
Budwar & Debrah (2001)
Buller (1988)
Burns & Stalker (1994)
Chow (2004)
Coates (1987)
Coates (2009)
Collins & Smith (2006)
Compton (2009)

Daft (1998)
Delery & Doty (1996)
Delery (1998)
DiMaggio & Powell (1983)
Dyer (1984)
Dyer & Holder (1988)
Erickson (2009)
Godard & Delaney (2000)
Golden & Ramanujam (1985)
Gooderham et al. (2004)
Gospel & Pendleton (2003)
Hitt et al. (2001)
Hofstede (1980, 1991, 2001a, 2001b)
Hofstede & Hofstede (2004)
Ignjatovic & Sveltic (2003)
Jackson (2002)
Jackson & Schuler (1992, 1995, 2000,
2007)
Jackson, et al. (1989)
Jones (1984)
Kalleberg et al. (2006)
Kanter (1989)
Ketkar & Sett (2010)
Kintana et al. (2006)

To be continued on the next page.

59

Table 2.7 continued.

Supporters of Best Fit
Kochan & Barocci (1985)
Lansbury et al. (2006)
Lawler (1995)
Lawler et al. (1993)
Lawler & Galbraith (1995)
Lengnick-Hall & Lengnick-Hall (1988)
Lenngnick-Hall et al. (2009)
Leopold & Harris (2009)
Lepak et al. (2004, 2006)
Lepak & Snell (1999)
Lundy (1994)
Lundy & Cowling (2000, 1996)
Mayrhofer et al. (2004)
Mckinlay & Starkey (1992)
Miles & Snow (1984)
Milliman et al. (1991)
Nankervis et al. (2008)
Ostroff & Bowen (2000)
Paauwee & Bosolie (2003, 2007)
Patrickson & Hartmann (2001)
Perrow (1986)
Pfeffer & Cohen (1984)
Pfeffer & Davis-Blake (1987)
Pfeffer & Langton (1988)
Pudelko (2005, 2006)
Pugh & Hickson (1976)
Purcell (1995, 1999)

Roehling, et al. (2009)

Rubery & Grimshaw (2003)
Schuler (1987a, 1987b, 1992)
Schuler & Jackson (1987, 1999)
Schuler et al. (2000)
Schuler & Walker (1990)
Selznick (1996)
Sisson & Storey (2000)
Sparrow & Hiltrop (1994)
Stavrou et al. (2010)
Storey (2009)
Tayeb (1998)
Tissen et al. (2010)
Trompenaars (1993)
Trompenaars & Hampden-Turner (1998,
2000)
Ulrich et al. (2010)
Walker (1980, 1988)
Warner (1984)
Whitley (2000).
Wils (1984)
Woodward (1994)
Wright & McMahan (1992
Wright & Snell (1998)
Wright et al. (1994, 1995, 1997, 1998,
2001)
Youndt et al. (1996)
Zanko (2003)

Note: some supporters of best fit are also listed as supporters of best practice, because they
found both approaches in their studies.

According to Boxall and Purcell (2008) the best fit model is most concerned with
achieving external fit and the addressing the flow-on implications for internal fit.
Moreover the most influential factor is an organization (business) strategy rather than an
alignment to the organizations stage of development. In this sense, matching business

60

(organization) strategy and HR strategy is the core idea of the best fit model as well as,
the essence of strategic HR.

It is not surprising that organizational strategy is a key factor for the formulation of HR
strategy. Pioneering studies by Fombrun et al. (1984) and Beer et al. (1984) found
support for linking business strategy and human resource management. The synergy of
this relationship has subsequently received strong support through numerous studies.
Dyer (1984: 161) says: organizational strategy is the major determinant of
organizational HR strategy. From a study of twenty-two different strategic business
units of a single corporation, Wils (1984) again identified business strategy as the
strongest predictor of HR strategy. Applying Miles and Snows (1984) typology of
business strategy, Ackerman (1986) also found a similar result.

Miles and Snow (1984) propose three groups of strategic behaviours, namely defender,
prospector and analyzer. The defender strategy relates to organizations that have narrow
and relatively stable product markets. The prospector strategy continually searches for
product and market opportunities and regularly experiments with potential responses to
emerging environmental trends. The analyzer strategy operates in two types of product
markets in a relatively stable or changing environment. Based on these three strategies,
Miles and Snow (1984) recommend the most suitable HR system for each strategy (see
table 2.8). This table recommends different business strategies is need different rules for
managing people.

61

Table 2.8: Business Strategies and HR System

Human Resource
(HR) Management
System
Basic Strategy

Type A (Defender)
Building HR

Business Strategy
Type B (Prospector)
Acquiring HR

Allocating HR

Emphasis: buy
Sophisticated
recruiting at all
levels
Selection may
involve preemployment
psychological testing
Informal, limited
Skill identification
and acquisition
Limited training
programs

Emphasis: make and

buy
Mixed recruiting and
selection approach

Recruitment,
Selection, and
placement

Emphasis: make
Little recruiting
above entry level
Selection based on
weeding out
undesirable
employees

Staff Planning,
Training and
development

Formal, extensive
Skill building
Extensive training
program

Performance appraisal

Process-oriented
procedure (for
example, based on
critical incidents or
productions target)
Identification of
training needs
Individual/group
performance
evaluations
Time series
comparisons (for
example, previous
years performance)

Result-oriented
procedure (for
example,
management by
objectives or profit
targets)
Identification of
staffing needs
Division/corporate
performance
evaluation
Cross-sectional
comparisons (for
example, other
companies during
same period)

Oriented toward
position in
organization
hierarchy
Internal consistency
Total compensation
heavily oriented
toward cash and
driven by
superior/subordinat
e differentials

Oriented toward
performance
External
competitiveness
Total compensation
heavily oriented
toward incentives
and driven by
recruitment needs

Compensation

Type AB (Analyzer)

Source: Miles and Snow, 1984: 49

62

Formal, extensive
Skill building and
acquisition
Extensive training
program
Limited outside
recruitment
Mostly process-oriented
procedure

Identification of training
and staffing needs
Individual/group/division
performance evaluation
Mostly time series, some
cross sectional
comparisons

Mostly oriented toward

hierarchy, some
performance
considerations
Internal consistency and
external competitiveness
Cash and incentive
compensation

Based on Porters (1980, 1985) generic strategies, Schuler and Jackson (1987) define the
three business strategy differently, these strategies are innovation, quality enhancement
and cost reduction. The innovation strategy focuses on developing products or services
different from competitors. The quality enhancement strategy focuses on enhancing
products and/or services quality. The cost reduction strategy focuses on gaining
competitive advantage by being the lowest cost producer. Moreover, they emphasize that
each strategy type requires different types of employee role behaviors. Further, once
behaviors that fit the strategy have been identified, HR practices should be employed to
ensure these behaviors work. Thus Schuler and Jacksons (1987) model takes a
behavioral approach SHRM. The alignment between business strategy, employee role
behaviors and HRM choices in the Schuler and Jackson (1987) model of SHRM can be
seen in table 2.9.

Table 2.9: Business Strategy and HRM Choices

Strategy

Innovation

Employee Characteristics
A high degree of creative behavior
Long-term focus
A relatively high level of
cooperative, interdependent
behavior
A moderate degree of concern
quality
A moderate concern for quantity
An equal degree of concern for
process and results
A greater degree of risk taking
A high tolerance of ambiguity and
unpredictable

To be continued in the next page.

63

HRM Practices
Jobs that require close interaction and
coordination among groups of individuals
Performance appraisal that are more likely
to reflect longer term and group based
achievement
Jobs that allow employees to develop
skills that can be used in other position in
the firm
Compensation systems that emphasize
internal equity rather than external or
market based equity
Pay rates that tend to be low, but that
allow employees to be stockholders and
have more freedom to choose the mix of
components that make up their pay
package
Broad career paths to reinforce the
development of a broad range of skills

Table 2.9 continued.

Strategy

Quality
Enhancement

Cost Reduction

Employee Characteristics

HRM Practices

Relatively repetitive and predictable

behaviors
A more long term or intermediate
focus
A moderate amount of cooperative
interdependent behavior
A high concern for quality
A modest for concern for quality of
output
High concern for process
Low risk-taking activity
Commitment to the goals of the
organization

Relatively fixed and explicit job

description
High level of employee participation in
decisions relevant to immediate work
conditions and the job itself
A mix of individual and group criteria for
performance appraisal that is mostly short
term and results oriented
A relatively egalitarian treatment of
employees and some guarantees of
employment security
Extensive and continuous training and
development of employees

Relatively repetitive and predictable

behavior
A rather short-term focus
Primarily autonomous or individual
activity
Moderate concern for quality
High concern for quantity output
Primary concern for results
Low-risk taking activity
Relatively high degree of comfort
with stability

Relatively fixed and explicit job

description that allow little room for
ambiguity
Narrowly designed job s and narrowly
defined career paths that encourage
specialization, expertise and efficiency
Short term results orientated performance
appraisals
Close monitoring of market pay levels for
use in making compensation decision
minimal levels of employee training and
development

Source: Schuler & Jackson, 1987: 209-213

Many researchers and scholars claim that business strategy is the central determinant of
HR strategy (e.g. Andersen, 2007; Bae & Lawler, 2000; Lundy & Cowling, 2000;
Wright et al., 2001). Hence, congruence between business strategy and HR strategy is
central to the best fit model and indeed, the SHRM literature. Lawler (1995: 14)
emphasizes that all organizational systems must start with business strategy because
it specifies what the company wants to accomplish, how it wants to behave, and the
kinds of performance and performance levels it must demonstrate to be effective.

64

Other contingencies emphasized by scholars are the organizational and environmental

factors (e.g. Arthur & Hendry, 1990; Boxall & Purcell, 2008; Buller, 1988; Jackson &
Schuler, 2007). Depending on the context externally and the internal environment
organizations will need a different pattern of HRM. This approach is widely accepted
given the continuous and dynamic changes faced by organizations (Erickson, 2009;
Leopold & Harris, 2009). The organizational variables scholars emphasize are size (e.g.
Jackson & Schuler, 1995, 2007; Kalleberg et al., 2006), stage in the organizations life
cycle (e.g. Baird & Meshoulam, 1988; Sisson & Storey, 2000), structure (Baron &
Kreps, 1999; Ulrich et al., 2010), access to capital or quality of funding (e.g. Bannet et
al., 1998; Boxall & Purcell, 2008), unionization (e.g. Collins & Smith 2006, Dyer &
Holder, 1988), and political relationships (e.g. Jones, 1984; Pfeffer & Langton, 1988).
Environmental and external factors to the organization include market competition (e.g.
Boxall, 2003; Lepak et al. 2006), technology (e.g. Compton, 2009; Godard & Delaney,
2003), legal (e.g. Gooderham et al., 1999; Roehling, et al., 2009), cultural (e.g. Budhwar
& Sparrow, 2002; Hofstede & Hofstede, 2005), macro-economic (e.g. Baron & Kreps,
1999; Schuler & Jackson, 2007) and the labor market (e.g. Collins & Smith 2006, Dyer
& Holder, 1988).

Recent studies (Ketkar & Sett, 2010; Stavrou et al., 2010; Tissen et al., 2010) provide
further support for the best fit or contingency approach. They strengthen the belief that
companies should always adjust their dynamic global environments into their
organizational processes. Accordingly, HRM also needs to be flexible to adjust to these
environmental changes.

65

Numerous studies support that the alignment between business strategy and HR strategy
is core to the best fit model. However, as demonstrated below the best fit model should
take account of other contingencies; where both external and internal have influences on
the HR strategy. Boxall and Purcell (2003) provide an excellent illustration of the impact
of competitive (business) strategy on HR strategy for companies with a different
dominant technology (See table 2.10).
Table 2.10: HR Strategy: Two Different Scenarios
Firms choice of
competitive
strategy

Cost leadership

Cost leadership

Nature of productive
technology in the sector

High technology or
highly capital
intensive; often low
staff numbers but key
specialist skill very
important to operation

Low-technology, often
highly labor intensive
operations and large
scale

Worker actions and impact

of State regulation

Implication for HR strategy

If organized to unions,
workers may extract
more of a wage premium
but this is not likely
affect the economics of
the firm unless work
practices are inefficient
or unduly inflexible.
Regulation by the State
is not likely to have
much relevance because
wage and conditions are
high in the sector

HR strategy should be
based on developing and
motivating workers to
maximize the benefits of
the technology (which
will help to achieve the
cost leadership strategy).
Prediction: high-wage/
high-skill models of labor
management are cost
effective. Investments in
creating highperformance work
system are likely to be
justified.

Here, strongly unionized

workforces will
strengthen the drive to
locate operation in lowwage countries.
Employment regulation
could have a significant
impact in setting the
lower bound of wage
conditions

HR strategy is dominated
by the need to survive in
environment where wage
are in competition.
Prediction: firm seek out
low wage sites where
productivity is high and
quality is acceptable.
Firms will pay the going
rate in the local labor
market but avid paying
premium conditions or
over-investing in training.

Source: Boxall and Purcell, 2003: 59.

66

The contingency approach also has strong support for implementation of HRM across
countries. The best fit approach emphasizes that the context differs among countries, and
causes differences in how HRM should be practiced (Budwar & Debrah, 2001;
Gooderham et al. 2004; Mayrhofer et al., 2004; Paauwee & Bosolie, 2003, 2007;
Pudelko, 205, 2006; Rubery & Grimshaw, 2003). These differences can be cultural
(Budhwar & Sparrow, 2002; Hofstede, 1991, 2001a, 2001b; Hofstede & Hofstede, 2004;
Trompenaars & Hampden-Turner 1998; Ignjatovic & Sveltic, 2003; Tayeb, 1998) or
institutional factors (DiMaggio & Powell 1983; Paauwee & Bosolie, 2003; Selznick
1996; Whiteley, 2000). Institutional, political, structural, cultural, and social
configuration differences at the national and organizational levels can lead to different
approach to managing people across nations (Aycan, 2005; Chow, 2004).

Although the best fit approach is widely spread and well-known as the main domain of
SHRM, some HR scholars are critical. Boxall and Purcell (2003) identify at least four
weaknesses of best fit approach. Firstly, the best fit approach fails to recognize the need
to align employee interests and integrate business and employee needs, as well as fit HR
strategy to competitive strategy. Secondly, the best fit approach tends to simplify
competitive (business) strategy, rather than recognize it is multidimensional and subject
to major variations across industries. Thirdly, alignment between the business strategy
and HR strategy also needs to align with other external environmental changes.
Fourthly, the strategic goals of HRM are complex and subject to paradox so
management should not focus solely on fit with any single variable (such as business
strategy).

67

Although Bamberger and Philip (1991), Boxall (1993), and Milliman et al. (1991) agree
that organizational strategy plays an important role in designing strategic HR, the HRM
system must not fit strategy so tightly it reduce the flexibility needed to adjust to
environmental uncertainty. This suggests that environmental factors, such as uncertainty,
technology, and demographic changes can often directly affect the choices made by
those responsible for HR strategy formulation. HR strategists need to apply the results of
their own environmental scanning, regardless of whether these are reflected in the
organizational business strategy.

Those criticisms do not invalidate the idea of fit between HR strategy and business
strategy, as the main idea of the model is ability to respond to contingencies. Although a
better model may arise it modification to deal with these criticisms were made (e.g.
Boxall & Purcell, 2003; Delery & Doty, 1996; Baird and Meshoulam, 1988) describe
some modifications that should be made to deal with those criticisms.

Boxall and Purcell (2003) emphasize that the best fit approach should include verticalhorizontal fit as proposed by Baird and Meshoulam (1988). Moreover, the basic idea of
best fit or contingency approach to SHRM should be based on the assumption that HR
strategy will be more effective when it is appropriately integrated with its specific
organizational and broader environment context (Boxall and Purcell, 2003: 47). The
organization needs to consider the most critical contingencies within the complexity of
internal and external factors and how these are best connected. Boxall & Purcells
(2003) model suggests fit approaches need to be a modified best fit/contingency model.

68

2.4.3. The Configurational Approach

In contrast, Delery and Doty (1996) and Baird and Meshoulam (1988) formulate a
different approach in the configurational approach (also see Doty & Glick, 1994). The
main idea here is that there are particular combinations or sets of mutually reinforcing
actions or responses so that their affect is more than the sum of their individual affects.
Delery and Doty (1996) argue this approach is concerned with how patterns of multiple
independent variables are related to dependent variables such as HR practices and
processes, and these are related to the dependent variable of organizational strategy. To
be effective, an organization must develop a human resource system that achieves both
horizontal and vertical fit. Horizontal fit refers to the internal consistency of the
organizations policies or practices, and vertical fit refers to the congruence of the HR
system with other organizational characteristics. Thus, in the configurational approach,
the HRM system must be consistent with the environmental and organizational factors
as well as internally coherent (Delery & Dotty, 1996; Dotty et al., 1993; Lengnick-Hall
et al., 2009; Ostroff & Bowen, 2000; Martin-Alcazar, 2005)

2.4.4. The Approaches into SHRM: A Summary

In summary there are three approaches SHRM, these are best practice, best fit and the
configurational approach. The best practice approach is based on universalistic
principles that assume that there is a universal prescription or one best way or a general
pattern that can be adopted by various organizations to manage their people, regardless
of the organizations circumstances. In contrast, the best fit is based on a contingency
approach, which focuses on the fit to the surrounding context, especially the business
strategy. In the best fit approach, every organization has a unique approach in managing
69

people depending on its context or environment, and especially the business strategy
chosen by the organization. Moreover, the configurational approach emphasizes the
pattern of interaction between organizational strategy and the dependent organizational
variables that achieve a horizontal and vertical fit. The configurational approach is based
on contingency approach but the interaction among variables is more complicated.
Accordingly, some scholars divide the approaches into SHRM in two streams only: best
practice and best fit. It also needs to be acknowledge that the nest fit and best practice
are not mutually exclusive and differing HR practices that fit each model can operate in
conjunction.

2.5 The Role of HRM in the Organization

Historically, HR functions were not recognized as strategic partners (Brockbank, 1999;
Lawler, 1995; Lawler & Mohrman, 2000), and the HR function identified as an
administrative function, with the primary roles of cost control and administrative
activities (Lawler et al., 1993; Ulrich, 1997a). Because of the rapid changes in the
business environment, globalization of the economy, intensive deployment of
information technology, and increasing complexity, modern organizations have been
converging to support HR becoming a more strategic partner (e.g. Brockbank, 1999;
Lawler & Mohrman, 2000; Ulrich, 1997a). Accordingly, it is necessary that the HRM
department move beyond an operational focus into a strategic role (Schuler, 1994).
Many studies across various countries indicate that HRMs status has increased in the
company hierarchy and thus plays a more strategic role (such as Camuffo & Costa, 1993

70

(Italy); Gunnigle & Moore, 1994 (Ireland), Jaap, 1996 (Netherland), Saborido et al.,
1992 (Spain), Siranni, 1992 (Italy), Teagarden et al., 1992 (Mexico))

Early studies investigating the role of HRM can be categorized into two streams, either
reactive or proactive (Golden and Ramanujam, 1985). The Reactive group (Ferris, et al.
1984; Smith 1982a, b; Walker, 1980, 1981) emphasizes organizational strategy is the
driving force to determine HR strategies and policies. Hence, this group believes that the
focal role of a HR department is to ensure that HR strategies and activities align with
organizational objectives. The second stream, the proactive group (Alpander & Botter,
1981; Dyer, 1983; 1984a, b; Dyer & Heyer, 1984; Lengnick-Hall & Lengnick-Hall,
1984; Napier & Smith, 1984; Tichy, 1983; Tichy et al. 1982) recommends that HR be
involved in the strategic formulation process. This means HR departments should be
active players in strategy formulation.

Within these streams, Golden and Ramanujam (1985) promoted four distinctive roles for
HRM in organizations: the administrative linkage, a one-way linkage, a two-way
linkage, and an integrative linkage. In the administrative linkage HR deals with day-today or routine administrative roles such as payroll, absenteeism, etc. In a one-way
linkage HR translates organizational strategies into HR strategies and policies, and the
strategic formulation processes exists without HRM input. In the two-way linkage HR
plays a dual function in formulating and implementing organizational strategies,
although it is not involved in strategic decision making. With the integrative linkage, HR
participates throughout the strategic formulation and decision process and also plays an
integral role in developing and implementing the firms competitive strategy. In this
71

role, HRM is a vital part of senior management and an effort is made to integrate
employee needs and business objectives to meet long-term organizational goals. The
illustration of Golden and Ramanujams (1985) formulation can be seen in table 2.11.

Table 2.11: Phases in SHRM

Linkage type
Characteristics

Administrative
Linkage

Motivation for
integration

n.a.**

View of human
resources (HR)

People as cost or
as insignificant to
business

View of the HR
function

One-Way
Linkage
SBP* HRM
Implementation
failures

Two-Way Linkage
SBP* HRM

Integrative
Linkage

Senior management
support

Philosophy or
future growth
considerations

People as flexible
variable

People as key success

factor (KSF) for the
business

People as a KSF
and investment in
future growth

Necessary, but a
burden

Resource for
assistance in plan
implementation

Essential to business

Critical to
organization

Primary role of
HR executive

Functional
administrator

Operationaltactical HR
expert

Strategic partner

Integral senior
management
member on a
formal and
informal basis

Primary role of
the HR function

Efficient program
administration
(e.g., benefits)

Development of
HR systems/programs to implement business
objectives

Development &
implementation of HR
strategy in concert
with business
planning

HR expert with
input in most
business matters

Performance
criteria for the
HR function

Cost
minimization,
effective
firefighting

Effective strategy
implementation,
financial impact
on business

Quality of HR input
into strategy
formulation &
implementation

Long term
impact on
organization

Triggers for HR
programs or
systems

Effectively
needed

Business goals
considered first

Business goals &

employee needs
considered jointly

Organizational
goals, integrating
employee needs
& business
objective

Source: Golden & Ramanujam, 1985: 435-436

Notes: *SBP: Strategic Business Planning ** n.a.: not applicable

72

Similarly, Purcell (1995) proposes a model of the HRM role, which also differentiates
four types, but with different technical terms. The first is the operational support role.
Here the HRM area provides operational support and develops internal programs to meet
specific needs, but is generally viewed as a processor of paperwork and employment
activities. The second is the reaction role that suggests HRMs role is to react to strategic
directions and requests from top management. Third, the input and react role is where
HRM provides input and reacts to strategic decisions set by top management, but only
on personnel matters. The fourth and final integrative role is where HRM is actively
involved in all types of strategic decisions, whether or not they directly affect personnel
matters.

Another slightly different framework was proposed by Ulrich (1997a, 1998) and is
identified by Raub et al. (2006) as the most widely accepted model. This model is
similar to Purcells (1995) model in that the proposed roles differ in relation to time
frames (long vs. short term or strategic vs. operational) and their focus on managing
process as opposed to managing people. Ulrichs model provides four roles for HRM in
the organization; they are the administrative expert, employee champion, change agent,
and the strategic partner role.

In the administrative expert role, the main role of HR managers is in designing and
delivering HR processes or practices, including recruitment, training & development,
performance appraisal, and compensation. The focus is how to deliver such activities as
effectively as is administratively possible. The employee champion role sees HR
managers deal with the day-to-day problems, concerns and needs of employees. Their
73

major concentration is to understand and ensure that employees needs are fulfilled in
such a way that will increase their organizational commitment. Furthermore, in the
change agent role, HR managers play a key role in identifying, transferring and
implementing transformation processes to achieve an organizational capacity for change.
Finally, the strategic partner underpins the strategic HRM era, and places HR managers
as key players in aligning and implementing HR practices that are in line with business
strategy.

Further development of Ulrichs (1998) framework reformulated into the five roles,
namely: the employee advocate, human capital developer, functional expert, strategic
partner, and leader (also see Ulrich & Brochbank, 2005). In the employee advocate role,
HR focuses its activities on the needs of employees by listening, understanding, and
empathizing; the human capital developer role focuses on preparing employees to be
successful in the future; the functional expert role is concerned with HR practices that
are central to HR value. The strategic partner role is where HR has multiple strategic
functions that help to achieve the organizations vision and mission, and in the leader
role, HR collaborates and leads other functions, to set and enhance standards of strategic
thinking and to ensure corporate governance is practiced consistently.

A different model promoted by Buyen and De Vos (1999, 2001) provides four ways to
evaluate the role of HR and its involvement in the strategic decision-making process,
these include value driven HRM, timely involvement of HRM, executive HRM, and
Reactive HRM. In value-driven HRM, HR professionals are involved throughout the
strategic decision-making process right from the earliest stages, including identifying
74

problems and their alternative solutions. HR professionals are members of the strategic
decision team. Timely involvement of HRM focuses on HR professionals involvement
in developing solutions and creating tools that help the organization implement
strategies and decisions successfully. In other words, HR professionals are part of the
team which elaborates the chosen strategic direction. In addition, in the executive HRM
role, the involvement of HR professionals is to identify solutions so they can be
implemented by selected other members of organization. Finally, in the reactive HRM
role, HR professionals are only involved as part of the decision-making process, or when
problems arise during implementation. The illustration of Buyen and De Voss model
can be seen in the figure 2.4.

Figure 2.4: Involvement of HRM in Decision-making Processes

Value-driven HRM
Anticipative
Recognize and determine
Give meaning
Timely involvement of HRM
Active adaptation
Conceptual understanding
Instrumental

very
early

very
late

early

late

Reactive HRM
- Reactive
- Glue
- Resolve misfits
Executive HRM
- Passive adaptation
- Executing
- Here-and-now problem solving

Source: Buyen & De Vos, 2001: 76.

Based on their model, Buyen and De Vos (1999, 2001) highlight that the earlier HR
professionals are involved in the strategic decision-making process, the more strategic is
the role they play and the greater will be their impact on the business. Bannet et al.

75

(1998) support this notion and point out that when HR managers play an active role in
formulating organizational strategy this also strengthens the departments position.
Moreover, they emphasize that when HR managers are full partners in the strategic
decision making process they will have the knowledge to craft the department role by
developing behaviors that support achieving the formulated strategy (also see Becker &
Gerhart 1996; Buyen & De Vos, 1999; Schuler & Jackson, 1999, 2000; Ulrich, 1997a).

To be optimal as a true strategic partner, Lawler and Mohrman (2003) emphasize that
HR professionals need to harmonize their partnership with line managers and develop a
broad and deep understanding of the HR issues (also see Barney & Wright, 1998). The
responsibility for routine and administrative HR activities can be delegated to line
managers because they have a closer interaction with employees daily work activities
(Brewster 1999; Budhwar 2000; Budhwar & Khatri, 2001; Ulrich, 1997). This
devolvement also provides an opportunity to increase intimacy between HRM and line
managers and supports HR managers understanding of front-line business problems,
which is turn leads to higher contributions at the corporate level (Laabs, 1992). For
effective devolvement, however, line managers need appropriate knowledge and skills
related to HR practices (Hall & Torrington, 1998; Budhwar, 2000). In other words, the
HR manager needs to be a strategic partner with line managers to ensure HR policies can
be executed successfully (Budhwar, 2000; Budhwar & Khatri, 2001; Teo, 2002).

Although Ulrich (1997a) supports the role of HR as a strategic partner, he has

highlighted a potential problem. If HR does not add real value as a member of the team,
then the HR can practice downsizing and de-layering through outsourcing. Accordingly,
76

Beatty & Schneier (1997) and Ulrich & Beatty (2001) emphasize that HRM must
enhance the organizations competitive advantage by adding real and measurable
economic value (e.g., shortened training cycle time) not only perceived value (e.g.,
training builds skills). Human resources management also needs to add economic value
to the organizations external stakeholders and investors, not just the internal clients.
They must become a strategic player by not only adding value, but by concentrating on
making things happen for customers, rather than purely being part of the team (Beatty &
Schneier, 1997; Ulrich & Beatty, 2001). In simple terms, HRM must be on the field
and positioned to score. Ulrich & Beatty (2001) prescribe six ways HR can contribute to
the organization; they are as a coach, an architect, a builder, a facilitator, a leader, and a
conscience.

1. The HR Coach: Coaching to Win

Ulrich and Beatty (2001: 294) underline the major role of the HR player as coach is to
enable professional growth and to help executives achieve their full potential in guiding
firms business success on the various scorecards. HR must be able to observe
behavior, describe behavior, provide feedback, and reward behavioral change. Human
resources coaches help executives change their behavior to improve their contributions
to organizational performance. The good coaches are not only familiar with the game;
more importantly, they have to know how to win the game. Moreover, they must be
able to understand the capabilities of each individual and each team within the
organization. In order to attain organizational success, the coaches should improve and
maintain every individual to be a winner, which means building a relationship of trust

77

with the business leader and the team. It also means they need to give clear, direct,
candid and useful feedback to both the business leader and the team.

2. The HR Architect: Designing to Win

Architects provide the high-level blue print. They help the organization identify ideas
about how firms will win in chosen marketplace and thus, how to design significant next
steps in competitiveness Ulrich and Beatty (2001: 297). To be good organizational
architects, HR professionals must have the conceptual capability to plan for and
implement strategies in the real organization. Although they may not own the problem,
they can offer choices so the organization can select suitable options. This means
architects must present clear and honest rationales for the alternatives provided and how
to implement them, what implications and risks might arise, so that success can be
achieved. To do this, HR professionals need to have multiple skills to ensure they are
able to analyze organizational phenomena from different perspectives.

3. The HR Builder: Constructing a Winner

Although architects and builders have a very close relationship, they play different roles,
as explained by Ulrich and Beatty (2001: 299):
Architects create blueprints, but those blueprints must be implemented to have impact.
HR professionals as builders- contribute to the construction of winning organization by
understanding the work required to build competitiveness. Clearly, once strategies have
been articulated and capabilities delineated, the right work and the right work processes
must be identified.

78

Although the blue prints is very important unless they can be implemented they are
only ideals without impact. Therefore, the builders role is very significant. As builders,
HR professionals turn ideas into action by designing and delivering HR practices. They
drive, reinforce, and maintain employee behavior that is consistent with organizational
strategy and capability. To do this job, HR staff need to understand current HR theories
and practices so they are able to implement plans with the best and up to date
approaches.

4. HR Facilitator: Changing the Organization to Win

The primary role of the facilitator encompasses strategic change leadership (Ulrich &
Beatty, 2001: 301). As facilitators, HR professionals are charged with getting things
done by making and sustaining changes at three levels: (1) helping teams operate
effectively and efficiently, (2) ensuring that organizational change happens, and (3)
ensuring that alliances operate.

5. The HR Leader: Creating Followers that Win

HR leaders can play the coach, builder, and facilitator but still face challenges in
implementing these functions. Accordingly, Ulrich and Beatty (2001: 304) emphasize
that effectively and efficiently leading ones own HR function earns credibility. The
HR function should be an exemplar of how to manage an effective department for other
departments. To do this the HR department should run as a business, so needs the same
elements of a business plan that fits business realities, with a HR vision and HR
governance.

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6. The HR as Conscience: Playing by the Rules to Win

As a conscience, HR is the internal referee who ensures that rules are followed by all
elements, including people and activities of the organization. In other words, HR plays
the referee to ensure that organization wins the right way Ulrich and Beatty (2001:
305). To play this role, HR needs to know when a practice activity is Green as in
acceptable, Yellow as in questionable, or Red as in risky. More importantly, HR
should mirror, or model, the right way.

Being either a strategic partner or strategic player is not easy. Accordingly, it is

necessary for HR staff to be competent in their field (Barney & Wright, 1998; Bradford
et al., 2006; Han et al., 2006). There are various meanings of competence, observable
performance (Boam & sparrow, 1992; Bowden & Masters, 1993), the quality of a
persons performance outcome (Hager et al., 1994; Rutherford, 1995), and underlying
personal attributes (Boyatzis, 1982; Sternberg & Kolligian, 1990).

Becker et al. (2001) identify three domain of HR competence, they are: knowledge of
the business, delivery of HR practices, and change management. Moreover, since most
organizations depend on technology expertise in this is the fourth variable of HR
competence (also see Brockbank et al., 1999; Brockbank & Ulrich, 2003; Hunter, 1993;
Schoonover, 2003; Ulrich et al., 1989, 1995;)

In terms of knowledge of the business, Bates (2002) recognizes that to be successful, the
practitioners HR need to understand the business and the context where the organization
works. More specifically, they need the ability to align HR strategies to business strategy
80

and to communicate with line managers for analysis and problem solving (Bail, 1999;
Kochanski & Ruse, 1996; Lawler & Mohrman, 2003; Svoboda & Scrooder, 2001; Ulrich
et al., 1995). In other words, a critical factor is having the business knowledge to be able
to give the best strategic contributions to their organizations (Brockbank & Ulrich,
2003).

The second competence is field expertise in delivering HR practices. As HR

professionals, they need to understand HR practices very well, including staffing,
training and development, compensation, performance appraisal, employee and
industrial relations (Lawson & Limbrick, 1996, Ulrich et al., 1995). Moreover, they
must have the ability to deliver such HR practices to the organizational members.

The third competence is for HR professionals to be change agents for their

organizations. They have to be able to diagnose new challenges in the early stages and
raise member awareness of how to respond to these (Ulrich et al., 1995). Furthermore,
HR professionals must be able to initiate organizational flexibility to respond to rapid
changes in the business environment (Svoboda & Schroder, 2001). Similarly, mastering
technology helps them to deliver services to employees (Brockbank & Ulrich, 2003) and
helps teach others how to use such systems (Lawson & Limbrick, 1996). This is
necessary for data collecting and transferring valuable information (Lawler & Mohrman,
2003). Bradford et al. (2006) identify that HRs technological competence can facilitate
individual and organizational success.

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Armstrong (2009) also provides a comprehensive framework of HR competencies that

help to ensure HR professionals are able to act both strategic partner and player. This
framework is shown in table 2.12.

Table 2.12: Competency Framework for HR Professional

Competencies
Business
awareness

Description
Understands: (1) the business environment, the competitive pressures the
organization faces and the impact of external events on organizational
policies and practices, (2) the drivers of high performance and the business
strategy, (3) the businesss key activities and processes and how these affect
business strategies, (4) how HR policies and practices impact on business
performance, and puts this to good use.

Strategic
capability

(1) Seeks involvement in business strategy formulation and contributes to the

development of the strategy, (2) contributes to the development for the
business of clear vision and a set of integrated values, (3) develops and
implements coherent HR strategies which are aligned to the business strategy
and integrated with one another, (4) works closely with line manager to
support the achievement of corporate, unit or functional strategies, (5)
understands the importance of human capital measurement, introduces
measurement systems and ensure that good use is made of them.

Organizational
effectiveness

(1) Contributes to the analysis and diagnosis of people issues and proposed
practical solutions, (2) helps to develop resource capability by ensuring that
business has the skilled, committed and engaged workforce it needs, (3)
helps to develop process capability by influencing the design of work
systems to make the best use of people, (4) pursues an added value
approach to innovation and service delivery.

Capacity as an
internal
consultant

(1) Carries out the analysis and diagnosis of people issues and proposes
practical solutions, (2) adopts interventionist style to meet client needs, acts
as catalyst, facilitator and expert as required, (3) uses process consultancy
approaches to resolve people problems, (4) coaches clients to deal with their
own problems, transfer skills.
(1) Anticipates requirements and sets up and operates appropriate services,
(2) provides efficient and cost-effective services in each HR area, (3)
respond promptly and efficiently to requests for HR services, helps and
advices, (4) promotes the empowerment of line managers to make HR
decisions but provide guidance as required.
Takes action to advocate and protect the interests and well-being of
employees.

Effective
Service delivery

Acts in the
interests of
employees
Continuous
professionals
development

(1) Continually develops professional knowledge and skills, (2) benchmark

good HR practices, (3) keeps in touch with new HR concepts, practices, and
techniques, (4) keeps up-to-date with research and its practical implications.

Source: Armstrong (2009: 126-127)

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2.6 The Implementation of HR Strategy

Strategy implementation is challenging for many managers (Hardy, 1994; Noble, 1999)
and can be source of frustration in many companies. Alexander (1991) identifies three
reasons why strategy is not implemented; strategy implementation is less glamorous than
strategy formulation, scholars and practitioners believe that strategy implementation can
be practiced by anyone, and it is often unclear where the process of strategy
implementation starts and stops in practice.

Paradoxically, Roney (2004) suggests that the majority of strategic plans are not
implemented successfully. In relation to strategic HRM, Gratton (1999) notes that too
often strategic intentions are not achieved in practice. Moreover, Alexander (1985),
Floyd and Wooldridge (1992), Judson (1991), and Pellegrinelli and Bowman (1994)
claim the proportion of successful implementations of strategic planning ranges from ten
to fifty percent.

Strategy implementation can be determined as simply the set of activities necessary to

fully execute an organizations strategies (Katsioloudes, 2006: 200). Although this
definition is easy to state and remember, the reality is that it is quite complicated to
achieve. As Hrebiniak (2005) states, implementation is much harder than formulation,
and it goes beyond planning or formulating strategy. Implementing strategy requires
considerable further effort to deal with interrelated activities, regardless of how well the
strategy has been formulated; it will amount to nothing if an organization fails to
execute it. Accordingly, Hardy (1994) emphasizes the critical importance of considering

83

implementation during the formulation process to ensure it can be implemented.

Unfortunately, the reality is that strategy formulation and strategy implementation are
often seen, and indeed practiced, as two separate phases (Quinn et al., 1988) or
Alexander (1991) suggests it is like a two headed-coin.

On one side is strategy formulation, which defines the plan need to compete successfully
within a certain industry, on the other side, the strategy implementation takes the
formulated strategies as a given and decides how these goals can be achieved. The
importance of strategy implementation is highlighted by Olson et al. (2005: 47): Many
executives argue that brilliant execution is more important than brilliant strategy. The
reason is simple: doing is harder than dreaming, and poorly executed strategy is merely a
vision of what could be.

Going one step further, Vasconcellos e Sa (1990) emphasizes that a well formulated
strategy, even if it is badly implemented, may be effective (in terms of doing the right
thing), but is not likely to be efficient (in terms of doing things right). Bonomas (1984)
model demonstrating this interaction between strategy formulation and implementation
is presented in figure 2.5. This model illustrates that poor implementation can cause
appropriate strategies to fail, whereas in contrast, excellent implementation can rescue
an inappropriate strategy.

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Figure 2.5: Interaction of Strategy Formulation and Implementation

Strategy Formulation
Appropriate
Success
Excellent

Strategy
Implementation

Targets for growth,

share, profits are met.

Inappropriate
Rescue or Ruin
Good execution may save
poor strategy or may hasten
failure

Trouble

Poor

Poor execution hampers

good strategy.
Management may
conclude strategy is
inappropriate.

Failure
Cause of failure hard to
diagnose. Poor strategy
marked by inability to execute

Source: Bonoma, 1984: 72.

To improve successful outcomes in strategy implementation, Lynch (2006: 613)

provides a general guide in the following four basic elements; (1) identification of
general strategic objectives, this specifies the general results expected from the strategy
initiatives; (2) formulating specific plans, takes the general objectives and turns them
into specific tasks and deadlines (these are often cross-functional); (3) resource
allocation and budgeting, indicates how the plans are to be paid for (this quantifies plans
and permits integration across functions); and (4) monitoring and control procedures,
ensures the objectives are being met, and that only agreed resources are spent and that
budgets are adhered to. The interaction of these elements can be seen in figure 2.6.

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Figure 2.6: The Basic Implementation Process

Strategy
Choice

Statement of the
main strategy
objectives
Quantifiable
Non-quantifiable

Formulation of
specific plans
Tasks
Deadlines
Responsibilities

Resource
allocation and
budgetting

Monitoring and control

procedures
Objectives
Resources
Validity of the planned
environmental projections
Source: Lynch, 2006: 614

Reid (1989) emphasizes that the existence of a strategy is an essential condition or

precondition for strategy implementation. According to Minzberg (1987), the strategy
can be more or less well-formed, more or less in the process formation, or even
emergent. The main thing is that, before it can be implemented, it is sufficiently
formulated to give directions or goals, so that the organizations members will be able to
understand and work toward its realization. As a result, strategic intentions are
inextricably linked with strategy implementation (Kernochan, 1997). Therefore, if the
strategy is to be successfully implemented, it needs to be credible to all those involved.

For successful implementation, Roney (2004) recommends organisations need adequate

resources to support strategic intent, a well-aligned organizational structure, and the
motivation of individuals at all levels to persist in effective goal-seeking behavior. In
addition, he identifies that leadership is an important catalyst to facilitate the

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organizational capability to shore up these three categories. As well as organizational

structure, De Cieri and Kramar (2003) identify four additional variables that assist
successful implementation, these being task design, reward systems, types of
information and the information system, and selection, training and development. Within
this framework, De Cieri and Kramar (2003) suggest HRM has the three primary
responsibilities of strategically aligning the tasks, people, and reward system. These
alignments have direct impacts on the structure, information flow and quality as well as
the decision processes. De Cieri and Kramar (2003) identify that it is not just about
leadership, structure, individual motivation or resources being adequate for the needs of
the organization, it is the synergy between these that promotes effectiveness and allows
the organization to utilize all its capabilities.

In addition, De Cieri and Kramar (2003: 57) argue that successful of HR strategy
implementation has the following three fundamental stages: (1) the tasks must be
designed and grouped into jobs in a way that is efficient and effective, (2) the HR
function must ensure that the organization is staffed with people who have the necessary
knowledge, skill, and ability to perform and implement the strategy, and (3) the HR
function must develop performance management and reward systems that lead
employees to work and support the strategic plan. The links between strategic choice
and HR practice can be seen in figure 2.7.

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Figure 2.7: HR Strategy Implementation

Strategic
choice

HR needs
Skills
Behavior
culture

HR Practices
Recruitment
selection
Job analysis
Job design
Performance
management
Pay structure
Incentive
Benefits
Learning &
development
Industrial relations

HR capability
Skills
Abilities
Knowledge

HR actions
Behaviors
Results
(productivity,
absenteeism,
turnover)

Firm performance
Productivity
Quality
profitability

Emergent strategies

Source: De Cieri & Kramar, 2003: 59

As discussed earlier, implementing HR strategy is not a simple process. Organizations

need to predict obstacles that occur during implementation. Armstrong (2003: 125)
identified that the barriers to implementation are mainly due to failure to understand the
strategic need of the business, and this in turn will lead to HR initiatives that are
irrelevant, or even counter productive. This can happen if organizations do not pay
sufficient attention to adequately assessing the environmental and cultural factors that

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affect the content of the (HR) strategies. Armstrong (2003) also strongly emphasizes that
difficulties will emerge if strategy initiatives are taken in isolation without considering
their implications on other areas of HR practice or ensuring that a coherent, holistic
approach is adopted.

Beer and Eisenstat (2000) recognize six silent killers that can block strategy
implementation and organizational learning these are: (1) a top-down or laissez-faire
senior management style, aspects of which include discomfort with conflict, frequent
absences in managing acquisitions and or the use of the top team for administrative
matters rather than focused strategic discussions, (2) unclear strategy and conflicting
priorities, (3) an ineffective senior management team, (4) poor vertical communication,
(5) poor coordination across functions, the business or borders, and (5) inadequate
down-the-line leadership skills and development.

To show how these six barriers interact to block strategy implementation and learning,
Beer & Eisenstat (2000) categorize them into three block processes (also see figure 2.7):
1. Quality of direction: an ineffective top team, top-down or laissez-faire senior
management approach and unclear strategy are related. Problems include a CEO or
general managers who bypass members of their senior team by getting information
from and giving orders to those at lower levels; this undermines the leadership group
from becoming an effective team. Second is laissez-faire managers, who on the other
hand, undermine the teams potential by avoiding discussions that could cause
conflicts or by not holding their subordinates accountable for coordinated decision
making. Third, a lack of a clear and compelling statement of the strategic direction
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deprives top management of a common rallying point that might help them form as a
team. Conversely, a team of managers unwilling to subordinate their individual
functional interests to the needs of the overall business will not be able to develop a
clear statement of priorities.
2. Quality of learning: blocked vertical communication has a particularly damaging
effect on a businesss ability to implement and refine its strategy or to learn. A lack
of strategic consensus and clarity also undermines effective upward communication.
3. Quality of Implementation: the three killers that are associated with senior
management make it very difficult to develop the needed coordination at lower
levels or to develop down-the-line leadership capabilities. Middle managers from
different functions across the organization cannot be expected to collaborate
effectively when their leaders push them to compete.

To combat those obstacles, Beer and Eisenstat (2000) recommend six capabilities that
are required for successful implementation of strategy, they are: Firstly, a leadership
style that embraces the paradox of top-down direction and upward influence. The
general manager advocates direction, but learns from the feedback of those down the
line. Second, a clear strategy sets a clear priority. The top team formulates the strategy
as a group and spends significant amounts of time discussing it with lower levels. Third,
an effective top team whose members possess general-management orientation. Through
constructive conflict, they can arrive at a common voice to create and implement the
strategy. Fourth, open vertical communication. The top team and lower levels are
engaged in an open dialogue about the organizations effectiveness. Fifth, maintain

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effective coordination. Effective teamwork integrates activities around customers,

products or markets across diverse function, localities and business. Sixth, implement
down-the-line-leadership. Mid level managers with the potential to develop leadership
skills and a general-management perspective are given clear accountability and
authority.

Figure 2.8: The Obstruction Processes in Strategy Implementation

Ineffective senior
management team

Qua

Quality of direction

Top-down or
laissez-faire senior
management style

Unclear strategies &

conflicting priorities

Quality of Learning
Poor vertical
communication

Poor coordination
across function,
business or
borders

Quality of Implementation

Inadequate downthe-line leadership

skills and
development

Source: Beer & Eisenstat, 2000: 32

Similarly, Armstrong (2003: 126-127) recommends that organizations follow the eight
steps action plan described below if they wish to successfully implement a HR strategy:
1. Conduct a rigorous initial analysis, which covers the business needs, corporate
culture, and the internal and external environmental factors.
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2. Formulate strategy that rationally sets out the aims, cost and benefits.
3. Gain support from top managers, line managers, employees generally, and trade
unions.
4. Assess potential barriers, especially relating to indifference, hostility (resistance to
change), and a lack of supporting processes or resources.
5. Manage change to gain acceptance for any new initiative contained in the strategy.
6. Prepare action or project plans, which cover what is to be done, who is to do it, and
when it should be completed. These plans should indicate the stages of the
implementation program, the resources required at each stage, and the final
completion

dates.

They

should

indicate

the

consultation,

involvement,

communication, and training programs required. The plan should also include how
progress will be monitored and what the success criteria will be.

In this way

progress can be measured objectively against specified targets.

7. Manage the implementation with constant reference back to the action plan, so that
progress can be monitored and problems can be dealt with, if and when they arise.
8. Follow up and evaluating after the implementation also needs to occur. This can be
through interviews, focus groups, and or attitude surveys. The key issue here is that
the evaluation should point the way to actions and amendments that alter the original
proposal, should this be required. Changes to the plan itself may not be necessary,
but changes to other areas of the organization may be required for the plan to
succeed. For example, line managers and employees may need more resources or
better training, or communication systems may need to be improved.

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Finally, Roney (2004: 237-244) also proposes a prescription for success when
converting strategy into effective actions, that consists of ten critical skills that should be
employed by organizations; they are the abilities to have internally: (1) consistent
objectives, (2) achieve strategic awareness, (3) manage resistance to change, (4) sustain
vigorous, focused effort, (5) align structure and strategy, (6) identify and develop leaders
and managers, (7) conduct projects, (8) budget and monitor progress, (9) envision needs
for future competences, and (10) realize when its time to change strategy and re-plan.

2.6. Conclusion
This chapter has described the evolution of HRM from the early reformers of the
industrial revolution through, personnel management to HRM and SHRM. The best fit,
best practice and the configurational approaches to SHRM have been discussed as have
the roles of HRM and strategy decision making. The determinants of HR strategy
implementation was also discussed.

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CHAPTER III
RESEARCH DESIGN

3.1. Introduction
As a scientific process, research should be designed very carefully with regard to
academic acceptance. Designing research is not a simple process because it involves a
number of related stages (Burrell & Morgan, 1979; Creswell, 2003; Crotty, 1998;
Denzin & Lincoln, 2000; Neuman, 2003; Sarantakos, 2005). Unfortunately, several
scholars (e.g. Blaiki, 2000; Bogdan & Taylor, 1975; Rocco, 2003; Yin, 2003) indicate
that quite often researchers demonstrate a lack of awareness of the need to provide a
rationale behind the selected research design. They tend to simplify the research process
by moving quickly into an explanation of the research methodology, or even just the
research method without discussing the philosophical underpinnings of the research;
namely the paradigm. However, the paradigm has a fundamental role and determines the
research process as a whole. Firestone (1990: 106) argues that paradigm assumptions
determine research strategy or as Lincoln (1990: 81) states, the adoption of a paradigm
literally permeates every act, even tangentially, associated with inquiry.

Based upon the rationale above, this chapter provides an explanation of the core
assumptions which underlie the arguments for utilizing qualitative research, or more
specifically a grounded theory approach. A comprehensive discussion of the theoreticalphilosophical rationale behind the research design selected and how it is operationalized
in each stage of research process is presented in this chapter. The main reason is to

94

provide a holistic picture of how the researcher conducted the research, including how
the research design was constructed, how the data were collected and analyzed, and how
a theoretical construct could be achieved. Moreover, to provide credibility and
acceptability, this research design has been presented at one international conference and
two national conferences. Each these conferences were peer reviewed and a list of the
papers can be seen in appendix 5.

The structure of this chapter begins by explaining the selection process of the research
design, followed by a discussion and justification of the research paradigm, research
methodology and research method. Issues related to the choice of a suitable paradigm,
ontology and epistemology are next explored. The justification of why this study
employs a qualitative research design, and more specifically the grounded theory
approach can be found in the methodology section. Furthermore, the research method
section provides details regarding the data collection and data analysis, including
interviewing, transcription, and data coding. Next, this chapter briefly discusses the
importance of, and how to establish, trustworthiness throughout the research process and
some of the ethical consideration involved, prior to its conclusion.

3.2. Selecting a Research Design

The research design describes each step and the whole process of the research. Creswell
(2003) describes a research design as the process of research, from conceptualizing a
problem to writing the narrative. While Yin (2003) says that a research design is an
action plan from here to there. Blaiki (2000: 35), moreover, describes the main purposes

95

of the research design are to, make the research design decision explicit; ensure that the
decisions are consistent with each other and with ontological assumption adopted; and
allow for critical evaluation of the individual design elements, and the overall research
design, before significant work commences.

According to Burrell and Morgan (1979), social researchers may approach their subject
via explicit or implicit assumptions about the nature of the social world and the way in
which it may be investigated. Accordingly, they assume that this is based on the
following three assumptions:
1. Assumptions about an ontological nature which concern the very essence of the
phenomena under investigation. In this assumption, the nature can be investigated
whether as an objective nature or the product of individual cognition. In other word,
reality can be investigated whether as a given out there in the world or as the product
of ones mind.
2. Assumptions of an epistemological nature which concern about the grounds of
knowledge. It is about how one might begin to understand the world and communicate
this as knowledge to fellow human beings. The nature of knowledge can be identified
and communicated as a real and transmitted in tangible form or may be more subjective
based on experience as personal nature.
3. Assumption of the human nature which concern about the relationship between human
beings and their environment. In one side, human beings can be identified as products of
the environment and conditioned by external circumstance. In another side, human
beings can be analysed in more creative role as the creator of their environment so they
tend to be the controllers rather than controlled, the master rather than marionette
(Burrel & Morgan, 1979: 1)

Burrell and Morgan (1979), furthermore, underline that the assumptions will have a
direct implication in choosing the methodology. This means that different ontological,
epistemological stances will cause researchers to employ different methodologies when
investigating the nature of the social world. Social scientists may treat the social world
like the natural world, as objective, such as being hard, real and external to the

96

individual, or may see it as having a much softer, personal and more subjective quality,
as illustrated in figure 3.1.

Figure 3.1: A Scheme for an Analyzing Assumption about the Nature of Social Science
The Subjective-Objective Dimension
The subjectivist
approach
to social science

Nominalism
Anti-Positivism
Voluntarism
Ideographic

The objectivist
approach
to social science

Ontology
Epistemology
Human Nature
Methodology

Realism
Positivism
Determinism
Nomothetic

(Source: Burrell & Morgan, 1979: 3)

In addition, Crotty (1998: 2) proposes four basic elements in any research process that
need to be spelt out carefully. Each of these elements relate to the solution for one of
four questions, they are: (1) what methods do we propose to use? (2) What methodology
governs our choice and use of methods? (3) What theoretical perspective lies behind the
methodology in question? and (4) What epistemology informs this theoretical
perspective?

Crottys (1998) model recommends the first stage of research should begin by selecting
the most suitable epistemology. He defines epistemology as the theory of knowledge

97

embedded in the theoretical perspective and thereby in the methodology (Crotty, 1998:
3). After the epistemology has been chosen, it needs to then inform the selection of the
most suitable theoretical perspective, which is the philosophical stance informing the
methodology thus providing a context for the process and grounding its logic and
criteria (Crotty, 1998: 3). The further stage of this process involves the selection of the
most suitable methodology, which means the selection of the strategy, plan of action,
process of design lying behind the choice and use of particular methods linking the
choice and use of methods to the desired outcomes (Crotty, 1998: 3). Finally, this
process concludes with selection of the most suitable of set of methods as the technique
or procedures used to gather and analyze data related to some research questions or
hypothesis (Crotty, 1998: 3). The illustration of Crottys model in selecting the research
design can be seen in figure 3.2.

Figure 3.2: Crottys Model of Selecting a Research Design

Epistemology

Theoretical Perspective

Methodology

Methods
(Source: Crotty, 1998: 4)

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Crotty (1998) does not include ontology in his model as recommended by Burrell and
Morgan (1979). He argues that ontological issues and epistemological issues tend to
emerge together, because ontology is concerned with a certain way of understanding
what is, while epistemology is concerned with what it means to know (Crotty, 1998:
10). In other words, it is impossible to separate ontology from epistemology
conceptually.

To operationalize his model, Crotty (1998) proposes some alternative choices in each
stage. This ranges from objectivism to subjectivism in epistemology; positivism to
postmodernism in the theoretical perspective; experimental research to feminism in the
methodology; sampling to case study in the data collection method, and life history to
conversation analysis in the data analysis method. All of these alternatives depend on
how a researcher responds to Crottys four essential questions, as mentioned before.
These alternative choices can be seen in table 3.1.

Another view of research design comes from Creswell (2003). He re-conceptualized

Crottys (1998) model by proposing three modified central questions to the design of
research: (1) What knowledge claims are being made by the researcher (including a
theoretical perspective)? (2) What strategies of inquiry will inform the procedures? and
(3) What methods of data collection and analysis will be used? The operational stages of
Creswells (2003) model in selecting a research design are illustrated in figure 3.3.

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Table 3.1: Alternative Choices in Each Stage of Selecting a Research Design

Epistemology
Objectivism
Constructionism
Subjectivism
(and their variants)

Theoretical Perspective
Positivism (and postpositivism)
Interpretivism
Symbolic interactionism
Phenomenology
Hermeneutics
Critical inquiry
Feminism
Postmodernism
etc.

Methodology
Experimental research
Survey research
Ethnography
Phenomenological
research
Grounded theory
Heuristic inquiry
Action research
Discourse analysis
Feminist standpoint
research
etc.

Methods
Sampling
Measurement and
scaling
Questionnaire
Observation
Participation
Non-participation
Interview
Focus group
Case study
Life history
Narrative
Visual ethnography
methods
Statistical analysis
Data reduction
Theme identification
Comparative analysis
Cognitive mapping
Interpretative methods
Document analysis
Content analysis
Conversation analysis
etc.

Note: the several etceteras occurring in this table. It is not an exhaustive listing.
Source: Crotty, 1998: 5

Figure 3.3: Basic Principles of Creswells Research Design Model

Knowledge Claims

Strategic of Inquiry

Methods

(Source: conceptualized from Creswells views)

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Creswell (2003) argues that the research process should begin by questioning what
alternative knowledge will be used. This means that researchers start their studies with
certain assumptions about how they will learn and what they will learn during their
inquiry (Creswell, 2003: 6). Moreover, he notes that knowledge claims might be called
paradigms by Lincoln and Guba (2000), Mertens (1998), and Sarantakos (1998, 2005),
philosophical assumptions, epistemologies, and ontologies by Crotty (1998), or be
broadly considered as research methodologies by Neuman (2000). He also proposes four
domains of alternative knowledge claims; namely postpositivism, constructivism,
advocacy or participatory, and pragmatism as presented in table 3.2.

Table 3.2: Alternative Knowledge Claim Positions

Postpositivism
Determination
Reductionism
Empirical observation and
measurement
Theory verification

Constructivism
Understanding
Multiple participant meaning
Social and historical construction
Theory generation

Advocacy/Participatory
Political
Empowerment issue-oriented
Collaborative
Change-oriented

Pragmatism
Consequences of actions
Problem-centered
Pluralistic
Real-world practice oriented

Source: Creswell, 2003: 6

By surfacing assumptions about knowledge claims researchers are able to operate at a

more applied level using strategies of inquiry, that provide specific directions for their
procedures (Creswell, 2003). Strategies of inquiry are also called traditions of inquiry
(Creswell, 1998), or methodologies (Mertens, 1998). Creswell (2003) argues that

101

strategies of inquiry can be experimental and non-experimental in quantitative

approaches or they can include narrative, phenomenology, ethnography, grounded
theory and case study designs in qualitative approaches; and sequential, concurrent and
transformative in mixed methods approaches.

The third element of inquiry conceptualized by Creswell (2003) is the research methods
of data collection and analysis. Based upon the knowledge claim and strategy chosen
researchers have many possibilities to collect and analyze data, and the complete
research design model is shown more completely in figure 3.4.
It is useful to consider to full range of possibilities for data collection in any
study and to organize these methods by their degree of predetermined nature,
their use of closed-ended versus open-ended questioning, and their focus for
numeric versus non-numeric data analysis Creswell (2003: 17).

Figure 3.4: Creswells Research Design Model

Element of Inquiry

Approaches to Research

1. Alternative Knowledge
Claims

1. Qualitative

2. Strategic of Inquiry

2. Quantitative

3. Methods conceptualized
by the Researcher

3. Mixed Methods

Translated into practice

Design Process
of research
1.Questions
2.Theoretical lens
3. Data Collection
4. Data Analysis
5. Write up
6. Validation

(Source: Creswell, 2003: 5)

Sarantakos (1998) proposes a modification of Crottys model (1998) when selecting

research design. She proposes a model that involves the three stages of selecting a
research paradigm, research methodology, and research method. She suggests that the

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issue of locating a study in a field of inquiry and selecting a theoretical perspective in

Crottys model has interwoven stages and these should be compressed to a single stage,
namely selecting a research paradigm. Sarantakos (1998:31) defines a paradigm as: a
set of propositions that explain how the world is perceived; it contains a world view, a
way of breaking down the complexity of the real world, telling researchers and social
scientists in general what is important, what is legitimate, what is reasonable.

Based on the selected paradigm; the two final stages of Sarantakos model involve
selecting a methodology and a research method. Sarantakos (1998: 32) describes
methodology as a model, which entails theoretical principles as well as a framework
that provides guidelines about how research is done in the context of a particular
paradigm. It means that a methodology should be able to translate the research
paradigm selected into a set of principles that show how the subject being studied can be
approached, explored and explained. In the final stage, Sarantakos (1998) emphasizes
that the researcher should be able to identify and choose the most suitable research
method for data gathering and analysis based on the paradigm and methodology
determined. The illustration of Sarantakos (1998) research design in social research can
be seen in figure 3.5.

Guba and Lincoln (2000) emphasize that a paradigm could be determined by answering
ontological, epistemological and methodological questions, whereas Sarantakos (2005)
modifies her research design (1998) into more detailed stages (see figure 3.6).
Sarantakos (2005) describes ontology as informing the methodology about the nature of
reality, while epistemology informs the methodology about the nature of knowledge.
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Thus, methodology gives instruction about the research design and more specifically and
operationally, about the instruments of research.

Figure 3.5: Sarantakos (1998) Research Design Model

Research Paradigm

Methodology

Methods

(Source: conceptualized from Sarantakos views)

Figure 3.6: Sarantakos (2005) Research Design Model

Ontology

Epistemology

Methodology

Design

Instruments

(Source: Sarantakos, 2005: 29)

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There are considerable overlaps among scholars in determining and describing the
essential terms of research design, such as the paradigm, ontology, epistemology,
theoretical perspective, knowledge claim, and strategy of inquiry. Consequently, they
propose different research activities in each stage. However Burrell & Morgan (1979),
Crotty (1998), Creswell (2003), and Sarantakos (1998, 2005) all suggest that the
research process can be separated into three main stages, which are adopted in this
thesis. This process begins by determining the most suitable paradigm, including the
ontology and epistemology, for the study. This is followed by the selection of research
methodology and then finalized by choosing a research method for collecting and
analyzing the data. The next sections discuss these terms comprehensively.

3.3. Selecting a Research Paradigm

The paradigm refers to a fundamental view or broad view of life that affects the way
particular aspects of reality are understood (Burrell & Morgan, 1979). The paradigm is
the general perspective or a way of thinking that reflects fundamental beliefs and
assumptions made about the nature of something. Kuhn (1970: 175) describes this as:
A paradigm is a set of beliefs, values and techniques which is shared by members of
scientific community, and which as a guide or map, dictating the kinds of problems
scientists should be address and the types of explanations that are acceptable to them.

Similarly, Guba (1990), Guba and Lincoln (1998), and Lincoln and Guba (2000)
emphasize that a paradigm is a set of basic beliefs (metaphysics) or the first principles in
understanding the worldview of life. Moreover, they stress that this basic belief system
is based on ontological, epistemological, and methodological assumptions.

105

Our concern here, however, is with those paradigms that guide disciplined
inquiry all these past paradigms, as well as the emergent contenders, can be
characterized by the way their proponents respond to three basic questions, which can
be characterized as the ontological, the epistemological, and the methodological
questions (Guba, 1990: 18).

It is undoubted that the paradigm has an essential role in shaping the basic research
(Burrell & Morgan, 1979; Crotty, 1998; Guba, 1990; Patton, 1990, 2000; Sarantakos,
1998, 2005). In other words, the research paradigm defines how researchers view the
world, how they relate to the object studied, and what they see as the nature of reality.

There are many views on identifying the choice of paradigms that can be employed by
researchers to guide their studies. Burrell and Morgan (1979) propose four major
paradigms, namely interpretive, functional, radical humanism, and radical structuralism.
Sarantakos (1998, 2005) argues for only three paradigms, they are positivistic,
interpretive and critical. While Guba (1990) and Guba & Lincoln (1998) suggest four
paradigms: positivism, post positivism, critical theory and constructivism. Based on
Heron (1996) and Heron and Reason (1997) work Lincoln and Guba (2000) propose
another paradigm, namely participatory. This means Lincoln and Guba (2000) mention
five paradigms; positivist, post positivist, critical theory, constructivist and a
participatory paradigm, that can be employed to observe the complexity of social
realities.

Burrell and Morgan (1979) contribute a fundamental model on how to break down the
complexity of the real world. Based on the assumption that the nature of science can be

106

thought of along a subjective-objective dimension and society can be analyzed along a

continuum from regulation to a radical change dimension, four distinct paradigms can
then be identified; namely interpretive, functional, radical humanism, and radical
structuralism. The interaction among these is illustrated in figure 3.7.

Figure 3.7: Four Paradigms for the Analysis of Social Theory

The Sociology of Radical Change
Radical Humanist

Radical Structuralist

Interpretive

Functionalist

Subjective

Objective

The Sociology of Regulation

(Source: Burrell & Morgan, 1979: 22)

Burrell and Morgan (1979) moreover explain that the functionalist paradigm seeks to
provide an essentially rational explanation of social affairs and it is characterized by an
objective point of view. Hence, this approach tends to be realistic, positivist, determinist
and nomothetic. In contrast, the interpretive paradigm relates to understanding the
fundamental nature of the social world; it uses a more subjective approach to analyze the
social world. It is not surprisingly that this paradigm tends to be nominalist, antipositivist, voluntarist and ideographic.

From the sociology of radical change standpoint, the radical structuralist has the same
perspective as the functionalist, as an objectivist. However, radical structuralism is more
concerned with structural relationships within the social world. In contrast, the

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subjective stands point to both the radical humanist and interpretive paradigm. The
environment that individuals interact with dominates human consciousness, and this
drives the cognitions between the individual and true consciousness (Burrell & Morgan,
1979: 32).

Further discussion about the research paradigm is proposed by Sarandakos (1998). She
offers three distinguish paradigms to investigate the complexity of the real world,
namely positivist, interpretive (or naturalist) and critical. To identify the similarities and
or differences, she analyses the paradigms from four different perspectives; they are the
perception of reality, the perception of human beings, the nature of science, and the
purpose of research, as illustrated in table 3.3.

Although these three paradigms, especially the positivist and interpretive, can be
distinguished theoretically the situation is more complex in reality. Moreover, there is a
grey area between the interpretive and critical paradigms, as mentioned by Sarantakos
(1998: 33):
It must be noted that although there is a clear distinction between the positivist
paradigm on the one hand and the other paradigm on the other, the distinction between
the critical and the interpretive, although significant, is rather weaker with regard to
the methodological issues, although the positivist and the non-positivist paradigms may
considered incompatible, the critical and the interpretive paradigms are not.

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Table 3.3: Theoretical Perspectives in the Social Sciences

Criterion

Reality is

Human beings
are

Science is

Purpose of
research:

Positivist

Interpretive

Critical Perspective

objective, out there, to

be found perceived
through the senses
perceived uniformly by
all
governed by universal
laws
based on integration

subjective, in peoples
mind
created, not found
interpreted differently
by people

both out there and

peoples minds
complex: appearance is
not reality
created by people not
by nature
in tension/ full of
contradictions
based on oppression
and exploitation

rational individuals
obeying external laws
without free will

creator of their world

making sense of their
world
not restricted by
external laws
creating systems of
meanings

creators of their destiny

oppressed alienated,
exploited, restricted
brainwashed, misled,
conditioned
hindered from realizing
their potential

based on strict rules and

procedures
deductive
relying on sense
impressions
value free

based on common
sense
inductive
relying on
interpretations
not value free

conditions shape life

but can be changed
emancipating,
empowering
relying n sense
impressions & values
not value free

to explain social life

to predict course of
events
to discover the laws of
social life

to interpret social life

to understand social
life
to discover peoples
meaning

to explain
to disclose myths and
illusions
to emancipate and
empower

Source: Sarantakos, 1998: 40

Lincoln and Guba (2000) propose five paradigms to observe the complexity of the social
sciences namely positivism, post positivism, critical theory, constructivism and
participatory. The characteristics of each paradigm can be determined by answering
three fundamental questions; these are the ontological, epistemological, and
methodological questions. Ontology relates to what is the form and nature of reality and,
109

therefore, what is there that can be known about it. Epistemology tells about what is the
nature of the relationship between the knower or would be knower and what can be
known. While, methodology answers the question of how can the inquirer (would beknower) go about finding out whatever he or she believes can be known (Guba, 1990:
19; Guba & Lincoln, 1998: 108; Lincoln & Guba, 2000). These different characteristics
of paradigms are shown in table 3.4.

Although Lincoln and Guba (2000) mention the different meanings and levels of
analyses of paradigm, ontology, epistemology, methodology, and method, it should also
be noted that these terms quite often are used interchangeably in the literature (also see
Burrell & Morgan, 1979; Crotty, 1998; Morgan, 1983; Sarantakos, 1998, 2005; Jones
2002). Therefore it is important for researchers to make sure that they are able to
breakdown these levels of analysis so the research process is consistently and clearly
informed.

Based upon the above discussion, Burrell & Morgan (1979), Guba (1990), Guba and
Lincoln (1998), Lincoln and Guba (2000), and Sarantakos (1998, 2005) all agreed that
there are two main paradigms in social research, they are positivism (or as Burrell &
Morgan call functional) and interpretive (which Guba & Lincoln called as
constructivism). Although post positivism, critical theory and participatory paradigms
exist and are practiced by researchers, these paradigms can be categorized as a
modification of the main domain paradigms (positivism and interpretive). This is
because at the heart of the basic idea, these paradigms refer to positivism or
interpretivism.
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Table 3.4: Basic Belief of Alternative Inquiry Paradigm

Issue

Ontology

Positivism

Postpositivism

Critical Theory
et al.

Constructivism

Participatory

Nave realism

Critical realism

Historical
realism

Relativism

Participative
reality

real reality but

apprehendable

Dualist/
objectivist;

Epistemology

finding true

Experimental/
manipulative;

real reality but

only imperfectly
and
probabilistically
apprehendable

virtual reality
shaped by
social, political,
cultural,
economic,
ethnic, and
gender values
crystallized
overtime

Modified
dualist/objectivist

critical tradition/
community;
finding probably
true

Transactional/
subjectivist;

value mediated
findings

Modified
experimental/
manipulative;

Dialog/dialectic

local and specific

construct realities

subjectiveobjective
reality,
corrected by
mind and given
cosmos

Transactional/subj
ectivist;

Critical
subjectivity in
participatory in
transaction
with cosmos;

created finding

extended
epistemology
of experiential,
propositional,
and practical
knowing;
cocreated
finding

Hermeneutic/
dialectic

Political
participation in
collaborative
action inquiry;

Methodology
verification of
hypotheses;
chiefly
quantitative
methods

critical multiplism;
falsification of
hypotheses, may
include qualitative
methods

primacy of the
practical; use of
language
grounded in
shared
experiential
context

Source: Lincoln & Guba, 2000: 168

3.3.1. Research Paradigm Selected: Interpretive

Audet, Landry, and Dery (1986), Behling (1980), Lincoln and Guba (1985), and Rorty
(1987) identify that most organizational investigations are mainly driven by the natural

111

science model or as Kuhn (1970) suggests the dominant normal science paradigm. By
utilizing the positivist-functionalist paradigm, researchers assume that the nature of
organizations is objective, out there, and can be explored as a single meaning (Burrell
& Morgan, 1979; Guba, 1990; Guba & Lincoln, 1998; Lincoln & Guba, 2000;
Sarantakos, 2005). In other words, the meaning of realities can be captured in a straight
forward, simple way that do not need to find out the hidden meanings within the topic.
Hence, researchers tend to employ a deductive approach by proposing appropriate
hypotheses about the organizational world and then test these using statistical analyses.
Unsurprisingly Gioia and Pitre (1990: 585) state the functionalist paradigm is
characterized by an objective view of the organizational world with an orientation
toward stability or maintained the status quo.

The positivist-functionalist approach becomes problematic as organizations can also be

viewed as complexly structured organism (Morgan, 1997), which constantly changes
overtime. An organization is a multifaceted social construct with a complex interaction
internally and externally. To survive an organization has to follow the flow of change,
and interact with and adapt to their dynamic social environment. This calls the social
facts and assumptions of stability into doubt. The assumption that the nature of
organizations is objective, out there, and can be explored as a single meaning are
challenged by the new belief that the nature of organizations is subjective, in here, and
consists of multiple realities (Burrell & Morgan, 1979; Lincoln & Guba, 2000;
Sarantakos, 2005). Interpretivists consider the meaning depends on what the
organizations members think, feel, experience, understand, interpret and construct of
their reality; these are not framed by the researcher.
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To provide a genuine picture of SHRM within the Indonesian context it is imperative to

explore if and how SHRM is experienced by organizational members, in this case HR
managers. What the HR managers think, feel and experience are considered the best
source for this study because they are the people most closely related to the subject
being studied.

By conceptualizing what HR managers think, feel and experience the phenomena of

SHRM can be explored as it exists in practice. Therefore, this study aims to generate a
theoretical framework of SHRM that represent the realities of practice in Indonesia.
Accordingly, the research is based in an interpretive paradigm, using a qualitative
approach that recognizes humans construct their reality. As Burell and Morgan (1979:
28) explain:
The interpretive paradigm is informed by a concern to understand the world as it is, to
understand the fundamental nature of the social world at the level of subjective
experience. It seeks explanation within the realm of individual consciousness and
subjectivity, within the frame of reference of the participants opposed to the observer of
action.

The meaning of reality is constructed by the lived experience and individuals can
construct multiple social realities (Burrell & Morgan, 1979). Accordingly, understanding
the process or experience constitutes the knowledge gained from an inductive
hypothesis, or theory generating mode of inquiry, as an alternative to deductive inquiry
or testing theory (also see Creswell, 2003; Crotty, 1998; Lincoln & Guba, 2000;
Sarantakos, 2005).

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Interpretivists believe that life is self-referential, and things or events are what the
mind makes of them (Tsoukas, 1998). In this way, events are viewed as dynamic and
they change our opinions as they unfold, which influences our understanding and
interpretation (Schwandt, 2000). To gain further understanding, the researcher needs to
explore the subjective meaning. Remenyi et al. (1998: 35) underline that the interpretive
approach is based on understanding the details of the situation, to understand the reality
or perhaps the reality working behind them.

Working within the interpretive paradigm, the researcher needs to analyze the world as a
socio-psychological series, despite the relationship the researcher forms with
participants, to ensure the subject can be fully explored (Lincoln & Guba, 2000). To
achieve this, Glasser (1992) emphasizes that researcher must have sufficient knowledge
of the research area to be able to interpret phenomena systematically.

3.3.2. Research Ontology Selected: Constructivist

The Ontology of a study describes the nature of reality (Burrell & Morgan, 1979;
Creswell, 1998; Guba & Lincoln, 1998; Sarantakos, 2005). Moreover, Hughes and
Sharrock (1997: 5) explain that the main question of ontology is what kinds of things
really exist in the world? Since the nature of realities are complex, ontologically they
should be explored carefully, as Masson (2002: 14) underlines:
Ontology can seem like a difficult concept precisely because the nature and essence of
social things seem so fundamental and obvious that it can be hard to see what there is to
conceptualize. In particular, it can be quite difficult to grasp the idea that it is possible to
have an ontological position or perspective (rather than simply to be familiar with the

114

ontological components of the social world), since this suggests that there may be
different version of nature and essence of social things.

Since the questions posed for this study are about SHRM in the Indonesian environment,
they need to be constructed in a way that is relevant to the prevailing societal constructs.
In other words, the answers to the research questions are discovered through what is
constructed by the respondents (Firestone, 1987). Based on this rationale, the most
suitable ontology for this study is constructivist (Crotty, 1998; Creswell, 2003; Guba &
Lincoln, 2000; Sarantakos, 2005)

The constructivist approach is a quest to understand the construction and reconstructions

that people hold (including the inquirer), before and during research activity (Guba and
Lincoln, 1998). This ontology allows reinterpreting and reconstructing of the data in a
contextual setting. Moreover, evaluation standards of reality and validity are not
absolute, but tend to be derived from community consensus considering what reality is,
what is useful, and what has meaning (Lincoln & Guba, 2000; Bradley & Schaefer,
1998). There are multiple personally and socially constructed versions of reality. Guba
and Lincoln (1989: 110) describe the constructivism ontology by saying:
Realities are apprehendable in the form of multiple, intangible mental construction,
socially and experientially based, local in specific in nature (although elements are often
shared among many individuals and even cross cultures), and dependent for their form
and content on the individual persons or group holding the constructions.

Constructivism occurs when we interpret and use our knowledge to construct a

meaningful reality out of the interactions between human beings and their world (Crotty,
1998: 42). Such an approach recognizes that this reality is developed and transmitted
115

within specific social contexts. Therefore, depending on the situation and context, there
can be multiple constructions or views of reality (Creswell, 1998; Whiteley, 2002). This
is quite different from the approach taken in quantitative studies, where the ontological
assumption is that there are single realities. Therefore, this study will concentrate on the
reality constructed by the participants involved in the research situation, rather than
building on apriori knowledge or theory.

To maintain of constructivist ontology, the researcher followed the guidelines for

constructivist research recommended by Guba and Lincoln (1989: 83):
1. The researcher-respondent relationship is subjective, interactive, and interdependent
2. Reality is multiple, complex, and not easily quantifiable.
3. The values of the researcher, respondents, research site, and underlying theory
cannot help but underpin all aspects of the research.
4. The research products (e.g. interpretations) are context specific.

3.3.3. Research Epistemology Selected: Subjective

Sarantakos (2005: 30) defines epistemology as the nature of knowledge or what
counts as a fact and where knowledge is to be sought. Similarly, Masson (2002: 16)
describes epistemology as questions about what we regard as knowledge or evidence of
things in the social world. More specifically, Creswell (1998: 76) explains that
epistemology is the relationship between the inquirer and the known; while Hughes
and Sharrock (1997: 5) underline that the key question of epistemology is How is it
possible, if it is, for us to gain knowledge of the world? In summary, epistemology can
be seen as the theory of knowledge that is concerned with the principles and rules of
116

deciding how social phenomenon can be known, and how knowledge can be
demonstrated.

As the aim of this study is primarily to understand the reality of SHRM within
Indonesian context, as constructed by the subjects, thus the subjective epistemology was
considered as most appropriate for this study (Crotty, 1998; Lincoln & Guba, 2000;
Sarantakos, 2005). The epistemology selected was operationalized in tandem with the
interpretive-constructivist approaches to build a picture of the participants reality, as
recommended by Denzin and Lincoln (2000).

In this study, the researcher interacted with the participants and asked for their responses
to open ended questions about SHRM in Indonesia. Respondents were asked to express
their independent views on a combination of opinions, experiences, feelings, and facts.

In a qualitative study, the researcher needs to interact with their subjects (Creswell,
1998). This may mean that the researcher can have greater personal investment in the
data (Casell & Symon, 1994a, 1994b) and runs the risk of explicitly or overtly applying
his or her own subjective interpretations and understanding to the phenomena under
study. As a subjectivist, the focus needs to be kept on the inner world of experiences,
rather than the world out there. The researcher needs to focus on the meanings that
people give to the environment, not the environment itself (May, 2001). It was critical
that objectivity was maintained to prevent or minimize distortion or bias in the
interpretation of the phenomenon.

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3.4. Selecting a Research Methodology

As mentioned earlier, when the complex process of determining the most suitable
paradigm is resolved, the research methodology can be determined. In simple terms, the
methodology translates the principles of the paradigm into a research language to show
how the world can be explained, handled, approached or studied (Creswell, 2003;
Crotty, 1998; Neuman, 2000; Sarantakos, 1998, 2005; Strauss & Corbin, 1998).

Strauss and Corbin (1998: 3) define methodology as a way of thinking about and
studying social reality. Whereas, Crotty (1998: 3) explains that methodology is the
strategy, plan of action, process or design lying behind the choice and use of particular
methods and linking the choice and use of methods to the desired outcomes. More
operationally, Sarantakos (2005: 30) explains, methodology is research strategy that
translates ontological and epistemological principles into guidelines that show how
research is to be conducted. Methodology provides the theoretical foundations and
operational considerations for conducting research. Moreover, Ruane (2005) emphasizes
that methodological rules have important roles to minimize the likelihood of error and
give the researchers confidence that their findings are accurate or error free.

To guide researchers, methodology can be seen from two perspectives (Sarantakos,

1998). First, a methodology is identical to a research model employed by a researcher in
particular study. Consequently, every single study has a distinct methodology and the
methodology will vary from study to study. Second, the methodology relates to the
theoretical and more abstract context but should be consistent with a distinct paradigm

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that translates into research principles and research practices (Burrell & Morgan, 1979;
Creswell, 1998, 2003; Crotty, 1998; Drisko, 1997) and is also contingent with the nature
of phenomena being explored (Guba, 1990; Guba & Lincoln, 1989; Morgan &
Smirchich, 1980; Patton, 2000).

3.4.1. Research Methodology Selected: Qualitative Research

The right choice for the methodology depends on the research paradigm, ontology and
epistemology (Burrell & Morgan, 1979; Creswell, 1998, 2003; Crotty, 1998; Sarantakos,
2005). Consistent with the interpretive paradigm, constructivist ontological, and
subjective epistemological selected, a qualitative methodology was determined as the
most suitable methodology for this study (Burrell & Morgan 1979; Cassell & Symon,
1994a, 1994b; Creswell, 1998, 2003; Crotty, 1998; Drisko, 1997; Kvale, 1996;
Sarantakos, 1998). As qualitative research, this study is based on a non-positivist,
natural setting, it is discovery oriented, and uses an inductive approach to build a holistic
picture of SHRM practices within Indonesian.

The researcher believes a qualitative methodology was superior for this study as it
allowed a contextual evaluation of the data. The origin of SHRM are from western
societies, where the concept is now relatively well developed (e.g. Bach, 2005;
Bamberger & Meshoulam, 2000; Boxall & Purcell, 2008; Lengnick-Hall et al., 2009).
However, Indonesian businesses operate within a culture and context, which is very
different from the west (Hofstede & Hofstede, 2005; Trompenaars & Hampden-Turner,
1998). This difference needs to be taken into consideration and should provide a deeper
understanding of how SHRM is operationalized in Indonesia. This methodology allows
119

the researcher to produce descriptive data from the written or spoken words of the
participants and other observable data resources (Taylor & Bogdan, 1998).

Creswell (1998: 17-18) mentions reasons why qualitative approach is recommended.

These include the nature of the research question and the topic needs to be explored.
Other reasons are because of the need to present a detailed view of the topic in order to
study individuals in their natural setting. Because of interest in writing in a literary style
and there is sufficient time and resources for extensive data collection in the field and
detailed data analysis of text information. A final reason is that the audience is receptive
to qualitative research.

Marshal and Rossman (1989: 46) point out the rationale for when qualitative research is
the most suitable methodology:

Research that cannot be done experimentally for practical or ethical considerations.

Research that delves in depth into complexity and processes.

Research for which relevant variables have yet to be identified.

Research that seeks to explore the where and why of policy, folk wisdom and
practice.

Research on unknown societies or innovative systems.

Research on informal and unstructured linkages and process in organizations.

Research on real, as opposed to stated, organizational goals.

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Guba and Lincoln (1989: 59-61) recommend that qualitative research should be
employed when a conventional methodology (quantitative-positivist) is not able to
capture some critical problems, these are:

Conventional methodology does not contemplate the need to identify stakeholders

and solicit claims, concerns and issues from them. Conventional researchers do not
see the reason to discover which persons or groups are those who may construct
knowledge about states of affairs or what they believe to be the case.

The positivist paradigm serves to verify rather than discover a posture. Without
discovery, hypotheses are not grounded but arise as a creative invention.

Conventional methodology does not take account of contextual factors, except to

physically or statistically measure them.

Conventional methodology does not provide a means for making evaluative

assessments on a situation-by situation basis.

Conventional methodologys claim to be value-free makes it a dubious instrument

for investigating judgments about some entity.

A Qualitative study allows researchers to investigate perspectives that are often beyond
the reach of a quantitative study, as Gillham (2000: 11) states qualitative studies:

explore complexity that are beyond the scope of more controlled approaches

get under the skin of a group or organization to find out what really happens this is
the informal reality which can only be perceived from inside

view the case from the inside out: to see it from the perspective of those involved.

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Creswell (1998) categorizes qualitative research into five traditions of inquiry; these are
biography, phenomenology, grounded study, ethnography, and case study. Biographical
research relates to the study of an individual and her or his experiences, whereas the
phenomenological study describes the meaning of lived experiences for several
individuals about a concept. A grounded study generates or discovers theory from a
phenomenon that relates to a particular situation, ethnography describes and interprets a
cultural or social group or system, while a case study explores a bounded system or a
case (or multiple cases) over time to provide detail and richness about that context. The
characteristics for each tradition are presented in table 3.5.

Table 3.5: Dimension for Comparing Five Research Traditions in Qualitative Research
Dimension
Focus

Discipline
origin

Data
Collection

Biography

Phenomenology

Grounded
Theory
Developing a
theory grounded
in data from the
field

Ethnography

Case Study

Describing and
interpreting a
cultural and
social group

Developing an
in-depth
analysis of a
single case or
multiple cases

Exploring the
life of an
individual

Understanding
the essence of
experiences
about a
phenomena

Anthropology,
Literature,
History,
Psychology,
Sociology

Philosophy,
Sociology,
Psychology

Sociology

Cultural
Anthropology,
Sociology

Political
science,
Sociology,
Evaluation,
Urban studies,
other social
sciences

Primarily
interviews and
documents

Long interview

Interviews with
individuals to
saturate
categories and
detail a theory

Primarily
observations and
interviews with
additional
artifacts during
extended time in
the field (e.g., 6
months to a
year)

Multiple
sources
documents,
archival
records,
interviews,
observations,
physical
artifacts

To be continued in the next page.

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Table 3.5 continued

Dimension
Data
Analysis

Biography
Stories,
Epiphanies,
Historical
content

Phenomenology
Statements,
Meaning,
Meaning
themes, General
description of
the experience

Grounded Theory
Open coding,
Axial coding,
Selective coding,
Conditional
matrix

Ethnography
Description,
Analysis,
Interpretation

Case Study
Description,
Themes,
Assertions

Narrative
Form

Detailed picture
of an
Individuals life

Description of
the essence of
the experience

Theory or
Theoretical
model

Description of
the cultural
behaviour of a
group or an
individual

In-depth study
of a case or
cases

Source: Creswell, 1998: 65

3.4.2. The Qualitative Methodology Selected: Grounded Theory

An underlying assumption in this study is that there is little evidence of SHRM studies
within Indonesia and no apparent evidence that a theory of SHRM within the Indonesian
context has been established (Bennington & Habir, 2003; Gunawan & Nankervis, 2006;
Habir & Larasati, 1999; Habir & Rajendran, 2007; Prijadi & Rachmawati, 2002;
Singleton & Nankervis, 2007). Accordingly, the main purpose of this study is to
discover and delineate how SHRM is practiced by Indonesian organizations.
Furthermore, this study intends to develop a theoretical model of SHRM within the
Indonesian context.
Considering the motivation of the study in terms of developing a theoretical model and
answering research questions that are consistent with an interpretive paradigm,
constructivist ontology, subjective epistemology, and qualitative methodology, the
researcher strongly believes that grounded theory is the most suitable methodology for
this study. Moreover, in terms of organizational studies, Lee (1999), Martin and Turner

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(1986) mention that grounded theory is important to management scientists because of

its broad applicability to many organizational issues and prevalence (also see Cassell &
Symons, 1994b; Goulding, 2002)

The aim of grounded theory research is to develop substantive or formal theory, and thus
is a means of explaining social process (Creswell, 1998; Glaser, 1995a, 1995b, 1998;
Glaser & Strauss, 1967; Strauss, 1987; Strauss & Corbin, 1998). Grounded theory
proposes generating theory from information demonstrated within data that is drawn
from a social unit of any size, large or small (Glaser & Strauss, 1967). In simple words,
grounded theory can be defined as the discovery of theory from data (Glaser &
Strauss, 1967: 1). Vaughan (1992) calls this process theoretical elaboration. More
completely, Charmaz (2000: 509) explains:
Essentially, grounded theory methods consist of systematic inductive guidelines for
collecting data and analyzing data to build middle-range theoretical frameworks that
explain the collected data. Throughout the research process, grounded theorists develop
analytic interpretations of their data to focus further data collection, which they use in
turn to inform and refine their developing theoretical analysis (Charmaz, 2000: 509).

Grounded theory was developed by Barney Glaser and Anselm Strauss in the sixties
(Glaser, 1978, 1992; Glaser & Strauss, 1967; Straus, 1987). The roots of grounded
theory lie in symbolic interactionism which was developed in the early 1900s by George
Herbert Mead (1959); a social psychologist who was influenced by American
pragmatism and particularly the views of John Dewey (Hammersley, 1989; Morris,
1977; Strauss, 1993). Pragmatists suggest that individuals are self-aware; they are able
to see themselves from the perspective of others and therefore adapt their behavior

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according to the situation. In other words, human beings go through a continual process
of adaptation in the constantly changing social world (Mead, 1959). Moreover, these
social interactions create meaning and shape society via shared meanings so that the
affect of society is predominant over individuals.

Herbert Blumer (1937, 1969) further developed Meads views and invented symbolic
interactionism. It can be said that Mead contributed the philosophical underpinning,
while Blumer moved symbolic interactionism forward to a sociological theory and a
research approach (Hammersley, 1989; Schwandt, 1994, 2000). As a research approach,
symbolic interactionism emphasizes two important issues; the researcher needs to
explicate the process by which meaning is developed from the represented interactions
between or among human beings, and that these meanings are understood only through
interpretation (Schwandt, 1994). Moreover, meaning is sense making rather than
definitive and gains utility and significance from patterned relationships, rather than
quantifiable correlations (Blumer, 1956, 1969).

Glaser and Strauss (1967) propose that grounded theory promotes intellectual
creativity for the purpose of developing theory (Turner, 1981: 225), as a response to the
trend among researchers at that time which concentrated on hypothesis testing,
validation and verification (Locke, 1996). In contrast with logico-deductive empirical
studies in mainstream research, Glaser and Strauss (1967) proposed a new approach in
generating theory that is grounded and systematically derived from data to develop a
well grounded theory that describes, interprets and predicts the phenomenon of interest
(also see Charmaz, 2000; Creswell, 1998; Goulding, 2002; Patton, 2000; Strauss &
125

Corbin, 1990, 1994 & 1998; Whiteley, 2000). Many studies have utilized grounded
theory across a wide range of disciplines such as sociology, nursing, anthropology,
health sciences, business and management (Glaser, 1995a, 1995b). More specifically,
grounded theory has been the dominant qualitative method of organizational studies
published in organizational science and management journals (Lee, 1999).

The main purpose of a grounded theory study is to generate a theory or conceptual

proposition and this is the most suitable methodology when phenomena are not well
understood or have not been studied before (Charmaz, 2000; Glaser & Strauss, 1967;
Lee, 1999; Strauss & Corbin, 1998). This is the case with SHRM in Indonesia where
research into SHRM is not well developed yet. Grounded research principles allow the
grey area of SHRM within the Indonesian context to be explored and investigated
thoroughly. More importantly, a theoretical framework of SHRM can be developed that
suits that context.

3.5. Research Method: Grounded Theory

Since grounded research is selected for this study data collection and analysis also need
to follow grounded research principles. Moreover, Glaser (1998) and Strauss and Corbin
(1998) mention that grounded theory can be categorised as both a methodology and a
research method (also see Charmaz, 2000, 2006; Creswell, 1998; Glaser, 1992, 1995a,
1995b; Goulding, 2001; Miles & Huberman, 1994). The grounded research approach is
not only a model to provide theoretical principles and frameworks for the research or a

126

way of thinking about and conceptualizing data; but it is also a procedure or guideline
on how to collect and analyze data (Strauss & Corbin, 1994:275)

In terms of data collection and data analysis, three principles occur simultaneously
throughout the whole research process: theoretical sampling, data coding, and the
constant comparative method (Charmaz, 2000, 2006; Glaser, 1992, 1995a, 1995b, 1998;
Glaser & Strauss, 1967; Strauss & Corbin, 1998). Theoretical sampling refers to
continuous data collection based upon emerging issues to achieve theory saturation.
Data coding is concerned with the procedure of disaggregating the data and breaking it
down into manageable segments, then identifying or naming those segments. The
constant comparative method relates to the strategy of comparing and asking questions.
Embedding these into the entire of research process sharpen the researchers thinking
and help him or her understand what is in the data.

3.5.1. Data Collection Method

In qualitative research, interviews have an essential and fundamental role in data
gathering. Interviews are the main data collection method to investigate the nature of
reality being studied (Creswell, 1998, 2003; Fontana & Frey, 1994, 2000; Whiteley et
al., 1998). Interviews can provide researchers with insights into the participants
thoughts, knowledge, feelings, memories, and experiences, in their own words, rather
than those of the researcher. More importantly, through interviewing, the phenomena
being studied can be explored independently from the real actors, so the richness and
originality of data can be uncovered.

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The purpose of interviewing is to allow us to enter into the other persons perspective.
Qualitative interviewing begins with assumption that the perspective of others is
meaningful, knowable, and able to be made explicit. We interview to find out what is in
and on someone elses mind, to gather their stories (Patton, 2000: 341).

The basic principle in grounded research is that data is collected continuously, as it

follows up the emerging issues or coding from previous respondents. This means that
respondents have a pivotal role in helping to reach saturation of knowledge. Creswell
(1998) provides a simple guide to the main activities in data collection within the
grounded theory tradition, as summarized in table 3.6.

Table 3.6: Data Collection Activities in Grounded Theory Research

Data Collection Activity

Grounded Theory

What is traditionally studied?

(Site/Individual)

Multiple individual who have responded to action or

participated in a process about a central phenomenon

What are typical access and rapport

issues? (access and rapport)

Multiple individual who have responded to action or

participated in a process about a central phenomenon

How does one select sites or

individuals to study? (purposive
sample strategies)

Finding a homogeneous sample, a theory based

sample, a theoretical sample

What type of information typically is

located? (forms of data)

Primarily interviews with people to achieve in the

theory

How is information recorded?

(recording information)

Interview protocol, memos

Interviewing issues (e.g. logistics, openness)

What are common data collection

issues? (field issues)
Transcriptions, computer files
How information is typically stored?
(storing data)
Source: Creswell, 1998: 112-113

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3.5.1.1. Sample Technique: Theoretical Sampling

Samples in qualitative research reflect the primary objective of developing an in-depth
understanding of the particular phenomenon being studied (Jones, 2002); so the focus of
qualitative research is on depth information, not on numbers of participants. The
emphasis is on gathering rich information about a small number of people or
organizations rather than a limited amount of information about a large number of
people or organizations (Ticehurst & Veal, 2000). Thus, questions about an appropriate
sample size have less to do with the actual number of participants or cases and much
more to do with the quality and depth of information elicited through the research
process (Jones, 2002: 465). Compared to quantitative inquiry, Creswell (1998)
characterizes qualitative researcher as relying on a few cases and many variables, rather
than few variables and many cases. Generally speaking, qualitative researchers are
prepared to sacrifice scope for detail (Silverman, 2005: 9). Moreover, Patton (2000)
clearly stated:
There are no rules for sample size in qualitative inquiry. Sample size depends on what
you want to know, the purpose of inquiry, what is at stake, what will be useful, what will
have credibility, and what can be done with available time and resources I repeat, the
size of sample depends on what you want to find out, why you want to find it out, how
the findings will be used, and what resources (including time) you have for the study
(Patton, 2000: 244).
The validity, meaningfulness, and insight generated from qualitative inquiry have to do
with the information richness of the cases selected and the observational/analytical
capabilities of the researcher than with the sample size (Patton, 2000: 245).

Consistent with grounded theory principles, this study employed theoretical sampling for
data gathering. Data were collected from 63 HR managers across four different industry

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sectors; these being the hotel, hospital, textile, and agriculture sectors. The respondents
were drawn from cities in eight different states or provinces; these being Solo in Central
Java, Yogyakarta in Special Territory of Yogyakarta, Jakarta in the Indonesian Capital
Territory, Denpasar in Bali, Padang in West Sumatra, Medan in North Sumatra,
Banjarmasin in South Kalimantan, and Makassar in South Sulawesi. The initial strategy
was to collect data from companies in Yogyakarta, Solo, and Jakarta only, to contain
time, accessibility, and cost. However, the preliminary interviews identified that local
attributes, such as the local culture and local government regulations, were important
variables in managing people, so the scope of the data collection was widened.

HR managers were selected became this study sought to investigate the implementation
of SHRM, so participants needed to be at a managerial or strategic level (not operational
level). Consequently, the respondents need to be people who were able to provide rich
information and understandings of managerial or strategic practices based on their
knowledge, feeling, and experiences. Patton (2000) recommends that decision about
who are the most appropriate participants for a qualitative study come from reviewing
the research questions that guide the study, to determine who can provide the richest
information. Furthermore, the sample can be composed of people, behaviors, events or
processes (Marshal & Rosman, 1995).

The need to be flexible when adopting the theoretical sampling principles is strongly
underlined by Glaser and Strauss (1967: 46): The basic question in theoretical sampling
(in either substantive or formal theory) is: what groups or subgroups does one need in
data collection and for what theoretical purpose? The reason for this is to ensure
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sufficient data is captured to collect the breadth and depth of available information and
achieve saturation. Data collection took nearly one year, including identifying potential
participants, sending invitation letters, contacting respondents via telephone and or email
then organizing a time and venue for the interviews.

This study did not provide equal numbers of organization in each type of industry, or
equal numbers and types of industry in each city. As mentioned earlier, this study
employs theoretical sampling not statistical sampling. This emphasizes richness of data
and theoretical saturation rather than the number and distribution of the sample. The
number and the diversity of data for theoretical sampling inquiries focuses more on
achieving saturation.
The adequate theoretical sample is judged on the basis of how widely and diversely the
analyst chose his groups for saturating categories according to the type of theory he
wished to develop. the researcher who generates theory need not combine random
sampling with theoretical sampling when setting forth relationship among categories and
properties (Glaser & Strauss, 1967: 63).

3.5.1.2. Preliminary Interviews: Unstructured Interviews

SHRM practice within the Indonesian context is a relatively new area of study. The
researcher was also aware that the existing frameworks have been developed in western
societies, and in particular, in America and Europe. Therefore, it was important to heed
the advice of Strauss and Corbin (1998) when entering the research site to make sure
these views do not contaminate the emerging information. Where similarities are found
it is because respondents identified these. The researchers role is not to force the fit.

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Bringing the existing literature into the research site is not forbidden, especially in the
early stages of grounded research studies. Having this knowledge helps the researcher to
explore the richness of the phenomena being studied, for as stated by Strauss & Corbin
(1998:51):
Before beginning a project, a researcher can turn to the literature to formulate questions
that act as a stepping off point during initial observations and interviews. After the first
interview(s) or observation(s), the researcher will turn to question and concept that
emerge from analysis of the data.

Drawing on current literature, the most basic idea of strategic HRM is that it is how
organizations make a linkage between organizational strategy and HRM (e.g. Bamberger
& Meshoulam, 2000; Beer et al., 1984; Boxall & Purcell, 2008; Fombrun et al., 1984;
Lengnick-Hall et al., 2009; Lundy, 1994; Truss & Gratton, 1994).

This linkage

integrates the strategic planning process, strategic decision-making, and strategic

implementation and these are explained systematically as a theoretical framework.

As a preliminary to the semi structured interviews, seven HR managers participated in

an exploratory preliminary study. These participants were asked the following two open
ended questions:
1. Could you please tell me what you think about strategic HRM?
2. Could you please tell me what your organizations experience is with the
linkage between organizational (business) strategy and HRM?

The first question is to stimulate a genuine response about and their knowledge of
SHRM based upon their knowledge and implementation in her/his organization. The

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intention of this question was to encourage respondents to speak freely about their
knowledge and experience of SHRM.

The second question sought to clarify the basic principles underlying SHRM if these
were not clearly explained or did not emerge from the first question. Elaboration of how
SHRM was practiced completely depended on the participants and their organizations
experiences. The rationale behind this question was that although many Indonesian
organizations link business strategy and HRM they might be unaware that their
organizations practiced SHRM.

As a result, an initial saturation of the main issues relating to SHRM emerged, these
were related to (1) the approaches to SHRM, (2) the role of HR department and its
people, and (3) HR strategy implementation. In addition, the preliminary interviewees
recommended extending the investigation to explore local attributes in managing people.
They also suggested the exploration should investigate across industry sector to
accommodate variability.

3.5.1.3. Main Interviews: Semi Structured Interviews

Theoretical sampling involves data gathering as a continuous process, so further
interviews based upon information from the preliminary stage were next undertaken
(Creswell, 1998; Glaser, 1995a, 1995b; Glaser & Strauss, 1969; Patton, 2000). The
preliminary interviews suggested the scope of what needed to be investigated and where
information needed to be sought. Using a prepared interview guide, suitable and

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accessible participants were contacted for further interviews. The process involved is
described below.

3.5.1.3.1. Designing Semi Structured Interview Guide

General open-ended questions were developed for the semi-structured interviews. These
questions were used to guide the conversation and to allow issues to emerge. The semistructured interview guide was used to open the discussion and as a flexible guide.
Participants were encouraged to express and propose issues they felt were related to the
topic. This strategy does not conflict with the data collection principles of grounded
research (Strauss & Corbin, 1998; Turner, 1983).

3.5.1.3.2. Access to Sites

Access to potential participants was facilitated by posting or faxing an invitation letter
(complete with summary of the study proposal, information letter, and ethics approval
from Murdoch University; see appendix 1). Potential participants usually responded with
their agreement within one to two weeks. If they did not give a response, the researcher
contacted them by telephone and or email to confirm their decision. In many cases, they
did not response because they were not familiar with the term SHRM, and were worried
that the study would be very complicated and could investigate some sensitive issues in
their organizations. The researcher reassured the subjects and emphasized that the study
was to investigating their experiences in managing people. By giving more information
via telephone and or email, and some negotiation, most agreed to participate in the
study.

In addition, some organizations, especially textile companies, could not

participate due to other external factors that posed difficulties for them at that time.
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Another strategy to attract participants was to offer flexibility in terms of time and venue
for the interview, especially for the organizations located in Yogyakarta, Surakarta, and
Jakarta. Those organizations located in Padang (West Sumatra), Medan (North
Sumatra), Banjarmasin (South Kalimantan), Makassar (South Sulawesi) and Denpasar
(Bali), were offered limited flexibility due to the distance and costs of collecting data on
these different islands. Participants from outside Java Island were offered a choice of
seven to fourteen days in a month of their choice; although this needed to coincide with
agreement from other participants in the same location.

3.5.1.3.3. Venue of Interviews

Most interviews were conducted in the participants office as these were private and
comfortable locations. One interview was conducted at the participants residence on a
Sunday evening to accommodate his busy weekly schedule. He claimed this best suited
him as he would be free of interruptions and so have more time for discussion that
would provide rich information. One interview was conducted in the car while the
participant traveled from his office to a training centre. One interview was conducted at
a recruitment site because the manager was on a site visit at that time. Another interview
was conducted in a restaurant after office hours.

3.5.1.3.4. Duration of Interviews

The main interviews were conducted up to two hours duration depending upon the
emerging categories produced. Two interviews took more than two hours. After the

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interview, some participants asked the researcher to discuss current organizational issues
informally, so the researcher allocated at least three hours for each interview.

3.5.1.3.5. Language Used

All interviews were carried out in the Indonesian language. Although some participants
were able to converse in English, they preferred to use Indonesian because of familiarity
and fluency. Some times they also used English and or local languages to express certain
situations more clearly. When local terms the researcher did not understand were used,
the meaning was clarified carefully and politely so the exact meaning could be captured.

3.5.1.3.6. Interview Process

Before conducting each interview, the researcher always tried to understand the local
values and culture of where the organization was established, to avoid disrespect during
the interview. This is a very important preparation when conducting interviews in a high
context culture society such as in Indonesia. To prepare, the researcher arrived at least
two days before the first interview was due, to familiarize himself with local situation
and to learn about local manners from local friends, family or contacts. The researcher
also tried to collect as much preliminary information as possible about the organization
via the industrial department, industrial chamber, university link, personal link, and or
information from internet. These preparations were very helpful in enhancing the
researchers confidence and being more familiar with the participants backgrounds and
surrounding.

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The interviews started with conventional greeting and thanking participants for their
contributions. The researcher gave a brief explanation of the subject being studied. The
usual formalities of introduction, discussion about family or self were used to break the
ice. This allowed for an open and friendly atmosphere so the researcher had no
difficulties entering the main stage of interview.

The main interviews started by asking for a general overview about the organization,
followed by other questions that explored the topic being studied. The semi-structured
questionnaire was used as a general guide only and employed by the researcher flexibly.
When participants understood very well the subject being studied and produced
significant categories, the researcher just asked for further elaboration. However when
participants had difficulties with aspects of the topic, the semi structured questionnaire
used to stimulate more ideas or help capture more clearly the issues related to the
questions. Otherwise, the conversation flowed freely around the core subject matter.
When interviewees talked on issues not relevant to the subject being studied, the
researcher inserted a question from the interview guide to redirect the interviewee back
to the subject.

By implementing the interview scenario described, rich qualitative data (categories)

emerged spontaneously and independently. The guide was very effective in avoiding
stagnation in the interview process. The semi-structured questionnaire can be seen in
table 3.7.

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Table 3.7: Semi-structured Questionnaire

An Investigation into SHRM in Indonesia: Semi-structured Questionnaire
(Remember: You should use this guide flexibly, dont force the respondents views;
let them to express knowledge, opinions, feelings, experiences, and facts freely!!!)
===============================================================
General Questions related to SHRM:
1. Could you please tell me what your understanding about SHRM?
2. Could you please tell me how your organizations experience in managing
people?
Questions related to Approaches to SHRM:
1. Could you please tell me how your organizations experience is in formulating
HR strategy?
2. Could you please tell me what factors influence to HR strategy and how? (if
themes have not emerged yet, then followed by further questions)
3. Could you please tell me is there any relationship between business strategy and
HR strategy? (If yes, could you please tell me what your organizations
experience is with the linkage between business strategy and HR strategy? If not,
why?)
4. Could you please tell me is there any relationship between internal or
organizational factors and HR strategy? (If yes, could you please tell me what
your organizations experience is with the linkage organizational factors and HR
strategy? Then followed by asking each organizational factors mentioned by
respondent? If not, why?)
5. Could you please tell me is there any relationship between external or
environmental factors and HR strategy? (If yes, could you please tell me what
your organizations experience is with the linkage environmental factors and HR
strategy? Then followed by asking each environmental factor mentioned by
respondent? If not, why?)
Questions related to the Role of HR Department and its People:
1. Could you please tell me how HR department plays role in strategic decisionmaking? (if themes have not emerged yet, then followed by further questions)
2. Is HR department involved in strategic decision-making? (If yes, could you
please tell me what your organizations experience is with the involvement of
HR department in strategic decision making? Then followed by asking each
factors associate with this involvement? If not, why?)
3. What is the highest structure in HR department? (Why the structure is like that?
Could you please tell me the HR department position compared to other
departments?)
4. Is there any informal strategic decision-making process? (If yes, could you
please tell me why and how this process? If no, why?)
To be continued in the next page.

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Table 3.7 continued.

Questions related to the HR Strategy Implementation:

1. Could you please tell me how your organizations experience is in implementing
HR strategy?
2. Could you please tell me what factors influence to the success of HR strategy
implementation and how? ( if themes have not emerged yet, then followed by
further questions)
3. Could you please tell me is there any influence of the quality of HR strategy to
the success of its implementation? (If yes, could you please tell me what your
organizations experience is with the influence of organizational factors to the
success of HR strategy implementation? Then followed by asking each quality of
HR strategy mentioned by respondent? If not, why?)
4. Could you please tell me is there any influence of organizational factors to the
success of HR strategy implementation? (If yes, could you please tell me what
your organizations experience is with the influence of organizational factors to
the success of HR strategy implementation? Then followed by asking each
organizational factors mentioned by respondent? If not, why?)
5. Could you please tell me is there any influence of HR department factors and the
success of HR strategy implementation? (If yes, could you please tell me what
your organizations experience is with the influence of HR department factors to
the success of HR strategy implementation? Then followed by asking each HR
department factors mentioned by respondent? If not, why?)

During the interviews, the interviewees quite often gave indirect responses, which
contained ambiguous meanings. This is a typical of a high context culture society, where
people tend to maintain harmony and avoid conflict. Facing this situation, the
researcher tried to clarify the ambiguity and politely asked participants to restate their
opinions. The researcher familiarity with the local jargon also allowed the questioning of
how organizations adapted to and or adopted local values. This local knowledge was
appreciated by the interviewees and this helped in the smooth conduct of the interviews.

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All participants agreed for interviews to be recorded, although in certain circumstances

when they explained a sensitive issue, some asked the researcher to turn the tape
recorder off for awhile. Again, they were reassured that only demographic
characteristics would be reported and other information would remain confidential.

In general, the participants were friendly and helpful during the interviews. Many of
them offered the researcher access to written documents that related to the topic.
Another phenomenon, although this was not part of the interview, was that quite often
participants asked about the researchers experiences when conducting interviews in
other organizations and places. Some requested the researcher share his academic and
practical experiences related to HRM, while at the same time, they shared their personal
experiences as HR managers. Some requested the researchers opinions and suggestions
on HRM practices in their organizations. Moreover, some also offered the researcher the
opportunity to present the research findings to their organizations after completing the
study.

3.5.2. Data Analysis Method

Qualitative data analysis requires the huge amount of information summarized,
described, and examined for patterns of relationship so the phenomena being studied can
be explained and constructed (Miles & Huberman, 1994; Strauss, 1987). Qualitative data
analysis can also be viewed as the process of organizing, categorizing, and meaningfully
interpreting the data (Creswell, 1998, 2003). To deal with the massive amount of data,
Patton (2002: 432) explains that qualitative analysis involves reducing the volume of
raw data, to reduce trivia from significant information, so that pattern can be identified
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and a framework for communicating the essence of what the data reveals can be
constructed.

In the sociological tradition, words are essential instruments in qualitative data analysis
to understand the nature of realities; they are the window into human experience (Ryan
& Bernard, 2000; Tesch, 1990). Accordingly, Richardson (2000) points out that
qualitative analysis and writing involve the researchers in making sense of the words and
their relationship to the subject being studied.

Constructing knowledge from the data is not a simple process; it must be done
analytically, carefully and rigorously. This process needs responsibility, integrity, and
honesty from the researcher (Jones, 2002). Simply pulling out a few themes and ideas
from the data does not constitute analysis. Janesich (2000: 387) underlines this by
stating: Simply observing and interviewing do not ensure that the research is
qualitative; the qualitative researcher must also interpret the beliefs and behaviours of
participants.

Miles and Huberman (1994) provide a model of qualitative analysis that consists of three
concurrent activities: data reduction, data display, and finally conclusion drawing and
verification. Data reduction is concerned with the process of selecting, simplifying,
abstracting, and transforming the data so they can be made intelligible in terms of the
issues being investigated. Data display goes a step beyond data reduction to provide an
organized, compressed assembly of information that permits conclusion drawing and
action (Miles and Huberman, 1994: 11-12). Drawing conclusions of involves stepping
141

back to consider what the analyzed data means and assessing the implications of this for
the research questions. Verification is the process of ensuring that conclusions are valid
and justified.

Creswell (1998: 190-195) provides a six-step general guide for data analysis in
qualitative research:
1. Organize and prepare the data for analysis; including transcribing interviews,
optically scanning material, typing up field notes, or sorting and arranging data into
different types depending on the source of information.
2. Read through all the data to obtain a general sense of the information and reflect on
its overall meaning.
3. Begin detailed analysis with a coding process.
4. Use the coding process to generate a description of the setting or people as well as
categories or themes for analysis.
5. advance how the description and themes will be represented in the qualitative
narrative
6. A final in data analysis involves making an interpretation or meaning of the data.

More specifically, this study employed the data analysis method from grounded research
tradition, and used a data coding procedure and constant comparative method (Charmaz,
2006; Creswell, 1998; Glaser, 1998; Glaser & Strauss, 1967; Strauss & Corbin, 1998).

In simple words, data coding is the process of categorizing and sorting data (Charmaz,
1983; Schwandt, 2001) which breaks data down into manageable and understandable
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fractions, relates, and integrates them to propose a theoretical construct (Charmaz, 2000,
2006; Glaser, 1995a, 1995b; Strauss & Corbin, 1998). The coding process
conceptualizes data into codes, categories, sub categories, properties and dimensions.
This means a massive amount of raw data is identified into themes and connected to
form a theory. Therefore, the data coding has an essential role to provide the building
blocks of theory. To identifying emerging categories the grounded theory researcher
needs to maintain their theoretical sensitivity at every step of data coding and the
constant comparative method is essential for doing this (Glaser, 1978; Strauss & Corbin,
1998). In this way, the constant comparative method clarifies emerging concepts,
categories and sub categories. In practice, the coding of data occurs at the same time as
comparing codes to codes, category to category, sub category to sub category, codes to
category, etc. (Glaser & Strauss, 1967). This iterative process is employed by grounded
theory researchers to define the basic properties and dimensions of all categories and the
relation between the categories to enrich and integrate the emerging theory.

Table 3.8 illustrates the data analysis method of grounded theory research and the steps
employed in this study. These will be discussed in the next section.

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Table 3.8: Data Analysis and Representation in Grounded Theory

Data Analysis and
Representation

Grounded Theory

Data managing

Create and organize files for data

Reading, memoing

Read through text, make margin notes, form initial codes

Classifying

Engage in open coding (categories, properties, dimensionalize

properties)
Engage in axial coding (causal conditions, context,
intervening conditions, strategies, consequences)

Interpreting

Engage in selective coding and development stories

Develop a conditional matrix

Representing, Visualizing

Present visual model or theory

Present proposition

Source: Creswell, 1998: 148-149

3.5.2.1. Data Transcription

All interviews were recorded by tape recorder, so the raw data were the cassette
recordings. To be analyzed all of data was transcribed onto paper in writing form with
the support of software program called audacity software. This is an audio editor and
recorder for private user that can be downloaded freely and legally from the internet; the
address is http://audacity.sourceforge.net/.

The process of transcribing consisted of two stages; firstly, transforming the data from
the cassette recorder into a wave format so it could be read by the software; and
secondly the researcher transcribed the wave format into written format. This software
was very useful because it provided many tools (such us change of speed, tempo, noise

144

removal, etc.) so conversations could be heard clearly by the researcher, and transcribed
precisely.

For accuracy purposes, all transcribed interviews were double checked by re-listening to
each cassette and checking it against the written transcription. All transcription and
checking was done by the researcher. Although this process was repetitive and time
consuming, this was a very important part of data analysis as it enhances the theoretical
sensitivity and understanding needed for data analysis and developing a theoretical
proposition. Listening, reading, identifying, relating, and integrating categories from the
data are interrelated processes in constructing a theory.

3.5.2.2. Data Coding

As recommended by Strauss (1987) and Strauss and Corbin (1990, 1998), data were
analyzed in four stages; open coding was used to break data line by line, axial coding
was used to relate categories as they were found, selective coding was used to integrate
components of theory, and a conditional matrix was used to locate phenomena within
the macro and micro context. Finally, the last stage was proposing theory. The data
coding process can be seen in figure 3.8.

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Figure 3.8: Steps in Data Coding

OPEN CODING
Discover Categories & their
properties & dimensions
Discover Subcategories &
their properties & dimensions
AXIAL CODING
Relating categories
to their sub categories
SELECTIVE CODING
Integrating & refining
the theory
CONDITIONAL MATRIX
Locating phenomenon
in its context (macro &
micro)
THEORETICAL
PROPOSITION

(Source: conceptualized from Strauss & Corbin, 1998)

3.5.2.2.1. Open Coding

Strauss and Corbin (1998: 101) describe open coding as the analytic process through
which concepts are identified and their properties and dimensions are discovered in
data. To operationalize the basic principles of open coding, moreover Strauss and
Corbin (1998:101) explain:

Phenomena: is the central ideas in the data represented as concepts

Concepts: are the building blocks of theory

Categories: are the concepts that stand for phenomena

146

Subcategories: are concepts that pertain to a category, giving it further

clarification and specification.

Properties: are characteristic of a category, the delineation of which defines and

gives it meaning

Dimensions: are the range along which general properties of category vary,
giving specification to a category and variation to the theory

The researcher broke the data down into discrete parts, which were closely examined
and compared for similarities and differences. Events, happenings, objects and actions or
interactions that were found to have similarities or were related in meaning were
grouped under the same categories. Grouping concepts into categories enabled the
researcher to reduce the number of units with which the researcher was working.

As recommended by Strauss and Corbin (1998: 114), once a category was identified, the
researcher then developed it in terms of its properties and dimensions. Properties
represent the general or specific characteristics of a category, while dimensions
represent the location of a property along a continuum. Advance action by the researcher
was to further differentiate categories by breaking these down into subcategories, by
explaining the when, where, why, how and so on of each category occurred. To identify
categories and subcategories accurately, the strategy suggested by Strauss and Corbin
(1998) was employed; these were line-by-line microanalysis, analyzing a whole sentence
or paragraph, and then perusing the entire document.

147

Line-by-line analysis was employed at the beginning to generate the initial categories
(with their properties and dimensions) and to suggest relationships among the categories.
This was supported by analyzing whole sentences or paragraphs by asking What is the
major idea brought out in this sentence or paragraph? Similarly, the entire document
strategy was implemented by asking, What is going on here? and What makes this
document the same as, or different from, the previous ones that I coded? These
strategies were employed so categories and subcategories (with their properties and
dimensions) were captured accurately and completely.

The categories, subcategories, their properties and dimensions that emerged were
labeled, coded, and written into separate columns set up by the researcher for each
written transcription.

3.5.2.2.2. Axial Coding

Axial coding is defined by Strauss and Corbin (1998: 123) as the process of relating
categories to their sub categories ...(to) link categories at the level of properties and
dimensions. Accordingly, the focus of the researcher in this stage was how categories
are systematically developed and linked with subcategories.

Creswell (1998: 57) summarizes clearly what should be done in axial coding by saying:
In axial coding, the investigator assembles the data in new ways after open coding. This
is presented using a coding paradigm or logic diagram in which the researcher identifies
a central phenomenon (i.e., a central category about the phenomenon), explores causal
conditions (i.e., categories of conditions that influence the phenomenon), specifies
strategies (i.e., the actions or interactions that result from the central phenomenon),
identifies the context and intervening conditions (i.e., the narrow or broad conditions

148

that influence the strategies), and delineates the consequence (i.e. the outcomes of
strategies) for this phenomenon.

Guided by Strauss (1987), Strauss and Corbin (1998), the researcher:

Laid out the properties of a category and their dimensions

Identified the variety of conditions, actions/interactions, and consequences

associated with the phenomenon

Related a category to its subcategories through statements denoting how they are
related to each other

Looked for cues in the data that denote how major categories might relate to each
other

It was very often that the sense of how categories relate begins to emerge during open
coding. In other words, axial coding can sometimes occur simultaneously with open
coding. In some cases, the axial coding was completed immediately after finishing the
open coding. The researchers theoretical understanding played a key role in linking
categories and their sub categories.

3.5.2.2.3. Selective Coding

Selective coding is the process of integrating and refining the theory (Strauss &
Corbin, 1998: 143). Although the axial coding stage generates relationships among
categories and subcategories systematically, they need to be integrated to form a larger
theoretical scheme; this is the area of the selective coding. Creswell (1998: 57) advises
that in selective coding, the researcher identifies a story line and writes a story that

149

integrates the categories in the axial coding model. In this phase, conditional
propositions (or hypotheses) are typically presented. Strauss and Corbin (1998)
recommend two main activities for the selective coding stage: integrating categories and
refining theory. The integration process, requires categories be organized around a
central explanatory concept. The first step is to decide the central or core category that is
a representation of the main theme of the research. This step is critical because the
central category has analytic power to pull other categories together.

To assist the process of identification Strauss and Corbin (1998: 148-156) provide three
techniques; writing the story line, using a diagram, and reviewing and sorting through
memos. Although the researcher as the main technique used diagrams, story lines and
memos were very helpful in unifying the concepts. Diagrams were used to sort and build
the sense of logical relationships among the concepts that lead to integrative
explanations. The story lines were very helpful for keeping the researcher on the right
track in terms of the analysis, because they provide descriptive sentences that illustrate
what seems to be going on the data. Moreover, memos were used to store those that
contained clues for integration.

The next step was to refine the theory. Strauss and Corbin (1998: 156) state, refining
theory consists of reviewing the scheme for internal consistency and for gaps in logic,
filling in poorly developed categories and trimming excess ones, and validating the
scheme. These recommendations were followed; for example:

150

In reviewing the scheme for internal consistency and logic, the researcher checked
and rechecked the diagrams, story lines, and memos to make sure that theoretical
development was systematical and integrated the categories that had emerged.

The researcher also reviewed the raw data, the results of open coding and axial
coding and the memos to check for data that might have been overlooked, while at
the same time trimming extraneous concepts that did not contribute to understanding
of the proposed theory. This process also determines how well the abstraction fits
with the raw data, and helps make sure that there are no salient categories omitted
from the theoretical scheme.

3.5.2.2.4 Conditional/ Consequential Matrix

The conditional matrix is defined by Strauss & Corbin (1998: 181) as an analytic
device to stimulate analysts thinking about the relationship between macro and micro
conditions/ consequences both each other and to process. The Conditional matrix can
be categorized as a coding device that helps grounded theory researchers consider the
surrounding context as part of the analysis process. Moreover, the conditional matrix is a
device for tracking the various levels of influence, such as the micro or macro influences
upon the phenomenon being studied. Strauss & Corbin (1998) identify these conditions
may run from international to national, community, organizational and suborganizational groups, or individual and collectives, or actions pertaining to individuals.
They also mention these broader conditions affect on phenomena may include economic
conditions, cultural values, political trends, social movement, etc. The main role of the
researcher in this conditional matrix stage was to locate the phenomenon in context and

151

to show specific linkages between these conditions and integrate them into the proposed
theory. More completely, this is summarized by Strauss & Corbin (1998: 182):
The conditional/ consequential matrix is a coding device to help analysts keep in mind
several analytic points. Among these are (a) that macro conditions/ consequences, as
well as micro ones, should be part of the analysis (when emerge from the data as being
significant); (b) that the macro conditions often intersect and interact with the micro
ones and (c) thereby, in direct or indirect ways, become part of the situational context;
and (d) that the paths taken by conditions, as well as the subsequent actions/ interactions
and consequences that follow, can be traced in the data (the paths of connectivity).

3.5.2.2.5. Theoretical Proposition

After all coding processes were completed, the researcher was able to propose a
theoretical construct of SHRM within the Indonesian context. The coding processes
produce a theory, or theorize, which means work that entails not only conceiving or
intuiting ideas (concepts) but also formulating them into a logical, systematic, and
explanatory scheme (Strauss and Corbin, 1998: 21). This can be elaborated into three
theoretical constructs: the approaches to SHRM, the role of the HR department and its
people, and the determinants of HR strategy implementation. All findings of this study
will be presented and discussed in the findings and discussion chapter.

3.5.2.3. Manual Analysis

The process of data analysis was conducted manually in consideration of the
interpretive-constructivist-subjective philosophical underpinning. While the researcher
realizes that qualitative software packages that can be used to aid qualitative data
handling and analysis, this was not used in regard to Coffey, Holbrok and Atkinson
(1996), and Lonkillas (1995) concerns about uncritical adoption by the users. They

152

underline that in many cases, qualitative researchers, especially novice researchers,

focus on keywords formulated by software, and can lose the sense of the analysis in the
context and ignore memos from their field research. Similarly, Easterby-Smith (1991:
113) emphasizes that no package can substitute for the interpretive skills of the
researcher. Many of them can alleviate much of the clerical task of sorting words,
concepts and passages contained in the transcripts; but the identification of significant
themes, patterns and categories still has to be done by the researcher. In the same sense,
Tesch (1991) emphasizes clearly that the researcher must do the thinking and make
judgments. Noble (2002) supports these warnings. At first, he employed software for
data coding, however he stopped this it when conflicted with his memos.

Beside the philosophical considerations, there are some technical reasons for manually
handling the data analysis:

Interviews were conducted in the Indonesian language and there is no qualitative

data analysis software available for this language. Data was not translated into
English due to the characteristics of language. There are many hidden meanings
because of the indirect language and indirect culture of Indonesia (for an
example: when respondents, especially Javanese people, say Yes; it does not mean
that he or she really agrees because they say No very rarely when they do not
agree with something). Manual data analysis allows explicit and implicit meanings
to be explored comprehensively and because the researcher is Indonesian and
understands the Indonesian language and culture, this approach was best suited to
this study. In this case, the researchers memos written during interviews were very
useful.
153

The amount of data collected was not so huge it could not be manually managed.
Moreover, Webb (1999: 329) emphasizes that: when the data set is not large
and this is probably the case with most PhD studies- the additional work of data
management may not be justified.

Although this study did not employ computer software for the data coding process, the
researcher used info rapid a search and replace software for data checking purposes.
By searching for key words, this software is able to trace and highlight all sentences in
the database with this word. This was very helpful to check and recheck emergent
categories at any time. Info rapid search and replace software is also free for private use
and

can

be

downloaded

freely

and

legally

from

the

internet

http://www.inforapid.de/html/english.htm

3.6. Establishing Trustworthiness

As an academic-scientific process, achieving and maintaining rigour is an essential part
of all research and qualitative research in particular, and especially in grounded theory
research (Brinberg & McGrath, 1985; Creswell, 1998; Glaser & Strauss, 1967; Guba &
Lincoln, 1989, 1994, 1998; Kirk & Miler, 1986). Consequently, the researcher must be
seriously aware of fulfilling certain criteria and performing logical assessments in
formulating the research design, data collection and data analysis to ensure that the
whole research process and research findings are acceptable, honest and believable.

154

Lincoln and Guba (1985) propose trustworthiness as a set of criteria for judging the
quality or goodness of qualitative inquiry. They define trustworthiness as the quality of
investigation (and its findings) that makes it noteworthy to audiences. Trustworthiness is
widely accepted by qualitative scholars as a tool for evaluating qualitative studies (see
such as Creswell, 1998; Miles & Huberman, 1994; Patton, 2002; Scwandt, 2001;
Whiteley, 2002); therefore, trustworthiness was adopted in this study.

Grounded research uses four criteria to judge quality, as proposed by Strauss and Corbin
(1998: 268), they are: (1) judgments about the validity, reliability and credibility, (2)
judgments about the theory itself, (3) the decisions related to the adequacy of the
research process through which theory is generated, and (4) the conclusions made about
the empirical grounding of the research.

To establish the trustworthiness, selected respondent statements that relate to the themes
emerging in this study are presented in chapter four. Moreover, the complete translation
of these statements is provided in appendix 2.

3.7. Ethical Considerations

Qualitative research is primarily based upon what people in this case is the HR
managers- think, feel, and experiencing relation to SHRM in their organizations.
Involving human participants means it is critical and necessarily for the researcher to be
aware, understand and give close attention to the ethical issues that arise in a research

155

process. This includes the research design, data collection, data analysis, and presenting
the results.

The most important issues related to the ethical considerations when conducting
qualitative study and particularly grounded research were applied to the present study.
These include: (1) voluntary consent, (2) right to withdraw at any time, (3)
confidentiality, (4) privacy, (5) anonymity, (6) protection or avoidance of harm and risk,
(7) courtesy (Christian, 2000; Creswell, 2003; Howe & Eisenhart, 1990; Miles &
Huberman, 1994; Neuman, 2003; Patton, 2000; Ticehurst & Veal, 2000).

To ensure all ethical considerations were met, the researcher submitted a request for
ethics approval to the Research Ethics Board of Murdoch University in Perth, Western
Australia. The researcher did not conduct any data collection activities until the
Research Ethics Board released a letter granting approval (see appendix 1) and the
researcher complied with all ethical considerations:

The researcher sent a brief proposal, including a consent letter, to the potential
participants. This provided full information about the nature of the research in lay
terms, so potential volunteers could fully understand what they were being asked to
contribute to. The consent form was written clearly at a language level appropriate
for participants. This process was to ensure that potential participants were well
informed so the decision to participate in this study was voluntarily.

The researcher gave freedom to the participants to withdraw from the study for any
reason, including after they agreed to be interviewed or even had already

156

interviewed. In this study, some participants cancelled their interviews because of

personal or organizational issues, and no participant cancelled their agreement after
interviews were conducted.

To ensure that privacy, confidentiality, and anonymity of the interviewees responses

no individual or organization is named or can be identified. All responses are coded
based on the organizations initial, and as a result, all data remains confidential and
anonymous; only the researcher knows the individuals and organizations that
participated in this study.

3.8 Conclusion
This chapter has reviewed and justified the choice of research design, paradigm,
methodology, and method. Why the phenomena of SHRM in Indonesia should be
investigated within an interpretive paradigm, using constructivist ontology, subjective
epistemology, and qualitative methodology, and more specifically a grounded theory
method has been discussed. How to operationalize the research design has also been
explained. The interview methods and the manual data coding procedures for analyzing
the data have been discussed from both the theoretical and operational perspectives. To
establish the quality of the study, this chapter has also presented the trustworthiness
principles and ethical code of conduct that were maintained by the researcher throughout
the research process.

157

CHAPTER IV
RESEARCH FINDINGS

4.1. Introduction
This chapter presents the research findings from the interviews with sixty-three
Indonesian HR managers from across the agriculture, textile, hospital and hotel
industries. The findings are classified into three groups; they are the approaches to
SHRM, the role of HRM in organizations, and the determinants of HR strategy
implementation. A brief conclusion to the findings is provided at the end of this chapter.

As described earlier in the methodology chapter, data was analyzed using Strauss &
Corbins (1998) data coding method. The findings from the data analysis are presented
in terms of the phenomena, concepts, categories, sub categories, properties and
dimensions. Phenomena is the central ideas in the data represented as concepts; concept
is the building blocks of theory; category is the concept that stand for phenomena;
subcategory is concept that pertain to a category, giving it further clarification and
specification; property is characteristic of a category, the delineation of which defines
and gives it meaning; and dimension is the range along which general properties of
category vary, giving specification to a category and variation to the theory.

To be more understandable, the findings are presented in the narrative style as

recommended by Manning and Cullum-Swan (1994). Moreover, as suggested by Patton
(1990), to avoid ambiguity between respondents and researchers views, this chapter

158

presents respondents descriptions only; whereas the researchers interpretations will be

presented in the discussion chapter. This approach also ensures that the research findings
are viewed independently, so the validity and reliability can be assessed.

To protect originality, quotations from respondents are presented as they were spoken.
As recommended by Strauss & Corbin (1998), who suggest themes from the interviews
should be labeled in vivo, in the words used by respondents. Quotations from
respondents ensure that the real meanings are presented. The quotations are presented in
italics. A source for each quotation is also provided. The source of quotations are
presented by the code of each industry then followed by the number of the respondents.
There are four codes in the study; Ag: means the agricultural industry, Tx: textile
industry, Hs: hospital industry, and Ht: hotel industry. Therefore (Ag1) means a
quotation from agriculture HR manager respondent number one, (Hs1) means the source
of the quotation from hospital HR manager respondent number one, and so on. In
accordance with the confidentiality agreement, no names of each individuals or
companies are disclosed. Moreover, in certain circumstances, the symbol [*] is used
within the body of quotations to indicate the researchers clarification of the meanings of
some ambiguous or multi-interpretation words.

4.2. Background of Participants

Participants included sixty-three HR managers from manufacturing and services
industries across eight cities (Surakarta, Yogyakarta, Jakarta, Padang, Medan,
Banjarmasin, Makassar, and Denpasar) within five main islands in Indonesia (Java,

159

Sumatra, Kalimantan, Sulawesi, and Bali). In total, thirteen agriculture HR managers,

twelve textile HR managers, eighteen hospital HR managers, and twenty hotel HR
manager have participated in the study. The general characteristics of these HR
managers, are quite similar; they are mainly male, aged between thirty to sixty years and
the majority have a bachelors and master level. Experience in the HR field varied with
some having up to 15 years experience, however nearly one third had less than 5 years
experience, and just over one third had between six to ten years HR experience. More
detail on the profile of the HR managers can be seen in table 4.1.

Table 4.1: Profile of HR Respondents

Gender

Male
Female

Industries
Manufacturing
Services
Ag
Tx
Tot
Hs
Ht
Tot
9
10
19
14
13
27
4
2
6
4
7
11

Tot
Inds
46
17

0
6
2
5
0

0
3
4
4
1

0
9
6
9
1

1
2
6
9
0

2
13
2
3
0

3
15
8
12
0

3
24
14
21
1

Education Senior High Sch.

Bachelor
Master
Doctor (PhD)

1
9
3
0

2
9
1
0

3
18
4
0

1
8
8
1

0
19
1
0

1
27
9
1

4
45
13
1

HR
Experiences

5 or less
6 to 10 years
11 to 15 years
16 to 20 years
More than 20

3
8
1
0
1

3
3
1
2
3

6
11
2
2
4

8
6
3
0
1

5
8
6
1
0

13
14
9
1
1

19
25
11
3
5

Moving Jobs

Never
1x
2x
3x
4x
5x
More than 5
Total

1
2
4
4
0
0
2
13

1
3
3
2
1
1
1
12

2
5
7
6
1
1
3
25

3
9
3
1
1
0
1
18

3
1
3
7
3
1
2
20

6
10
6
8
4
1
3
38

8
15
13
14
5
2
6
63

Age

20 to 30 years
31 to 40 years
41 to 50 years
51 to 60 years
More than 60

160

In terms of the organizations profile, most establishments have existed for ten to forty
years and employee numbers vary from one hundred to more than five thousand people.
Most indicated their predominant strategy was quality, and for many unions power was
medium to strong. There is a significant difference in terms of their market.
Manufacturing industries had a market mix between domestic and export, whereas
services industries mainly focused on serving domestic consumers. More details on the
characteristics of the industries can be seen in table 4.2.

Table 4.2: Profile of Industry Respondents

Years of
Existence

10 or less
11 to 20
21 to 30
31 to 40
41 to 50
51 to 60
61 to 70
71 to 80
81 to 90
91 to 100
More than 100

Number of
Employees

101 to 500
501 to 1000
1001 to 1500
1501 to 5000
More than 5000

Industry
Manufacturing
Ag
Tx
Tot
Hs
2
3
4
1
0
6
2
8
5
2
3
2
3
4
5
1
0
1
0
1
1
0
0
0
2
0
0
0
2
0
0
0
4
0
0
0
1
0
0
1
0
1
2
1

Services
Ht
Tot
9
11
5
5
5
7
1
4
0
0
0
1
0
2
0
2
0
4
0
0
0
2

Tot
Inds
15
13
12
9
1
1
2
2
4
1
3

4
3
1
4
1

3
3
2
2
2

7
6
3
6
3

4
7
6
0
1

17
3
0
0
0

21
10
6
0
1

28
16
9
6
4

Market

Foreign
Domestic

9
4

3
9

12
13

0
18

5
15

5
33

17
46

Strategy

Price
Quality
Innovation

4
8
1

4
5
3

8
13
4

0
18
0

2
17
1

2
35
1

10
48
5

3
9
1
0
13

6
2
1
3
12

9
11
2
3
25

6
6
3
3
18

9
6
1
4
20

15
12
4
7
38

24
23
6
10
63

Union

Strong
Medium
Weak
No Union
Total

161

4.3. Research Findings

Each sections has a brief summary of the findings before the evidence supporting them
are presented. The information has been presented in the way to present evidence in a
logical format. The research findings are described in accordance with the following:
1. Phenomena:
The main phenomenon investigated in this study is the practice of SHRM.
2. Concept:
The main concept in this study is the SHRM within the Indonesian context.
3. Categories:
The main categories are (1) the approaches to SHRM, (2) the roles of HRM in
the organizations, and (3) the determinants of HR strategy implementation.
4. Subcategories:
a. The core subcategories relating to approaches to SHRM are (1) a best
practice and (2) a best fit.
b. The core subcategories relating to roles of HRM in organizations are (1)
a two-way linkage and (2) an integrative linkage.
c. The core subcategories relating to determinants of HR strategy
implementation are (1) credibility of HR strategy, (2) organizational
support and (3) the role of HR staff.
5. Properties and dimensions:
Given the large number of properties and dimensions, these are presented
directly following each subcategory and property.

162

4.3.1. The Approaches to SHRM

There are two subcategories relating to the approaches to SHRM found in both
manufacturing and services industry; namely the best practice (universalistic) approach
and the best fit (contingency) approach. These subcategories emerged from the HR
managers respond in interviews. The general consensus among HR managers is
summed up in table 4.3.

Table 4.3: Findings Related to the Approaches to SHRM

Subcategories

The General Consensus of Respondents Statements

The Best
Practice
(Universalistic)
Approach

HR systems have been well-tested for a long time. Proof is that

their organizations performance to date remains good. Moreover,
the production process has not changed much, companies markets
are already well-established, and the organizations cycle is already
in the mature stage so there is no reason to change their well
established HR system.

The Best Fit

(Contingency)
Approach

The business strategy is constantly changing to adjust to the

changing business environment. Consequently, their HRM must
also continue to align, so the organizational goals can be achieved.
In addition, HRM must also be able to adjust to the dynamics of the
internal and external organizational contexts.

4.3.1.1. The Best Practice (Universalistic) Approach

Ten HR managers (four from agricultures, three from textiles, and three from hospitals)
mentioned that their organization believed in a best practice approach. No hotel HR
managers mentioned that their organizations utilize the best practice approach. All
indicated their organizations employed the best fit or contingency approach.

163

The best practice approach assumes that some HRM practices are appropriate for all
organizations. This means there is a universal prescription or a general pattern that can
be adopted by various organizations to manage their people, regardless of the
organizations circumstances.

The properties of the best practice approach link to the approach of SHRM comprises
three themes; namely organizational process, market conditions, and organizational life
cycle. The general consensus among HR managers related to best practice can be seen in
the table 4.4.

Table 4.4: Findings Related to the Best Practice Approach

Properties
The
Organizational
Process

The General consensus of Respondents Statements

The organizations processes are simple and relatively unchanged
from time to time. The current HRM system allows all the
organizational processes to be managed properly.

The Market
Condition

The market is relatively stable. Even, it can be said they already

have a captive market. By using their current HRM system, they
prove that they are able to manage the company competitively.

The
Organizational
Life Cycle

The organizations life cycle is already in the mature stage. Their

HRM system has been established over time. It remains proven and
well established for managing their people.

Organizational Process
Nine HR managers across three industries believed that the HRM they practiced was
always relevant to achieve their organizational goals, often because their processes were
considered to be uncomplicated. Respondents mentioned dimensions related to simple

164

processes such as the number of employees, production process, employee control, and
the decision making process.

In relation to this theme HR managers said: the numbers of our employees are not
great; we have no problems with the current system [*HRM] (Ag4: 4); we are not a big
company (Tx6: 6); its simple... we are only a small textile company (Tx8: 4); we are
only a small hospital (Hs4: 5); we only have a small number of employees... so we keep
going with our current way [*HRM] (Hs16: 4).

In terms of the production process, HR managers comments included: the process is

no big deal (Ag1: 2); the process is simple and it has never changed (Ag2: 4); the
production process is easy... (Tx2: 4); the production process in our company is simple
so we dont need to conduct a complicated model in managing people (Ag4: 6); No...The
process is not complex (Tx6: 3); its only a routine and simple process (Tx8: 7).

Responses to the theme of ease of control of the employees was related to small number
of employees or the simple production process: a small number of employees means
that its easy to control them (Tx8: 7); their numbers are small , controlling them is easy
so we will maintain the currently available system (Hs16: 4); the process is simple and it
doesnt need much effort to control it (Ag1: 2); the production process is centered in a
big room, its easy to control it (Tx2: 4); Not many employees, so a simple process...of
course it is easy to monitor them (Ag4: 4).

165

In relation to decision process, the HR managers mentioned: we completely depend on

the owner decisions (Hs5: 5); the owner plays a dominant role in taking decisions (Ag1:
3); decisions are centralized in the owner (Ag4: 5); the owner plays a vital role (Tx8:
7); every decision in our company is based on the owner; and he thinks the current
model [*HR management model] is perfect, that it doesnt need to be changed (Tx2:
5).

Market Condition
The second property in the best practice approach was market condition. Because of
their success in the market, these companies did not consider changing their
management style. They believed their current approaches best suited their
circumstances.

The following selected quotations represent HR managers statements as associated to

being in mature and stable markets: we have been dominating the market; that means
we have succeeded in managing our human resources. What should we change it for? It
has been proven (Ag4: 4); we have a captive market; we maintain it with the current
process [*HRM]. We are on the right track (Ag7: 4); our market is already stable; our
main task is to maintain the stability of the process, including HR management (Tx8: 8);
consumers are aware of how we serve them, and they keep coming to us (Hs4: 5).

Organizations Life Cycle

The third property linked to the best practice approach was the organizations life cycle.
Some companies in the mature stage felt that their businesses were already on the right
166

track, so they would keep going with what they were doing. They illustrated this was
demonstrated by the stability of their processes, high profits, high productivity and low
levels of absenteeism.

The following selected citations support HR managers perceptions of the influence of

the mature stage of the organizational life cycle: our organization has had a long
journey and now we are in an established position; we think this is the best model
[*HRM] that should be maintained (Hs4: 5 ); the current system [*HRM] is the result of
a long journey of the organization, we assumed this is the best (Hs5: 5 ); all of the
organizational functions have already worked well; we just need to maintain them (Ag2:
5); our profitability is stable, it means that nothing is wrong... (Ag7: 4); high
productivity, high loyalty, low absenteeism; everything works well; nothing is wrong
with our system [*HRM] (Tx2: 5).

4.3.1.2. The Best Fit (Contingency) Approach

In contrast to the universalistic or the best practice approach, the best fit adopts a
contingency approach which focuses on the fit with the surrounding context. Central to
the best fit model is business strategy. In addition to this central property, other
properties were internal (organizational) context and external (environmental) context.
The general consensus related to the best fit can be seen in the table 4.5.

167

Table 4.5: Findings Related to the Best Fit (Contingency) Approach

Properties

The Business
Strategy

The General consensus of Respondents Statements

The business strategy is always changing to adapt to the
increasingly competitive rivalries. Consequently, HRM must also
continue to adjust itself in line with the changes of the business
strategy

Many variables within the organization have been changing to

align to the changing of either business strategy or business
The Internal
environment, including the organizational size, the organizational
(Organizational) structure, stage in the life cycle and access to capital. It is seems
Context
logical the HRM must also follow these changes to be more
compatible with the actual conditions of the organization.
The organizations external environment is rapidly changing; this
includes market competition, the economy, politics, the culture,
The External
(Environmental) technology, government rules, globalization and the dynamic state
Context
of the union. To be able to adjust to these changes, HRM should
also be adjusted to manage in the organizations new environment.

4.3.1.2.1. Business Strategy

Almost all of the HR managers who believed in the best fit approach identified business
strategy as the central alignment for HR strategy. Accordingly they emphasized that
(competitive) business strategy was the foundation when they developed their HR
strategy and with other related variables followed this. In other words, they believed that
business strategy played the most dominant role in HRM.

The HR managers realized that the business was the core determinant of the
organizations activities, for example: we are profit motivated; of course business
strategy becomes the main reference (Hs17: 2). One HR manager expressed
differently, saying HR should not become a barrier to business development: like it or

168

not, we [*HRM] must not be a barrier when there is a plan for business improvement.
That must not happen (Ag11: 3). Moreover another in a stronger statement said
business should be as the General or Commander of the organization: We have an
understanding that our General or Commander is business. HR management is not the
goal but is a tool to achieve the organizational objectives; so we are as a supporting
system (Ag11: 3).

Due to their understanding that business was the core determinant, furthermore the HR
managers who supported a contingency approach mentioned the importance of
alignment between business strategy and HRM. The following selected statements
expressed is view: our HR strategy approach depends on the business strategy that we
have chosen (Ag3: 3); the organizations goal becomes a main determinant in
developing HR strategy (Tx11: 4); always adjusting the business strategy... and HRM
must always be on the same track (Tx1: 8); if there is a change in strategy, we [*HRM]
must also change (Hs15: 10); in our field [*HRM], we [*HR department] have to adjust
to the organizational strategy and change quickly. If not, we will be left behind by the
rapid external and organizational change (Hs9: 10); whatever change happens in
management, the HR department must follow it; there is no constant general pattern
(Ht10: 15); thats right, there is no constant formula, I do believe in a dynamic role,
especially in HR (Ht11: 25).

On how to adjust to the changes in business strategy, some HR managers emphasized

that HR strategy should be adjusted gradually by saying: not radical modification, but
adjustments (Hs8: 12); not total changes (Tx3: 6); adjustments were done by priority
169

(Ag5: 9); strategy should be determined based on conditions (Tx3: 8); which contents
should be adjusted are flexible (Ht12: 18); we usually adjust it based on the financial
ability (Ht6: 7). Some other HR managers believed that adjustment should be done
spontaneously or automatically following the changing of business strategy: when
business strategy changes, automatically we have to change HRM (Ag12: 18) or by
saying influenced; of course HR policies will automatically adapt to the changes of
company strategy. It can be seen as a chain link (Tx5: 10). One of HR managers
mentioned the use of balanced score card: we align business strategy and HR using a
balances score card (Ag9: 3).

Another finding of this study was the belief by HR managers that alignment between
business strategy and HR strategy is a never ending process (Ag11:11). Furthermore,
alignment becomes spontaneous or even an un-recognized process due to the intensive
communication among key persons. One HR manager stated: because we regularly
meet, alignment was happening automatically (Ag9: 15); whereas another said
because we have meetings continuously, we did not feel something had changed; but in
fact, we adjusted something new to our HR strategy

(Ag11: 11). Finally, since

alignment between business strategy and HR strategy becomes a continuous process, it

is considered as a natural adjustment: we often dont recognize that we have adjusted
our HR strategy, so it happens naturally (Ag11: 10).

Examples of how HR departments adjusted their HR strategy to match the business

strategy were also given by HR managers, for examples: our company just changed the
market positioning; so we also responded by preparing our staff to be able to serve that
170

new segment at their best (Ht14:7). Another example was When a shift in business
strategy happens, we always follow it. In the past, our hospital placed technology as a
competitive advantage, but at the moment almost all hospitals have a similar strategy.
Then we turned to staff professionalism as a competitive strategy (Hs2: 13).

4.3.1.2.2. Internal (Organizational) Context

The organizations size, structure, stage in the organizational life cycle, and access to
capital or quality of business funding are the dimensions which relate to the best fit
(contingency) approach

Organizations Size
The HR managers mentioned that the number of employees should be considered
carefully in the HR strategy. This partially related to some issues: understanding the
strategy, participation in developing and strategy implementation, communication, and
controlling. In general, HR managers from bigger companies considered the size of
organization was a more important variable in developing HR strategy than smaller
ones.

The following statements illustrate the HR managers views on the theme of

organizational size: we feel we are still small, so we designed a HR strategy as simple
as possible, but able to support the maximum achievement of our organizational goals
(Ag10: 10 ); we must be careful in formulating a HR strategy because there are
thousands of people who we have to manage; it is not easy (Ag9: 7); we have many
employees, therefore the strategy to manage them is not easy (Ht14: 7); with
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approximately 10,000 employees you could imagine how difficult it is to make them
understand about the intentions of our corporate strategy (Tx4: 9); it is not easy to
communicate what we want with employees who have very diverse backgrounds; if we
are not careful in formulating the HR strategy, we'll be at a loss of control during
implementation because thousands of employees will be involved (Tx10:6); we are lucky
because we are a technological-intensive hospital, we can minimize the number of
people so it is easier to understand their wants and to control them (Hs9: 8).

Organizations Structure
HR managers considered that the philosophy underpinning the selected organizational
structure should be understood and accommodated into HR strategy. They explained that
different organizational structures play a different role in how they control the
organizational processes. They also stated that different structures have different needs
for developing and implementing strategy. Moreover, they believed that the more
complex the processes the more carefully the organization has to.

The study found three different types of organizational structure: We have a simple
organizational structure; it is a line structure. As a consequence, we adjust our HR
strategy so it will not create problems of communication, coordination, controlling, and
feedback (Ag8: 2); thats true... by using a matrix structure, our HR strategy should be
able to accommodate flexibility of all departments in strategy implementation (Hs7: 3);
we have a divisional structure. Accordingly, we should design HR strategy which able to
cover all of the divisions (Tx10: 3).

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Stage in the Organizational Life Cycle

HR managers said that different stages in the organization life cycle (start up, growth,
maturity, and decline) have different consequences for managing people to achieve the
organizations goals in that situation. Consequently, they declared that these different
stages needed to be examined seriously in relation to the HR strategy. The HR managers
identified that most of the organizations are in the growth (thirty four companies) and
mature stages (twenty seven companies), while only one company was at start-up and
one company was in the decline stage.

The HR managers from the growth stage organizations mainly focused on how
employees should be more productive to accelerate the speed of growth, for example:
the organization needs to move faster, we [*HR manager] have the main job to ensure
that people are able to support that (Ag8: 6); we are in the expansion stage, we need
more productivity (Ag12: 7); my boss told me: dont obstruct this growth with your
peoples problems (Tx3: 5); if needed, we put some non-core jobs to the third party
(Hs9: 8); we do not hesitate to learn with other hotels within the group to push the
productivity (Ht7: 7); we are in the expansion stage to boost revenue. HR should have
sufficient speed (Ht16: 5).

The majority of HR managers in the mature stage organizations pointed to the

importance of maintaining productivity, they said: we have to maintain our
productivity to ensure that we are able to maintain this stage (Ag6: 6); Because a
company needs a stable supply to maintain the market, the only answer from the HR
department is to maintain productivity and loyalty of employees (Tx4: 6).
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The HR manager from the start-up company emphasized: my priority is to prepare and
manage employees in terms of quantity and quality (Hs6: 6).Where the HR manager
from the company in decline explained: we are in a difficult situation. We have to
encourage innovation and creativity in our people to move beyond this decline (Ag3:
5).

Access to Capital or Quality of Business Funding

The HR managers considered that even the best HR strategy would have no meaning if
not supported by a sufficient budget. For that reason, accessibility of funding to support
HR department programs should be in place obligatory to the HR strategy. The
following statements support the importance of financial access in HRM: money plays
a significant role in HRM (Tx7: 5); how are we supposed to encourage productivity, if
there is no incentive (Ag 13: 9); a compensation strategy will be of no meaning if we
have not sufficient financial support (Hs3: 7) understanding that the money spent by us
[*HR department] will contribute to the organizations performance is important to be
understood by the entire organizations members; however we have to provide a proof
for that (Ht12: 6).

4.3.1.2.3. External Context

The dimensions linking the external context to the best fit (contingency) model are
market competition, technology, government rules, global changes, economy conditions,
culture, and the role of the union.

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Market Competition
HR managers reported that market conditions, either domestic or export are very
dynamic. Accordingly, organizations need to pay seriously attention to these if they
want to survive in this competitive arena. It is not only the existing players but the threat
of new comers that can be either local or international.

The HR managers in the agriculture sector were concerned with dynamic competition
for heir products and how to deal with the situation: our market expansion will be
Malaysia, China, and India so we have to look at our internal capability (Ag9: 15); the
market is always changing, we have to change too (Ag11: 12); whether we are still
competitive or not by using the existing strategy, it should be answered by the
organization (Ag11: 12). Competition was also a concern for the textile HR managers
particularly because of the invasion of textile products from China: yes... because
external conditions, especially the market competition forces us to change (Tx1: 4); the
textile market is very vulnerable, and has very competitive rivalry (Tx3: 9); product
competition has a big influence; especially now that there is a Chinese product with
quality at the same level, while the price is cheaper (Tx5: 10); competition in the textile
industry is very tight, especially with the entrance of textile products from China (Tx7:
7); we are not rigid, we see the market dynamics (Tx11: 1).

International competition was also a concern in the hospital industry. In addition to

competition among them, there is the changing habit among Indonesian people to go
abroad for medical treatment. Another trend is foreign hospitals operating in Indonesia:
hospital customers are not easy to be understood (Hs1: 17); the changing behavior for
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medical treatment abroad (especially Malaysia and Singapore) poses a threat to the
hospital. Moreover, some foreign hospitals have opened in Indonesia with a competitive
price (Hs2: 13); direct flight to Kuala Lumpur and Singapore make it easy for people to
get medical treatment abroad (Hs3: 20); customers often compare us with foreign
hospital services, while they want to pay less (Hs8: 3); there is open competition in the
hospital services (Hs13:1); there are many hospitals around us; thats a challenge
(Hs11: 2); we also have to see other hospitals, what kind of services they have (Hs12:
1).
The hotel HR managers were more concerned with domestic competition and also
mentioned the dynamic competition in their arena. For example: we always open our
eyes to other hotel services (Ht1: 8); the most influential factor is competition. Market
competition among five stars hotels in Jakarta is very competitive (Ht6: 2); there are
many new hotels established surrounding us, so we have to compete fairly (Ht9: 2);
today, our competitor invents x; tomorrow what will be invented? (Ht12: 3); the hotel
market in Jogja is very competitive (Ht 13: 7); for sure, competition is the most
influential factor. Our market is locals, and there are many hotels surrounding us (Ht15:
5).

Technology
HR managers described technology playing a significant role in the changes to people
management. Some of the issues related to the rapid changing of technology, such as,
information technology, production technology, material handling technology,
communication technology and transportation technology. These changes have

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considerable implications for HRM as they affect the number of people, work systems,
coordination and control, and the decision making process.

HR managers from the agriculture, textile and hospital industries were truly concerned
with the rapid changes of technology and the implications for HR strategy: previously,
we worked manually, now we are a computerized based company. The number of people
has been adjusted (Ag6: 2); Technology is changing dramatically; they [*employees]
learn a lot, saving cost, improving productivity... (Ag8: 3); we positively respond to the
changes of technology; we do not mind spending a lot of money (Ag12: 20);
technological changes are very influential (Tx1: 8); technology is not a simple problem
(Tx3: 9); textile technologies should be changed gradually every five years if we dont
want to be categorized as an out of date company. Whereas, the cost is very expensive
and bank loans are not easy (Tx5: 10); hospital equipment is very expensive; while their
technology changes continuously (Hs1: 17); we combine between good people and high
technology (Hs8: 4); advanced equipment must be backed up by sufficient funding
(Hs11: 2).

Different from the HR managers in agriculture, textile, and hospitals, the hotel managers
mentioned that technology was not such a crucial issue as in other industries: there is
no significant differences among hotels in terms of the technology that they use (Ht4: 7);
yes, we upgrade our equipment gradually, but it is not the most important thing (Ht11:
5); we provide a free wireless broadband for customers, but other hotels have also
similar facilities (Ht 12:7); there is standard technology for hotel industry, such as lifts,
air conditioning, entertainment, bath rooms, and kitchen sets (Ht17: 8); online booking,
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payment with cards... I think almost all of hotels, especially four and five stars, have
also these services (Ht19: 10).

Government Rules
The most frequent government regulation mentioned by the HR managers was Act
Number 13 of the Year 2003 which concerns Manpower. Furthermore they stressed the
importance of understanding and following the Act as the most important rule for
managing people in their organizations. This act regulates the basic principles of
manpower management in Indonesia; such as, employment relations, protection, wages
and welfare, and industrial relations. More specifically it sets the minimum wage that
must be met by companies. HR managers receive notifications of district minimum
wages from their districts manpower ministry when it is updated every year.

The following selected quotations express the HR managers views related to government
rules: the most influential external factors are from the government such as the
regional minimum wage regulation (Ag3: 4); at least, we should follow the minimum
wage regulation but we are above it (Ag6: 21); government rules related to manpower
and wages must be followed without question (Tx3: 10); regulations are not negotiable
(Tx5: 10); we refer to act number 13 year 2003; thats the basic guidance (Tx11: 6);
regulations are given factors; we have to follow them (Tx12: 6); our man power
regulation is not hard to be followed (Hs1: 17); we should understand the man power
regulation so it will not obstruct us (Hs9: 10); our fundamental rule is not to violate the
law (Ht5: 10); the man power act absolutely must be followed (Ht14: 7); the external
variable is the government rules, especially the minimum wage regulations (Ht16: 5).
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In addition to Act number 13 Year 2003, the HR managers also mentioned other
government rules, such as export-import regulations, for example, we have to obey the
export-import regulation (Ag5: 1); before the free market, exports must be via
association, but now we directly export to customers (Ag7: 1); we have to obey the
export quota although we are able to export more than that (Tx5: 10); another
regulation was the industrial waste regulation there is a government rule for treating
waste safely (Ag13: 5); and, similarly, hospital regulations hospitals are highly
regulated by government, we must obey all of the rules very carefully (Hs 10: 15).

Global Changes
The global changes identified by HR managers included the mobility of foreign
employees, international standard processes such ISO, and regionalization and free trade
agreements. The HR managers suggested that these aspects must be considered in the
HR strategy so the organization does not have any problems from international
communities, such as an export ban, restrictions of raw material imports and or other
forms of unofficial embargos from other countries.

Regionalization of market has had a particular impact on the manufacturing industries,

for example because APEC is coming, we have cut some non core business functions...
to be transferred to third parties (Ag6: 2); APEC, AFTA, and now CAFTA, whats next?
(Ag9: 6); AFTA is not easy for us; now comes CAFTA... [*China ASEAN Free Trade
Area] (Tx3: 9); CAFTA has been implemented; what should we do? (Tx5: 10).
International standards or certificates such ISO were also mentioned by the HR
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managers: changes to quality reports and the production process as required by ISO
(Tx13: 6); we follow what are desired by ISO (Tx5: 10); as an example; ISO requires
the coaching of staff periodically. If we do not do so the certificate may be cancelled
(Tx7: 2). While other HR managers were concerned about raw materials: raw
materials; cotton is 100% imported (USA, Australia, China, India, Pakistan); chemical
materials are also imported, production machines & spare parts are also imported. The
marketing orientation is also to export, to Europe and Asia. Thus, this company is very
sensitive to the global dynamics (Tx4: 1).

In terms of international mobility of people, the HR managers also mentioned the

implications of this to the organizations: foreign staff are entering the Indonesian
manpower market. It should encourage us to find better systems in recruiting local staff
so their quality is not worse than foreigners (Ag6: 22); as an international chain hotel,
there are some expatriates here (Ag6: 5).

Economic Condition
The most influential economic variable recognized by the HR managers as a turning
point for HRM practices in Indonesia was the economic or monetary crisis of 19971998. At that time, the exchange value of the Rupiah to the US Dollar was falling down
and interest rates were also very high. As a result, many companies in Indonesia went
bankrupt and terminations became were widespread. The HR managers mentioned that
this tragedy changed the mindset of people in Industry generally and within HRM, and
subsequently the role HR plays has become more significant in organizations.

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The HR managers also related some positive outcome of this crisis on HRM as
represented in the following statements: the impact was positive for us because we are
able to change our work system (Ag8: 2); we really started to become professionals
after the crisis, the momentum of the crisis made us aware, in terms of managing people
professionally (Hs12: 1); in 1998-2003 (economics crisis), we didnt recruit employees.
We hired seasonal employees so there was no fixed cost for that (Ag5: 9); during the
crisis, mass dismissal was done. We learned from that, and now we are growing again
(Tx10: 9); during the crisis, we adjusted and modified our HR system to be more
reliable in facing the turbulence (Ht17: 8).

In addition to the economic crisis, the HR managers also mentioned other economic
factors, such as the inflation rate, exchange rate of the Rupiah, and the labor market. In
relation to the inflation rate, they emphasized the influence of inflation on HR strategies,
especially compensation, incentives, and training strategies: Inflation is also important
and should be taken into consideration...How is the purchasing power from the salary
that they have received. If the salary cannot meet the necessities of life, how can we
expect them to be productive? (Ag12: 3); when inflation was high, we had difficulties to
adjust the employees salary policies (Tx1: 2); the increase of the salary level in our
company is strongly influenced by inflation growth (Tx7: 3); dont forget... the
operational cost of HR strategies, particularly those dealing with external partners, are
strongly influenced by the rate of inflation. The higher the rate of inflation, the greater
cost we needed, for example trainings cost... (Hs15: 6); if inflation gets high, the
purchasing power of consumers will decrease, the corporate revenue will also decrease,
so how do we pay the employees salary? Whereas, they need more money to survive in
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this difficult situation (Ht5: 4); if inflation is stable, especially low [*and stable], it will
allow us to be better in formulating compensation and incentive strategies (Ht13: 5).

The exchange rate of Rupiah to the US dollar was also considered an important factor
for some, when formulating HR strategy, more specifically this related to expatriate
salaries and the cost of imported raw material: If the Dollar exchange rate is high
[*expensive], its not easy for us to pay the expatriates salary (Ht8: 3); the effect of
Dollar is not really significant.. we predict it annually. Only when high deviation of
prediction happens, the problems will arise (Ht17: 2); when the Dollar goes up, we will
have trouble because we import raw materials while our market is local (Tx4: 7). The
high rate of dollar could also benefits some by reducing the costs of local materials
(including employees) or improving the return for locally based companies with an
export market orientation, especially the agriculture industry: This is the benefit of
being locally based. We are not much influenced by the dollars volatility (Ag5: 7); we
actually receive more benefit if the value of Dollar gets higher. We use local raw
materials and employees, while our market is exports (Ag10: 4).

Culture
As respondents were scattered throughout Indonesia multicultural aspects country
influenced HR practice. The HR managers said they have to manage the differences
between organizational culture and local culture wisely in the HR strategies. Moreover,
they identified some specific topics related to culture: work mindset, employees values
and belief, employees behavior, and acculturation management.

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The influence of local cultures on the organization and how organizations manage these
are seen in the following selected statements: externally, the most influential factor is
culture; In Minang [*Padang, West Sumatra], cultural values greatly affect peoples
lives, including their working lives (Ag3: 2); honestly, there is an influence from local
culture; we are in the Javanese culture society. We were born and became a big
company in Yogyakarta (Ag6: 2); generally, there is an influence from local cultural
values (Ag11: 16); we are established in the Javanese culture society; Yogyakarta. So,
the Javanese culture can be felt easily (Tx5: 10); because we are established in the
society which upholds cultural values, so Balinese traditions become part of our daily
work life. We are also very close with the Hindu community (Ht8: 3); generally, the
Banjar people have a negative image about hotels. It becomes our challenge to provide
evidence that Hotels could be a clean business (Ht11: 9); we highlight Javanese
culture, although our approach to employees is a multi-cultural approach (Ht17: 9).

The characteristics of people across the five main Indonesian cultures are represented by
the following HR managers statements: Minang people are egalitarian, very
democratic. They do not hesitate to speak out and to be criticized (Ag3: 8); the
characters of Medan [*North Sumatra] people are unique. They tend to be
temperamental and direct (Ag12: 4); the characters of Javanese people are humble and
submissive. They are loyal and not demanding (Ag5: 8); Banjar [*Banjarmasin, South
Kalimantan) people are gentle. The most important thing is dont offend them. They are
similar to Javanese people (Ag8: 8); the characters of Makasar people are
temperamental, quick-tempered; but they have a high responsibility. To handle them, we
should behave gently. Because if something hard meets something also hard; they will
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be broken. However, in certain times we should behave hard, while in other time we
should behave as a friend (Ag10: 14); Balinese people have great respect and abide by
the traditions rules. They tend to be honest and friendly people (Ht8: 2).

In terms of positive cultural values among societies and how these can be managed by
organizations, the HR managers explained: Minang people prefer to be traders; if they
are productive they will receive more. We translate that with an incentive model in the
compensation system (Ag3: 8); Javanese people are not demanding (Ag5: 8); it tends to
be easier to manage Javanese people, including their loyalty and productivity (Ag3: 8);
the good thing about Javanese people are that they are submissive, not much
complaining, they understand when the company is in a difficult situation (Tx1: 7);
Makasar people are temperamental, however, if we approach them in a proper manner
they will behave and work nicely (Hs6: 6); Makasar people are temperamental,
however, when they can accept the reasons they will be loyal (Hs 13: 6); when serving
guests, the characters of the Makasar people [*temperament] do not appear. They work
as a professional (Ht3: 10); generally, Banjar people are friendly and they have a high
teamwork orientation (Ht9: 5).

In terms of negative cultural values among the societies and how organizations should
pay attention to them, the HR managers recommended: Minang people have greater
attention to people from their family when working in the same organization (Ag3: 8);
Javanese people tend to be slow and submissive; they have no great fighting spirit (Ag5:
8); Here is not an industrial region. Their culture is agrarian (Ag6: 6); the weakness of
Javanese people is that they are slow; so they are not easy to be motivated (Tx1: 7);
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because of the influence of agrarian culture, the spirit for self-development is not high
(Tx9: 7); actually, Minang culture does not align with the hotel values. The most basic
principle in the hotel industry is to serve while Minang people want to be served (Ht1:
4); it is not easy to hire Medan people to work in hotel industries. They tend to be
temperamental (Ht2: 5); because they are temperamental, Makasar people often do not
realize their faults. They to point the mistake of others or even their superiors (Ht4: 4);
Balinese people have many traditional ceremonies which affect work hours. We should
be more flexible, every single individual has the flexibility to manage their holidays, as
long as they dont conflict with the organizational rules (Ht8: 2).

Union
HR managers said that unions, as the representation of employees, played an important
role for conveying the aspirations of employees. Moreover they suggested the unions
could play a critical role as a business partner.

The following statements illustrate how important the role of unions is and how they
should be managed: our union has a strong power, but we have a good relationship
(Ag1: 7); the most important thing is that we have to listen and have communication
with the union (Ag7: 7); the union and the company are as partners, so we have
continuous communication to discuss employees issues and how to make the
organization better (Tx1: 2); the management involves the union to discuss
organizational issues via formal meetings every three months (Tx5: 9); we have a formal
interaction with the union, then the result is signed by the management and the union as
a mutual work agreement and reviewed every two years (Tx7: 4); to make a conducive
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work environment, a mutual work agreement which is signed by the union and the
company should be implemented consistently by both parties (Tx9: 9); Here, the union
exists to ensure that employees rights are fulfilled by the company (Hs7: 19); we
provide freedom for the union, moreover they become a partner (Hs9: 9); I think the
relationship between the company and the union is in harmony, but democratic (Ht5:
13); in certain situations the union is involved in making decisions (Ht6: 21); the union
in this hotel consists of smart people; it becomes a dynamic partner to make our
organization better (Ht7: 7); the union has a very strong position in this hotel. We put it
as a business partner (Ht13: 7).

4.3.2. The Role of HRM and Its People in the Organization

The core subcategories relating to the role of HRM and its people in the organization are
two-way linkage and integrative linkage. The general consensus among HR managers
related to the role of HRM in the organization can be seen in the table 4.6.

Table 4.6: Findings Related to the Role of HRM in the Organization

Subcategories

The General consensus of Respondents Statements

The Twoway Linkage

Role

Although the organization assumes that people are important assets,

HR managers have not been involved in the overall strategic process.
They are involved in the strategy formulation and execution but not
in the decision making.

The
Integrative
Linkage Role

Since people are considered the most important asset in the

organization, the HR managers play a full strategic role. They are not
only the executors of the strategy, but they also are involved in the
formulation and the strategic decision making. They are involved in
the overall strategic processes.

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4.3.2.1. The Two-Way Linkage Role

In the two-way linkage, HR plays a dual function in formulating and implementing
organizational strategies, although HR is not involved in strategic decision making. Four
HR managers from the agricultural companies, six HR managers from the textile
companies, and five from the hospitals, and in all fifteen HR managers who stated that
their organizations were using HR in a two way linkage role. No hotel HR managers
mentioned that the two-way linkage approach was used in their organizations.

The core properties of two-way linkage embraces to three themes: organizational

mindset, organizational structure, and informal strategic decision processes. The
general consensus among the HR managers related to the two-way linkage can be seen
in the table 4.7.

Table 4.7: Findings Related to the Two-Way Linkage

Properties

The General consensus of Respondents Statements

The Organizational
Mindset

The HR managers role in the organization is to formulate

and to implement the strategy. They do not decide the most
suitable strategy.

The Organizational
Structure

HR departments have no formal representation in the

structure of the strategic decision making. As a result, they do
not involve in deciding the strategy.

The Informal
Strategic Decision
Process

HR managers do not even have an informal role in the

strategic decision making. The Strategic decision making
process is a formal process and they do not have
representations there.

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Organizational Mindset
HR managers indicated that where the organization puts human in the organizational
process determine the influence of HR department and its people in the strategic
decision making process. They clarified that share holders played a dominant role in
how the mindset of organization should be. Moreover, they felt that their organizations
placed them as strategic partners, in that they were involved in developing the business
strategy and translating this into HR strategies and implementing these; but they were
not involved in strategic decision making.

In terms of the role of the HR department, four agricultural HR managers explain their
experiences in designing and implementing strategy but not in deciding strategy: in
corporate planning, I [*HR manager] contribute a work plan and inputs; however the
final decision is with the director (Ag1: 2); we are involved in planning only, the
management makes a decision then we implement it. Of course we provide inputs (Ag2:
5); the HR department has a space to talk, but not to decide (Ag4: 3); yes....we often
give contributions. Thats my job... (Ag7: 3).

Similarly, six textile managers described the two-way linkage role in their organizations,
as illustrated in the following quotations: for strategic direction, our role is to provide
inputs and alternatives (Tx2: 2); the HR department is not involved in making decisions.
We implement what the management decides (Tx4: 2); we are as an intermediary
function to supply inputs from the bottom to the top (Tx6: 6); so far, the role of the HR
department is not part of strategic decision making (Tx8: 1); the organization has not
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involved us yet; our roles are giving suggestions and implementing decisions (Tx9: 1);
we arent involved in strategic decision making; if implementing, yes... (Tx10: 10).

Five hospital managers also emphasized two-way linkage roles by saying: in terms of
strategic planning, the HR department provides some proposals (Hs1: 4); we prepare
scenarios, decision is not our portion (Hs4: 3); we are involved in terms of supplying of
strategic plans only (Hs5: 4); the HR department is mainly implementing what decisions
have been made, then giving feedback (Hs14: 3); a strategic role? Not yet really.... we
supply strategic plans and evaluations to the management (Hs16: 2).

Organizational Structure
HR managers said that the organizational structure is the formal expression of roles for
parts of the organization, including the HR department. More specifically, they indicated
that whether the HR department has a representative in the strategic decision structure or
not, clearly indicates whether HR department plays part in the decision making or not.
Furthermore, because they are not part of the strategic decision board, their role is
related to designing and implementing strategy only, while the final strategic decisions
completely depend on the strategic decision board.

All sixteen organizations that mentioned two-way linkage role of HR, confirmed that
they have no specific HR representation in the strategic decision board. The lack of a
role as the decision making table can be seen in the following representative quotations:
we have a CEO, director of finance, marketing, and general affairs. There is no
specific HR director as part of the strategic decision board, so formally we are not part
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of the decision making (Ag7: 2); the HR department is in the general affairs structure,
not specifically as a HR department (Tx4: 1); we are report the vice director for
administrative and general affairs (Hs4: 4 & Hs5: 3).

Informal Strategic Decision Process

HR managers mentioned that besides the formal decision process, organizations usually
have an informal process and sometimes decisions can be influenced at this level. The
sixteen HR managers in the two-way linkage group indicated that such informal
processes in their organizations were very rare. If there is an informal agreement, it may
be a non-binding agreement. As the result, the contribution of the HR department is
purely formulation and implementation of the strategy; they are not strategic decision
makers. This is demonstrated in the following quotations; The strategic decisions
completely depend on the official decision of the strategic board; while we are not there
(Ag4: 2); we have informal discussions, but often the decisions are not as an informal
agreement (Tx6: 3); formally we are not involved in the strategic decision process yet.
On the other hand, there is no informal decision process (Hs1: 4).

4.3.2.2. Integrative Linkage

Through the integrative linkage, HR participates throughout the strategic formulation
and decision process and also plays an integral role in developing and implementing the
organizational strategy. In this role, HRM is a vital part of senior management and effort
is made to integrate employee needs and business objectives to meet long-term
organizational goals. Nine HR managers from the agricultural industries, six HR
managers from the textiles, thirteen from the hospitals, and twenty (all) from the hotels,
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and in all forty-eight HR managers who stated that their organizations were using HR in
an integrative role.

The core properties of the integrative linkage, which relates to the role of HR
management in organization, consists of three themes, these are the organizational
mindset, organizational structure, and informal strategic decision process. The HR
managers general consensus to the integrative linkage can be seen in the table 4.8.

Table 4.8: Findings Related to Integrative Linkage

Properties
The Organizational
Mindset

General consensus of Respondents Statements

The organizations put HRM into the entire strategic process;
including formulation, decision making and implementation
strategy.

The Organizational
Structure

HR departments are part of the strategic decision board in the

organizational structure. Since they are represented in the
structure at the decision level, they are actively involved in
the strategic decision making processes.

The Informal
Strategic Decision
Process

Although HR managers are not part of the strategic decision

structure, they usually contribute informally to decisions as
the result of intensive communication. The strategic decision
making process in the formal structure tends to be a
formalization process

Organizational Mindset
HR managers across industries indicated that their organizations put people as the most
valuable asset. Accordingly, HRM plays a strategic role throughout all the
organizational processes and is actively involved in strategic decision making process.

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The following statements describe the organizational mindset of agricultural industry;

we [*all of managers] have an equal role from formulating to making decisions (Ag3:
2); the concept of the strategy has been discussed in the meeting; so the decision is the
result of joint decisions [*including HR department] (Ag5: 2); when the company wants
to release a new strategy, the management always involves the department head
[*including HR], with the deliberations of the manager. They are more involved in
decision making; when it is announced, we are all ready (Ag6: 7); our organization
strongly believes in the principle of cross-departmental, mutual contribution; we make
decisions together [*including HR department] and implement them together as well
(Ag10: 14); we are grateful that the board is listening to our inputs [*HR departments
inputs] were even involved in decision making (Ag12: 22).

The following quotations express the situation in the textile industry: so far... my
position [* HR manager] has been very strategic. It can be said that I am as an acting
director (Tx1: 4); we provide alternative strategies, then we discuss them to make
decisions (Tx3: 2); we are involved in a strategic meeting annually (Tx7: 2); humans
are considered the most important asset, not surprisingly, the HR department plays a
strategic role (Tx11: 4); I am [*HR manager] a strategic partner with CEO,
consequently I am involved in strategic decision making (Tx12:2).

The Hotel HR managers stated that HR is considered their most valuable asset,
particularly as they are a service industry. Not surprisingly, all of the hotel HR managers
claimed that their organizations integrated HR and actively involved HR throughout the
strategic process, including formulation, decision making, and implementation. There
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were found similarities among the HR managers roles in the hotel industry, each was as
part of the decision making board, usually called an executive committee. This
committee consists of the general manager and other functional managers, such as
marketing, finance, HR, food and beverages, etc.

The following comments illustrate the rationales for the hotel industry using an
integrative role: we make decisions via meetings with all of the department heads and
the general manager (Ht3:2); we have an executive committee meeting involving the
GM and the five department heads; namely assistant executive manager, personnel
manager, sales manager, communications manager, and financial controller. This is
where strategic matters are decided together (Ht4: 3); ... then we make strategic
decisions by the executive committee (Ht9: 4); ... so the involvement of the HR
department is very intensive in designing a strategy, deciding what's best, doing it, and
even to the control mechanism (Ht12: 2); we have enough space to deliver the program,
considerations, thoughts, and are also involved in determining the final decision (Ht13:
2); we [*HR department] sit together in the executive committee, the GM with all
managers. We sit together so that all departments can brainstorm before making a
decision (Ht14: 2); the HR department is always involved in strategic decision making,
because we are members of the executive committee (Ht16: 1).

Similar to the hotel industry, the hospital HR managers also recognized the importance
of the HR role in the organization. Although recently technology has played a critical
role, they did mention that those behind the technology are still human. It is not
surprising, that most of these managers (thirteen of eighteen) claimed that HRM in their
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organizations could be categorized as an integrative role, as expressed in the following

quotations: humans are the main raw material in our organization. Accordingly, we are
placed as strategic players (Hs3: 7); the managers [*including HR managers] provide
data, give inputs, and are involved in decision making; they are also as the main
executor (Hs7: 7); organizational strategy always changes dynamically. The role of the
HR department is not only in implementation, but we are also involved in deciding
policies actively (Hs9: 9); the cycle of plan-do-act-feed back-new decisions, runs
continuously and we are engaged together (Hs12: 8); long-term planning is created by
the planning directorate, then decided by the board of directors [including HR director]
(Hs13: 2); integrative...however the process is bottom up. HR managers should seek
advice as much as possible to be brought into a decision-making forum (Hs17: 3).

Organizational Structure
HR managers across industries mentioned that how SHRM is viewed in the
organization, can be seen in the organizational structure. Moreover, they reported that
the HR department is part of the highest structure in their organizations. HR is officially
recognized in the strategic decision making structure, and therefore considered as an
active strategic player.

HR managers from the agriculture, textile and hospital industries mentioned there are
many variations of where HR position sits in the organizational structure; however the
essence of it is to ensure the HR manager is in the strategic structure. The following
selected quotations express this issue: the highest structure consists of a director, then
followed by marketing, production, technique, finance and HR managers (Ag3: 2); the
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HR department is a member off all strategic committees (Ag9: 5); the HR department is
part of managing strategic directions,

so it is called a strategic human resource

department (Ag12: 3); my position [*HR manager] is directly under the director; and I
often take the role of an acting director when he goes out (Tx1:1); clearly, our structure
shows that the head of the HR department is a part of the strategic decision structure
(Tx5: 3); the highest structure of the HR department is the vice director of HR (Tx7: 2);
as the HR director, my position is within the second layer of the structure (Tx11: 1); the
highest person in the HR department is the vice director of HR, and of course he is a
member of strategic board (Hs6: 3); we have one director and four vice directors, they
are: clinical services, supporting clinic, finance, and HR (Hs12: 4).

In relation to the hotel industry, this study found there were similarities in organizational
position structure among respondents. In general, hotels are organized by General
Manager (GM) then a number of department heads or divisional heads and these
certainly included HR. Strategic directions and daily operations are decided in the
meeting between the GM and these department heads. The following selected quotations
clarify these findings: the highest structure in this hotel is the general manager (GM),
and is then followed by eight department heads including HR. These nine positions are
the highest decision makers (Ht3: 3); monthly, there is an executive committee which
consists of the GM and divisional heads including HR. All things related to the hotel are
discussed and decided here. (Ht6: 6); the highest meeting is the meeting between the
GM and the eight department heads including HR. We call this meeting an executive
committee. Here, all strategic decisions are made (Ht9: 4); the highest structure is the
GM, who is supported by five division heads; one of them is HR. Those six people are
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the members of the executive committee, the highest structure of decision makers (Ht12:
1).

Informal Strategic Decision Process

In addition to the formal process, one textile HR manager and one hospital HR manager
said that informal strategic decision making processes also occurred in their
organizations. Although the organization has not placed them in the strategic decision
board, they have considerable influence to affect a strategic decisions decided by the
board. Furthermore they described the board meeting as a formal process to verify the
decisions after the real discussions before the meeting have developed solution.

The statement from one textile HR manager was: Although I am the highest person in
the HR department, I am not part of the strategic decision board. However, experiences
show that a strategic decision that is created is no more than what we discussed not in
the strategic board. Perhaps this is because my role is quite central in the
organizational restructuring process that is currently underway (Tx3: 4). The
explanation from one hospital industry is: Our hospital is unique and we are like a
family rather than a formal organization. Almost all organizational decisions are the
result of discussions outside the strategic board meeting. There are strategic meetings,
but they tend to be the formalization process of what has been agreed in discussions
outside the strategic board meetings (Hs7: 2).

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4.3.3. The Determinants of HR Strategy Implementation

The core subcategories connecting HR strategy implementation are credibility of HR
strategy, organizational supports, and the role the HR department and its staff.

HR managers across the industry sectors believed that to be successful in implementing

HR strategy, the strategy must be credible, get adequate organizational support, and the
HR managers should be in the right role. The general consensus among the HR
managers related to the HR strategy implementation can be seen in table 4.9.

Table 4.9: Findings related to the Determinants of HR Strategy Implementation

Subcategories

The General consensus of Respondents Statements

The
Credibility of
the HR
strategy

The HR strategy cannot be implemented successfully if that strategy

is not relying on the business strategy and the real conditions of the
organization. It is impossible to achieve if the HR strategy stands
alone and lacks interaction with other organizational factors.

The
A good HR strategy will be nothing if there is no support in the
Organizational physical and non-physical environment. It may be possible to
supports
implement a good strategy without supportive environments;
however the performance will not be optimal.

The Role of
HR managers

When the quality of HR managers is average or below average,

organizations will have many problems in implementing HR
strategies. HR managers are the key to HR strategy implementation.
It is not only about how to translate the strategy but also how to
motivate others and to build collaborations

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4.3.3.1. The Credibility of HR Strategy

The credibility of the HR strategy link is determined by the HR strategy implementation
which is based on the understanding of business strategy, compatibility with the
prevailing condition in the organization, and involvement of the organizations members
in producing the HR strategy. The general consensus among the HR managers related to
the credibility of HR strategy can be seen in the table 4.10.

Table 4.10: Findings Related to the Credibility of HR Strategy

Properties
Level of
understanding of
business strategy

The General consensus of Respondents Statements

When HR department people are able to understand the
business strategy very well, the formulated HR strategy will
be more integrated and rational.

Compatibility with
organizational
environment

To be credible, the HR strategy should be compatible with

organizational characteristics and the surrounding context.
When organizations ignore these factors, they will face
difficulties in implementation.
HR people are the real people who implement HR practices.
So if they are not involved in the strategic formulation
process; that HR strategy will lack validity.

Involvement of the
organizations
members in
producing the
strategy

Level of Understanding Business of Strategy

As reported earlier, both the manufacturing and service sector HR managers agreed
business strategy was central to alignment of HR strategy. As a consequence, it is not
surprising that they underlined that understanding the business strategy was the critical
determinant of the credibility of HR strategy. Included in these notions were
understanding and ability to identify the choice of business strategy and its

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consequences, followed by the ability to translate business strategy into the chosen HR
strategy.

The reasons why HR managers placed business strategy as the most significant factor
determines credibility of the HR strategy were: we [*HR department and staff] are here
to achieve the business goals (Ag4: 6; I think its clear; how can we align if we dont
know what the source of alignment is (Ht15: 5).

HR managers clarified that understanding business strategy means: what is the strategy
chosen by organization (Ag8: 4); what is our organizations focus (Ag12: 13); what are
our competitive advantages (Tx11: 3); what are our comparative advantages (Hs7: 10);
how do we compete with others (Hs18: 6); how will the company achieve its goal (Ht10:
7); what is declared by the organization... to accomplish the vision and mission (Ht19:
8). The HR managers also emphasized that understanding business strategy should
be dynamic; not only just to understand but also to be able to identify the consequences
behind the strategy chosen (Ag9: 9); ok, we know this is our business strategy, so what...
(Hs9: 10); if we understand it well [*the business strategy], the next problem is what the
implications to us are [*HR department] (Ht12: 7). Beyond the ability to identify the
consequences of business strategy to HR strategy, others highlighted how to translate
the business strategy into the HR strategy is much more important (Tx10: 9). It is about
making sense, because a HR strategy can be categorized as a good one when key points
of the business strategy can also be followed up into the HR strategy (Ht13: 7); a HR
strategy means the strategy in managing people to achieve a business strategy (Hs16:
6); a HR strategy is the mini-prototype of a business strategy in terms of HR (Ag4: 6).
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Compatibility with the Condition of Organization

HR managers suggested that HR strategies could be categorized as credible when they
are able to accommodate the organizations characteristics, including the number and
capability of employees, resource and/or funds, the technology that is implemented, and
the stage in the organizational life cycle.

HR managers from both manufacturing and service industries strongly believed that
strategies decided upon should fit with the conditions here [*organization] (Tx3: 8).
To be fit the organization should adjust to the surrounding contexts (Ag6: 8); other
comments in relation to employees were in making policies we should listen to their
[*employees] aspirations (Ht6: 22). As a result if we discuss everything first,
according to the conditions, they will go ahead with no resistance (tx10:10); while
another HR manager said: What we implemented was truly based on what we need; so
we got numerous support [*from employees] (tx11: 4).

More specifically the HR managers recommended some adjustments that should be

implemented to make HR strategy more credible, these related to the number and
capability of employees, management style, resource and or funds, technology
implementation, and the stage in the organizations life cycle. Their ideas are captured in
the following quotations: the number of our employees is getting bigger and bigger, we
have to recognize them in our [*HR] strategy (Ag8: 12); in the recent decade,
technology has been taken into consideration more seriously in our HR strategy (Ag13:
13); we just modified our strategy, since we are using technology more intensively (Tx4:
9); a HR strategy means nothing if we do not consider financial support to implement it
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(Hs11: 4); if our HR strategy is good and fits with the business strategy and other
contexts, but we have not sufficient money to do it; it means nothing to the organization
(Hs12: 17); since we received more financial support, we [*HR department] were able
to implement our strategy more successfully (Ht8: 12); we give a more serious
consideration when the company moves into the mature stage. Our HR strategy has to
be stronger in terms of alignment with the business strategy, to keep the company strong
in this very beneficial life stage (Ht11: 4).

Two HR managers reported some experiences when their companies hired professional
HR consultants from western countries (Deutsch and US), saying unfortunately the
companies performance worsened with their advice worst precisely. They shared
experiences by saying in the past we hired foreign HR consultants, our productivity
index dropped 10% because they did not adapt to the situation here (Tx3:9); while
another HR manager simply said being too western is not suitable because we are
living in an eastern society (Ag9: 4).

Involvement of Organizations Members

The HR managers claimed that involvement in designing HR strategy resulted in a sense
of belonging among the organizations members, which lead to high involvement in
implementation, evaluation, control and feedback. Based upon their experience, they
believed that the more organizational members involved in crafting the HR strategy, the
more credible it would be and of course, the more applicable to that HR strategy. The
HR managers also believed that involving employees in the HR strategy formulation
would make it easier to be implemented as seen in the following quotations: we
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[*organization] tried to involve them [*employees]; so when it becomes policy, they

could implement it easier (Tx 3: 10); when they [*employees] get involved, usually they
are trouble-free in their implementation (Ag13: 7); when people are involved more
intensively in a HR strategy development, that strategy usually is more reliable (Ht1: 5);
the process of developing a strategy should involve as many people as possible
[*employees] because it will receive many inputs. When the top management works
alone, the decision might not be based on what we need (Hs12: 17); the intensity in
process [*HR strategy development] is also a determinant factor, especially in terms of
communication (Ht6: 22).

The study found an important rationale for why the HR department should pay attention
in how employees at different level have the opportunity to be involved in HR strategy
formulation, recognizing they have different degrees of involvement. Generally, the HR
managers mentioned that the involvement in developing and deciding strategy will
encourage a sense of belonging and responsibility to make it successful (Ht16: 5). On
the same track, another HR manager explained in more detail: if the organization
involved more people [*employees] from the beginning; when the formulation is
completed then we communicated again to them this is our strategy. They will
comment: it was our inputs then they have commitment to make it successful (Hs12:
18). Employees will voluntarily implement the strategy because they are proud of
themselves, another HR manager from one agriculture company said: when they
[*employees] -in certain levels- are also involved in decision makings, when those
decisions are implemented they will feel proud because those are their decisions too;
their wants too; so their aspirations were heard (Ag6: 25). Moreover, this will bring
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out the best in employees: if they were involved in decision making, they will defend
that decision to their best (Hs9: 10).

Although HR managers agreed that employee involvement in the formulation of HR

strategy played an important role, they realized this was not simple. It is about an art in
how to involve every person in decision making. Therefore, when a decision is made
everyone becomes part of that decision. In this process, the most important thing is
communication so whoever does not agree with a decision will finally accept the
decision (Hs3: 21); if they are involved [*in HR strategy formulation], they usually feel
guilty if they do not do it. Moreover, they will control that decision voluntarily (Ag9:
13). Additionally, employee involvement also helped organizations when facing
difficulties: their involvement will also help resolve the problems [* HR strategy
implementation] (Tx7: 9). The additional benefit is that if their inputs are part of the
decision, they will give input gladly for improvement next time (Tx12: 11).

4.3.3.2. Organizational Support

The core properties that relate to the determinants of HR strategy implementation are top
management support, partnerships among departments, and organizational culture. The
general consensus among HR managers regarding the organizational support can be seen
in table 4.11.

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Table 4.11: Findings Related to the Organizational Support

Properties
Top
management
support

The General consensus of Respondents Statements

The role of the top management is the key to get support from the
rest of the organizations members. When top management gives
full support to the HR strategy, other organizational members will
not be able to obstruct it.

Partnerships
among
departments

The HR strategy should be implemented across departments,

because people in each department are targets of its
implementation. Implementation will face huge hurdles if there are
barriers among departments.

Organizational
culture

The situation that motivates every single organizational member to

achieve the organizations goal should be created. If the
environment can be achieved, and HR strategy is an integrated part
of the organizations strategy, the HR strategy will be implemented
more successfully.

Top Management Support

The HR managers reported that the commitment of top management to the chosen HR
strategy, back up with HR policies, adequate financial support and managing the
implications of HR strategy implementation play a vital role.

In general, HR managers across the industries expressed similar views supporting the
need for top management support as a key to successfully implementing HR strategy.
Examples of their views are: of course... the role of the director to support
[*implementation] is very helpful (Ag2: 8); for sure... support from the top is very
important (Ag11:14); definitely from the top if there is no support from the top
management of course I [*HR manager] can do nothing (Tx9: 10); backup from the top
management is vital. If not, they [*HR strategies] cannot be implemented (Hs15: 9);

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when we implement it, and the top management did not support them; it would be very
hard or even impossible (Ht4: 15); although we are very disciplined... but if there is no
support from the management, it cannot be implemented (Ht8: 15); the key word is
support, if there is no support, do not expect it can be implemented successfully (Ht11:
15).

As mentioned earlier, the HR strategy is formulated based upon business strategy,

organizational and external factors. The HR managers emphasized that whatever the HR
strategy, all organizational members should commit and support whatever the selected
strategy was, because of its importance to achieving the business goals, especially the
top management. One HR manager from the textile sector said: consistent support from
the top management to something that has been decided [*HR strategy] is crucial,
because other people will follow it (Tx1: 7). While another HR manager from a
hospital said: commitment from the top management becomes a key factor, because
usually the style of management in Indonesia is centralistic (Hs1: 5). Another manager
identified that communication with management is an important part for engendering
high commitment: they [*top management] will commit to it [*HR strategy
implementation] if they are well-informed; we have to give them as much detail as
possible before everything is decided (Ag8: 13). If top management commitment is
achieved, implementation of the HR strategy will be easier: we may influence the top
first, but no matter how remarkable our HR strategies, if people at the top have no
commitment, it cannot be implemented successfully (Tx10:11).

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Once people at the top have a high commitment to the selected HR strategy, HR
managers believed they will support policies to implement the strategy. One of HR
manager said of his experience: the management always backup our policies, because
they do understand what we are doing it for (Tx4: 9). Another manager demonstrated
this by saying: backup from the management is very intensive every day. It can be said
that the top management are part of the [*operational] actors, although they are not
(Tx8:4).

Whit sufficient support from top management, the HR department will also receive
further benefits, such as easier access to financial support: now, negotiation for the HR
budget is getting easier because they [*top management] believe in us; that what we
spend will have a greater impact on the business (Ag13: 6). Another advantage is
problem solving support when the HR department is facing difficulties with
implementation: we once decided policies which had many challenges, however they
could be implemented successfully because of the unreserved support from the top
management when we dealt with difficulties in the field (Ht16: 6).

Partnership among Departments

The HR managers expressed the opinion that HR strategy implementation is not just the
responsibility of the HR department, but of other departments also. By communication,
coordination, evaluation and control, and giving feed back all the departments work
together to achieve organizational goals. Moreover, they clarified that all departments
have equal responsibility to implement HR strategy so the organization can effectively
play as a team.
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HR managers across departments believed that even if a company is made up of many

departments, they basically need to act in unity. Accordingly, they should work together
to implement the HR strategy. One hotel HR manager presented a very good illustration:
an organization is just like a human body. If one part is ill or even disabled [*including
HR department]; it will affect the others (Ht6: 8).

The following thoughts from HR managers mentioned the importance of togetherness,

cooperation and team work, as critical factors for the successful implementation of HR
strategy: success is not because of him or her but because of the team, not individuals.
Thats why team work is very important here (Ag12: 9); our principle is togetherness.
Other managers are involved in the work together (Tx1: 2); cooperation with other
departments, of course, is an important determinant of success in implementing a
strategy (Tx3: 7); if we do not work together, what will they say? We are an
organization (Tx11: 9); it is a challenge for us to make the doctors who were trained to
be solitary to become a team in our hospital. It really is a struggle (Hs3: 6); each person
has their own role in one big team -the organization. Cooperation between them is vital
(Hs13: 6); cooperation among people across departments is also very critical to success
(Ht6: 22); because we're small, a teamwork model could be well implemented (Ht11: 7);
cooperation with other departments is very good, and even when other departments have
difficulties, they quite often consult us [*HR manager] (Tx12: 8); cooperation with other
departments obviously influences the successful implementation of the strategy (Ht14:
8).

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To achieve teamwork, the HR managers mentioned the importance of communication

between them and other managers, and between them and employees as a whole. One
textile manager said: communication among departments is a critical factor to build
teamwork in the organization. Furthermore, awareness of team work will assist in the
implementation of the strategy (Tx10: 10). Expressed differently, one hotel manager
explained: we are always keeping in touch, we are all related ... (Ht8: 4). Another
manager from the hospital sector also mentioned: dialogue among managers and also
with employees makes significant contributions to forming strong partnerships (Hs9:
10).

It does not mean there is no dissention among managers, or between managers and
employees. One textile manager said: a clash with other managers is a normal thing;
the most important thing is how to communicate it so the problem can be solved wisely;
with a win-win solution (Ht15: 5). As long as understanding among departments can be
achieved by good communication, the HR strategy can be implemented successfully:
the other departments will support us, as long as we have good communication with
them (Ht16: 6)

In discussing how to build good communication, HR managers underlined that both

formal and informal events were effective ways to maintain their team relationship. One
HR manager explained that his organization tends to utilize a formal meeting: our main
priority is the head department meeting as a forum of communication and confirmation
(Ag6: 24). Another manager added: we have formal communications such as
department head meetings, morning briefings, etc. (Ht11: 7). Although a number of
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HR managers referred the importance of formal meetings, they generally agreed both
formal and informal meeting should be utilized as media communication. The following
statement can be said to be representation of this view: collaboration with the other
managers? We have a commitment to share thoughts at the either lunch or other
moments when there are regular meetings. We always have discussions either formally
or informally. It doesnt matter... whenever, wherever... we have no problem to
communicate; we have no borders (Tx5: 11)

In addition to communication, HR managers also mentioned the theme of the importance

of coordination. They emphasized that: coordination is a further step beyond
communication (Tx6: 14); coordination tends to be a more formal step to integrate an
action (Ag9: 15); communication and coordination are very hard to separate; however
coordination is more powerful to make an agreement in the strategy execution (Hs 10:
13); it can be said that there is no coordination if there is no communication (Ht 8:
15).

Some of statements that expressed the importance of coordination in implementing HR

strategy are as follows: we work together to achieve the organizations goal. To do this,
we always learn from each other; coordination is the key factor (Ag6: 25); coordination
among managers will support the successful implementation of the strategy (Ag13: 6);
coordination among departments are done through formal and informal meetings (tx2:
2); coordination... controlling each other so there is no manipulation in implementing
the strategy (Tx4: 9); we must have managerial coordination across departments so the
strategy can be executed smoothly (Tx11: 1); we have a coordination meeting across
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departments weekly so when we have constraints they can be solved together (Hs11: 15;
HR strategy implementation is not only determined by the HR department, but as the
result of coordination among departments (Hs18: 1); we always have coordination with
other departments (Ht3: 11).

Organizational or Corporate Culture

HR managers across industries agreed that a good environment (organizational culture)
that stimulates people to achieve organizational goals enthusiastically should be created.
If this environment can be achieved, HR strategy will be implemented more
successfully. Moreover, the HR managers identified the critical factors for
organizational culture related to productivity, loyalty, and example or role model in HR
strategy implementation.

One of hotel HR manager said: organizational culture affects the successful

implementation of a HR strategy (Ht1: 5), while another textile HR manager suggested:
We create a business culture that spurs people to achieve profit, if there is anything we
do it

together, including the implementation of the HR strategy (Tx10: 11). A

conducive organizational culture will create a conducive atmosphere for the

implementation of HR strategy: According to our experiences, a corporate culture is
important. Incompatibility between the corporate culture and the HR strategy that we
must execute greatly impedes success; even in certain cases, we are unsuccessful (Ht16:
5). Due to this important role, it is a critical task for organizations to create and develop
the most suitable organizational culture to achieve their goals: we conduct employee
surveys regularly to develop our culture... as an organization growing dynamically in
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response to the rapid changing of the external environment (Ag12: 12). Moreover, HR
managers also underlined the importance of familiarizing all organizational members to
the culture: the awareness of employees to our culture should be reminded
continuously. To do this, the union has significantly helped us (Tx4: 9).

In terms of organizational cultural values, HR managers generally mentioned three

themes; they were productivity, loyalty, and example or role model. Related to
productivity values, these quotations clearly illustrate the importance of creating a
situation that encourages the organizational members to be more productive: our
cultural values are positive. If an employee has already achieved the production
standard on that day, he or she may go home. However if he or she wants to do more,
the company will always welcome this (Ag4: 7); we always encourage employees to be
more productive (Ag8: 9); employees work for a living; we motivate them: who is more
productive will have a better living (Tx6: 6).

In terms of loyalty, HR managers stated that loyalty make someone voluntarily do their
job to their best. This theme is captured in the following statements: our people have
high loyalty so they will try to do the best for the company (Ag8: 12); we take care of
them [*employees] seriously, so it makes them feel at home and loyal to us. The impact
that follows is that they will also work seriously (Tx10: 13); many of our employees have
been working for a long time; it is just like their own company. They dedicate their
knowledge, skill and ability for the organization (Hs7: 15); our employees feel guilty
when our competitor moves a step ahead of us (Ht18: 16).

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As these companies operate in a patriarchal society, the HR managers identified the role
of example was significant and important to successful HR strategy implementation. The
belief can be seen the following excerpts: an important leadership principle in this
company emphasizes that the higher positions should always be able to give an example
to their subordinates, for achieving the organizational goals (Ag 11: 23); example is
important. Employees need a role model (Hs7: 19); the style of the leader. Most
Indonesian people follow the patriarchal system (Hs8: 12); subordinates always look to
their superiors (Tx6: 12); superiors always become a mirror for their subordinates
(Ht13: 14); if the management does not work seriously, it is impossible to encourage the
employees (Ht20: 11). There was a general agreement among the managers for using a
common principle of leadership in the Indonesian context; this is Ing Ngarso Asung
Tuladha, Ing Madya Mbangun Karsa Tut Wuri Handayani: give examples when in the
front, keep harmony when in the middle, and give support when at the rear (Ag11: 23).

Many HR managers stated that their organizational cultures supported achieving

organizational goals, and the HR strategy. The following quotations illustrate the
supportive organizational cultures: the culture here [organizational culture*] is very
supportive (Ht13: 7); most employees have no problem working overtime when needed
(Ag4: 7); our employees enjoy their job (Ag10: 14); we are working together with
happiness; its just like a family (Tx6: 6); money is not everything, they work for honor
(Tx8:6); they [*employees] work just like they would do in their own company (Hs8: 8);
most of them have been working for more than 15 years and they have no intention to
leave (Hs11: 7); our senior employees are happy to guide their juniors (Ht18: 13 ).
Nonetheless, some managers did express concern that culture in their organizations
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could be a barrier to change particularly; for example: honestly, some parts of our
culture obstruct the organization from moving faster (Ag7: 12); its very hard to
encourage old employees; most of them tend to have lost motivation because their lives
are already established (Ag13: 11 ); some of them [*employees] do not feel at home
when working ( Tx2: 10); not all of our culture is positive; we are slow, not responsive
to change (Hs1:15); our low level staff have difficulties in adjusting to the change (Hs9:
2); they [*some employees] think that either working hard or not will get the same
reward (Hs15: 10); low motivation, difficulty in learning, slow responses are our
problems (Ht20: 14 ).

Another finding of this study was the intention to create and develop the organizational
culture based on their organizational distinctiveness: although we invite consultants,
they are not to dictate, but to help us to portray who we are, what our unique features
are (Ag12:12); for sure, we cant accept western values directly, we need to sort the
most suitable for us (Ag9: 4); we have unique values: honesty, loyalty, and hardworking
are our core values (Tx5: 12). Moreover one manager from the agriculture industry
shared her experience of when they employed westerners to boost the productivity
index, a strategy which unfortunately failed: recently, our head office in Nederland
sent two people to stimulate organizational productivity. They used their own beliefs
[*western principles] and neglected input from the locals. The result was not an
increase in the productivity index that we achieved, but it got worse. Indeed, the work
environment also became not conducive; too many conflicts. Now, the management
tends to use locals who understand more how to handle employees wisely as long as the
organizational goals can be achieved (Ag6: 14).
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The study also found that the adoption of local values and religious values were often
used by organizations to develop their organizational culture. The following quotations
illustrate this issue: because the company is established in West Sumatra, our challenge
is to change traders mindsets into an industrial mindset. As we know, Minangkabau
people are known as traders (Ag4: 8); our distinctive feature is the ability to adapt local
culture into the organizational values (Ht8: 7); the Javanese culture has the most
suitable values to be adapted by our organization (Ag11: 23); here, Javanese culture is
continuously reinforced and implanted as a guideline in their work (Ht5: 8); we are
living in Bali, naturally we adapt Balinese values into our organization (Ht8: 6).

Religious values were also viewed as a source of organizational culture, especially in the
Islamic, Catholic and Christian hospitals and the hotels in Bali; as can be seen the
following citations: in our hospital, a religious approach [*Islam] is very helpful
because if the entry point is merely management aspects then it wont get into their
minds (Hs1: 12 ); although we are not as militant as Catholic hospitals, ...but we still
use Christian principles to shape our work culture (Hs2: 12); principles of catholic
teachings are elaborated into our organizational values (Hs: 10); in the last three years,
the management has been using Islamic values to encourage work motivation of
employees so they work harder to compete with other hospitals (Hs12: 14); we are not a
religious based organization but we exist in a society that is highly influenced by
Hinduism, so Hindu religious values are adapted into our organization (Ht8: 7).

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4.3.3.3. The Role of HR Departments Staff

The core properties of the role of the HR department helps to determine HR strategy
implementation are the HR staff capability, their autonomy, and their commitment. The
general consensus among HR managers related to the role of the HR staff can be seen in
table 4.12.

Table 4.12: Findings related to the Role of the HR Staff

Properties
The HR staff
capability

The HR staff
Autonomy

The HR staff
commitment

Generalizations of Respondents Statements

As key organizers, HR staff need an excellent understanding of the
factors associated with and surrounding the HR strategy. To be
able to do this, they need to motivate themselves to learn more and
consider different perspectives.
In certain circumstances, strict regulation makes it difficult to
implement HR strategy. In this situation, it is very helpful if HR
have autonomy related to that problem because this gives
flexibility.
The HR department is viewed by other departments as the most
responsible department for HR programs. Accordingly, as HR
coordinators, these employees have to be role models. To
implement the HR strategy, they need to demonstrate high
motivation, responsibility and commitment.

The HR Staff Capability

The HR managers said that the HR department is central to implementing HR strategy,
so their staff need to be capable of handling all implementation aspects. More
specifically, they listed capability in translating HR strategy into policies and practices,
coordinating and controlling activities, communicating with other departments and their
members, handling difficulties, and acting as role models for other organizational

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members. The following statements from agricultural HR managers describe the

importance of this : HR people should be placed in the right position according to their
expertise (Ag3: 5); a HR manager should be able to give necessary assistance (Ag6:
10); skill, capability of our staff is crucial (Ag8: 5); of course, depends on the capability
of our people [*HR people] (Ag10: 13); should be supported by HR people who have
good analytical capability 13: 6).

Managers from the textile industry made similar comments: ability of the HR people
determines the success of the implementation of the strategy (Tx1: 7); our ability to
analyze the situation will give a high contribution to the success of the implementation
(Tx3: 8); the most influential is the ability of the HR people itself (Tx5: 11); to
implement a HR strategy, the role of the HR manager is vital (Tx8: 5); how to translate
it into action, that deeply relies on our capability (Tx10: 9). Similar comments came
from the HR managers from the hospital sector: if we [*HR people] have the ability
and expertise, the results will be good (Hs2: 12); I think so. Our leadership will
determine the success of implementation (Hs8: 7); to be wise, thats important. So
employees are able to accept and implement the HR strategy (Hs9: 10); to understand
what should we do in implementation; thats the key (Hs12: 10); recognition will come
automatically when employees see our conceptual and operational abilities (Hs12: 11);
people always pay attention to what we (*HR people) do so we should be an example
(Hs13: 6); other people in the organization will follow us (Hs16: 5); the HR manager
should be a role model (Hs20: 12).

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The viewpoint was also shard by the hotel managers; for example: dont make a gap,
embrace them then they will participate with happiness (Ht1: 7); cultural approach is
very helpful to encourage people in implementation (Ht3: 12); when people believe in
our ability they will follow us (Ht6: 9); giving examples is very helpful (Ht7: 3); in
certain times we must be firm, in (an) other times we should be more flexible (Ht10:
16); deeply relies on the ability of the HR people to explain and convince (Ht13: 7); how
we play our role as a primary actor (14: 8); be a role model... (Ht18: 10); understand
peoples characters then encourage them (Ht21: 12); think of us [*HR people] as they
are [*organizations members] so we know how to drive them (Ht22: 9); keep in mind
that we have sufficient skill and ability to organize the implementation (Ht24: 11).

The HR Staff Autonomy

To implement HR strategy successfully, the HR managers underlined the importance of
and need for autonomy for their position. They emphasized that autonomy in making
policies, managing activities, and handling difficulties was essential for them and this
can be seen in excerpts from all the industry sectors.

For example agriculture HR managers stated: I have sufficient autonomy; its really
helpful (Ag1: 6); I really have the discretion to implement the strategy based on the
situation of the organization (Ag2: 2); I have the autonomy and responsibility at the
same time. The most important thing is how to use it (Ag3: 3); we receive general
guidance; then we have the flexibility to execute HR strategies in the best way based on
our judgments (Ag4: 7); we have space [*autonomy] to solve problems that occur
during implementation (Ag6: 7); how far is my autonomy? It depends on how much I am
217

able to receive it (Ag8: 4); there are regular meetings but they werent to discuss small
things that could be handled by managers (Ag10: 6); although every single manager has
autonomy, but we must have synergy among departments (Ag11: 15); to implement a HR
strategy, we need adequate autonomy to do that (Ag12: 24); every HR policy should be
authorized by the HR department (Ag13: 7).

Similar comments came from the textile HR managers: all decisions related to
implementation is up to us [*HR department]; as long as its on the right track (Tx1: 7);
I need autonomy to implement the strategy (Tx3: 7); autonomy? Not fully. It tends to be
flexible but thats enough to support the HR strategy execution (Tx4: 10); its critical;
how to use autonomy that we have from the management (Tx5: 11); I need autonomy
proportionally as a manager (Tx9: 11); as long as its already decided; we always
receive autonomy to do it within our context (Tx10: 10); every manager needs autonomy
according to their field; so do I (Tx11:4); we have no complicated rules; the
management believe us in how we do it [*autonomy] (Tx12: 11).

A number of HR hospital staff also supporting the need for autonomy, for example:
autonomy is needed to make our moves more flexible (Hs2: 12); the management
believes in us to do the best (Hs4: 10); autonomy is important but it depends on us, how
to use it (Hs5: 9); there is space for us to make judgments (Hs8: 8); beyond input from
colleagues, there is my right to make decisions (Hs10: 13); clearly the autonomy that we
have is an influential factor for the success of the implementation of the HR strategy
(Hs12: 18); we know where we should go, and we have a right to organize how to go
there (Hs13: 9); executing a HR strategy is more complicated, so we need flexible
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approaches to do it (Hs14: 7);after the HR strategy has been decided; its our arena to
implement it (Hs15: 14); we received full autonomy, unfortunately we still have
difficulties to use it in practice (Hs 16: 5); autonomy our space is more than enough
(Hs17: 3); autonomy is an important part people at the managerial level (Hs19: 9).

This was an important attribute for HR managers from the hotel sector; for example: of
course as a manager, my authority must be clear. If there are restrictions, I will act
within those restrictions (Ht1: 6); its rational for flexibility to be within our hands,
since we are directly involved in strategy implementation (Ht2: 12); as long as its in my
field; the manager gives me autonomy, however I always consult him [*CEO] (Ht3: 10
); thats true, my autonomy as HR manager is great, but I have to report monthly (Ht4:
3); we have full autonomy but should reported on how we use it (Ht5: 8); we need trust
to succeed in the mission charged to us (Ht7: 6); we have autonomy to organize
implementation as long as it doesnt go out of the vision, mission, and budget (Ht8: 6);
as long as its in our autonomy, we may move flexibly (Ht9: 5); our autonomy is very
flexible. It moves across departments -as long as its related to HR (Ht12: 8);
autonomy? Yes, but dont let someone receive something beyond her/his capability
(Hs13: 8); for sure, autonomy to do our function as HR manager is extremely needed
(Ht 15: 5); we need it, unfortunately sometimes the management still do not completely
believe in us (Ht16: 6); the General Manager (GM) gives us autonomy to make
decisions when needed (Ht17: 8); how to implement HR strategy was handed to me...
whatever the policies... as long as they do not damage the company (Ht19: 9); the GM
gives full autonomy to me as HR manager (Ht20: 11).

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The HR Staff Commitment

HR managers advised that time-line commitments, budget commitment, and rewardpunishment commitments should be kept in mind to implement HR strategy effectively.

The following selected agriculture HR managers statements describe the importance of

commitment: it [*HR strategy implementation] is our job to do it (Ag1: 7); when
needed, rule must be enforced to support the success of the HR strategy implementation
(Ag7: 7); the HR people are the primary actors, so we have to commit to what the
organization has decided [*HR strategy] (Ag8: 13); the HR people must have
commitment to change, as is needed by the HR strategy formulated (Ag11: 12); ...and
the commitment of the HR people to transfer from top [*strategy] to bottom [*policies
and practices] (Ag12: 24)

HR managers from the textile industry ask related the importance of HR staff
commitment: Oh yes... the HR managers commitment is very important (Tx3: 8); the
HR peoples commitment should be improved as the organization is getting complicated
(Tx5: 11); as a form of our commitment, it doesnt matter for us to work overtime. The
most important thing is that the system must be running well (Tx6: 8); some companies
offer me better jobs, but it is my commitment to the company; the change must be
completed first (Tx8: 10); eight hours is not enough for me; working overtime tends to
be my routine. Thats my consequence as the HR manager (Tx10: 13); we already had a
time to speak, then its our turn is to have commitment (Tx11: 5); we should have people
from the top, middle, and low level, who commit to do what we have decided (Tx12: 7).

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Similar comments came from the hospital HR managers: There is no time for giving
up; we have to try, whatever difficulties there are (Hs1: 15); commitment, of course, is
very critical to the success of implementation (Hs2: 12); commitment is easy to be said
but difficult to be done. However we must do it because its very important (Hs5: 9); if
we dont even have commitment to implement it [*HR strategy], what about others
(Hs8: 11); commitment of the HR people is very (demanding) necessary (Hs10: 15);
superiors must have a commitment to succeed (Hs15: 11); luckily, our peoples [*HR
people] commitment is very good so it makes it [*HR manager] easier for me in
implementing the strategy (Hs16: 5); what we have done, that we will follow (Hs17: 3);
although our commitment is not the only variable for success; but its very important
(Hs19: 13).

Hotel managers used similar comments to support the significant role of HR staff
commitment for the successful implementation of HR strategy: the determinant factor
is that our managers have the same commitment (Ht1: 4); there is no doubt that the
commitment of the HR people is very needed (Ht3: 22); the HR department should pay
attention continuously regarding consistency in the HR strategy implementation (Ht6:
22); it can be said that, however good a strategy is, but if we [*HR people] are not able
to be a role model, it will be nothing (Ht7: 20); our people should have dedication to do
what we have formulated (Ht9: 5); assertiveness to implement a strategy should be done
consistently (Ht11: 24); commitment is not only about us [*HR people] but for all of the
organizations members (Ht14: 4); thats our responsibility; we must have commitment
(Ht15: 8); when there is a decision, we must have commitment to do it. If we are
inconsistent; others will follow us (Ht 16: 6); thats our responsibility; we must have
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commitment (Ht19:14); our consistency will influence others to do the same thing
(Ht21: 10); good strategy, good people, good environment, high commitment; thats
what we need to be successful in HR strategy implementation [Ht25: 9]; as a
commander, I [*HR manager] should be able to show that I do what I decided (Ht28:
13).

4.4. Conclusion
This chapter has reported the findings from sixty-three HR managers across the
agriculture, textile, hospital, and hotel industries. The findings suggest that the main
categories related to the concept of SHRM in the Indonesian context were; the approach
to SHRM, the role of HRM in the organization, and the determinants of HR strategy
implementation.

The approaches to SHRM were either based on a best practice or universalistic approach
or a best fit or contingency approach, with the latter being predominant properties
associated with best practice were the organizational processes, the market conditions,
and the stage of organizational life cycle. The properties linked to the subcategory of
best fit were the business strategy, the internal or organizational context, and the external
or environmental context. It should be noted that no HR managers from the hotel
industry indicated a best practice approach was being implemented in their sector.

The findings also indicate that the two subcategories connect to the role of HRM in the
organization either through a two-way linkage or and an integrative linkage. The

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properties that formed subsets of these were the organizational mindset, the
organizational structure, and the strategic decision process. The distribution of responses
relating to the approaches to SHRM and the role of HRM in Indonesian organizations
are presented in table 4.13.

Table 4.13: Distribution of Indonesian SHRM

Approaches to SHRM
Types of
Industry

Roles of HR Department
and Its People
Two-way Integrative
Total
Linkage
Linkage
4
13
9

Best
Practice
4

Best Fit

Total

13

Textile

12

12

Manufacturing

18

25

10

15

25

Hospital

15

18

13

18

Hotel

20

20

20

20

Services

35

38

33

38

63

15
(23.81%)

48
(76.19%)

63

Agriculture

Total

10
53
(15.87%) (84.13%)

The findings reported in this chapter indicate the determinants of HR strategy

implementation were the credibility of HR strategy, the organizational support and the
role taken by the HR staff. Moreover, the properties related to credibility of the HR
strategy were the level of understanding of the business strategy, the compatibility of the
HR strategy with the conditions of the organization and the involvement of all the
organizational members. Organizational support referred top management support, an

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organizational structure that gave independence and prominence to HR, and partnerships
among departments. The final influence was the organizational culture. The final
category that influenced the implementation of HR strategy was the role of the HR
professional; this influence is through the capability of the HR staff, their having a
degree of autonomy to implement the HR strategy and the commitment to make it
workable. All findings are summarized in figure 4.1 and will be discussed in chapter
five.

Figure 4.1: The Summary of Research Findings

The SHRM within

Indonesian Context

The Approaches
to SHRM

The role of
HRM in the
Organizations

The Determinants
of HR strategy
Implementation

Best Practice
(Universalistic)

Two-Way Linkage

Credibility of HR
Strategy

Best Fit
(Contingency)

Integrative
Linkage

Organizational
Support

The role HR
Department and
Its Staff

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CHAPTER V
DISCUSSION AND CONCLUSION

5.1. Introduction
This chapter discusses the findings identified in the previous chapter in relationship to
literature. The some of findings have been presented and received feedback from five
different peer-reviewed international conferences. Moreover, one of these papers was
selected as the best paper in HRM stream at the 1st International Management and
Business Research Conference, Denpasar-Bali, Indonesia, 23-24th August 2006. A list of
these conference papers is provided in appendix 5.

To make it easier to understand the discussion, the chapter follows the same structure of
the research findings as they were presented in chapter four. The chapter begins by
discussing the findings in relation to the approaches to SHRM, these being the two core
categories of the best practice, and or the best fit approach. The best practice approach
focuses on the organizational mindset, market conditions and stage of organizational life
cycle. In the best fit section of the discussion, the focus of attention is the influence of
the internal or organizational context and external or environmental context, and how
these and the business strategy, affect and relate to HRM practices.

The next part of the chapter discusses the findings related to the role of HRM in
organizations and whether it serves a two-way linkage or an integrative linkage role. The

225

subsets of this discussion concentrate on the organizational mindset, organizational

structure and informal strategic decision making.

In the next section is a discussion of issues related to the determinants of HR strategy

implementation; they are credible strategy, organizational support, and the role of the
HR people. More substantial discussions related to the categories of those three
constructions are presented accordingly. The chapter concludes with the limitations,
conclusions, recommendations and directions for further study of SHRM within the
Indonesian context.

5.2. The Approaches to SHRM

The research findings suggest that two approaches are being practiced by Indonesian
organizations; they are the best practice or the universalistic approach and the best fit or
the contingency approach. Although the best practice approach is practiced by much
fewer Indonesian organizations (16%), however the organizations using this approach
are able to achieve good organizational performances and survive in a very competitive
business environment. The alternative approach used by 84% of organization is the best
fit approach and these organizations are also able to demonstrate some high
achievements.

5.2.1. The Best Practice (Universalistic) Approach

The rationale behind employing the best practice approach is mainly because the ten
organizations that used this approach work in three following conditions: the

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organizational process is simple, the organizations have a captive market, and their
organizational life stage is already mature. Adopting general principles of HRM has
allowed them to survive for a long time. This rationale clearly addresses Boxall and
Purcells (2008) doubt that quite often companies employ the best practice approach
with a lack of reasons. These Indonesian companies have been using the best practice
successfully as is evidenced by their survival through the serious Asian economic crisis
in 1997-1998.

The finding of a best practice approach existing within Indonesian companies is in line
with Habir Larasatis (1999:1) findings: HRM in Indonesia is a complex process with
both national and international influences. The cases suggest national conditions need
not hinder the adoption of international best HRM practices. Furthermore, Sitalaksmi &
Zhus (2010) study also mentioned the pervasiveness of best practice in changing
Indonesian HRM practices.

The research findings also provide stronger support for the universalistic principles in
SHRM, there is a general pattern of HRM that can be implemented universally (e.g.
Armstrong, 2000, 2009; Bolman & Deal, 1997; Guest, 1997; Delery & Doty 1996;
Petterson et al. 1997; Telpstra & Rozell, 1993). The most recent studies conducted by
Aydinli (2010), Gould-Williams & Mohamed (2010), Lee et al. (2010), Razouk and
Bayad (2010), and Stavroua et al. (2010) all present support for the best practice in
HRM being adopted internationally and leading to a convergent approach. HRM is
becoming more uniform as business becomes more global and companies in different
countries may adopt similar organizational structures, processes, and practices (Carr &
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Pudelko, 2006; Gooderham et al., 2004; Mayrhofer et al., 2004; McGaughey & De Cieri,
1999; Paauwe & Boselie, 2005; Vanhala et al., 2006).

The best practice findings in this study suggest that common characteristics of HR
strategies, policies and practices that are employed by Indonesian companies are:
recruitment using internal channels, and advertising if necessary, to attract good
candidates; the selection process focuses on attitude toward choosing the best candidate
with a high motivation to work; intensive training to develop skills and attitudes;
continuous performance appraisal focuses on individuals as an instrument for promotion
and incentives; minimum wages are the base line of compensation and these are
combined with incentives based on productivity or performance. Another important
strategy is providing sufficient space for employees to speak out, as well as social
activities that maintain harmony among employees and between the employees and
management (for detail see appendix 3).

These findings are in line with the general characteristics of best practice frequently
cited in the literature such as, Ostermans (1994) universalistic model of innovative
work practices, Delery and Dottys (1996) seven strategic HR practices, Woods (1996)
universalistic model of high commitment management (HCM), Pfefers (1998) seven
practices of successful organization, and Appelbaums et al. (2000) high performance
work system (HPWS). In summary, Boselie et al. (2005) report that four most often
reported HR practices considered as universal or best practice include careful
recruitment and selection processes; training and development to enhance skills,
teamwork, and commitment to their job; contingent pay to increase employee work
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motivation, and rigorous performance management, this includes conducting appraisals

to achieve high organizational performance and ensure employees are treated fairly.

It is difficult to specify what practices are needed for best practice in HRM (Boxall &
Purcell, 2008). There is not one fixed list of generally applicable HR practices or
systems of practices that define or construct HRM (Paauwee & Boselie, 2005: 69).
Furthermore, Boselie et al. (2005) indicate that at least twenty six HR practices have
been examined by scholars in relation to the universalistic principles. Although
recognising a need for diversity in HR practices, scholars do agree that these should
promote autonomy, commitment, and team-work (Ichniowski et al., 1997; MacDuffie,
1995; Osterman, 1994; Pfeffer, 1994, 1998; Wood, 1996). To find the most suitable
approach to HRM the organization needs to experience and learn what best suits them,
for example, some companies in this study conducted social activities to strengthen
relationships among employees, which leads to a higher performance of team-work.
The research findings support this view and a number of the respondents did identify
that they maintained their current practices because they had been successful over a
period of time, and no doubt only required minor, rather than major changes. This
constancy helps them managing their people to achieve their organizational goals and
survive in a very competitive business environment.

The findings also identified that the Indonesian organizations that employed best
practice had good performance. A number of respondents credited their sustained
profitability and sustainability to their HR practices. They clearly saw no need to change
from best practice approach because they are able to achieve good individual and
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organizational performance. The indications of good organizational performance were

proven by market domination and stability of profits, or high productivity, high loyalty,
and low absenteeism. This matches other evidence that the universalistic approach can
enhance either individual performance (Gong et al., 2010; Guthrie, 2001; Sun, 2007;
Varma et al., 1999) or organizational performance (Becker & Gerhart, 1996; Guthrie et
al., 2002; Combs et al., 2006; Farias & Varma, 1998; Lee, 2010).

5.2.2. The Best Fit (Contingency) Approach

Clearly most favoured among the Indonesian companies was the contingency approach
to SHRM, with eighty four percent (84%) of respondents favouring this approach. In
other words, the majority of respondents adopted their HRM practices to their own
specific context. Furthermore, central to the best fit model was business strategy and
linked to this fundamental driver was need to link contingencies from the internal and
external environmental. The main driver for using a contingency approach was response
to the dynamic business environment. The managers identified that needed to be aligned
to those changes to achieve organizational goals. The internal factors included the
organizations size, structure, and the stage of its organizational life cycle, as well as
access to the capital or in some cases the quality of business funding. The external
factors included the market competition, technology, government rules, global changes,
economic conditions, culture, and role taken by the union.

The findings that HRM should fit with business strategy, and either internal and external
contexts provide further strong support for the best fit or the contingency approach,

230

which many HR scholars consider the superior approach to SHRM (e.g. Boxall &
Purcell, 2008; Delery & Doty, 1996; Jackson & Schuler, 2007; Lengnick-Hall &
Lengnick-Hall, 1988; Lengnick-Hall et al., 2009; Sisson & Storey, 2000; Tissen et al.,
2010). Although scholars may focus on different aspects of fit, they agree that to achieve
better performance, HRM should be able to fit itself, or adjust to its surrounding internal
and external, as does business strategy. This means organizations need to be flexible (de
Pablos, 2005; Ketkar & Sett, 2010; Milliman et al., 1991; Wright & Snell, 1998).

Organizations that are able to adjust their fit to the external and internal opportunities
and threats flexibly will be able to respond quickly to environmental demands, so
sustainable competitive advantage can be achieved. Accordingly, HR flexibility is
considered a dynamic capability that helps organizations adapt to changing
environmental contingencies (Bhattacharya et al., 2005; Hitt et al., 2001).

The contingency approach to SHRM has also received much support in various studies
across countries. This is also recognized as a divergent approach where companies in
each country can adopt to their specific context; therefore there are different ways to
manage people in organizations. The specific contexts that have an influence include the
institutional, political, structural, cultural, and social differences which exist within both
the organizational and national context (Aycan, 2005; Hofstede & Hofstede, 2004;
Pauwee & Boseli, 2003, 2007; Pudelko, 2006). Habir and Rajendran (2007) confirm that
the changing face of HRM in Indonesia has been influenced by multiple factors,
including the politics, economy, social, and cultural aspects. Furthermore others describe
that HRM in Indonesia is a complex process with both national and international
231

influences (Habir & Larasati, 1999; Gunawan & Nankervis, 2006; Singleton &
Nankervis, 2007).

In relation to Indonesia, there is existing evidence supporting the utilization of the best
fit approach by Indonesian organizations. Sitalaksmi and Zhu (2010) found that the
transformation of HRM in Indonesian state-owned enterprises was determined by the
firms relationship with both internal and external stakeholders. Rhodes et al. (2008)
also found evidence the successful implementation of the western strategic management
practices, such as a balanced scorecard, needed adjusting to suit the Indonesian
characteristics. They, moreover, mentioned some critical factors that should be taken
into consideration; these included the national culture, leadership style, organizational
culture, and current HRM practices.

5.2.2.1. Business Strategy

The HR managers underlined that business strategy was central to the alignment of HR
strategy, and accordingly they emphasized this was the foundation to their HR strategy.
Business strategy plays the most dominant role in HR strategy and all often related
variables follow on from this. Changes to the business strategy can be both gradual and
spontaneous adjustments, and thus the alignment between business strategy and HR
strategy is considered a never ending process, so intense and continuous communication
among key personnel is very important to ensure the process can be achieved.

The finding that the role of business strategy as central to HR strategy is clearly in line
with the major SHRM literature (e.g. Bamberger & Meshoulam, 2000; Boxall & Purcell,
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2008; Leopold & Harris, 2009; Lundy & Cowling, 2000). Dyer (1984a: 161) says:
organizational strategy is the major determinant of organizational HR strategy.
Business strategy is also a representation of ...what the company wants to accomplish,
how it wants to behave, and the kinds of performance and performance levels it must
demonstrate to be effective (Lawler, 1995: 14). The pioneers of SHRM studies,

Michigans model (Fombrun et al., 1984) and Harvards model (Beer et al., 1984)
clearly put business strategy as the source of reference for HR strategy. Furthermore, the
two well-known SHRM typologies were proposed by Miles and Snow (1984) and
Schuler and Jackson (1987) also emphasize this. Miles and Snow (1984) provide
evidence that different strategies require different HR strategies. Miles and Snows
(1984) typology of strategy describes the prospector, analyzer, defender, and reactor as
business strategies that require different formula for HRM. Similarly, based on Porters
(1980 & 1985) typology of business strategy, Schuler and Jackson (1987) provide
further evidence that cost-reduction, innovation, and quality enhancement business
strategies need different employee behaviours, which leads to a different HR strategy,
and these ideas are clearly supported by Indonesian HR managers.

5.2.2.2 Internal (Organizational) Context

The HR managers in this study identified that the organizations size, structure, and
stage in the organizational life cycle, were internal factors that influenced the HR
strategy. Along with this, the HR managers also mentioned that another critical factor
was access to the capital or the quality of business funding. This matches with previous
findings (e.g. Daft, 1998; Jackson & Schuler, 2007; Jackson et al., 1989; Jones, 1984;
Perrow, 1986; Storey, 2009; Woodward, 1994)
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The Organizations Size

The study respondents explained that the number of employees (or the organizations
size) should be considered carefully, as this has a bearing on HR strategy. Some of
issues were how well employees will understand the HR strategy, how they can
participate in developing and implementing the strategy, and how the organization
communicates and controls them. An Organization with more employees needs to pay
more attention on how to manage them in consideration of the HR strategy.

Concern about matching to HR strategy with number of employees has also been
identified in the literature (e.g. Baird & Meshoulam, 1988; Boxall & Purcell, 2008;
Jackson & Schuler, 1995, 2007; Jackson et al., 1989; Jones, 1984; Kalleberg et al.,
2006). The size of the organization and whether it has simple or complex processes need
to be taken into consideration in the HR strategy. More specifically, Baird and
Meshoulam (1988) suggest that smaller and more informal organizations are able to
have more flexible styles of HRM. In contrast, more sophisticated and professional
approaches are needed to handle the greater complexity of a firm that is large and more
mature.

Boxall and Purcell (2008), Jackson and Schuler (1995, 2007) emphasize that HRM
varies systematically with the organizations size. Moreover, they recommend of HR
strategy in larger organizations should pay more attention the processes procedures,
employee involvement, sophisticated staffing, training and development procedures, the
development of internal labor market, the appraisal system, compensation and incentive
234

or other benefits. These opinions of HR managers who use the contingency approach
clearly support these views.

Similarly, Jackson et al. (1989) and Jones (1984) also mention the implications of the
organizations size on HRM. They emphasize that people in large organizations are
likely to be managed differently from small organizations. Jobs in large organizations
are generally more specialized to increase efficiency; for example, this study found that
employees in the manufacturing industries, especially the textile industry, must have
specific skills to operate specific production machines. Consequently it requires less
diverse skills which mean it needs less training overall. In terms of supervision, small
organizations may be managed through direct interaction between the highest and the
lowest level of employees, an approach that is impossible to be done in large
organizations. It is not surprising if in small organizations HRM tends to rely on more
informal methods of performance appraisal. Another difference relates to the internal
labour market. Due to specialization and greater possibility of slack resources in large
organizations, it is possible to develop the internal labour market by entry through
lower-level jobs, internal promotions, career paths succession planning, rewards for
seniority and formal grievance procedures. Most of the organizations in this study
preferred to utilize the internal labor market for management positions, as they would
have a better understanding of the complexities involved in managing Indonesian
people. However, in certain circumstances, they did sometimes recruit externally for
higher managerial levels, so they could gain the benefits of their experience and develop
a better global awareness.

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More specifically, related to organizations with more complex employees; (Boxall &
Purcell, 2008; Kalleberg et al., 2006) describe that they often have multiple HR system;
one model for management and another for professionals, or it might be one model for
core operating staff, and another model for support employees. By employing multiple
HR systems, employees can be managed more appropriately based on their complexity
so, both fairness and performance can be achieved simultaneously. This study found that
some companies with complex tasks for employees, especially in the agricultural
industry, adopted multiple systems of HRM. There are differences between the HR
system in the head office and SBUs (strategic business unit), as well as differences
between production employees and the mostly casually employed plantation workers.

The Organizations Structure

The HR managers in this study noted that the philosophical underpinning behind the
organizations structure and why it is designed that way needs to be understood and
taken into consideration in the HR strategy. A different organizational structure plays a
different role in how to control the organizations processes, including how to develop
and implement the HR strategy. More complex processes affect the organizations
structure and this should be taken into consideration in the HR strategy. This accords
with previous findings by many others, including Baron and Kreps (1999), Jackson and
Schuler (2007), Sisson and Storey (2000).

Ulrich et al. (2010) identified two different organizational structures, the product based
division and the functional department, which influence the formulation of HR strategy
(also see Lawler & Galbraith, 1995). The product-based structure is more suitable for
236

organizations which have several distinct products and serve many markets; while the
functional structure is more suitable for a single product or service organization. These
views are strongly supported by this study. Five holding companies in this study which
have several product lines (such as agriculture, property, hotel, finance, pulp and paper)
utilized a divisional structure to cover the differences of each product line, more
specifically this relies on group orientation and horizontal work-flow control. While
others that had a single product majority used line or functional structures to focus more
on individual jobs and hierarchical control.

Stage in the Organizational Life Cycle

The research findings suggest that different stages in the organizational life cycle (start
up, growth, mature, and decline) will have different consequences for managing people
to achieve the organizations goals. Consequently, the stage in the organizations life
cycle should be assessed carefully and taken into consideration in the HR strategy.
Moreover, the HR managers identified that organizations at the start up stage should
focus on the HR strategy in how to provide employees in terms of sufficient number and
skill required; encourage the employees to be more productive in the growth stage;
maintaining employee productivity in the mature stage; and encourage employees to be
innovative and creative so the organization can move beyond the declining stage. These
findings accord with previous researches, such as Baird & Meshoulam (1988),
Lengnick-Hall & Lengnick-Hall (1988), Milliman et al., (1991), and Sisson and Storey
(2000). Moreover, the right choice of HR strategy in the different stages of the
organizational life cycle lead to a good fit between them, which turns into organizational
effectiveness (Schuler & Jackson, 1995, 2007).
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Access to Capital or Quality of Business Funding

Boxall and Purcell (2008) mention the importance of having sufficient funding to
implement a good HRM system (also see Armstrong, 2009; Bannet et al., 1998). How
good the HRM design is, if there is inadequate financial source provided by the
organization; it will not able to be implemented effectively. As the result, intended goals
could not be achieved successfully. The research findings also identified that access to
sufficient financial support plays a significant role, because even the best HR strategy
will have no meaning if it is not supported by sufficient budget. Accordingly, adequate
funding to support the HR department programs must be obligatory for HR strategy
implementation.

Based on the HR managers experiences, some unique phenomenon emerged when

implementing SHRM in Indonesia. A small number of organizations had difficulties in
gaining sufficient financial support for SHRM, despite that organizationally a strategic
approach to HRM had been accepted. The trade mark here is to the treat HRM as a
cost centre, not a centre of staff investment. In consequence, some HR strategies were
not be performed, especially the following up of performance appraisals and the related
training and incentives. In these instances the HR managers indicated it was not easy to
wipe the negative image of HR out from the peoples minds. The HR needs to provide
evidence that its contributions are truly in line with the business strategy (see e.g.
Andersen, 2007, Wright et al., 2001)

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5.2.2.3. External or Environmental Context

Similar to previous findings (e.g. Boxall & Purcell, 2008; Coates, 2009; Delery & Doty,
1996; Jackson & Schuler, 1995, 2007; Roehling, et al., 2009; Walker, 1988) the
respondents to the study explained that the external environmental context needed to
monitored and adjusted carefully when formulating HR strategy. This includes market
competition, technological changes, government rules, global changes, economics
condition, culture, and the role of the union.

Market competition
The literature suggests that the market conditions where organizations are involved in
competition, can influence the prototype of HRM should be formulated (e.g. Boxall,
2003; Boxall & Purcell, 2008; Jackson & Schuler, 2007; Lepak et al., 2006). The
findings from this study indicate that market competition, both domestic or export, are
very dynamic. Indonesian companies not only face competition from existing players,
they also have the threat of new local and global players. The HR managers underlined
the importance of paying attention to competition and its affect on HR strategy. A
specific example was given by the textile HR managers whose companies need to deal
with the invasion of Chinese products.

Similarly the hospital HR managers face the changing behavior among Indonesian
people who want to go abroad for medical treatment and the increase in foreign hospitals
operating in Indonesia. Agricultural companies were more concerned with global
competition because most of them are export based companies, plus hotel competition is
tighter because more international chain hotels operate in Indonesia. The Indonesian HR
239

managers emphasized that when competition was tighter organizations needed to be

more careful in terms of attracting employees, training and development, and
compensation strategies (Jackson & Schuler 2007). Moreover, they also differentiated
the implications of national and global competition to the HR strategies, identifying that
the global market needs demand people who understand the specific context of countries
where products or services are delivered (Bartlett et al., 2002; Pudelko, 2006)

Technology
The Indonesian HR managers express a high awareness to the changes of technology
and its implications to the HR strategy. These findings provide support to the previous
literature (e.g. Baron & Kreps, 1999; Compton, 2009; Deyo & Donner, 2000; Dyer &
Holder, 1988; Godard & Delaney, 2000; Lepak et al., 2004). The research findings
indicate that technology also plays a significant role in the changing of SHRM practices.
Rapid changes in technology, such as information technology, production technology,
material handling technology, communication technology, and transportation technology
had considerable implications on the number of people, the work system, coordination
and control, and decision making.

In particular HR managers from the agriculture, textile, and hospital industries were
concerned because their operations or production are highly influenced by technology.
The textile and agricultural industries use machines as the main technology for their
production system and this requires employees with certain skills. Accordingly, the HR
strategy focuses on building employee competencies and fostering employee
commitment to achieve the lowest unit costs (see Jackson & Schuler, 2007; Kintana et
240

al., 2006). On the other hand in the hospital sector, technology is used in tandem with
knowledgeable and skillful people in delivering medical treatment services and the focus
is on quality of treatment. Technology was not as crucial to the hotel managers as they
rely more on their staff to provide their services and an atmosphere that sets them apart,
as they all had similar facilities and technology.

Government Rules
HR scholars (e.g. Armstrong, 2009; Baron & Kreps, 1999; Boxall & Purcell, 2008; Dyer
& Holder, 1988; Roehling, et al., 2009) suggest that legal aspects must be taken into
consideration when formulating a HR strategy. There are many aspects of HRM highly
regulated by the Indonesian government, such as the minimum wage, insurance,
occupation health safety, equal employment opportunity, etc. Jackson and Schuler
(1995, 2007) underline that almost all aspects of HRM are affected by the legal and
regulatory environment; accordingly organizations should pay attention and ensure that
their HR strategies do not contradict with the regulations. There are many studies (e.g.
Gooderham et al., 1999; Gospel & Pendleton, 2003; Pauwee & Bosolie, 2003, 2007)
that provide evidence that HRM varies across nations due to adaptation to government
regulations. In some countries it could be at the regulations to protect the employees,
while in others it may be that they provide more benefits to employers or employees.

The HR managers in the study identified three important regulations: the minimum wage
regulation, Act number 13 (year 2003) concerning manpower, and Act number 2 (year
2004) concerning industrial relations dispute settlement. The Act number 13 (year 2003)
regulates the basic principles of manpower management in Indonesia, such as
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employment relation including employee protection, wages and welfare, and industrial
relations. The Indonesian Manpower Act sets specific requirements to be accommodated
in the HR strategy; these include equal opportunity, job training, job placement,
extension of job opportunities, employment of foreign workers, termination of
employment, criminal provisions and administrative sanctions. More specifically in
relation to the minimum wage, companies receive annual updates of the district
minimum wage from the district manpower ministry. The minimum wage in Indonesia is
decided differently in each kabupaten (regency) each year. Therefore it is referred to as
Upah Minimum Kabupaten (UMK) or a Regency Minimum Wage. In relation to
industrial relations dispute settlement in Indonesia, Act number 2 (year 2004) principally
consists of procedures for the settlement of disputes and through the industrial relations
court, administrative sanctions and criminal provisions (Indonesia Legal Center
Publishing, 2004).

It should also be mentioned that the Indonesian government rules related to manpower
have dramatically changed following the shifting of the political system from an
authoritarian to a more democratic one (Ghosal, 2004; Shiraishi, 2000; Singleton &
Nankervis, 2007; Tan, 2006). The political shift has led to significant improvements in
basic and civil rights, and compliance with labour standards, such as the minimum wage,
union rights, equal employment rights (Manning, 2004; Mizuno, 2005; Rama, 2001;
Smith et al., 2002). The Indonesian government has also ratified several key ILO
conventions, including the right to compete without discrimination, and freedom of
association (Manning, 2004). Another significant change in the Indonesian regulations
which needs taking into consideration carefully when designing a HR strategy is that
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more regulations have been decentralized to local governments, giving otonomi daerah
or local autonomy (Devas, 1997; Guess, 2005; Shome, 2005). Other government rules
which are mentioned in the study are the export-regulation, waste regulation, and
specific regulations for hospitals.

Global Changes
This study identified that Indonesian organizations continuously face global changes,
including the mobility of foreign employees, internationalization of standard processes
(e.g. ISO), and regionalization and the impact of being in a free trade area. The HR
managers suggested these changes affect the HR strategy (also see Compton, 2009).
Organizations need to ensure they have no problems with international communities,
such as export bans, restrictions on raw material imports or any other form of unofficial
embargos from other countries. This accords with Habir and Rajendarn (2007) finding
that Indonesian organizations need to pay more attention to HRM. Indonesian faced a
financial crisis, as a result of the Asian financial crisis in 1997, and this provided a very
important lesson that global situations will have continuous impacts on the national
economy. Accordingly the HR managers in the study agreed that global changes should
be monitored, evaluated, and taken into consideration for both the business and HRM
strategies.

Lansbury et al. (2006), Nankervis et al. (2008), Patrickson and Hartmann (2001), and
Zanko (2003) underline issues such as entry-barriers, tariff reductions, trade agreements
(e.g. WTO, APEC, AFTA, CAFTA), economic crisis, inflation rates, and interest rate
can all affect the HRM system. This becomes more complicated because of complex
243

variables within the Indonesian society which sometimes do not match with those global
changes. For example:
in the competitive process of globalisation and complexity, it is becoming critical to
manage sustainable multinational organisations more effectively by using SHRM, and to
link this with strategic needs in the larger organisational context. (However they)
must also work within the confines of (their) local environment as well as a range of
laws, politics, culture, economies and practices between societies (Erwee, 2003: 59).

Economic Condition
HR scholars (e.g. Baron & Kreps, 1999; Boxall & Pucell, 2008; Schuler & Jackson,
2007) mention that economic variables such as the labor market, unemployment index,
inflation, and interest rate should be monitored carefully due to their significant
influence to HR strategy; especially related to recruitment, training and development,
and compensation strategy. The most influential economic variable which was reported
by the Indonesian HR managers as the turning point of HRM practices in Indonesia, was
the economic crisis on 1997-1998. Many companies went bankrupt and this led to mass
dismissals. The HR managers all viewed this as a tragedy that has changed the mindset
all players so that how HR plays a more significant role in organizations.

After emerging from the difficulties of 1997-1998, Indonesia has redesigned its
economy to be more resistant to global turbulence. Economics scholars (e.g. Basri,
2002; Eichengreen, 2004; Kim & Haque, 2002; Pincus & Ramli, 1998; Prasetiantono,
2000; Shiraisi, 2001; Smith et al., 2003) suggest this economic reform is on the right
track. More recently, Indonesian organizations are working within growth economic
conditions: GDP per capita is around $US 4,000 with a growth of approximately 5% per

244

year, economic growth is of more or less 6% per year; although this went to minus 13%
during the crisis of 1998. The inflation index is between 5 to 8% per year, as compared
to about 60% during the crisis. The exchange rate in 2010 is around 9,000 Rupiahs per
$US 1 in comparison to 15,000 Rupiahs ten years ago. The labour force is estimated at
116 million people, the unemployment index about 7.40%, a decline of 3 % compared to
1998. People below the poverty line is around 13%, a big improvement on the 40%
during crisis. The minimum wage varies in terms of amount of the money across states
with the highest in Jakarta (BPS, 2010; CIA, 2010; Gunawan & Nankervis, 2006;
Manning & Roesyad, 2006; Singleton & Nankervis 2007; Wikipedia, 2010).

HR managers mentioned that all these conditions influence how Indonesian

organizations design their HR strategies, especially those related to recruitment, training
and development, and compensation and other incentives strategy. Companies are highly
influenced by economic turbulence, for example when inflation is high, consumers
purchasing power becomes lower so sales will decline, revenue drops and this will
influence all organizational functions, including HRM. In this situation, for example,
usually training programs are reduced or will even be removed from the list of HRM
practices. Similarly, when the exchange rates of Rupiah drop to $ US, companies have
difficulties to import raw material and technology, and expatriate compensation becomes
higher.

Although it caused suffering, it should be mentioned that the economic crisis has
enhanced the paradigm shift of HRM in Indonesia from an administrative to a more
strategic role (Bennington & Habir, 2003; Gunawan & Nankervis, 2006; Habir &
245

Larasati, 1999; Habir & Rajendran, 2007; Prijadi & Rachmawati, 2002; Singleton &
Nankervis, 2007; Sitalaksmi & Zhu, 2010). Overall, there is a growing awareness among
Indonesian organizations especially the big companies- that put HR as the most
important asset and must be managed strategically as Sitalaksmi and Zhu (2010: 38)
state: in fact, the impact of Asian crisis is believed to be mixed, given that Indonesia is
the hardest hit country, where political, social and economy turmoil occurred
simultaneously, the impact on HRM in Indonesia could also be unique.

Indonesias financial crisis caused economic instability which was seen in increasing
prices of goods and foods and lowered standards of living and quality of life, events that
provoked demonstrations and social riots (e.g. Basri, 2002; Eichengreen, 2004;
Kinsbury, 2005; Prasetiantono, 2000). The economic crisis paved the way to changing
perceptions in how to manage people in Indonesian organizations. There was a fall in
demand for goods and services, especially for companies that relied on the domestic
market. Simultaneously, the crisis increased the cost of capital, especially for companies
accessing foreign sources. As a result, Indonesian companies faced real difficulties, and
many went bankrupt. Added to this rapid changes were forced by advances in
technology, global competition, and demands for both cost efficiency and quality. These
were influential factors that made companies realize they had to change to survive
domestically and internationally.

Along with the economic recovery, politics and society in Indonesia have slowly
changed; the prices of goods and services are more restrained, the foreign exchange and
interest rates are more stable, social life is more peaceful, and the political situation is
246

more democratic. From an industrial perspective, the economic recovery meant

increased demand for goods and services, more stable access to fund and lower risk of
capital costs, making it safer for doing business. In general, Indonesia may still have
some way to go but it is on the right (better) track.

Culture
This study investigated the influence of characteristics from across five main Indonesian
cultures: the Minang people in the West Sumatra are deemed egalitarian and democratic;
they do not hesitate to speak out and to be critical. The Batak people in North Sumatra
and the Makassar people in South Sulawesi tend to be temperamental and direct,
whereas the Javanese people are humble, more submissive, loyal, and un-demanding.
The Banjar people in South Kalimantan are different again; they are gentle and more
similar to the Javanese people. The Balinese people are viewed a having have great
respect and abiding by traditions rules; and they are honest and friendly. Companies that
operate in a multi-local-culture country such as Indonesia need to manage the dialectic
between organizational culture and local culture wisely in the HR strategy, and this is
what many of respondents felt they were able to do. The study findings emphasize that
HRM within Indonesian organizations is highly influenced by the culture and strongly
support the position of culture in the HRM literature. There has been continuous support
for the importance of culture in HRM studies (e.g. Budhwar & Sparrow, 2002; Hofstede
& Hofstede, 2005; Ignjatovic & Sveltic, 2003; Tayeb, 1998; Trompenaars & HampdenTurner, 1998)

247

Hofstede (1980) proposes four dimensions of culture, which are widely accepted as a
typology of culture, these include are power distance, individualism-collectivism,
masculinity-feminity, and uncertainty avoidance (also see Hofstede, 1991, 1993, 2001a,
2001b; Hofstede & Hofstede, 2005). Based on these dimensions, Indonesia can be
broadly categorized as a country with large power distance, highly collectivist, and
slightly weak in uncertainty avoidance; making it quite different culturally to many
western cultures. On the other it has a slightly feminine dominance, although this is still
quite low on Hofstedes index as can be seen in table 5.1.

Table 5.1: Indonesian Cultural Dimensions

Cultural

Indonesia

Singapore

USA

Dimensions

Power Distance

78

15-16

74

19

40

57-59

36

62

35

63-65

Individualism

14

68-69

20

56-61

91

90

89

Masculinity

46

41-42

48

38

62

19

61

20

66

11-13

46

62

51

55-56

35

66-67

Uncertainty
48 60-61
8
74
Avoidance
Source: Compiled from Hoftede & Hofstede, 2005.

Notes:

Australia

Britain

S: score on comparative scale , R: rank among countries

The number of country in the survey was 74 countries
The lowest score is 0 and the highest is 100, so 50 is categorized as medium.
Power Distance: 0 is the smallest and 100 is the largest power distance
Individualism: 0 is the most collectivism and 100 is the highest individualism
Masculinity: 0 is the most feminine and 100 is the most masculine
Uncertainty avoidance: 0 is the weakest and 100 is the strongest.

In the workplace, these Indonesian cultural dimensions can broadly be interpreted by

Hostede and Hofstede (2005) as follows:

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Large power distance: hierarchy in organizations reflect the existential inequality between
higher and lower levels; centralization is popular; there are more supervisory personnel,
there is a wide salary range between the top and bottom of the organization; managers rely
on superiors and on formal rules; subordinates expect to be told what to do; the ideal boss is
a benevolent autocrat or good father; subordinate-superior relationships are emotional;
privileges and status symbols are normal and popular (Hofstede & Hofstede, 2005: 59).
Collectivism: employees are members in-groups who will pursue their in-groups interest;
hiring and promotion decisions take employees in-group into account; the employeremployee relationship is basically moral, like a family link; management is management of
groups; direct appraisal of subordinates spoils harmony; in-group customers get better
treatment (particularism); relationship prevails over task (Hofstede & Hofstede, 2005: 104).
Feminine: management as mnage: intuition and consensus; resolution of conflicts by
compromise and negotiation; rewards are based on equality; preference for smaller
organizations; people work in order to live; more leisure time is preferred over more money;
careers are optional for both genders; there is a higher share of working women in
professional jobs; humanizations of work by contact and cooperation; competitive
agriculture and service industries (Hofstede & Hofstede, 2005: 147).
Weak uncertainty avoidance: more changes of employer, shorter service; there should not be
more rules than strictly necessary; hard-working is only when needed; time is framework for
orientation; there is tolerance for ambiguity and chaos; belief in generalist and common
sense; top managers are concerned with strategy; more new trademarks; focus on decision
process; intrapreneur are relatively free from rules; there are fewer self-employed people;
better invention, worse at implementation; and motivation by achievement and esteem or
belonging (Hofstede & Hofstede, 2005: 189).

Due to these differences, western concepts, including HRM, need to be adjusted to fit
with the Indonesian cultural values. This evident in the example Rhodes et al. (2008)
provides, which mentions that the implementation of the balance scorecard -a western
based management system, in Indonesia created problems. Similar examples were
provided by the HR managers in this study.

It should also be mentioned, cultural dimensions may not be static over time. For
example, Habir and Larasati (1999) provide evidence that paternalistic and status
orientation behaviours in the work place have eroded enough to allow for more strategic
and performance-oriented HRM in Indonesia.

249

Similarly, this study also provides

evidence that the cultural values of the Padang, Batak, and Makassar people tend to be
similar to western values. There are also many companies, especially hotels, in this
study that have been successfully implementing sophisticated SHRM system that rely on
western concepts.

Furthermore, different from previous HRM studies which mention culture in terms of
national culture, this study suggests local culture is more appropriate for assessing
the influence of culture on HRM practices in Indonesia. This is based on the research
finding that two contradictive cultural groups have influenced SHRM practices in
Indonesia; these are the Javanese, Bali, and Banjar cultures which are identical to eastern
values: where people tend to be humble, submissive, silent, and not demanding. The
second group, those from Padang, Batak, and Makassar, have cultural values close to
western values; they are direct, expressive, egalitarian, and out spoken. Therefore, the
additional theme of local culture is needed to capture the richness of cultural variables in
the Indonesian SHRM literature.

Union
The respondents in the study explained that the unions, as the representation of
employees, play an important role in conveying the aspirations of employees. In this
way unions play a critical role as a business partner, with the organization as the senior
or managing partner. This is similar to other findings that unions presence in the
organization influences the HRM system (e.g. Boxall & Purcell, 2008; Collins & Smith
2006, Dyer & Holder, 1988; Jackson & Schuler, 2007; Jackson et al., 1989).

250

HR strategies should be formulated with attention given to role of the unions.

Previously, the Indonesian government tightly directed and controlled unions
(Bennington & Habir, 2003). Only one union (called Serikat Pekerja Seluruh Indonesia
or SPSI) was permitted and this has fully controlled by the government. This tight
control was part of a government strategy to create a safe atmosphere to attract foreign
investors. This condition was completely changed after Soehartos resignation in 1997.
Under the new government, Indonesia ratified ILO Convention 87 on freedom of
association, which provides the right of workers to establish unions of their choosing.
Moreover, the Manpower Ministerial Number PER-06/MEN/1998, followed by the
Trade Union Act in 2000, were released to provide more freedom to workers in
conducting their union activities. Under these new regulations, it is possible for a
minimum of 10 workers to establish a trade union (Manning, 2004).

5.2.2.4. The Adoption of the Best Fit in the Indonesian Organizations

This study produces an important contribution to the best fit or contingency approach
and identifies this is the most commonly used in Indonesia. Clearly the business
(competitive) strategy is the major variable for determining the HR strategy, which
suggests that Indonesian companies indeed use a SHRM approach. However this study
also suggests that business strategy is not the only factor which influences HR strategy.
Indonesian organizations also mentioned that their HR strategy needs to fit with their
existing environment in relation to the organization size, structure, stage of
development, and access to capital. It also had to be adjusted to meet external demands
such as the market competition, technology, government rules, global changes,
economic conditions, culture, and the union presence. In addition, the interaction among
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these factors could either directly influence the HR strategy, or the influence could be
through the business strategy first, then indirectly affect the HR strategy.

The study also emphasized that, to be effective, HR strategy needs to ensure that
individual HR strategies, policies and practices (recruitment, selection, training and
development, performance appraisal, compensation, employee relation) are designed to
fit and support each other. Just for illustration; when an organization needs an agent of
change, the strategy to buy in skilled people should be supported by attractive
compensation.

It the past HRM in Indonesia tended to play an administrative role for a long time. The
result was that Indonesian business practitioners considered HRM was not as important
as other functions in organization such as production, marketing and finance
(Bennington & Habir, 2003; Warner, 2000; Habir & Larasati, 1999). This changed after
the financial crisis of 1997-1998 and these days HRM has a more strategic role in
Indonesian organizations. The fact that the best fit or contingency approach used in the
Indonesian context is not something really new approach (Bennington & Habir, 2003;
Budiharjo, 1996; Habir & Larasati, 1999; Habir & Rajendran, 2007; Rhodes et al., 2008;
Singleton & Nankervis, 2007; Sitalaksmi & Zhu, 2010).

What is new, in terms of the best fit model, is how this model works and what factors
are associated with the model. The national political reform and the strengthening of the
local government following the economic crisis in 1997 have been significant factors in
determining changes to HR strategies, both directly and indirectly. The shift in
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Indonesias political orientation also produced new regulations that gave more support to
employees (such as the Manpower Act Number 13 year 2003). Another interesting
finding was the importance of local culture. Both are clearly important factors that are
seldom acknowledged by western HR scholars who are more familiar with term of
national culture rather than local culture.

5.3. The Role of HRM and Its People in the Organization

The findings from the study suggest that the strategic decision making role of HR
departments in the Indonesian context can be categorized into two ways. First, the HR
department is involved throughout the whole strategic process, including the
formulating, decision making and implementing of strategy, using the integrative model
recommended by Golden and Ramanujam (1985) and Purcell (1995) or the value driven
HRM model (Buyen & Devos, 1999, 2001). The second approach is where the HR
department participates in formulating and implementing strategy, but is not involved in
the decision making process, and this approach has been categorized as two-way linkage
(Golden & Ramanujam, 1985) or input and react role (Purcell, 1995). The reasons that
explain why Indonesian organizations employ these were the fit with the organizational
mindset, the organizational structure, and the informal decision making process. No
participants in this study suggested they used an administrative and one-way linkage HR
role. This means all organizations in this study put HR department into a strategic role.
From an organizational mindset perspective, there is a considerable difference between
the two-way and integrative linkage roles of a HR department in the organizational
processes. Although Indonesian organizations in this study all claimed people were their

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most important asset, the difference was that one group believed HR should play a full
strategic role, whereas the second group did not involve HR in strategic decisions. Those
companies that saw HR as having a two-way linkage role did not include HR department
representation in the formal structure that made strategic decisions. The Indonesian
organizations that adopted an integrative HR role included HR department in the formal
strategic decision structure. This meant the HR managers were a vital part of the senior
management and played a significant role in the overall strategic processes. There were
two organizations (one from the textile sector and the other a hospital) that did not have
HR representation at the strategic level, but HR was involved in the strategic decision
process informally. In this instances, the formal process was used to formalize decision
that had been reached through the informal process. This is a unique finding that has not
been mentioned in the literature elsewhere.

Four HR managers from agricultural companies, six managers from textile companies,
and five HR managers from hospital sector (overall 24%), stated that their organizations
used a two way linkage role. In contrast seventy six percent (66%) Indonesian
organizations (nine agricultural, six textile, thirteen hospitals, and twenty hotels)
practiced an integrative linkage role and involved HR representatives in the overall
strategic processes of formulating, decision making and strategy implementation. This
suggests that most Indonesian HR departments operate strategically. More specifically,
all twenty hotels put the HR department in the integrative and strategic role. The
findings provide continue support for the paradigm shift regarding HRM in the
Indonesian context as indicated in previous literature (e.g. Gunawan & Nankervis, 2006;

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Habir & Rajendran, 2007; Rhodes et al., 2008; Singleton & Nankervis, 2007; Sitalaksmi
& Zhu, 2010).

Learning from past experiences, respondents emphasized that their organization pays
more attention to how to manage people better, to sustain economic progress and build
competitive advantage simultaneously. A general concern among respondents was the
need to sustain the major shift of direction in HRM development, away from traditional
personnel management (Brochbank, 1999; Lawler & Mohram, 2000). The new direction
in HRM is that people need less guidance and supervision, and more scope and
autonomy. People should not be seen as a cost but as an asset in which to invest, to add
to their inherent value. For this reason the HR managers stressed that HRM must move
beyond administrative functions that provide control, compliance, and consistency if
organizations are to be more flexible, resourceful, and creative. It is common in the
western literature that HR must take a strategic role and employees should be considered
as strategic resource (Barney, 1991), that should be employed collectively with other
resources (e.g., patent, reputation) to enhance organizational success (also see Pfeffer,
1994; Prahalad, 1983; Wright et al., 1994).

Nowadays, Indonesia cannot use low labor costs as a competitive advantage because
other countries in the region and elsewhere have much lower labor costs (Deyo &
Donner, 2000). Effective HRM practices can be determined as a key factor and for being
regionally and internationally competitive (Cheocharnpipat et al. 1997, Wolfe & Arnold,
1994). As early as 1999, Habir & Larasaty identified that HRM practices in Indonesia
needed a more strategic orientation; they need long term orientation, continuous
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learning, knowledge creation, a team focus, empowerment and most importantly they
needed to be an integration of HRM with the firms strategy. From what the HR
managers in this study reported, this shift is occurring.

In summary, the paradigm shift in HRM in Indonesia has come about because of the
losses suffered following Asian economic crisis 1997. This made organizations aware of
how dependant they and the economy were on employee wellbeing (Habir & Rajedran,
2007; Sitalaksmi & Zhu, 2010).

In line with previous studies, Indonesian organizations in this study indicated that their
HR department has moved from administrative to strategic roles; these are two-way
linkage and integrative role. Golden and Ramanujam (1985), provide some helpful
criteria to measure the degree of strategy among HR roles, this includes the motivation
for using an integration, approach the view of HR and the HR function, the primary role
of the HR executive and the HR function, performance criteria on which HR is measured
and the for implementing HR programs or system. Based on these criteria, Indonesian
organizations practice both the two-way linkage and integrative linkage approaches;
these can be distinguished clearly when examining table 2.11 on page 72.

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Those Indonesian organizations that consider HR as important capital that helps them
achieve competitive advantages, involve the HR department throughout all
organizational activities, both strategic and non-strategic (operational) activities. This
means that HR not only deals with day-to-day routine activities, but more importantly, is
also involved in the strategic process. This choice is highly influenced by the business
owners mindset.

Most service organizations in the study, especially in the hotel

industry are categorized to this group and engage HR representation on their corporate
board. In contrast, Indonesian organizations that believe HR provides a lower or more
moderate capital investment to accomplish the organizations goals tend to put HR
departments into a less strategic role. Although the HR department may contribute to
designing the organizational strategy, they are not involved in the decision process. An
interesting finding was that two organizations practice informal strategic decision
processes.

Literature suggest that to be able to play a more strategic role, HR managers should be
involved in the strategic decision making process together with other senior managers as
this to provide a greater opportunity to align HRM with organizational objectives and
the business strategy (e.g. Bhudwar, 2000; Buyen & De Vos, 1999; Hall & Torrington,
1998a, 1998b; Scullion & Sarkey, 2000; Teo 2000, 2002; Ulrich, 1997a, 1997b).
Membership of HR managers at the decision board also creates a better relationship
among top people in the organization and increases integration and value creation
(Andersen, 2007) which leads to achieving sustainable competitive advantage and higher
performance (Koch & McGrath 1996; Wright et al., 2001). This higher involvement of

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HR in organizational strategy development is also strongly related to perceptions of HR

effectiveness (Wright et al., 1997).

5.4. The Determinants of HR Strategy Implementation

The findings from this study identified three underlying determinants for the successful
implementation of HR strategy in Indonesian organizations, these are the credibility of
the HR strategy, the level of organizational support and the role of the HR department
and its staff. The HR managers made it clear that the HR strategy will not be able to be
implemented successfully if it does not rely on the business strategy and the real
conditions of the organization. The HR strategy cannot stand alone; it needs to interact
with other organizational factors. Having a good HR strategy is not enough it must be
supported in the organization. Unless this occurs performance will not be optimal. The
quality of the HR manager is also important. If the HR manager is average or of a low
standard

problems

will

arise

when

implementing

HR

strategies.

Effective

implementation is not only about how to translate the strategy into practice, but also
about how to motivate employees and build among all of the organizational members
into teamwork. These findings clearly provide support for existing literature (e.g. Beer &
Eisenstat, 2000; Boswell, 2006; Coates, 2009, De Cieri & Kramar, 2003; Inyang, 2010;
Lynch, 2006; Roney, 2004; Storey, 2009; Teo, 2000).

5.4.1. The Credibility of HR Strategy

The credibility of HR strategy was also considered important by respondents in this
study. Credibility is influenced by the understanding of business strategy, compatibility

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with the conditions of organization, and employee involvement in HR strategy

formulation. These findings support the existing literature, such as Armstrong (2009),
Jackson and Schuler (2007), Lynch (2006), and Inyang (2010).

Understanding of Business Strategy

The Indonesian HR managers mentioned that when HR staff understood the business
strategy very well, the strategy was more integrated and rational. A good understanding
of the business strategy is thus a critical determinant of HR strategy credibility. Once the
HR manager understands and is able to identify the reasons for the business strategy and
its consequences, they are able to translate business strategy into HR strategy. These
findings provide further support to the emphasis that HR strategy should be sufficiently
formulated to give direction and goals that the organisational members understand and
can work toward (Boswell, 2006; Huselid, 1997; Kernochan, 1997; Lynch, 2006;
Mintzberg, 1987a, 1987b; Reid, 1989). Moreover, when business strategies are well
understood by HR managers, they can to send consistent signals throughout the
organization that reinforce and support appropriate individual and collective responses
in the implementation phase (Bowen & Ostroff, 2004; De Cieri & Kramar, 2003). Based
on experiences, the Indonesian HR managers found difficulties in understanding an
ambiguity of business strategy which leads to problems in its implementation. Moreover,
they underlined that well understood business strategy is a key to successful
implementation.

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Compatibility with the Conditions of Organization

A credible HR strategy has to be compatible with the organizations characteristics and
its surrounding contexts, including the number and capability of employees, funding
resources, technology, and life cycle. If organizations ignore these factors, they will face
difficulties in its implementation. The managers in the study identified that every
organization should pay attention to its unique characteristics, and experience has taught
that benchmarking, or adopting HR strategies from other organizations which have
significant differences, including from western organizations, may not provide positive
contributions. This approach can even make the situation worse. This finding is clearly
in line with recommendations in the literature that suggests HR strategy will be more
credible and applicable if it fits with its environment (Coates, 1987, 2009; Jackson &
Schuler, 1995, 2007; Roehling et al., 2009; Storey, 2009). Moreover, Armstrong (2009)
indicates that HR implementation failure is a failure of the HR strategy in adjusting to its
environment. In line with these, the Indonesian HR managers emphasized that HR
department should pay sufficient attention to adequately assessing the environmental
and cultural factors that affect the content of the HR strategies. This becomes more
crucial because companies operate their business in the complex society such as
Indonesia.

Employee Involvement
The literature suggests that the involvement of the HR staff helps the successful
implementation of HR policies that can lead to competitive advantage (Inyang, 2010)
and enhance commitment during implementation (Budhwar, 2000; Teo, 2000). From a
behavioral theory perspective taking account of employees needs leads to positive
260

behaviors that assist in implementing HR strategies and help reduce absenteeism, and
turnover (Becker & Huselid 1998). These views are strongly supported by the findings
of this study. The respondents suggested HR staff and employees are the ones who
implement HR practices and their involvement enhances the HR strategy validity. Wider
involvement of employees in designing HR strategy, results in a sense of belonging that
leads to high involvement and acceptance of both the implementation and in the
evaluation. In fact, in some Indonesian contexts, employees will feel guilty if they were
involved in developing the HR strategy and do not engage with implementing it.

5.4.2. Organizational Support

Sheehan et al. (2007) mention the importance of organizational support to the effective
implementation of HR strategy. Moreover, successful HR strategy implementation
requires adequate resources to support strategic intent, and a well-aligned organizational
partnership, coordination, and synergy with other departments (Roney, 2004). These
views are strongly supported by the HR Managers in this study, who were adamant that
organizational support was necessary for the success of HR strategy implementation,
and this relies on top management support, partnerships among department, and the
organizational culture.

Top Management Support

The Indonesian HR managers explained that top management support is the key to
receiving further support from the rest of the organizations members. When top
managers provide full support to the HR strategy other members are unable to obstruct it
and strategy can be implemented more easily. Top management support and
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commitment will also bring other benefits, such as easier access for financial support, or
back up from the top if there are problems in HR strategy implementation. These
findings are in line with the current literature.

Godard (2004) and Klein et al. (2001) mention the importance of the senior management
team in SHRM, including their role in setting the strategic goals and designing the HRM
system to achieve those goals. Accordingly, the role of the top management in providing
legitimacy to the HR strategy is crucial (Bartram et al., 2007; Sheehan et al., 2007;
Stanton, 2010). Top management support for the HR strategy makes it easier to translate
the HR strategy throughout the organizations levels (Stanton, 2010) and empowers
implementation. The Indonesian HR managers mentioned that top management support
was more crucial in a high power distance society such as Indonesia because their
positions are highly respected by others. This supports other evidence the senior
management has a critical role in developing and implementing HR strategy (e.g. Guest
1997; Lepak & Snell 1999; Macky & Boxall 2007; Wright et al., 1994).

Partnerships among Departments

After receiving sufficient support from the top management, the successful HR strategy
implementation needs the cooperation among departments. The Indonesian HR
managers described that the HR strategy should be implemented across all departments,
because people in each department are targets of its implementation. The HR strategy is
not just the responsibility of the HR department, but other departments. All departments
have equal responsibility to implement HR strategy because they need to work together
as a team for the good of the organization. Communication, coordination, evaluation and
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control, and giving feed back is a role for departments when working together to achieve
organizational goals.

These findings are undoubtedly in line with existing literature which emphasizes the
adoption and integration of HRM involve different managerial levels across departments
in the organization (e.g. Lepak & Snell, 1999; Mayrhofer et al. 2005; Valverde et al.,
2006). A number of other studies have demonstrated the important role of middle and
line managers in the implementation of HR strategy (Currie & Procter, 2001; Mayrhofer
et al., 2005; Purcell & Hutchinson, 2007; Teo & Rodwell, 2007).

Based on their

experiences, some the Indonesian HR managers provided evidence that the successful
implementation of HR strategy was very difficult to achieve without this coordination,
or if there was not harmony, either among senior managers or between senior managers
and line managers.

Organizational Culture
The literature suggests that organizational or corporate culture plays a significant role in
the implementation of HR strategy (e.g. Lengnick-Hall et al., 2009; Ostroff & Bowen,
2000; Schuler & Jackson, 1987; Wright & McMahan, 1992). These views are highly
supported by the research findings. The HR managers underlined that a positive culture
that encouraged people to achieve organizational goals enthusiastically should be
created. If this environment can be achieved, HR strategy will be able to be implemented
more successfully. As Indonesian companies are working within a high cultural and
religious society so it is necessary to accommodate local and religious values into the
architecture of organizational culture.
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Cabrera and Bonache (1999) recommended aligning the culture with HR strategy, as this
promotes appropriate employees behaviors to support the implementation of HR
strategy (Schuler & Jackson, 1987). Moreover, there is a causal relationship between
corporate culture and HRM implementation. Corporate culture not only influences the
implementation of HR strategy, but it is also influenced by the HR strategy
implementation (Bowen & Ostroff, 2004; Chan et al., 2004). Organizational culture is
also considered as a mediating variable in the SHRM and organizational performance
relationship (Ostroff & Bowen, 2000). The findings suggested that the phenomenon of
causality between organizational culture and HRM (Bowen & Ostroff, 2004; Chan et al.,
2004) were practiced by Indonesian organizations. These cases could be found easily
especially in the Indonesian Islamic and Catholic hospitals, and companies in Bali.

5.4.3. The Role of HR Department Staff

The study findings highlighted that the HR department staff in Indonesian companies
were the key people in HR strategy implementation. Accordingly, the HR managers
argued that they should have sufficient capability, autonomy and a high commitment to
their role to play this significant role. This means HR staff need to be capable of
handling all of the implementation aspects; including translating the HR strategy into
policies and practices, coordinating and controlling the activities, communicating with
other departments and their members, handling difficulties, and even acting as a role
model for other organizational members. As the key organizers, HR staff need an
excellent understanding of the factors associated with and surrounding the HR strategy.
This requires they motivate themselves to learn and consider different perspectives.
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The literature (e.g. Armstrong, 2009; Boxall & Purcell, 2008; Buyen & Devos, 1999 &
2001; Golden & Ramanujam, 1985; Guest 1997; Macky & Boxall 2007; Purcell, 1995;
Wright et al., 1994) suggests that the HR department plays a significant role in either
formulating or implementing strategy. Moreover, in certain organizations HR also is a
decision maker due its membership in the strategic decision board. Another finding was
that in certain circumstances, strict regulations make it difficult to implement the HR
strategy. In such a situation, HR staff need autonomy so they have the flexibility to fix
the problem and being a decision maker gives HR this flexibility. They need a degree of
autonomy that allows them to meet the organizations goals, so that they remain relevant.
The HR department is viewed by other departments as most responsible for HR
programs and accordingly, they need to be role models.

This requires them to

demonstrate high motivation, responsibility and commitment. Indonesian HR managers

highlighted that the time-line commitment, budget commitment, and reward-punishment
obligations should be kept in mind, so for HR strategy to be implemented effectively.

The HR Staff Capability

De Cieri and Kramar (2003) argue that to be successful in implementation the HR
function must ensure that the organization is staffed with people who have the necessary
knowledge, skill, and ability to perform and implement the strategy. In other words, HR
people especially HR managers- should have both strategic and operational capability
to support their vital role in the HR strategy implementation. Inyang (2010) emphasizes
that the HR practitioners must be highly knowledgeable, multi-skilled and obtain core
competencies such as business knowledge, strategic vision, credibility and integrity, and
265

internal consulting skills. These views were supported by the HR managers in this study.
They identified the HR department is central to implementing HR strategy and HR staff
must be capable of handling all implementation aspects.

The HR Staff Autonomy

Translating HR strategy into practice is not an easy task. Moreover, the HR managers in
this study supported the view that HR acts as a coordinator across the entire organization
to ensure that HR policies and practices are implemented properly, as argued previously
by Hope-Hailey et al. (2005). When complexity or ambiguity initiatives emerge in
implementation, especially in large and diverse organizations, the HR manager needs
sufficient autonomy to be flexible in dealing with such difficulties (Guest & King, 2004;
Hope-Hailey et al., 2005).

The HR managers underlined the importance of autonomy to act; whether it was

autonomy in making policies, managing activities, and handling difficulties. This view
has strong support in the literature especially view that HR managers must be actively
involved in both formulating and executing or implementing strategy (e.g. Buyen &
Devos, 1999, 2001; Golden & Ramanujam, 1985; Guest 1997; Macky & Boxall 2007;
Purcell, 1995). In the case of Indonesian managers this is important not only because of
ambiguity in their role, but because of the complex socio-cultural variables in the
workplace.

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The HR staff Commitment

Literature supports HR playing a dominant role in HR strategy implementation. To be
able to play this critical role, it is necessary for HR managers to have deep
understanding and high commitment to the HR strategy that will be implemented (e.g.
Buyen & Devos, 1999, 2001; Boswell, 2006; Di Cieri & Kramar, 2003; Lawler &
Mohrman, 2003; Lynch, 2006; Purcell, 1995; Roney, 2004). The HR managers in the
study similarly gave strong support to need for a commitment to HR. This commitment
needs to come from the top of organizations and include time-line commitments, budget
commitments, and reward-punishment commitments that ensure to the benefit of
achieving strategic goals.

5.4.4. The Determinants of HR Strategy Implementation in the Indonesian

Organizations
Overall, the findings related to the determinant of HR strategy implementation suggest
that Indonesian HR managers are very aware of the need to link HR and organizational
strategy, and their opinions are very much in line with those proposed in the western
literature. The successful implementation of HR strategy depends on how well the
organization can link HRM to business strategy; this is the essence of strategic HRM.
This finding is in line with the recommendations of many HR scholars (e.g. Bamberger
& Meshoulam, 2000; Beer et al., 1984; Boxall & Purcell, 2008; Fombrun et al., 1984;
Leopold & Harris, 2009; Lundy & Cowling, 2000)

Another finding, in line with the literature, was that HR activities need to be credible to
the organization and employees for them to be accepted and followed. In fact, the
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respondents also supported credibility of HR strategies as a necessary pre-condition for

them to be operationalized at any level of the organization. The other two important
criteria they raised were that the HR strategy itself must be credible and that a credible
HR strategy can only be implemented in a supportive organizational environment and
with a supportive and appropriately skilled HR manager.

Respondents viewed

credibility as a necessary pre-condition for effective strategic HR implementation, and

variously associated this with it being realistic, accurate, specified, consistent, complete
and valid.

Their view was that the HR strategy needs to be holistic, to include recruitment,
selection, training and development, performance appraisal, rewards and recognition,
employee relations strategies, and employee involvement, if it is to help the
organization achieve its strategic objectives. This is also accords with such determinant
as understanding to business strategy (Boswell, 2006; Lynch, 2006), compatibility with
the organizational context (Jackson & Schuler, 2007; Storey, 2009), and employee
involvement (Inyang 2010; Teo, 2000), as has been identified in the western literature.
In addition, respondents supported the view proposed by others that HR strategies need
to be understood and implemented in a way that is sensitive to the organizations
environment (Armstrong, 2009; Kernochan, 1997; Reid, 1989).

Another point respondents made was that having an excellent or credible HR strategy
does not necessarily mean that it will lead to successful performance. A well formulated
HR strategy that is not organized and implemented properly, will not motivate
organizational members to achieve good the performance. The success of the HR
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strategy implementation depends not only on how HR professional translates the

strategy into action, but also on having adequate support from the organization.

The respondents in this study held similar views to those identified in the literature, in
that they believed HR strategies can only be implemented effectively if a number of
other conditions exist. A part from top management support, an appropriate
organizational structure that clearly shows the importance of HR and facilitates
communication that is clear, so there is the ability to coordinate activities crossfunctionally, through either strategic partnerships with HR or other departments and
functions. The final condition is a sympathetic organizational culture to support and
facilitate engagement of all employees. Taken together these findings replicate those
previously espoused by Bennet et al. (1998), De Cieri & Kramar (2003), Gordon (1985),
Roney (2004), Wallace (1983), and Zammuto and OConnor (1992) who all variously
argue that implementing strategy successfully requires organizations to not only have the
strategic intent, they must also have a well-aligned organizational structure, and the
motivation of individuals at all levels to achieve effective goal-seeking behavior.

In terms of the role of HR staff, this study highlights the importance of having
competent and trained or experienced staff, who can successfully implement HR
strategies. To be able to do this, HR professionals need the ability to influence people
across the organization and at all levels. This means the HR staff and especially HR
manager need to have credibility and professionalism. The respondents identified that
HR managers also need to have both autonomy and commitment, so they can persevere
when they come up against obstacles within the organization, particularly when dealing
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with other areas that have competing priorities between production, customers and
promoting employee engagement.

An interesting finding from this research was that the respondents believed that top
management support was the most critical factor influencing HRs ability to implement
HR strategy in Indonesian organizations. This is not surprising, considering Hofstedes
(1980) well accepted findings about cultural differences (also see Hofstede, 1991, 1993,
2001a, 2001b; Hofstede & Hofstede, 2005). Indonesian people are categorized as having
a high power distance and this means support from the top makes it easy to gain other
support from the rest of the organizational members. Similarly, Trompenaars and
Hampden-Turner (1998) also classified the Indonesian organizational culture as highly
directive and having paternalistic managers. These managers are used to operating in a
culture where status is ascribed. Given the cultural context of Indonesia, these attributes
may well act as blocks to implement HR strategy effectively, unless senior management
support is unambiguously given.

5.5. Characteristics of Each Industry

Thirteen (13) agricultural companies participated in this study, and most of these (69%)
utilized the best fit approach to managing their people; whereas 31% used the best
practice or universalistic approach. Exactly the same percentage of 69% of agricultural
companies used the integrative role and 31% used the two-way linkage approach. All
four companies that employed the best practice approach to SHRM, used the two-way

270

linkage for their HR departments role. Whereas all nine companies that employed the
best fit approach, employed the integrative role.

Twelve (12) textile companies participated in the study. Most of these (75%) utilized the
best fit or contingency approach to the SHRM, and 25% of organizations used the best
practice approach. The HR departments role was equally split between the two-way
linkage and the integrative linkage, with 50% or six (6) companies adopting each role.
Furthermore, all three (3) textile companies that used the best practice approach used a
two-way linkage. Nine (9) textile organizations employed best fit, however, three (3) of
them used the two-way linkage, and the other six (6) utilized the integrative role.

In comparison, the manufacturing sector respondents had quite similar characteristics to

the agriculture and textile industries in that the majority or 72% used the best fit
approach. In terms of the role of the HR departments involvement in strategic decision
making process, the agricultural industries involvement (69%) was higher than both the
textile (50%) and manufacturing sector (60%).

A higher level of utilization of the best fit approach was found among the eighteen (18)
hospitals that participated in the study. Most of these, 15 hospitals (83%), utilized the
best fit in SHRM approaches, while three (17%) used the best practice approach. The
HR departments role in the strategic decision making process saw 13 hospitals (72%)
using an integrative linkage and 5 hospitals (28%) utilizing a two-way linkage.
Compared to agriculture, textile, and the manufacturing respondents it can be said that
the Indonesian hospitals were stronger in the practice of SHRM.
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Twenty (20) hotels participated in the study and all utilized a best fit SHRM approach
and integrative linkages for the HR departments role. This means the formulation of HR
strategy in Indonesian hotels is always fitted to their business strategy, and the internal
and external contexts. Furthermore, all the hotels HR managers were members of the
strategic decision making board and were actively involved in formulating, deciding,
and implementing HR strategy. Compared to the other sectors (hospital, agriculture,
textile companies), it is clear the SHRM has been most strongly adopted by Indonesian
hotels. One reason for this is that industry is more strongly influenced by external events
and international conditions.

All of the hotel respondents came from four and five stars rated hotels, with rating
determined an international committee. Most of them (75%), are owned by domestic
investors, however they are mostly operated by hotel chain managements, that are either
national or international, which means they operate using modern western management
principles. Another interesting feature of this is that their business activities are in eight
cities (Jakarta, Yogyakarta, Surakarta, Denpasar, Padang, Medan, Banjarmasin,
Makassar), across five islands (Bali, Java, Sumatra, Kalimantan, Sulawesi) with six local
cultural backgrounds (Balinese, Javanese, Padang, Batak, Banjar, Makasar) and they are
able to incorporate. This makes an excellent portrait of interaction between the
international, national and local culture, where there is a merging of west and east, and
modern and traditional values that can be managed effectively and produce an excellent
outcome by implementing and adopting the SHRM model.

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Two similar interesting stories emerged from Padang and Banjarmasin during the field
research. People in both cities rely heavily on cultural and religious principles that do
not fit the principles found in the hotel industry. The local people identified hotels with
alcohol, night life, and prostitution. In consequence, the hotels found it difficult to attract
and hire employees. Their choices were to hire people from other cities or even other
islands at a higher cost. Slowly but surely, the hotels finally succeeded in convincing the
public that hotels were not as bad as they thought. They did this by engaging in local
customs through, for example, inviting religious leaders and combining social and
religious functions for example Ramadhan celebration held in hotel or wedding
celebration. Many of the hotels do not serve alcohol. The recent situation is the hotels in
both cities are now well accepted and people do not hesitate to be employees of the
hotels.

These findings are in line with Boxall and Purcells (2008) views, that service
organizations generally adopt a more strategic role for HRM when compared to
manufacturing companies, arguing that this occurs because the link between
competitive strategy and HRM is stronger.

Other scholars identify that service

industries have business characteristics that rely heavily on human roles. Service
organizations differ from manufacturing in the following three ways; products of
service organizations are intangible, while manufacturing products are tangible;
customers are actively involved in the production or services, whereas they are not
involved with manufacturing; and the consumption of services occur simultaneously
with their production, whereas manufactured products are consumed after the production
processes is complete (Fisk et al., 1995; Lovelock, 1995; Norman, 2000). Moreover,
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Combs et al., (2006) emphasize that employees in manufacturing organizations do not

deal directly with customers; they work with machines to produce the products and
accordingly, take into consideration how to increase their interaction capability with the
machine, not with customers (Combs et al., 2006). In general, service organizations
develop their HRM systems based on the following fundamental principles: employee
and client input into performance appraisal, the results of which are used to assess
training needs. They provide extensive training of new employees, and emphasize
performance and the performance appraisal result to determine compensation (Jackson
& Schuler, 1992).

5.6. Limitations, Conclusions and Recommendations

5.6.1. Limitations
Although this study provides a substantial contribution understanding SHRM theory and
practice in Indonesia, the findings and discussions inevitably have limitations:

Firstly, although data was collected from sixty three HR managers from eight cities
across five islands with six different cultural backgrounds, the study only involves
relatively large, stable, and high reputation companies. This may mean the SHRM may
not be as widely accepted among other organizations, and particularly smaller
organizations.

274

This study only involves two industries from both the manufacturing and service sector,
so the findings may not be representative of other industries within these sectors. There
is also the possibility that this has limited themes which emerged from the research. A
larger coverage of industries may allow a richer picture to arise and provide an even
more comprehensive picture of SHRM practices within Indonesia. Third, although this
study includes six different ethnic cultural background within Indonesia, it would be
more comprehensive extended to include a broader range of cultural backgrounds. While
this study found that culture has a significant influence on the formulation of HR
strategy, including a wider range of cultural backgrounds would enhance the richness of
findings on the SHRM practice within Indonesian context.

Finally, because of the lack of previous evidence about the adoption of SHRM in
Indonesia, this study employs a qualitative grounded theory approach. The finding that
SHRM is practiced in Indonesia as it is in other parts of the world, albeit with
modification to accommodate local and national culture, will allow further study of the
interaction among the variables in the construct, that were not able to be presented.
Further study to test the construct using quantitative methodology and larger sample
would be very valuable contribution to test the findings of this study, and extend
understanding of relationship among the SHRM constructs as practiced in Indonesia.

5.6.2. Conclusions and Recommendations

5.6.2.1. The Approaches to SHRM
The findings of this study suggest that Indonesian organizations use both best fit or
contingency, and best practice or universalistic approaches to SHRM. It should be
275

mentioned that in practice, best fit and best practice are not mutually exclusive and can
be implemented simultaneously in differing components of HRM. The best fit is
predominant (84%), when compared to the best practice approach (16%). This means
most Indonesian organizations, have a high awareness of the need to fit their HR
strategy to the business strategy and internal or external factors. Internal determinants
are organizations size, structure, and stage in the organizational life cycle, and the
access to capital or quality of business funding as influential. External factors they take
into consideration are market competition, technology, global changes, government
rules, economic conditions, culture, and the union presence. This study also identifies
that local culture is more appropriate when implementing HR strategies rather than
national culture. Although local culture is not widely recognized in the literature, it is
likely to be a factor that needs to be considered in other countries, who like Indonesia,
have different cultures, defined by differences in race, ethnicity, and religion. As a
result, this study proposes a model of SHRM for the Indonesian context, as can be seen
in figure 5.1.

276

Figure 5.1: A Model of SHRM within the Indonesian Context

Environmental Factors:
Market competition
Technology
Government rules
Global changes
Economic
Local culture
Union

Organizational Factors:

Size
Structure
Stage in OLC
Access to capital

Business Strategy
Human Resource Strategy

Recruitment
& Selection

Training &
Development

Performance
Appraisal

Compen
sation

Employee &
Industrial
Relation

Human Resource Management

Based on these findings, this study recommends the following considerations when
operating a business organization within Indonesia. Firstly, for organizations that want
to be successful in managing Indonesian people it is necessary for the HR strategy to
address the interplay between professional business principles and the complex
attributes of the people and their social-cultural backgrounds. Secondly, as a
consequence of becoming more democratic, the Indonesian government is more
protective of employee rights and have given power to local government to ensure open

277

and fair interactions. In addition, unions have a role to play as strategic partners.
Accordingly, it is crucial that organizations be flexible, adaptive and adjust to the local
environment if they are to survive. There are many local cultures that exist in Indonesia
and these have special role in shaping the society, these also need to be taken into
careful consideration for managing HRM. Even a global company needs to also be a
local entity!

5.6.2.2. The role of HRM in the Organization

The role of HR managers in Indonesian organizations can be categorized as using either
an integrative SHRM model, or a two-way linkage role. The integrative linkage is
predominant (76%), as compared to the two-way linkage at 24%. This means most HR
departments in Indonesian organizations are represented at the strategic decision making
level and HRM is involved throughout the strategic process of formulating, deciding,
and implementing strategy. A small number of companies also use informal decision
processes, so that strategic board meetings formalize agreements achieved informally.
This is an emergent phenomenon not seen in the HRM literature, but most likely would
be evidence in practice.

Based on these findings the following recommendations for operating a business in

Indonesia are made. Recognize and value the contribution HRM can make to strategy
design and its implementation. Secondly, engage HRM practitioners at the most senior
level and involved them in strategic decision-making to ensure effective policy
formulation, decision-making and implementation of HR practices and processes.
Finally, pay attention to the interplay between formal and informal HR processes, as

278

these may generate credible operational HR strategies that can be successfully

implemented.

5.6.2.3. The Determinants of HR Strategy Implementation

This study found that the determinants of HR strategy implementation within the
Indonesian context are similar to those found within western or international
organizations.

Three central issues identified as most important for effective HR

strategy implementation are the credibility of the strategy, having senior management
and organizational support, and the role and skills of the HR professional and these have
the following implications for operating a business within Indonesia.

Firstly, successful HR strategy implementation needs to accommodate all the necessary

elements that support the credibility of a HR strategy at all levels of the organization,
and this needs to include employees. Secondly, organizations need to pay particular
attention to attracting HR managers who have a high level of HR skills, knowledge and
experience or training: they must have the ability to work with and relate to other senior
managers, if they are to play a significant role in facilitating business strategy through
the HR strategy. Finally, while empowering employees is popular in the west and can be
appropriate in some settings in Indonesia, it also needs to be recognized that having
autocratic leadership within an organization can be very effective when it is matched
with the cultural context and effectively wielded for the good of the organization and its
citizens. On the other hand, top management that is too directive, or has poor vertical

279

and horizontal communication or who are not in alignment with the organizational
culture will block implementation, no matter how good the strategy is.

280

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Appendix 1.a
INTRODUCTION LETTER TO POTENTIAL RESPONDENTS

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Appendix 1.b
COVERING LETTER FROM THE RECTOR OF UNIVERSITAS ISLAM INDONESIA

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Appendix 1.c
ETHICAL APPROVAL FROM MURDOCH UNIVERSITY

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Appendix 2
TRANSLATION OF FINDING THEMES

1. The Approaches to SHRM

1.1. The Best Practice (Universalistic) Approach
1. Organizational Process:
Jumlah karyawan kami tidaklah sangat banyak, dengan cara yang sekarang kami merasa
tidak ada amasalah (Ag4: 4)
The numbers of our employees are not great; we have no problems with the current
system [*HRM] (Ag4: 4)
Kami bukanlah perusahaan besar (Tx6: 6)
We are not a big company (Tx6: 6)
Ini sederhana... kami hanyalah perusahaan tekstil kecil (Tx8: 4)
Its simple... we are only a small textile company (Tx8: 4)
Kkami hanyalah rumah sakit kecil (Hs4: 5)
We are only a small hospital (Hs4: 5)
Kami hanya mempunyai jumlah karyawan yang sedikit... sehingga kami
mempertahankan cara kami sekarang (Hs16: 4)
We only have a small number of employees... so we keep going with our current way
[*HRM] (Hs16: 4)
Buat apa susah-susah, toh prosesnya gitu-gitu juga (Ag1: 2)
...the process is no big deal (Ag1: 2)
Prosesnya sederhana kok... dan tidak pernah berubah (Ag2: 4)
The process is simple and it has never changed (Ag2: 4)
Proses produksinya mudah... (Tx2: 4)
The production process is easy... (Tx2: 4)
Perusahaan kami proses produksinya simpel sehingga tidak perlu model pengelolaan
manusia yang terlalu canggih (Ag4: 6)
The production process in our company is simple so we dont need to conduct a
complicated model in managing people (Ag4: 6)
Tidak... process tidak komplek (Tx6: 3)
No...The process is not complex (Tx6: 3)

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Ini hanyalah process yang rutin dan sederhana (Tx8: 7)

Its only a routine and simple process (Tx8: 7)
Jumlah orang yang sedikit berarti mudah untuk mengontrol mereka (Tx8: 7)
A small number of employees means that its easy to control them (Tx8: 7)
Orangnya sedikit, ngontrolnya juga gampang; jadi kita pertahankan cara yang ada
sekarang (Hs16: 4)
Their numbers are small, controlling them is easy so we will maintain the currently
available system (Hs16: 4)
Proses sederhana dan tidak memerlukan tenaga yang berlebihan untuk mengontrolnya
(Ag1: 2)
The process is simple and it doesnt need much effort to control it (Ag1: 2)
Proses produksi terpusat dalam ruangan yang besar, mudah untuk mengontrolnya (Tx2:
4)
The production process is centered in a big room, its easy to control it (Tx2: 4)
Sedikit karyawan, proses sederhana...tentu saja mudah untuk memonitor mereka (Ag4:
4)
Not many employees, so a simple process...of course it is easy to monitor them (Ag4: 4)
Kami sepenuhnya bergantung kepada keputusan pemilik (Hs5: 5)
We completely depend on the owner decisions (Hs5: 5;
Pemilik memainkan peran yang dominan dalam pengambilan keputusan (Ag1: 3)
The owner plays a dominant role in taking decisions (Ag1: 3)
Keputusan terpusat pada pemilik (Ag4: 5)
decisions are centralized in the owner (Ag4: 5)
Pemilik memainkan peran yang vital (Tx8: 7)
The owner plays a vital role (Tx8: 7);
Setiap keputusan diperusahaan kami tergantung pada pemilik dan dia menganggap
model yang sekarang sudah pas tidak perlu dirubah-rubah (Tx2: 5)
Every decision in our company is based on the owner; and he thinks the current model
[*HR management model] is perfect, that it doesnt need to be changed (Tx2: 5)

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2. Market Condition:
Kami berhasil menguasai pasar, itu artinya kami berhasil memanage tenaga kami. Untuk
apa dirubah? Kan sudah terbukti... (Ag4: 4)
We have been dominating the market; that means we have succeeded in managing our
human resources. What should we change it for? It has been proven (Ag4: 4)

Kita punya market sudah captive, kita jaga itu dengan proses yang sekarang. Kita sudah
ada di jalur yang benar (Ag7: 4)
we have a captive market; we maintain it with the current process [*HRM]. We are on
the right track (Ag7: 4)
Pasar kami sudah stabil, tugas utama kami menjaga kestabilan proses termasuk SDM
tentunya (Tx8: 8)
Our market is already stable; our main task is to maintain the stability of the process,
including HR management (Tx8: 8)
Konsumen sudah tahu bagaimana cara kami melayani, dan mereka terus datang ke kita
(Hs4: 5)
Consumers are aware of how we serve them, and they keep coming to us (Hs4: 5)

3. Organization Life Cycle:

Perjalanan organisasi kita sudah panjang dan sekarang sudah mapan, inilah model yang
kami rasa terbaik dan akan kita pertahankan (Hs4: 5)
Our organization has had a long journey and now we are in an established position; we
think this is the best model [*HRM] that should be maintained (Hs4: 5)
Sistem sekarang merupakan hasil perjalanan organisasi yang cukup lama; sekarang
sudah kita anggap yang terbagus (Hs5: 5)
The current system[*HRM] is the result of a long journey of the organization, we
assumed this is the best (Hs5: 5 )
Semua fungsi organisasi sudah berjalan dengan baik, kita menjaganya saja (Ag2: 5)
All of the organizational functions have already worked well; we just need to maintain
them (Ag2: 5)
Profitabilitas kita sudah mantap, berarti tidak ada yang salah dong... (Ag7: 4)
Our profitability is stable, it means that nothing is wrong... (Ag7: 4)
Produktifitas tinggi, ketidakhadiran rendah, semua berjalan dengan baik (Tx2: 5)
High productivity, high loyalty, low absenteeism; everything works well; nothing is
wrong with our system [*HRM] (Tx2: 5)

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1.2. The Best Fit (Contingency) Approach

1.2.1. Business Strategy
Kita kan profit motif, jelas strategi bisnis menjadi acuan utamanya (Hs17: 2)
We are profit motivated; of course business strategy becomes the main reference (Hs17:
2)
Suka atau tidak, kita tdk boleh menjadi penghambat bila ada rencana pengembangan
bisnis; itu sama sekali nggak boleh dilakukan (Ag11: 3)
Like it or not, we [*HRM] must not be a barrier when there is a plan for business
improvement. That must nothappen (Ag11: 3)
Kita punya pemahaman jenderal kita itu kan bisnis. HRD atau SDM itu bukan tujuan
tapi tool utk mencapai sasaran organisasi jadi kita supporting sifatnya (Ag11: 3)
We have an understanding that our General or Commander is business. HR
management is not the goal but is a tool to achieve the organizational objectives; so we
are as a supporting system (Ag11: 3)
Pendekatan strategi SDM yang kita pakai tergantung dari strategi bisnis yg kita tetapkan
(Ag3: 3)
Our HR strategy approach depends on the business strategy that we have chosen (Ag3:
3)
Tujuan organisasi menjadi pedoman utama dalam penyusunan strategi SDM (Tx11: 4)
The organizations goal becomes a main determinant in developing HR strategy (Tx11:
4)
Selalu menyesuaikan, strategy bisnis dan SDM harus selalu seiring sejalan (Tx1:8)
Always adjusting the business strategy... and HR management must always be on the
same track (Tx1: 8)
Kalau srategi berubah, kita harus berubah; harus... (Hs15: 10)
If there is a change in strategy, we [*HRM] must also changed (Hs15: 10)
Kalau dlm bidang saya [SDM*] hrs cepat menyesuaikan perubahan strategi organisasi.
Kalau tdk; kita akan ketinggalan dengan cepatnya perubahan diluar maupun organisasi
(Hs9: 10)
In our field [*HRM], we [*HR department] have to adjust to the organizational strategy
and change quickly. If not, we will be left behind by the rapid external and
organizational change (Hs9: 10)
Apapupun perubahan yang terjadi di manajemen, HR department hrs mengikuti; nggak
ada pola umum yg berlaku terus menerus (Ht10: 15)
whatever change happens in management, the HR department must follow it; there is no
constant general pattern (Ht10: 15)

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Jadi betul tdk ada satu rumus yg mati, saya yakin betul dinamis itu terjadi di HR
terutama (Ht11: 25)
Thats right, there is no constant formula, I do believe in a dynamic role, especially in
HR (Ht11: 25)
Modifikasi dlm artian radikal tdk, tapi adjustment terjadi (Hs8: 12)
Not radical modification, but adjustments (Hs8: 12)
Perubahan nggak total(Tx3: 6)
Not total changes (Tx3: 6)
Penyesuaian dilakukan dengan mengedepankan skala prioritas (Ag5: 9)
Adjustments were done by priority (Ag5: 9)
Strategi-strategi yang diambil harus sesuai dengan kondisi yg ada disini (Tx3: 8)
Strategy should be determined based on conditions (Tx3: 8)
Konten mana yg dirubah fleksibel sifatnya (Ht12: 8)
Which contents should be adjusted are flexible (Ht12: 18)
Tapi biasanya kita menyesuaikan dari kemampuan keuangan (Ht6: 7)
We usually adjust it based on the financial ability (Ht6: 7)
Ketika strategi bisnis berubah, otomatis kita hrs berubah strategi SDM (Ag12: 18)
When business strategy changes, automatically we have to change HR management
(Ag12: 18)
Terpengaruh; jelas kebijakan SDM akan secara otomatis mengadaptasi perubahan
strategi perusahaan. Boleh dikatakan sbg mata rante (Tx5: 10)
Influenced; of course HR policies will automatically adapt to the changes of company
strategy. It can be seen as a chain link (Tx5: 10)
Kita melakukan allignment bisnis dgn human resource memakai balance scorecard
(Ag9: 3)
We align business strategy and HR using a balanced score card (Ag9: 3)
Alignment strategi bisnis dan strategi SDM merupakan proses yg tdk akan pernah
berhenti (Ag11: 11)
Alignment between business strategy and HR strategy is a never ending process
(Ag11:11)
Krn sering ketemu, otomatis aligningnya jalan (Ag9: 15)
Because we regularly meet, alignment was happening automatically (Ag9: 15)
Krn kita mempunyai meeting secara kontinyu sehingga scr tdk terasa sesuatu telah
berubah; tapi kenyataanya kita telah melakukan sesuatu yg baru kedalam strategi SDM
kita (Ag11: 11)

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Because we have meeting continuously, we did not feel something had changed; but in
fact, we adjusted something new to our HR strategy (Ag11: 11)
Biasanya mungkin tdk disadari kita sdh melakukan penyesuaian strategi SDM; jadi
mungkin natural saja (Ag11: 10)//
We often dont recognize that we have adjusted our HR strategy, so it happens naturally
(Ag11: 10)
Kita kemarin melakukan perubahan positioning pasar, maka kita pun mengimbangi
kesiapan karyawan untuk melayani segmen itu dengan sebaik2nya (Ht14: 7)
Our company just changed the market positioning; so we also responded by preparing
our staff to be able to serve that new segment at their best (Ht14:7)
Bila terjadi pergeseran strategi bisnis, SDM ada pergeseran juga. Dulu kita bisa
mengedepankan alat, tapi sekarang semua rumah sakit juga punya, maka kemudian
justeru keprofesionalan staff sebagai kompetitif strategi (Hs2: 13)
When a shift in business strategy happens, we always follow it. In the past, our hospital
placed technology as a competitive advantage, but at the moment almost all hospitals
have a similar strategy. Then we turned to staff professionalism as a competitive
strategy (Hs2: 13)

1.2.2. Internal (Organisational) Context

1. Organizations Size
Kami merasa masih kecil, strategi SDM pun kita bikin sesederhana mungkin tapi tetap
mampu menunjang secara maksimal pencapaian tujuan bisnis kita (Ag10: 10)
We feel we are still small, so we designed a HR strategy as simple as possible, but able
to support the maximum achievement of our organizational goals (Ag10: 10)
Kami harus hati-hati dalam merumuskan strategy SDM karena ada ribuan orang yg
harus kita manage; ini nggak mudah (Ag9: 7)
We must be careful in formulating a HR strategy because there are thousands of people
who we have to manage; it is not easy (Ag9: 7)
Karyawan kami banyak strategi pengelolaanya pun tidaklah mudah (Ht14: 7)
We have many employees, therefore the strategy to manage them is not easy (Ht14: 7)
Dengan karyawan sekitar 10.000 bapak bisa bayangin, betapa susahnya memahamkan
mereka maksud dari strategi perusahaan kita (Tx4: 9)
With approximately 10,000 employees you could imagine how difficult it is to make them
understand about the intentions of our corporate strategy (Tx4: 9)

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Tidak mudahlah lho pak mengkomunikasikan apa maunya kita dengan mereka yang
sangat beragam latar belakang kalau tidak hati-hati dalam merumuskannya, kita akan
kelabakan dalam pengendalian saat implementasi karena ribuan pekerja akan terlibat
(Tx10: 6)
Iit is not easy to communicate what we want with employees who have very diverse
backgrounds; if we are not careful in formulating the HR strategy, we'll be at a loss of
control during implementation because thousands of employees will be involved
(Tx10:6)
Kita beruntung karena rumah sakit kita padat teknologi, jumlah orangnya bisa kita
minimalkan sehingga lebih mudah dalam memahami maunya dan mengontrol mereka
(Hs9: 8)
Wwe are lucky because we are a technological-intensive hospital, we can minimize the
number of people so it is easier to understand their wants and to control them (Hs9: 8)

2. Organizational Structure
Kita menggunakan struktur organisasi yang simple yaitu garis, konsekuensinya strategi
SDM kita sesuaikan agar a tidak menimbulkan masalah dalm komunikasi, koordinasi,
pengawasn, dan umpan-balik (Ag8: 2)
We have a simple organizational structure; it is a line structure. As a consequence, we
adjust our HR strategy so it will not create problems of communication, coordination,
controlling, and feedback (Ag8: 2)
Betul pak.... dengan sistem matrix strategi SDM harus mampu mengakomodir
fleksibilitas bagian-bagian dalam implementasi strategi (Hs7: 3)
Thats true.... by using a matrix structure, our HR strategy should be able to
accommodate flexibility of all departments in strategy implementation (Hs7: 3)
Kita kan divisonal, strategy SDM pun kita sesuaikan agar bisa menaungi semuanya
(Tx10: 3)
We have a divisional structure. Accordingly, we should design HR strategy which able
to cover all of the divisions (Tx10: 3)

3. Stage in the Organizational Life Cycle

Organisasi perlu bergerak lebih cepat, kami mempunyai tugas utama untuk memastikan
bahwa SDM mampu untu mensupportnya (Ag8: 6)
The organization needs to move faster, we [*HR manager] have the main job to ensure
that people are able to support that (Ag8: 6)
Kita sedang dalam tahap ekspansi, kami membutuhkan produktivitas yang lebih (Ag12:
7)
We are in the expansion stage, we need more productivity (Ag12: 7)

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Bos saya mengatakan: jangan ganggu pertumbuhan ini dengan persoalan2 karyawanmu
My boss told me: dont obstruct this growth with your peoples problems (Tx3: 5)
Jika duperlukan, kami meberikan pekerjaan-pekerjaan yang bukan core bisnis ke pihak
ketiga (Hs9: 8)
If needed, we put some non-core jobs to the third party (Hs9: 8)
Kami tidak ragu-ragu untuk belajar ke hotel lain dalam grup kami untuk mendorong
produktivitas
We do not hesitate to learn with other hotels within the group to push the productivity
(Ht7: 7)
Kami sedang dalam fase ekspansi untuk meningkatkan pendapatan. SDM harus
mempunyai kecepatan yang memadai (Ag16: 5)
We are in the expansion stage to boost revenue. HR should have sufficient speed (Ht16:
5).
Kami harus menjaga produktivitas untuk memastikan bahwa kami mampu menjaga
tahapan ini (Ag6: 6)
We have to maintain our productivity to ensure that we are able to maintain this stage
(Ag6: 6)
Karena perusahaan membutuhkan kestabilan suplai untuk mempertahankan pasar,
jawaban dari departmene SDM tiada lain kecuali menjaga produktivitas dan loyalitas
pekerja (Tx4: 6)
Because a company needs a stable supply to maintain the market, the only answer from
the HR department is to maintain productivity and loyalty of employees (Tx4: 6)
Prioritas saya adalah untuk menyiapkan dan mengelola karyawan, baik dalam hal
kuantitas maupun kualitas
My priority is to prepare and manage employees in terms of quantity and quality (Hs6:
6)
Kami sedang dalam situasi sulit. Kami harus mendorong inovasi dan kreativitas
karyawan untuk beranjak dari tahap penurunan ini (Ag3: 5)
We are in a difficult situation. We have to encourage innovation and creativity in our
people to move beyond this decline (Ag3: 5)

4. Access to Capital
Uang memainkan peran yang significant dalam mengelola SDM (Tx7: 5)
Money plays a significant role in HRM (Tx7: 5)
Bagaimana mendorong produktivitas kalau tidak ada insentif (Ag13: 9)
How are we supposed to encourage productivity, if there is no incentive (Ag 13: 9)

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Strategi kompensasi tidaa akan ada artinya kalau kita tidak mempunyai daya dukung
keuangan yang memadai (Hs3: 7)
A compensation strategy will be of no meaning if we have not sufficient financial
support ( Hs3: 7)
Pemahaman bahwa uang yang kita keluarkan akan mempunyai kontribusi pada performa
organisasi itu penting untuk dipahami oleh seluruh anggota organisasi; tetapi kita harus
mampu meberikan bukti untuk itu (Ht12: 6)
Understanding that the money spent by us [*HR department] will contribute to the
organizations performance is important to be understood by the entire organizations
members; however we have to provide proof for that (Ht12: 6)

1.2.3. External Context

1. Market competition
Ekspansi market kita malaysia, cina, india, makanya kita harus kemampuan internal kita
(Ag9: 15)
Our market expansion will be Malaysia, China, and India so we have to look at our
internal capability (Ag9: 15)
Market itu selalu berubah kita juga hrs berubah (Ag11: 2)
The market is always changing, we have to change too (Ag11: 12)
Kita masih kompetitif enggak dgn menggunakan strategi yg ada sekarang; ini harus
dijawab oleh organisasi (Ag11: 12)
Whether we are still competitive or not by using the existing strategy, it should be
answered by the organization (Ag11: 12)
Iya...krn kondisi2 diluar (terutama pasar) mamaksa kita utk berubah (Tx8: 4)
Yes... because external conditions, especially the market competition forces us to change
(Tx1: 4)
Pasar tekstil sangat rawan, persaingannya sangat tinggi (Tx3: 9)
The textile market is very vulnerable, and has very competitive rivalry (Tx3: 9)
Persaingan produk itu sangat mempengaruhi; apalagi skrg ada produk China mulai
masuk dgn kualiats yg tdk kalah sementara harganya lebih murah (Tx5: 10)
Product competition has a big influence; especially now that there is a Chinese product
with quality at the same level, while the price is cheaper (Tx5: 10)
Persaingan industri tekstil sangat ketat, terutama dgn masuknya produk tekstil dari
China (Tx7: 5)
Competition in the textile industry is very tight, especially with the entrance of textile
products from China (Tx7: 7)

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Kita tidak kaku; kita lihat perkembangan pasar (Tx11: 1)

We are not rigid, we see the market dynamics (Tx11: 1)
Customer rumah sakit tidak mudah diterjemahkan (Hs1: 17)
Hospital customers are not easy to be understood (Hs1: 17)
Ancaman perilaku berobat ke LN (terutama ke malaysia dan singapura) juga menjadi
ancaman, bahkan bukan itu saja RS LN sdh mulai masuk juga ke DN bahkan tariff yang
kompetitif (Hs2: 13)
The changing behavior for medical treatment abroad (especially Malaysia and
Singapore) poses a threat to the hospital. Moreover, some foreign hospitals have opened
in Indonesia with a competitive price (Hs2: 13)
Penerbangan langsung ke kuala lumpur dan singapore membuat orang lebih mudah
untuk berobat ke LN (Hs3: 20)
Direct flight to Kuala Lumpur and Singapore make it easy for people to get medical
treatment abroad (Hs3: 20)
Mereka sering membandingkan dengan RS LN tapi mrk maunya membayar dengan
lebih murah (Hs8 3)
Customers often compare us with foreign hospital services, while they want to pay less
(Hs8: 3)
Prsaingan RS sdh mulai terbuka (Hs13: 1)
There is open competition in the hospital services (Hs13:1)
Disekitar sini banyak RS itu adalah tantangan bagi kita (Hs11: 2)
There are many hospitals around us; thats a challenge (Hs11: 2)
Kita juga hrs melihat RS lain spt apa, seperti apa layanan mereka (Hs12: 1)
we also have to see other hospitals, what kind of services they have (Hs12: 1)
Kita selalu melirik terhadap layanan hotel lain (Ht1: 8)
We always open our eyes to other hotel services (Ht1: 8)
Yg paling berpengaruh persaingan. Persaingn hotel bintang 5 di Jakarta sangat ketat
(Ht6: 2)
The most influential factor is competition. Market competition among five stars hotels in
Jakarta is very competitive (Ht6: 2)
Memang saat ini bbrp hotel mulai banyak bermunculan shg kita benar2 bersaing dgn
sehat (Ht9: 2)
There are many new hotels established surrounding us, so we have to compete fairly
(Ht9: 2)
Hari ini kompetitor invention X, besok invention apa lagi? (Ht12: 3)
today, our competitor invents x; tomorrow what will be invented? (Ht12: 3)

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Kompetisi hotel di jogja sangat ketat (Ht13: 7)

the hotel market in Jogja is very competitive (Ht 13: 7)
Persaingan tentu saja sangat berpengaruh. Market kita lokal, dan disekitar kita juga
banyak hotel (Ht15: 5)
For sure, competition is the most influential factor. Our market is locals, and there are
many hotels surrounding us (Ht15: 5)

2. Technological
Sebelumnya kami bekerja secara manual, sekarang kita compurized based company.
Jumlah orangnya juga sudah kita sesuaikan (Ag6: 2)
Previously, we worked manually, now we are a computerized based company. The
number of people has been adjusted (Ag6: 2)
Teknologi berubah secara dramatis; mereka banyak belajar, saving costs, produktivitas...
(Ag8: 3)
Technolgy is changing dramatically; they [*employees] learn a lot, saving cost,
improving productivity... (Ag8: 3)
Kami merespon perubahan teknology secara positip; kami tidak keberatan untuk
mengeluarkan banyak uang (Ag12: 20)
We positively respond to the changes of technology; we do not mind spending a lot of
money (Ag12: 20)
Perubahan teknologi juga sangat berpengaruh (Tx1: 8)
Technological changes are very influential (Tx1: 8)
Teknologi bukan persoalan sederhana (Tx3: 9)
Technology is not a simple problem (Tx3: 9)
Teknologi pertekstilan sebaiknya dirubah secara gradual tiap lima tahun jika kita tidak
mau dikatakn ketinggalan jaman. Padaha, biayanya sangat mahal dan meminjam bank
tidaklah mudah (Tx5: 10)
Textile technologies should be changed gradually every five years if we dont want to be
categorized as an out of date company. Whereas, the cost is very expensive and bank
loans are not easy (Tx5: 10)
Alat-alat RS sangatlah mahal, padahal teknologi itu berubah secara terus menerus (Hs1:
17)
Hospital equipment is very expensive; while their technology changes continuously
(Hs1: 17)
Kita mengkombinaksikan antara good people dan high tech (Hs8: 4)
We combine between good people and high technology (Hs8: 4)

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Teknologi yang canggih harys didukung keuangan yang cukup (Hs11: 12)
Advanced equipment must be backed up by sufficient funding (Hs11: 2)
Tidak ada perbedaan yang signifikan diantara hotel2 dalam hal teknologi yang mereka
gunakan (Ht4: 7)
There is no significant differences among hotels in terms of the technology that they use
(Ht4: 7)
Ya kami memang mengpgrade teknology secra rutin, tapi ini bukanlah yang terpenting
dalam bisnis perhotelan (Ht11: 5)
Yes, we upgrade our equipments gradually, but it is not the most important thing (Ht11:
5)
Kami menyediakan fasiilitas wireles gratis bagi konsumen, tapi kan hotel-hotel lain juga
menyediakan fasilitas yang sama (Ht12: 7)
We provide a free wireless broadband for customers, but other hotels have also similar
faciities (Ht 12:7)
Ada suatu standard yang digunakan dalam industri perhotelan, antara lain lift, AC,
hiburan, kamar mandi, dan peralatan dapur
there is a standard technology for hotel industry, such as lifts, air conditioning,
entertainment, bath rooms, and kitchen sets (Ht17: 8 )
Pemesanan onlie, pembayaran pakai kartu... saya kira hampir semua hotel juga
pelayanan yang sama (Ht19: 10)
Online booking, payment with cards... I think almost all of hotels, especially four and
five stars, have also these services (Ht19: 10).

3. Government Rules
Yg paling berpengaruh dari eksternal itu pemerintah, UMR misalnya (Ag3: 4)
The most influential external factors are from the government such as the regional
minimum wage regulation (Ag3: 4)
Minimal kita mesti mengikuti aturan upah minimal tapi kita diatas UMR itu (Ag6: 21)
At least, we should follow the minimum wage regulation but we are above it (Ag6: 21)
peraturan pemerintah berkaitan dgn upah minimum dan perburuhan mutlak harus kita
taati (Tx3: 10)
Government rules related to manpower and wages must be followed without question
(Tx3: 10)
Aturan/hukum scr langsung berpengaruh krn enggak bisa ditawar (Tx5: 10)
Regulations are not negotiable (Tx5: 10)

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Kita mengacu UU no 13; itu yg kita pakai sbg pedoman (Tx11: 6)

We refer to act number 13 year 2003; thats the basic guidance (Tx11: 6)
Aturan pemerintah itu given. Kita harus terima apa adanya (Tx12: 6)
regulations are given factors; we have to follow them (Tx12: 6)
Peraturan ketenagakerjaan kita nggak terlalu berat utk diikuti (Hs1: 17)
our man power regulation is not hard to be followed (Hs1: 17)
Kita harus menguasai ketentuan ketenegakerjaan agar tidak menjadi batu sandungan
(Hs9:10)
we should understand the man power regulation so it will not obstruct us (Hs9: 10)
Aturan pokok kami tidak boleh melanggar aturan pemerintah (Ht5: 10)
Our fundamental rule is not to violate the law (Ht5: 10)
UU ketenagakerjaan mutlak tidak bisa dilanggar (Ht14: 7)
The man power act absolutely must be followed (Ht14: 7)
Variabel eksternalnya peraturan pemerintah, terutama UMR (Ht16: 5)
The external variable is the government rules, especially the minimum wage regulations
(Ht16: 5)
Kita harus mentaati aturan ekspor-impor (Ag5: 1)
We have to obey the export-import regulation (Ag5: 1)
Sebelum pasar bebas, ekspor harus melalui asosiasi, tapi sekarang kita langsung ke
customers (Ag7: 1)
Before the free market, exports must be via association, but now we directly export to
customers (Ag7: 1)
Kita harus mentaati kuota ekspor meskipun kita mampu untuk mengekspor lebih dari itu
(Tx5: 10)
We have to obey the export quota although we are able to export more than that (Tx5:
10)
Ada aturan pemerintah untuk mengelola limbah secara aman (Ag13: 5)
There is a government rule for treating waste safely (Ag13: 5)
RS merupakan bisnis yang dikontrol ketat oleh pemerintah, kami harus mengikuti semua
aturan dengan sangat hati2 (Ag10: 15)
Hospitals are highly regulated by the government, we must obey all of the rules very
carefully (Hs 10: 15)

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4. Global Changes
Karena APEC dateng segala macam, jadi kita memangkas bbrp fungsi yg bukan core
bisnis kita itu dialihkan ke persh third party (Ag6: 2)
because APEC is coming, we have cut some non core business functions... to be
transferred to third parties (Ag6: 2)
APEC, AFTA, sekarang CAFTA, apalagi ya)ng akan datang? (Ag9: 6
APEC, AFTA, and now CAFTA [*China ASEAN Free Trade Area], whats next? (Ag9:
6)
AFTA tidak mudah bagi kami, sekarang CAFTA... (Tx3: 9)
AFTA is not easy for us; now comes CAFTA... (Tx3: 9)
CAFTA sudah diberlakukan, apa yang harus kita lakukan? (Tx5: 10)
CAFTA has been implemented; what should we do? (Tx5: 10)
Perubahan2 quality report dan proses produksi yang disyaratkan ISO (Tx13: 6)
Changes to quality reports and the production process as required by ISO (Tx13: 6)
Kita hrs sll bisa mengikuti standard international (ISO) (Ag13: 6)
We follow what are desired by ISO (Tx5: 10)
Umpanya, ISO mensyaratkan coaching secara periodeik. Nah kalau kita tidak
melakukannya sertifikat kita bisa dicabut (Tx7:2)
As an example; ISO requires the coaching of staff periodically. If we do not do so the
certificate may be cancelled (Tx7: 2)
Bahan baku; kapas 100% impor (AS, Australia, China, India, Pakistan), bhn bantu kimia
juga impor, mesin produksi & spare part juga import. Orientasi pemasaran pun ekspor
juga, Eropa dan Asia. Dengan demikian perusahaan ini sangat sensitif terhadap dinamika
global (Tx4: 1)
Raw materials, cotton is 100% imported (USA, Australia, China, India, Pakistan);
chemical materials are also imported, production machines & spare parts are also
imported. The marketing orientation is also to export, to Europe and Asia. Thus, this
company is very sensitive to the global dynamics (Tx4: 1)
TKA sekarang sudah masuk ke pasar tenaga kerja Indonesia. Hal ini mendorong kita
untuk meneemukan sistem yang lebih bagus guna merekrut tenaga lokal sehingga
kualitas mereka tidak kalah dgn mereka yang dari luar (Ag6: 22)
Foreign staff are entering the Indonesian manpower market. It should encourage us to
find better systems in recruiting local staff so their quality is not worse than foreigners
(Ag6: 22)
Sbg hotel chain internation, ada beberapa ekspatriate yang bekerja disini (Ag6: 5)
Aas an international chain hotel, there are some expatriates here (Ag6: 5)

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5. Economic Condition
Dampaknya positif bagi kita kareNa kita mampu untuk merubah sistem kerja kita (Ag8:
2)
The impact was positive for us because we are able to change our work system (Ag8: 2)
Kita betul-betul mulai profesional pasca krisis; momentum krisis telah menyadarkan kita
dalam mengelola SDM secara lebih profesional (Hs12: 1)
We really started to become professionals after the crisis, the momentum of the crisis
made us aware, in terms of managing people professionally (Hs12: 1)
Tahun 1998-2003 (masa krisis) kita tdk mengadakan karyawan. Kita cukupi saja dari TK
musiman, sehingga tidak ada beban tetap untuk membayar mereka (Ag5: 9)
In 1998-2003 (economics crisis), we didnt recruit employees. We hired seasonal
employees so there was no fixed cost for that (Ag5: 9)
Kalau saat itu [krisis*] kita lakukan PHK besar2an. Kita belajar dari hal tersebut, dan
sekarang kita sedang tumbuh lagi (Tx10: 9)
during the crisis, mass dismissal was done. We learned from that, and now we are
growing again (Tx10: 9)
Pada saat krisis kita juga melakukan adjusment2 dan modiikasi sistem SDM kita agar
lebih reliabel dalam menghadapi goncangan (Ht17:8)
During the crisis, we adjusted and modified our HR system to be more reliable in facing
the turbulence (Ht17: 8)
Inflasi juga penting diperhatikan pak... Bagaimana daya beli karyawan dari gaji yang
mereka terima. Kalau dari gaji yang mereka terima mereka tidak bisa mencukupi
kebutuhan hidup, bagaimana kita berharap mereka bisa produktif (Ag12: 3)
Inflation is also important and should be taken into consideration...How is the
purchasing power from the salary that they have received. If the salary cannot meet the
necessities of life, how can we expect them to be productive? (Ag12: 3).
Saat inflasi tinggi kita kesulitan melakukan penyesuaian kebijakan gaji karyawan (Tx1:
2)
When inflation was high, we had difficulties to adjust the employees salary policies
(Tx1: 2).
Kenaikan gaji di perusahaan kita sangat dipengaruhi pertumbuhan inflasi (Tx7: 3)
The increase of the salary level in our company is strongly influenced by inflation
growth (Tx7: 3).

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Jangan lupa pak...biaya operasionalisasi strategi SDM, terutama yang berhubungan

dengan pihak luar, sangat dipengaruhi laju inflasi. Semakin tinggi inflasi maka semakin
besar pula biaya yang kita butuhkan, training misalnya... (Hs15: 6)
Dont forget... the operational cost of HR strategies, particularly those dealing with
external partners, are strongly influenced by the rate of inflation. The higher the rate of
inflation, the greater cost we needed, for example trainings cost... (Hs15: 6).
Kalau inflasi tinggi, kan daya beli konsumen turun, pendapatan perusahaan turun, terus
gimana kita mbayar karyawan? Padahal mereka butuh lebih banyak uang untuk bertahan
hidup pada situasi sulit tersebut (Ht5: 4)
If inflation gets high, the purchasing power of consumers will decrease, the corporate
revenue will also decrease, so how do we pay the employees salary? Whereas, they
need more money to survive in this difficult situation (Ht5: 4).
Kalau inflasi stabil, apalagi rendah, memudahkan kita untuk menyusun strategi
kompensasi dan insentif yang lebih baik (Ht13: 5).
If inflation is stable, especially low [*and stable], it will allow us to be better in
formulating compensation and incentive strategies (Ht13: 5).
Kalau nilai dolar lagi tinggi, kita pusing juga mikirin gaji para expart (Ht8: 3)
If the Dollar exchange rate is high [*expensive], its not easy for us to pay the
expatriates salary (Ht8: 3).
Pengaruh dolar nggak terlalu juga.... kan biasanya sudah kita prediksikan setiap
tahunnya. Hanya saja kalau melesetnya besar, baru timbul masalah (Ht17: 2).
The effect of Dollar is not really significant.. we predict it annually. Only when high
deviation of prediction happens, the problems will arise (Ht17: 2).
Agak repot juga pak kalau dolar naik, karena bahan baku kita impor sementara pasar
lokal (Tx4: 7)
When the Dollar goes up, we will have trouble because we import raw materials while
our market is local (Tx4: 7).
Inilah untungnya kalau berbasis lokal. Kita tidak terlalu terpengaruh gejolak naiknya
dolar (Ag5: 7)
This is the benefit of being local based. We are not much influenced by the dollar
volatility (Ag5: 7)
Kalau kita malah diuntungkan kalau dolar lagi tinggi. Kita kan bahan baku lokal, tenaga
lokal, padahal pasar kita ekspor (Ag10: 4)
We actually receive more benefit if the value of Dollar gets higher. We use local raw
materials and employees, while our market is export (Ag10:4)

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6. Culture
Eksternalnya yang paling banyak berpengaruh adalah lingkungan/budaya. Di Minang
nilai2 adat sangat mempengaruhi kehidupan masyarakat termasuk dalam kehidupan di
tempat kerja (Ag3: 2)
Externally, the most influential factor is culture; In Minang [*Padang, West Sumatra],
cultural values greatly affect peoples lives including working lives (Ag3: 2)
Klo jujur ada [pengaruh budaya*] sih, kita kulturnya kebetulan ada di daerah jawa. Persh
lahir di jogja, besar di jogja (Ag6: 2)
Honestly, there is an influence from local culture; we are in the Javanese culture
society. We were born and became a big company in Yogyakarta (Ag6: 2)
Secara umum memang ada pengaruh dari nilai2 budaya lokal (Ag11: 16)
Generally, there is an influence from local cultural values (Ag11: 16)
Kita berada di berada di lungkungan masyarakat berbudaya Jawa; Yogya. Dengan
demikian kultur budaya jawa sangat terasa disini (Tx5: 10)
We are established in the Javanese culture society; Yogyakarta. So, the Javanese culture
can be felt easily (Tx5: 10)
Karena kita berada di lingkungan masyarakat yang menjunjung tinggi nilai budaya,
maka tradisi masyarakat Bali menjadi bagian dari kehidpuan kerja kita sehari-hari. Kita
juga sangat dekat dengan komunitas Hindhu disini (Ht8: 3)
Because we are established in the society that upholds cultural values, so Balinese
traditions become part of our daily work life. We are also very close with the Hindu
community (Ht8: 3)
Secara umum masyarakat Banjar mempunyai image yg negatif thd hotel. Ini semua
menjadi tantangan bagi kami untuk membuktikan bahwa hotel bisa menjadi bisnis yg
bersih (Ht11: 9)
Generally, the Banjar people have a negative image about hotels. It becomes our
challenge to provide evidence that Hotels could be a clean business (Ht11: 9)
Kita menonjolkan budaya jawa, meskipun kita tetap mendekati karyawan dengan multicultural appraoch (Ht17: 9)
We highlight Javanese culture, although our approach to employees is a multi-cultural
approach (Ht17: 9)
Orang Minang itu egaliter, sangat demokratik. Mereka tidak takut untuk mengatakan
sesutau dan juga tidak alergi untuk dikritik (Ag3: 8)
Minang people are egalitarian, very democratic. They do not hesitate to speak out and
to be criticized (Ag3: 8)

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Karakter org Medan itu unik. Mereka cenderung temperamental dan terus terang/ apa
adanya (Ag12: 4)
The characters of Medan [*North Sumatra] people are unique. They tend to be
temperamental and direct (Ag12: 4)
Karakter orang jawa itu penuh sopan santun dan nrimo. Mereka loyal dan tidak banyak
menuntut (Ag5: 8)
The characters of Javanese people are humble and submissive. They are loyal and not
demanding (Ag5: 8)
Orang Banjar itu gentle. Yang terpenting jangan singgung perasaannya. Mereka mirip
dengan orang jawa (Ag8: 8)
Banjar [*Banjarmasin, South Kalimantan) people are gentle. The most important thing
is dont offend them. They are similar to Javanese people (Ag8: 8)
Karakter orang makasar itu temperamental, cepat tersinggung; tapi mereka mempunyai
tanggung jawab yg tinggi. Untuk menangani mereka kita harus agak lembut. Karena
keras ketemu keras kan patah. Tetapi pada saat tertentu kita harus bersikap keras,
sementara pada saat yg lain kita harus bersikap sebagai teman (Ag10: 14)
The characters of Makasar people are temperamental, quick-tempered; but they have a
high responsibility. To handle them, we should behave gently. Because if something hard
meets something also hard; they will be broken. However, in certain times we should
behave hard, while in other time we should behave as a friend (Ag10: 14)
Orang bali itu menaruh respek yg tinggi dan taat pada aturan2 tradisi. Mereka cenderung
jujur dan ramah orangnya (Ht8: 2)
Balinese people have great respect and abide by the traditions rules. They tend to be
honest and friendly people (Ht8: 2)
Orang minang itu lebih seneng jadi pedagang, jika mereka produktif mereka akan
mnerima lebih banyak. Hal itu kita terjemahkan dengan model insentif dalam sistem
kompensasi (Ag3: 8)
Minang people prefer to be traders; if they are productive they will receive more. We
translate that with an incentive model in the compensation system (Ag3: 8)
Orang jawa itu tidak terlalau banyak meneununtut (Ag5: 8)
Javanese people are not demanding (Ag5: 8)
Ada kecenderungannya lebih mudah memanage org jawa demikian juga dgn loyalitas,
produktivitas dsb. (Ag7: 8)
It tends to be easier to manage Javanese people, including their loyalty and productivity
(Ag3: 8)
Kelebihan orang jawa itu menerima apa adannya, tidk banyak komplai, mengerti ketika
perusahaan dalam situasi yang sulit (Tx1: 7)
The good thing about Javanese people are that they are submissive, not much
complaining, they understand when the company is in a difficult situation (Tx1: 7)
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Orang makasar itu temperamental, tapi kalau kita mendekati mereka dengan cara yang
tepat mereka akan berperilaku dan bekerja dgn baik (Hs6: 6)
Makasar people are temperamental, however, if we approach them in a proper manner
they will behave and work nicely (Hs6: 6)
Orang Makasar itu temperamen, tapi ketika mereka bisa menerima alasannya mereka
akan loyal (Hs13: 6)
Makasar people are temperamental, however, when they can accept the reasons they
will be loyal (Hs 13: 6)
Ketika melayani tamu, karakter orang Makasar nggak nampak. Dia kerjanya profesional
(Ht3: 10)
When serving guests, the characters of the Makasar people [*temperament] do not
appear. They work as a professional (Ht3: 10)
Secara umum orang Banjar itu ramah dan kebersamaannya tinggi (Ht9: 15)
Generally, Banjar people are friendly and they have a high teamwork orientation (Ht9:
5)
Orang minang itu menaruh perhatian yang lebih besar kepada orang-orang yang dari
keluargannya ketika bekerja di tempat yang sama (Ag3: 8)
Minang people have greater attention to people from their family when working in the
same organization (Ag3: 8)
Orang jawa cenderung lambat dan nrimo, mereka tdk mempunyai fighting spirit yang
tinggi (Ag5: 8)
Javanese people tend to be slow and submissive; they have no great fighting spirit (Ag5:
8)
Disini bukan daerah industri. Budaya mereka agraris (Ag6: 6)
Here is not an industrial region. Their culture is agrarian (Ag6: 6)
Kelemahan orang jawa itu adalah lambat, sehingga mereka tidak mudah untuk
dimotivasi (Tx1: 7)
The weakness of Javanese people is that they are slow; so they are not easy to be
motivated (Tx1: 7
Karena pengaruh budaya agraris, semangat untuk mengembangkan diri tidak tinggi
(Tx9: 7)
Because of the influence of agrarian culture, the spirit for self-development is not high
(Tx9: 7)
Sesungguhnya budaya minang itu tidak cocok dengan value dalam bisnis perhotelan.
Prinsip yang paling mendasar dlm industri perhotelan adalah utk melayani padahal orang
minang itu maunya dilayani (Ht1: 4)
Actually, Minang culture does not align with the hotel values. The most basic principle
in the hotel industry is to serve while Minang people want to be served (Ht1: 4)
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Tidaklah mudah untuk merekrut orang Medan untuk bekerja di industri perhotelan.
Mereka itu cenederung temperamental (Ht2: 5)
It is not easy to hire Medan people to work in hotel industries. They tend to be
temperamental (Ht2: 5)
Karena watak orangnya temperamental, mereka sering tdk menyadari bhwa kesalahan
itu ada pada dirinya, mrk tetap menyalahkan pada orang lain atau bahkan atasannya
(Ht4: 4)
Because they are temperamental, Makasar people often do not realize their faults. They
point to the mistake of others or even their superiors (Ht4: 4)
Orang bali itu mempunyai upacara-upacara tradisional yang tentu saja mempengaruhi
jam kerja mereka. Kita harus lebih fleksibel, masing2 orang mempunyai keluwesan
untuk memanage hari libur mereka sepanjang tdk bertentangan dengan aturan organisasi
(Ht8: 2)
Balinese people have many traditional ceremonies which affect work hours. We should
be more flexible, every single individual has the flexibility to manage their holidays, as
long as they dont conflict with the organizational rules (Ht8: 2)

7. Union
Kita punyai serikat pekerja (SP) yang cukup kuat, tapi kita mempunyai hubungan yang
baik (Ag1: 7)
Our union has a strong power, but we have a good relationship (Ag1: 7)
Yang terpenting kita harus mau mendengar dan mempunyai komunikasi h
The most important thing is that we have to listen and have communication with the
union (Ag7: 7)
SP dan perusahaan adlh sbg patner sehingga kita berkomunikasi scr terus menerus untuk
membicarakan isu2 berkaitan dgn pekerja dan bagaimana upaya2 untuk membuat
organisasi menjadi lebih baik (Tx1: 2)
The union and the company are as partners, so we have continuous communication to
discuss employees issues and how to make the organization better (Tx1: 2)
Management melibatkan SP untuk mendiskusikan isu2 organisasi melalui pertemuan
formal setiap tifa bulan (Tx5: 9)
The management involves the union to discuss organizational issues via formal meeting
every three months (Tx5: 9)

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Kami mempunyai interaksi formal dgn SP kemduain hasilnya ditandatangani bersama

antara SP dan management sbg kesepakatan kerja bersama dan direview tiap dua tahun
sekali (Tx7: 4)
We have a formal interaction with the union, then the result is signed by the
management and the union as a mutual work agreement and reviewed every two years
(Tx7: 4)
Untuk menciptakan lingkungan yg kondusif, kesepatan kerja bersama yg ditandatangani
oleh SP dan perusahaan harus diterapkan secara konsisten oleh kedua belah pihak (Tx9:
9)
To make a conducive work environment, a mutual work agreement which is signed by
the union and the company should be implemented consistently by both parties (Tx9: 9)
Disini, keberadaan SP untuk menjamin bahwa jak2 pekerja dipenuhi oleh perusahaan
(Ht7: 9)
Here, the union exists to ensure that employees rights are fulfilled by the company
(Hs7: 19)
Kami memeberikan kebebasan kpd SP, bahkan lebih jauh merka itu menjadi partner kita
(Hs9: 9)
We provide freedom for the union, moreover they become a partner (Hs9: 9)
Saya rasa hub antara perusahaan & SP itu harmonis tapi tetap demokratis. Kadang2
keras... (Ht5: 13)
I think the relationship between the company and the union is in harmony but
democratic (Ht5: 13)
Dalam situasi tertentu SP terlibat untuk membuat keputusan2 (Ht 6: 21)
in certain situations the union is involved in making decisions (Ht6: 21)
SP di hotel itu terdiri dari orang2 yg cerdas pak, mrk berilmu; ini mjd partner yg dinamis
untuk membawa organisasi menjadi lebih baik (Ht7: 7)
The union in this hotel consists of smart people; it becomes a dynamic partner to make
our organization better (Ht7: 7)
SP mempunyai posisi yg kuat di hotel ini. Kami meletakkannya sbg partner bisnis
(Ht13: 7)
The union has a very strong position in this hotel. We put it as a business partner (Ht13:
7)

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2. The Role of HRM and Its People in the Organization

2.1. The Two-Way Linkage
1. Organizational Mindset
Dalam perencanaan perusahaan, saya sendiri memberikan suatu rencana kerja dan
masukan-masukan, tetapi keputusan tetap pada beliau/direktur (Ag1: 2)
In corporate planning, I [*HR manager] contribute a work plan and inputs; however the
final decision is with the director (Ag1: 2)
Kami terlibat hanya saat perencanaan, manajemen membuat keputusan kemudian kami
melaksanakannya. Tentu saja kami memberikan masukan-masukan (Ag2: 5)
We are involved in planning only, the management makes a decision then we implement
it. Of course we provide inputs (Ag2: 5)
Departemen SDM mempunyai ruang untuk menyampaikan pendapat tetapi tidak untuk
memutuskan (Ag4: 3)
The HR department has a space to talk, but not to decide (Ag4: 3)
Tentu saja... kami sering memberikan masukan-masukan. Itulah tugas saya... (Ag7: 3)
Yes....we often give contributions. Thats my job... (Ag7: 3)
Berkaitan dengan arahan yang sifatnya strategis, peran kita adalah memberikan
masukan-masukan dan alternatif-alternative pilihan (Tx2: 2)
For strategic direction, our role is to provide inputs and alternatives (Tx2: 2)
Departemen SDM tidak terlibat dalam pengambilan keputusan. Kami
mengimplementasikan apa-apa yang manajemen putuskan (Tx4: 2)
The HR department is not involved in making decisions. We implement what the
management decides (Tx4: 2)
Kami perperan sebagai perantara untuk mensuplai input-input dari bawah ke atas (Tx6:
6)
We are as an intermediary function to supply inputs from the bottom to the top (Tx6: 6)
Selama ini, peran departemen SDM bukanlah bagian dari pembuat keputusan-keputusan
strategis (Tx8: 1)
So far, the role of the HR department is not part of strategic decision making (Tx8: 1)
Organisasi belum melibatkan kita, peran kami memberikan saran-saran dan
mengimplementasikan keputusan-keputusan (Tx9: 1)
The organization has not involved us yet; our roles are giving suggestions and
implementing decisions (Tx9: 1)

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Kami tidak terlibat dalam pembuatan keputusan strategis, kalau mengimplementasikan

iya.... (Tx10: 10)
We arent involved in strategic decision making; if implementing, yes... (Tx10: 10)
Berkaitan dengan rencana strategis, departemen SDM menyiapkan beberapa proposal
(Hs1: 4)
In terms of strategic planning, the HR department provides some proposals (Hs1: 4)
Kami menyiapkan beberapa skenario, keputusan bukanlah porsi kami (Hs4: 3)
We prepare scenarios, decision is not our portion (Hs4: 3)
Kami terlibat sebatas sebagai penyuplai rencana strategis saja (Hs5: 4)
We are involved in terms of supplying of strategic plans only (Hs5: 4)
Departemen SDM pekerjaan utamanya adalah melaksanakan keputusan-keputusan yang
sudah dibuat kemudian memberikan feedback (Hs14: 3)
The HR department is mainly implementing what decisions have been made, then giving
feedback (Hs14: 3)
Peran strategis? Belum kali ya... kami mensuplai rencana-rencana strategis dan evaluasievaluasi ke manajemen (Hs16: 2)
A strategic role? Not yet really.... we supply strategic plans and evaluations to the
management (Hs16: 2)

2. Organizational Structure
Kita punya CEO, direktur keuangan, pemasaran, dan urusan umum. Tidak ada direktur
spesifik SDM sebagai bagian dari strategic decision board sehingga secara formal kita
bukanlah bagian dari pembuat keputusan strategik (Ag7: 2)
We have a CEO, director of finance, marketing, and general affairs. There is no specific
HR director as part of the strategic decision board, so formally we are not part of the
decision making (Ag7: 2)
Departemen SDM itu ada dibawah struktur urusan umum, tidak secara spesifik dibawah
struktur SDM (Tx4: 1)
The HR department is in the general affairs structure, not specifically as a HR
department (Tx4:: 1)
Kami ini dibawah wakil direktur urusan administratif dan umum (Hs4: dan Hs5: 3)
We are under the vice director for administrative and general affairs (Hs4: 4 & Hs5: 3)

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3. Informal Strategic Decision Process

Keputusan-keputusan strategik itu sepenuhnya bergantung pada keputusan formal dari
strateggic board, dan kami tidak ada disana (ag4: 2)
The strategic decisions completely depend on the official decision of the strategic board;
while we are not there (Ag4: 2)
Kami melakukan pembicaraan-pembicaraan secara informal, tapi lebih seringnya
diskusi-diskusi tersebut tidak bisa dikatakan sebagai suatu keputusan informal (Tx6: 3)
We have informal discussions, but often the decisions are not as an informal agreement
(Tx6: 3)
Cecara formal kita belum terlibat dalam proses pengambilan keputusan strategik. Disisi
lain kita juga tidak ada proses pengambilan keputusan secara informal (Hs1: 4)
Formally we are not involved in the strategic decision process yet. On the other hand,
there is no informal decision process (Hs1: 4)

2.2. Integrative Linkage

1. Organizational Mindset
Kita memeiliki peran yang berimbang mulai dari penyusunan sampai pembuatan
keputusan (Ag3: 2)
We [*all of managers] have an equal role from formulating to making decisions (Ag3:
2)
Konsep strategi kita diskusikan dalam rapat, sehingga keputusan merupakan hasil dari
keputusan bersama (Ag5: 2)
The concept of the strategy has been discussed in the meeting; so the decision is the
result of joint decisions [*including HR department] (Ag5: 2)
Ketika perusahaan ingin melaunching suatu strategi baru, manajemen selalu melibatkan
kepala-kapala department dengan pertimbangan-pertimbangan para manajer. Mereka
lebih dilibatkan dalam pengambilan keputusan, terus saat itu di announce kita semua sdh
siap (Ag6: 7)
When the company wants to release a new strategy, the management always involves the
department head [*including HR], with the deliberations of the manager. They are more
involved in decision making; when it is announced, we are all ready (Ag6: 7)
Organisasi kami sepenuhnya percaya pada prinsip-prisnip cross-departemental dan
mutual-contribution, kami membuat keputusan secara bersama-sama dan
mengimplementasikannya secara bersama-sama pula (Ag10: 14)
Our organization strongly believes in the principle of cross-departmental, mutual
contribution; we make decisions together [*including HR department] and implement
them together as well (Ag10: 14)

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Kita bersyukur karena direksi selalu mendengarkan masukan-masukan kita bahkan kita
dilibatkan dalam pegambilan keputusan (Ag12: 22)
we are grateful that the board is listening to our inputs [*HR departments inputs] were
even involved in decision making (Ag12: 22)
Selama ini posisi saya sangat strategis. Bahkan dapat dikatakan saya memerankan
sebagai direktur pelaksana (Tx1: 4)
So far... my position [* HR manager] has been very strategic. It can be said that I am as
an acting director (Tx1: 4)
Kami menyiapkan alternatif-alternatif strategi, kemudian kita mendiskusikannya untuk
membuat keputusan-keputusan (Tx3: 2)
We provide alternative strategies, then we discuss them to make decisions (Tx3: 2)
Kami terlibat dalam pertemuan strategis tahunan (Tx7: 2)
we are involved in a strategic meeting annually (Tx7: 2)
Manusia dianggap sebagai asset terpenting bagi perusahaan, makanya tidak
mengherankan kalau departemen SDM memainkan peran yang strategis (Tx11: 4)
Humans are considered the most important asset, not surprisingly, the HR department
plays a strategic role (Tx11: 4)
Saya sebagai strategic partnernya CEO, konsekuensinya saya terlibat dalam pembuatan
keputusan strategic (Tx12: 2)
I am [*HR manager] a strategic partner with CEO, consequently I am involved in
strategic decision making (Tx12:2)

Kita membuat keputusan melalui meeting dengan semua departemen head dan General
Manager (GM) (Ht3: 2)
We make decisions via meetings with all of the department heads and the general
manager (Ht3:2)
Kita ada yang namanya executive committee meeting yang melibatkan GM dan lima
dept head executive assisstant manager, personnel manager, sales manager,
communication manager, financial controller-. Disinilah hal-hal yang sifatnya strategik
diputuskan secara bersama-sama (Ht4: 3)
We have an executive committee meeting involving the GM and the five department
heads; namely assistant executive manager, personnel manager, sales manager,
communications manager, and financial controller. This is where strategic matters are
decided together (Ht4: 3)
...kemudian kita ambil keputusan melalui Exco (Ht9: 4)
...then we make strategic decisions by the executive committee (Ht9: 4)

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...dengan demikian keterlibatan departemen SDM sangat intensif mulai dari mendesain
strategi, memutuskan apa yg terbaik, bahkan mekanisme kontrolnya (Ht12: 2)
... so the involvement of the HR department is very intensive in designing a strategy,
deciding what's best, doing it, and even to the control mechanism (Ht12: 2)
Kita diberi space yg cukup untuk menyampaikan program, pertimbangan, pemikiran,
dan juga terlibat dalam menentukan keputusan akhir (Ht13: 2)
we have enough space to deliver the program, considerations, thoughts, and are also
involved in determining the final decision (Ht13: 2)
Kita [HR department*] duduk bersama dalam executive comitttee, GM dengan semua
manager. Kita duduk bareng sehingga sumbang saran semua departemen sangat
diharapkan sebelum pengambilan keputusan (Ht14: 2)
we [*HR department] sit together in the executive committee, the GM with all managers.
We sit together so that all departments can brainstorm before making a decision (Ht14:
2)
HR department selalu dilibatkan dalam pengambilan keputusan strategik, karena kita
anggota Executive Committee (Ht16: 1)
The HR department is always involved in strategic decision making, because we are
members of the executive committee (Ht16: 1)
Manusia adalah bahan baku utama di organisasi kami. Karenanya kita menempatkannya
sebagai pemain strategik (Hs3: 7)
Humans are the main raw material in our organization. Accordingly, we are placed as
strategic players (Hs3: 7)
Para manager menyediakan data, memberikan masukan2, dan terlibat dalam
pengambilan keputusan, mereka juga sebagai ekesekutor utama/pelopor (Hs7: 7)
The managers [*including HR managers] provide data, give inputs, and are involved in
decision making; they are also as the main executor (Hs7: 7)
Strategi organisasi selalu berubah secara dramatis. Peran dari departemen SDM tidak
hanya dlm hal implementasi tapi kami terlibat dalam pengambilan keputusan kebijakankebijakan secara aktif (Hs9: 9)
Organizational strategy always changes dynamically. The role of the HR department is
not only in implementation, but we are also involved in deciding policies actively (Hs9:
9)
Siklus plan-do-act-feedback-new decision berjalan secara kontinyu dan kami terlibat
secara bersama2 (Hs12: 8)
The cycle of plan-do-act-feed back-new decisions, runs continuously and we are
engaged together (Hs12: 8)
Perencanaan jangka panjang dibuat oleh direktorat perencanaan, kemudian diputuskan
oleh dewan direktur (Hs13: 2)

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Long-term planning is created by the planning directorate, then decided by the board of
directors [including HR director] (Hs13: 2)
Integratif...tetapi prosesnya secara bottom up. Manajer SDM mencari input sebanyak
mungkin untuk dibawa kedalam forum pengambilan keputusan (Hs17: 3)
integrative...however the process is bottom up. HR managers should seek advice as
much as possible to be brought into a decision-making forum (Hs17: 3)

2. Organizational Structure
Struktur tertinggi terdiri dari direktur kemudian diikuti manajer pemasaran, produksi,
teknik, keuangan, dan SDM (Ag3: 2)
The highest structure consists of a director, then followed by marketing, production,
technique, finance and HR managers (Ag3: 2)
Departemen SDM adalah anggota dari semua komite strategik (Ag9: 5)
The HR department is a member off all strategic committees (Ag9: 5)
HR adalah bagian dari managing direktur strategik makanya namanya strategic HR
department (Ag12: 3)
The HR department is part of the managing strategic directions, so it is called a
strategic human resource department (Ag12: 3)
Posisi saya langsung dibawah direktur, dan saya sering memerankan sebagai direktur
pelaksana ketika beliau sedang bepergian (Tx1: 1)
My position [*HR manager] is directly under the director; and I often take the role of an
acting director when he goes out (Tx1:1)
Jelas sekali, struktur kita memperlihatkan bahwa departemen SDM merupakan bagian
dari struktur pengambilan keputusan strategik (Tx5: 3)
Clearly, our structure shows that the head of the HR department is a part of the strategic
decision structure (Tx5: 3)
Struktur tertinggi dari dept SDM adalah wakil direktur SDM (Tx7: 2)
The highest structure of the HR department is the vice director of HR (Tx7: 2)

Sebagai direktur SDM, posisi saya merupakan lapis kedua dlm struktur (Tx11: 1)
As the HR director, my position is within the second layer of the structure (Tx11: 1)
Orang tertinggi dept SDM adl wakil direktur urusan SDM, dan tentu saja dia merupakan
anggota dari strategic board (Hs6: 3)
the highest person in the HR department is the vice director of HR, and of course he is a
member of strategic board (Hs6: 3)

352

Kita mempunyai satu direktur dan empat wakil direktur, yaitu pelayanan klinik,
penunjang klinik, keuangan dan SDM (Hs12: 4)
We have one director and four vice directors, they are: clinical services, supporting
clinic, finance, and HR (Hs12: 4)
Struktur tertinggi di hotel ini adalah GM, kemudian dibawahnya ada 8 dept head
termasuk SDM. Mereka-mereka (bersembilan) inilah para pengambil keputusan tertinggi
di hotel (Ht3: 3)
The highest structure in this hotel is the general manager (GM), and is then followed by
eight department heads including HR. These nine positions are the highest decision
makers (Ht3: 3)
Secara monthly ada namanya executive comittee itu terdiri dari GM sampai division
head [termasuk SDM*]; disitulah dibahas dan diputuskan hal-hal kecil sampai hal-hal
besar (Ht6: 6)
Monthly, there is an executive committee which consists of the GM and divisional heads
including HR. All things related to the hotel are discussed and decided here. (Ht6: 6)
Rapat tertinggi adalah rapat antara GM dgn kedelapan DH, termasuk departemen head
SDM. Rapat ini kita sebut Executive Committee (Exco). Disinilah segala keputusan
strategik diambil (Ht9: 4)
The highest meeting is the meeting between the GM and the eight department heads
including HR. We call this meeting executive committee. Here, all strategic decisions
are made (Ht9: 4)
Struktur tertinggi adalah GM dengan dibantu 5 kepala divisi; salah satu diantaranya
divisi SDM. Keenam orang itu merupakan anggota executive comitte, struktur tertinggi
pengambil keputusan (Ht12: 1)
The highest structure is the GM, who is supported by five division heads; one of them is
HR. Those six people are the members of the executive committee, the highest structure
of decision makers (Ht12: 1)

3. Informal Strategic Decision Process

Meskipun saya orang tertinggi di departemen SDM tetapi saya bukanlah bagian dari
strategic decision board (SDB). Tetapi pengalaman menunjukkan bahwa keputusankeputusan strategis yang lahir tidak lebih dari apa yang telah kita diskusikan bukan di
strategic decision board. Kemungkinan karena peran saya yang cukup sentral pada
proses restrukturisasi yang saat ini sedang terjadi di organisasi (Tx3: 4)
Although I am the highest person in the HR department, I am not part of the strategic
decision board. However, experiences show that a strategic decision that is created, is
no more than what we discussed not in the strategic board. Perhaps this is because my
role is quite central in the organizational restructuring process that is currently
underway (Tx3: 4)

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RS kami ini unik dan kami semua disini sudah seperti keluarga sendiri bukan layaknya
organisasi formal. Hampir semua keputusan-keputusan merupakan hasil dari diskusidiskusi diluar rapat dewan strategis. Pertemuan-pertemuan strategik memang ada, tetapi
hal itu tidak lebih dari proses formalisasi apa yang telah kita setujui pada diskusi-diskusi
diluar pertemuan-pertemuan dewan strategik (Hs7: 2)
Our hospital is unique and we are like a family rather than a formal organization.
Almost all organizational decisions are the result of discussions outside the strategic
board meeting. There are strategic meetings, but they tend to be the formalization
processes of what has been agreed in discussions outside the strategic board meetings
(Hs7: 2)

3. The Determinants of the HR Strategy Implementation

3.1. Credibility of HR Strategy
1. Level of Understanding Business of Strategy
Kita berada disini untuk menggapai tujuan bisnis (Ag4: 6)
We [*HR department and staff] are here to achieve the business goals (Ag4: 6)
Saya kira jelas; bagaimana kita melakukan alignment kalau kita tidak tahu apa yang
menjadi sumber dari alignment tersebut (Ht15: 5)
I think its clear; how can we align if we dont know what the source of alignment is
(Ht15: 5)
Strategi apa yg dipilih oleh organisasi (Ag8: 4)
What is the strategy chosen by organization (Ag8: 4 )
Apa yang menjadi fokus organisasi kita (ag12: 13)
What is our organizations focus (Ag12: 13 )
Apa keunggulan kompetitif kita (Tx11: 3)
What are our competitive advantages (Tx11: 3)
Apa keunggulan komparatif kita (Hs7: 10)
What are our comparative advantages (Hs7: 10)
Bagaimana ita berkompetisi dengan yg lain (Hs18: 6)
How do we compete with others (Hs18: 6)
Bagaimana perusahaan meraih tujuannnya (Ht10: 7)
How will the company achieve its goal (Ht10: 7)
Apa yang didekalarasikan oleh organisasi untuk mencapai visi dan misi (Ht19: 8)
What is declared by the organization... to accomplish the vision and mission (Ht19: 8)
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Memahami strategi bisnis itu hendaknya bersifat dinamis; tidak hanya paham sematamata tapi juga mampu untuk mengidentifikasi koesekuensi-konsekuensi dibalik strategi
yang dipilih (Ag9: 9)
Understanding business strategy should be dynamic; not only just to understand but also
to be able to identify the consequences behind the strategy chosen (Ag9: 9)
Ok, kita tahu ini strategi bisnis kita, so what... (H9: 10)
Ok, we know this is our business strategy, so what... (Hs9: 10)
Jika kita sudah paham benar, masalah selanjutnya adalah apa implikasinya bagi kita
(Ht12: 7)
If we understand it well [*the business strategy], the next problem is what the
implications to us [*HR department] are (Ht12: 7)
Bagaimana menerjemahkan strategi bisnis ke dalam strategi SDM itu jauh lebih penting
(Tx10: 9)
How to translate the business strategy into the HR strategy is much more important
(Tx10: 9)
Strategi SDM bisa dikategorikan bagus jika poin-poin utama dalam bisnis strategi juga
bisa di follow-up-i ke dalam strategi SDM (Ht13: 7)
A HR strategy can be categorized as a good one when key points of the business strategy
can also be followed up into the HR strategy (Ht13: 7)
Strategi SDM maknanya strategi dlm me-manage orang untuk mencapai strategi bisnis
(Hs16: 6)
A HR strategy means the strategy in managing people to achieve a business strategy
(Hs16: 6)
Strategi SDM merupakan prototype kecil dari strategi bisnis dalam hal SDM (Ag4: 6)
A HR strategy is the mini-prototype of a business strategy in terms of HR (Ag4: 6)

2. Compatibility with the Condition of Organization

Strategi-strategi yang diambil harus sesuai dengan kondisi yg ada disini (Tx3: 8)
Strategies decided upon should fit with the conditions here [*organization] (Tx3: 8).
Organisasi harus melakukan penyesuaian dengan berbagi kontek disekelilingnya (Ag6:
8)
The organization should adjust to the surrounding contexts (Ag6: 8)
Kebijakan-kebijakan harus mendengar aspirasi-aspirasi mereka (Ht 6: 22)
In making policies we should listen to their [*employees] aspirations (Ht6: 22)

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Segala sesuatu kita bahas dulu sehingga sesuai dengan kondisi sini maka mereka akan
bisa jalan tanpa ada resistensi (Tx10: 10)
If we discuss everything first according to the conditions, they will go ahead with no
resistance (tx10:10)
Apa yg kita implementasikan betul-betul berdasarkan kebutuhan sehingga mendapat
dukungan yang luar biasa (Tx11: 4)
What we implemented was truly based on what we need; so we got numerous support
[*from employees] (tx11: 4)
Karyawan makin hari makin banyak dan makin banyak, kita harus mengenali
keberadaannya dlm strategi SDM kita
The number of our employees is getting bigger and bigger, we have to recognize them in
our [*HR] strategy (Ag8: 12)
Selama satu dekade terakhir, teknologi telah mendapat perhatikan secara lebih serious
pada strategi SDM kami
In the recent decade, technology has been taken into consideration more seriously in our
HR strategy (Ag13: 13)
Kita baru saja memodifikasi strategi kita semenjak menggunakan teknologi secara lebih
intensif
We just modified our strategy since we are using technology more intensively (Tx4: 9)
Strategy SDM tidak berarti apa2 bila kita tidak mendapat dukungan finansial yg
memadai untuk mengimplementasikannya
A HR strategy means nothing if we do not consider financial support to implement it
(Hs11: 4)
Kalau strategi SDM kita bagus, fit dengan bisnis strategi kita dan juga kontek-kontek
yang lain, tapi kita tidak mempunyai dana untuk melakukannya maka berarti tidak ada
artinya sama sekali bagi organisasi
If our HR strategy is good and fits with the business strategy and other contexts, but we
have not sufficient money to do it; it means nothing to the organization (Hs12: 17)

Semenjak mendapat dukungan finannasial yg lebih, kami telah mampu untuk

mengimplementasikan strategi kami secara lebih berhasil
since we received more financial support, we [*HR department] were able to implement
our strategy more successfully (Ht8: 12)
Kami menaruh perhatian yg lebihh serius ketika perusahaan telah memasuki fase
dewasa. Strategi SDM kami hrs lebih kuat dlm hal keterkaitannya dengan strategi bisnis
utk tetap menjaga perusahaan tetap kokoh dlm siklus yg sangat menguntungkan ini
we give a more serious consideration when the company moves into the mature stage.
Our HR strategy has to be stronger in terms of alignment with the business strategy, to
keep the company strong in this very beneficial life stage (Ht11: 4)

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Dulu kami pernah hire consultant asing, nggak tahunya produktivitas kami malah turun
10% krn mereka nggak adaptasi dgn kondisi disini (Tx3: 9)
In the past we hired foreign HR consultants, our productivity index dropped 10%
because they did not adapt to the situation here (Tx3:9)
Terlalu kebarat-baratan tidak akan cocok karena kita hidup di masyarakat timur (Tx9: 4)
Being too western is not suitable because we are living in an eastern society (Ag9: 4)

3. Involvement of Organizations Member

Kita mencoba melibatkan mereka shg ketika jadi policy mereka dapat
mengimplementasikan secara lebih mudah (Tx10: 10)
We [*organization] tried to involve them [*employees]; so when it becomes policy, they
could implement it easier (Tx 3: 10)
Ketika mereka terlibat, biasanya tidak akan ada masalah dalam implementasinya (Ag13:
7)
When they [*employees] get involved, usually they are trouble-free in their
implementation (Ag13: 7)
Keterlibatan karyawan yg semakin intensif dlm pembentukan strategi SDM biasanya
strateginya lebih handal (Ht1: 5)
When people are involved more intensively in a HR strategy development, that strategy
usually is more reliable (Ht1: 5)
Proses penyusunan sebisa mungkin melibatkan orang banyak, krn dari situlah akan
banyak masukan. Manakala top manajemen hanya bekerja sendiri mungkin
keputusannya tidak sesuai yg kita butuhkan (Hs12: 17)
The process of developing a strategy should involve as many people as possible
[*employees] because it will receive many inputs. When the top management works
alone, the decision might not be based on what we need (Hs12: 17)

Intensitas keterlibatan dalam proses juga sangat menentukan, terutama dlm komunikasi
(Ht6: 22)
The intensity in process [*HR strategy development] is also a determinant factor,
especially in terms of communication (Ht6: 22)
Keterlibatan dlm penyusunan dan keputusan strategi akan menimbulkan rasa memiliki
dan tanggung jawab untuk mensukseskannya (Ht16: 5)
The involvement in developing and deciding strategy will encourage a sense of
belonging and responsibility to make it successful (Ht16: 5)

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Apabila dari awal sudah melibatkan banyak orang; setelah jadi kita komunikasikan lagi
ini lho strategy kita. Nah merek akan berkomentar, ini nih dulu yg kita kasih
masukan sehingga mrk mempunyai komitmen untuk mensukseskannya (Hs12: 18)
If the organization involved more people [*employees] from the beginning; when the
formulation is completed then we communicated again to them this is our strategy.
They will comment: it was our inputs then they have commitment to make it successful
(Hs12: 18)
Ketika mereka padalevel tertentu itu juga diikutkan dlm setiap pengambilan keputusan,
maka pada saat keputusan itu diterapkan mereka merasa bangga bahwa itu keputusan
mereka juga; keinginan mereka juga; jadi aspirasi mereka sampe/didengarkan (Ag6: 25)
When they [*employees] -in certain levels- are also involved in decision makings, when
those decisions are implemented they will feel proud because those are their decisions
too; their wants too; so their aspirations were heard (Ag6: 25)
Jika mereka dilibatkan dlm pengambilan keputusan, mereka akan membela mati-matian
keputusan itu (Hs9: 10)
If they were involved in decision making, they will defend that decision to their best
(Hs9: 10)
Ini adl seni bgmn melibatkan semua orang dlm pengambilan keputusan. makanya ketika
keputusan diambil, semua orang merasa terikat denga keputusan tersebut. Dlm proses
ini, hal yg terpenting adalah komunkasi sehingga siapa-siapa yg menolak pun akhirnya
bisa menerima (Hs3: 21)
It is about an art in how to involve every person in decision making. Therefore, when a
decision is made everyone becomes part of that decision. In this process, the most
important thing is communication so whoever does not agree with a decision will;
finally accept the decision (Hs3: 21)
Jika mereka terlibat, mereka biasanya merasa bersalah kalau tidak melaksanakannya.
Bahkan, mereka mengawasi keputusan itu tanpa harus dipaksa (Ag9: 13)
If they are involved [*in HR strategy formulation], they usually feel guilty if they do not
do it. Moreover, they will control that decision voluntarily (Ag9: 13)
Keterlibatan mereka juga juga akan membantu menyelesaikan persoalan-persoalan
dalam implementasi (Tx4: 9)
Their involvement will also help resolve the problems [* HR strategy implementation]
(Tx7: 9)
Jika masukan dari mereka merupakan bagian dari keputusan, mereka akan memberikan
input lagi dengan senang hati guna perbaikan dimasa mendatang
If their inputs are part of the decision, they will give input gladly for improvement next
time (Tx12: 11)

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3.2. Organizational Support

1. Top Management Support
Tentu....peran direktur untuk mendukung (support) sangat membantu (Ag2: 8)
of course... the role of the director to support [*implementation] is very helpful (Ag2: 8
Jelas...support dari atasan yg sangat penting (Ag11: 14)
For sure... support from the top is very important (Ag11:14)
Tetap dari pimpinan, klo nggak ada dukungan dari pimpinan ya saya nggak bisa (Tx9:
10)
Definitely from the top, if there is no support from the top management of course I [*HR
manager] can do nothing (Tx9: 10)
Backup dari top manajemen sangat vital, klo nggak tidak akan jalan (Hs15: 9)
Backup from the top management is vital. If not, they [*HR strategies] cannot be
implemented (Hs15: 9)
Ketika kita implementasikan, top manajemen nggak support itu susah jalannya atau
bahkan mustahil (Ht4: 15)
When we implement it, and the top management did not support them; it would be very
hard or even impossible (Ht4: 15)
Walaupun saya disiplin tapi klo top manajemnnya tdk support, tidak akan jalan. (Ht4:
15)
Although we are very disciplined... but if there is no support from the management, it
cannot be implemented (Ht8: 15)
Keywordnya itu ada pada support, klo nggak ada support jangan harap itu mau jalan.
(Ht4: 15)
The key word is support, if there is no support, do not expect it can be implemented
successfully (Ht11: 15)
Dukungan yg konsisten dari top management thd sesuatu yg sdh diputuskan sangat
krusial, karena orang lain akan mengikutinya (Tx1: 7)
Consistent support from the top management to something that has been decided [*HR
strategy] is crucial, because other people will follow it (Tx1: 7)
Komitmen dari top managemen menjadi faktor kunci karena biasanya style manajemen
di indonesia itu sentralistik (Hs1: 5)
Commitment from the top management becomes a key factor, because usually the style
of management in Indonesia is centralistic (Hs1: 5)

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Mereka akan komit klo mereka well-informed, kami harus membicarakannya selengkap
mungkin sebelum segala sesuatunya diputuskan (Ag8: 13)
They [*top management] will commit to it [*HR strategy implementation] if they are
well-informed; we have to give them as much detail as possible before everything is
decided (Ag8: 13)
Kita bisa menginfluence yang diatas dulu, karena sehebat apapun kalau yang diatas tidak
ada komitmen maka tidak bisa jalan (Tx10: 11)
We may influence the top first,but no matter how remarkable our HR strategies, if
people at the top have no commitment, it cannot be implemented successfully (Tx10:11)
Manajemen selalu membackup policy kami krn mereka sangat memahami untuk apa
kami melakukannya (Tx4: 9)
The management always backup our policies, because they do understand what we are
doing it for (Tx4: 9)
Backup manajemen sangat intens, setiap hari. Shg dapat dikatakan top manajemen
bagian dari pelaku disana [operasional*], meskipun sebenarnya bukan (Tx8: 4)
Backup from the management is very intensive every day. It can be said that the top
management are part of the [*operational] actors, although they are not (Tx8:4)
Sekarang, negosiasi untuk anggaran SDM semakin mudah karena mereka percaya kpd
kita bhwa apa yg kita keluarkan akan mempunyai dampak yang lebih besar bagi bisnis
(Ag13: 6)
Now, negotiation for the HR budget is getting easier because they [*top management]
believe in us; that what we spend will have a greater impact to business (Ag13: 6)
Kami pernah memutuskan policy yang banyak tantangannya tetapi akhirnya dpt
diimplementasikan dengan sukses karena adanya dukungan yg tak terbatas dari top
manajamen manakala kami dealing dgn persoalan di lapangan (Ht16: 6)
We once decided policies which had many challenges, however they could be
implemented successfully because of the unreserved support from the top management
when we dealt with difficulties in the field (Ht16: 6)

2. Partnership among Department

Memang organisasi ini spt badanmnya manusia lah.....klo ada yg cacat [termasuk
departemen SDM*] ya mempengaruhi yg lain juga (Ht6: 8)
Organization is just like a human body. If one part is ill or even disabled [*including HR
department]; it will affect the others (Ht6: 8)
Keberhasilannya bukan krn dianya tapi krn timnya, tdk ada yg namanya individual.
Makanya teamwork disini sangat penting (Ag12: 9)
Success is not because of him or her but because of the team, not individuas. Thats why
team work is very important here (Ag12: 9)

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Prinsip kita adalah kebersamaan. Yang lainnya [manager-manager *] terlibat secara

bersama-sama (Tx1: 2)
Our principle is togetherness. Other managers are involved in the work together (Tx1:
2)
Kerjasama dgn dept yg lain tentu saja merupakan penentu penting bagi keberhasilan dlm
implementasi strategi (Tx3: 7)
Cooperation with other departments, of course, is an important determinant of success
in implementing a strategy (Tx3: 7)
Kalau nggak bersama-sama bagaimana? kita kan satu organisasi (Tx11: 9)
if we do not work together, what will they say? We are an organization (Tx11: 9)
Menjadi tantangan bagi kami bagaimana menjadikan dokter yg dididik menjadi soliter
untuk bisa bekerja dgn baik dalam team-work. Perjuangan betul (Hs3: 6)
It is a challenge for us to make the doctors who were trained to be solitary to become a
team in our hospital. It really is a struggle (Hs3: 6)
Semua orang punya peran masing-masing dalam satu team besar, organisasi. Maka perlu
kerjasama diantara mereka (Hs13: 6)
Each person has their own role in one big team the organization. Cooperation between
them is vital (Hs13: 6)
Kerjasama antar orang lintas departemen juga sangat menentukan keberhasilan (Ht6: 22)
cooperation among people across departments is also very critical to success (Ht6: 22)
Karena kita kecil, model team-worknya dapat diimplementasikan dengan baik (Ht11: 7)
because we're small, a teamwork model could be well implemented (Ht11: 7)
Kerjasama dgn dept lain juga sangat baik; bahkan seringkali kesulitan dept lain konsul
dulu ke HR dept (Ht: 8)
Cooperation with other departments is very good, and even when other departments
have difficulties, they quite often consult us [*HR manager] (Ht12: 8)
Kerjasama dgn dept lain jelas sangat mempengaruhi keberhasilan implementasi strategi
(Ht14: 8)
Cooperation with other departments obviously influences the successful implementation
of the strategy (Ht14: 8)
Komunikasi lintas departemen merupakan critical factor utk membangun teamwork yg
kuat di organisasi. Lebih lanjut, kepedulian terhadap team work akan sangat membantu
dalam implementasi strategi (Tx10: 10)
Communication among departments is a critical factor to build teamwork in the
organization. Furthermore, awareness of team work will assist in the implementation of
the strategy (Tx10: 10)

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Kita selalu berhubungan, kita semua saling terkait... (Ht 8: 4)

We are always keeping in touch, we are all related ... (Ht8: 4)
Dialog antar sesama manajer dan juga kebawah (pekerja) memberikan kontribusi yang
signifikan bagi terbentuknya partnership yg kuat (Hs9: 10)
Dialogue among managers and also with employees makes significant contributions to
forming strong partnership (Hs9: 10)
Perbenturan dengan dept head lain itu hal biasa, yg penting komunikasi sehingga
terpecahkan masalah dgn wise; win-win solution lah... (Ht15: 5)
A clash with other managers is a normal thing; the most important thing is how to
communicate it so the problem can be solved wisely; with a win-win solution (Ht15: 5)
Departemen-departmen lain akan mendukung asal kita komunikasikan dgn baik (Ht16:
6)
The other departments will support us, as long as we have good communication with
them (Ht16: 6)
Kami memprioritaskan dept head meeting sebagai forum untuk komunikasi dan
konfirmasi (Ag6: 24)
Our main priority is the head department meeting as a forum of communication and
confirmation (Ag6: 24)
Kami punyai komunikasi formal seprti dept head meetings, morning briefing, dsb
.(Ht11: 7)
We have formal communications such as department head meetings, morning briefings,
etc. (Ht11: 7)
Kerjasama dengan manager-manajer lain? kita ada komitmen utk saling bertukar pikiran
baik pada saat makan siang maupun pada saat ada pertemuan rutin. kita selalu
diskusikan baik formal maupun informal. Tdk masalah...kapanpun, dimanapun...kita tdk
punya masalah untuk berkomunikasi, kita tdk ada penghalang (Tx5: 11)
Collaboration with the other managers? We have a commitment to share thoughts at the
either lunch or other moments when there are regular meetings. We always have
discussions either formally or informally. It doesnt matter... whenever, wherever... we
have no problem to communicate; we have no borders (Tx5: 11)
Koordinasi merupakan tahap berikutnya setelah komunikasi (Tx6: 14)
Coordination is a further step beyond communication (Tx6: 14)
Koordinasi cenderung merupakan langkah yang lebih formal untuk mengintegrsikan
dalam satu tindakan (Ag9: 15)
Coordination tends to be a more formal step to integrate an action (Ag9: 15)

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Komunikasi & koordinasi sangat susah utk dipisahkan, akan tetapi koordinasi
mempunyai kekuatan yang lebih besar utk membuat agreement dalam pengeksekusian
strategi (Hs10: 13)
Communication and coordination are very hard to separate; however coordination is
more powerful to make an agreement in the strategy execution (Hs 10: 13)
Dapat dikatakan bahwa tidak ada koordinasi kalau tidak ada komuniaksi (Ht8: 15)
It can be said that there is no coordination if there is no communication (Ht 8: 15)
Kita kan bekerja sama utk mencapai tujuan organisasi. Untuk bisa melakukan ini, kita
selalu belajar satu sama lain; nah disinilah koordinasi kata kuncinya (Ag6: 25)
We work together to achieve the organizations goal. To do this, we always learn from
each other; coordination is the key factor (Ag6: 25)
Koordinasi antar seluruh manager sangat mensupport keberhasilan implementasi strategi
(Ag13: 6)
Coordination among managers will support the successful implementation of the
strategy (Ag13: 6)
Koordinasi antar bagian dilakukan melalui pertemuan fromal maupun secara informal
(Tx2: 2)
Coordination among departments are done through formal and informal meetings (tx2:
2)
Koordinasi, saling mengawasi sehingga tidak terjadi manipulasi dalam implementasi
strategi (Tx4: 9)
Coordination... controlling each other so there is no manipulation in implementing the
strategy (Tx4: 9)
Kita harus mempunyai koordinasi managerial yang sifatnya lintas bidang shg strategi dpt
dieksekusi secara mulus (Tx11: 1)
We must have managerial coordination across departments so the strategy can be
executed smoothly (Tx11: 1)
Kita punya koordinasi antar bagian setiap minggu shg kalau ada kendala2 apapun bisa
diselesaikan di rapat itu scr bersama2 (Hs11: 15)
we have a coordination meeting across departments weekly so when we have constraints
they can be solved together (Hs11: 15)
Implementasi strategi SDM tidak semata-mata ditentukan oleh departemen SDM, tapi
hasil koodinasi dengan departemen lainnya (Hs18: 1)
HR strategy implementation is not only determined by the HR department but as the
result of coordination among departments (Hs18: 1)
Kami selalu berkoordiansi dengan departemen lainnya (Ht3: 11)
We always have coordination with other departments (Ht3: 11)

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3. Organizational or Corporate Culture

Budaya organisasi sangat berpengaruh terhadap keberhasilan implementasi strategi
SDM (Ht1: 5)
Organizational culture affects the successful implementation of a HR strategy (Ht1: 5)
Kita menciptakan suatu budaya bisnis yang mendorong setiap orang untuk mencapai
profit, jika ada apa-apa kita kerjakan secara bersama-sama termasuk dlm hal
implementasi strategi SDM (Tx10: 11)
We create a business culture that spurs people to achieve profit, if there is anything we
do it together, including the implementation of the HR strategy (Tx10: 11)
Menurut pengalaman kita, corporate culture itu penting. Ketidaksesuaian budaya
perusahaan dengan strategi yang harus kita jalankan sangat menghambat keberhasilan
bahkan dalam kasus tertentu kita gagal (Ht16: 5)
According to our experiences, a corporate culture is important. Incompatibility between
the corporate culture and the HR strategy that we must execute greatly impedessuccess;
even in certain cases, we are unsuccessful (Ht16: 5)
Kita melakukan survey terhadap karyawan secara reguler untuk membangun budaya
kita; hal ini dikarenakan organisasi tumbuh dengan dinamis sebagi respon terhadap
perubahan lingkungan eksternal yang begitu cepat (Ag12: 12)
We conduct employee surveys regularly to develop our culture... as an organization
growing dynamically in response to the rapid changing of the external environment
(Ag12: 12)
Kesadaran para karyawan terhadap budaya kita perlu utk selalu diingatkan secara
kontinyu. Utk melakukan ini, serikat pekerja telah mebantu kita scr signifikan (Tx4: 9)
The awareness of employees to our culture should be reminded continuously. To do this,
the union has significantly helped us (Tx4: 9)
Culture disini ini positip kok. Kalau karyawan sudah nyampe standar (target) produksi
hari itu, dia bisa pulang. Tetapi kalo mau lebih ya silakan, perusahaan sih nggak
keberatan (Ag4: 7)
Our cultural values are positive. If an employee has already achieved the production
standard on that day, he or she may to go home. However if he or she wants to do more,
the company will always welcome this (Ag4: 7)
Kita selalu mendorong para karyawan utk bekerja lebih produktif (Ag8: 9)
We always encourage employees to be more productive (Ag8: 9)
Karyawan bekerja utk hidup; kami memotivasi mereka: siapa yang lebih produktif
mereka akan mempunyai kehidupan yg lebih baik (Tx6: 6)
Employees work for a living; we motivate them: who is more productive will have a
better living (Tx6: 6)

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Karyawan kami mempunyai loyalitas yg tinggi makanya mereka berusaha utk bekerja
sebaik-baiknya bagi perusahaan (Ag8: 12)
Our people have high loyalty so they will try to do the best for the company (Ag8: 12)
Kami memperhatikan mereka secara serius sehingga membuat mereka merasa seperti di
rumah sendiri dan loyal ke kita. Dampak berikutnya, mereka juga bekerja secara serius
(Tx10: 13)
We take care of them [*employees] seriously, so it makes them feel at home and loyal to
us. The impact that follows is that they will also work seriously (Tx10: 13)
Banyak dari karyawan kami yang telah bekerja disini untuk waktu yang lama; seperti
sudah menjadi perusahaannya sendiri. Mereka mendedikasikan ilmu, ketrampilan dan
kemampuannya bagi organisasi (Hs7: 15)
Many of our employees have been working for a long time; it is just like their own
company. They dedicate their knowledge, skill and ability for the organization (Hs7: 15)
Karyawan kami merasa bersalah ketika perusahaan pesaing telah maju selangkah di
depan kita (Ht18: 16)
Our employees feel guilty when our competitor moves a step ahead of us (Ht18: 16)
Satu prinsip kepemimpinan yg penting di perusahaan ini menekankan bahwa posisi yang
lebih tinggi harus selalu bisa memberikan contoh kepada bawahannya dalam pencapaian
tujuan-tujuan organisasi (Ag11: 23)
An important leadership principal in this company emphasizes that the higher positions
should always be able to give an example to their subordinates, for achieving the
organizational goals (Ag 11: 23)
Keteladanan itu penting , karyawan butuh role model... (Hs7: 19)
Example is important. Emlpoyees need a role model (Hs7: 19)
Style of leadernya. Mungkin itu yg dianut sebagain besar masy Indo patriarkhi (panutan)
(Hs8: 12)
The style of the leader. Most Indonesian people follow the patriarchal system (Hs8: 12)
Bawahan itu selalu melihat atasan-atasannya (Tx6: 12)
Subordinates always look to their superiors (Tx6: 12 )
Atasan itu selalu menjadi cermin bagi bawahannya (Ht13: 14)
Superiors always become a mirror for their subordinates (Ht13: 14)
kalau manajemen tidak bekerja secara sungguh-sungguh maka tidak mungkin untuk
mendorong karyawannya (Ht20: 11)
If the management does not work seriously, it is impossible to encourage the employees
(Ht20: 11)

365

Ing Ngarso Asung Tuladha, Ing Madya Mbangun Karsa Tut Wuri Handayani (Ag11: 23)
Giving examples when in the front, keeping harmony when in the middle, and giving
support when at the rear (Ag11: 23)
Kalau budaya yang didalam sini [organizational culture*] saya rasa sangat mendukung
sekali (Ht13: 7)
The culture here [organizational culture*] is very supportive (Ht13: 7)
Sebagian besar karyawan tidak masalah (mau) untuk bekerja lembur bila diperlukan
(Ag4: 7)
Most employees have no problem working overtime when needed (Ag4: 7)
Karyawan kami enjoy melakukan pekerjaan mereka (Ag10: 14)
Our employees enjoy their job (Ag10: 14)
Kami bekerja bersama dengan senang hati, seperti layaknya sebuah keluarga (Tx6: 6)
We are working together with happiness; its just like a family (Tx6: 6)
Uang bukanlah segalanya, mereka bekerja untuk kehormatan (Tx8: 6)
Money is not everything, they work for honor (Tx8:6)
Mereka bekerja seperti sedang mengerjakan perusahaan mereka sendiri (Hs8: 8)
They [*employees] work just like they would do in their own company (Hs8: 8)
Sebagian besar mereka telah bekerja lebih dari 15 tahun dan mereka tidak ada keinginan
untuk pindah atau keluar (Hs11: 7)
Most of them have been working for more than 15 years and they have no intention to
leave (Hs11: 7)
karyawan-karyawan senior kami dengan senang hati membimbing yunior-yuniornya
(Ht18: 13)
Our senior employees are happy to guide their juniors (Ht18: 13)
Sejujurnya, sebagian budaya kami menghambat organisasi untuk bergerak lebih cepat
(Ag7: 12)
Honestly, some parts of our culture obstruct the organization from moving faster (Ag7:
12)
Sangat susah untuk mendorong karyawan-karyawan yang sudah tua; sebagian besar dari
mereka cenderung sudah kehilangan motivasi karena kehidupan mereka sudah mapan
(Ag13: 11)
Its very hard to encourage old employees; most of them tend to have lost motivation
because their lives are already established (Ag13: 11 )
beberapa dari mereka merasa tidak kerasan/betah ketika sedang bekerja (Tx2: 10 )
some of them [*employees] do not feel at home when working ( Tx2: 10);

366

Memang tidak semua budaya kita posistip; kita ini lambat, kurang responsif terhadap
perubahan (Hs1: 15)
Not all of our culture is positive; we are slow, not responsive to change (Hs1:15)
Karyawan kelompok bawah sangat susah untuk menyesuaikan diri dgn perubahan (Hs9:
2)
Our low level staff have difficulties in adjusting to the change (Hs9: 2)
Mereka berpikiran bahwa dengan kerja keras atau tidak toh gajinya sama (Hs15: 10)
they [*some employees] think that either working hard or not will get the same reward
(Hs15: 10)
motivasi yang rendah, susah untuk belajar, respon yang rendah adalah masalah-masalah
kami (Ht20: 14 )
low motivation, difficulty in learning, slow responses are our problems (Ht20: 14 )
Meskipun kita mendatangkan konsultan, mereka bukan untuk mendikte kami tapi untuk
membantu kita untuk memotret siapa kita, apa keunikan yang kita miliki (Ag12: 12)
Although we invite consultants, they are not to dictate, but to help us to portray who we
are, what our unique features are (Ag12:12)
Sepenuhnya benar bahwa tetep kita nggak bisa terima langsung nilai-nilai barat tadi, kita
perlu untuk memilah dan memilih mana yang paling sesuai untuk kita (Ag9: 4)
For sure, we cant accept western values directly, we need to sort the most suitable for
us (Ag9: 4)
Kami punya values yang unik; keujuran, loyalitas, dan bekerja keras sbg core values
kami (Tx5: 12)
we have unique values: honesty, loyalty, and hardworking are our core values (Tx5: 12)
Beberapa waktu yang lalu, kantor pusat kami di Nedherland mengirim 2 orang mereka
untuk menstimulasi produktivitas organisasi. Mereka cenderung menggunakan apa yang
mereka percayai dan mengabaikan masukan-masukan dari orang-orang lokal. Hasilnya
bukannya indek produktivitas yang meningkat tapi justeru semakin memburuk. Bahkan
kemudian lingkungan kerja juga menjadi tidak produktif , begitu banyak konflik. Nah
sekarang..., manajemen cenderung menggunakan orang-orang lokal yang memahami
benar bagaimana menghandle para karyawan secara bijak selama tujuan-tujuan
organisasional dapat dicapai (Ag6: 14)
Recently, our head office in Nederland sent two people to stimulate organizational
productivity. They used their own beliefs [*western principles] and neglected input from
the locals. The result was not an increase in the productivity index that we achieved, but
it got worse. Indeed, the work environment also became not conducive; too many
conflicts. Now, the management tends to use locals who understand more how to handle
employees wisely as long as the organizational goals can be achieved (Ag6: 14 )

367

Karena perusahaan establish di Sumbar, tantangan kita adalah bagaimana merubah pola
pikir pedagang menjadi pola pikir industri. Seperti kita ketahui, orang-orang
Minagkangkabau terkenal sebagai pedagang (Ag4: 8)
Because the company is established in West Sumatra, our challenge is to change
traders mindsets into an industrial mindset. As we know, Minangkabau people are
known as traders (Ag4: 8)
Kekhasan kita adalah kemampuan untuk mengadaptasi budaya lokal ke dalam budaya
organisasi (Ht8: 7)
Our distinctive feature is the ability to adapt local culture into the organizational values
(Ht8: 7)
Budaya jawa yang paling pas nilai-nilanya untuk diadaptasi oleh organisasi kami (Ag11:
23)
The Javanese culture has the most suitable values to be adapted by our organization
(Ag11: 23)
Di sini budaya jawa terus menerus diingatkan dan ditanamkan kepada karyawan sebagai
guide mereka bekerja. (Ht5: 8)
Here, Javanese culture is continuously reinforced and implanted as a guideline in their
work (Ht5: 8)
Kita hidup di Bali, secara alamiah kami mengadaptasi nilai-nilai budaya Bali kedalam
organisasi kami(Ht8: 6)
We are living in Bali, naturally we adapt Balinese values into our organization (Ht8: 6)
Di RS kami, pendekatan religious [*Islam] lebih mengena karena kalau entry pointnya
dgn aspek manajemen melulu maka tidak akan masuk ke dalam otak mereka (Hs1: 12)
In our hospital, a religious approach[*Islam] is very helpful because if the entry point
is merely management aspects then it wont get into their minds (Hs1: 12 )
Meskipun kami tidak semilitan rumah sakit katholik tapi prinsip-prinsip kristen tetap
kita gunakan untuk mempertajam budaya kerja kita (Hs2: 12)
Although we are not as militant as Catholic hospitals, ...but we still use Christian
principles to shape our work culture (Hs2: 12)
Prinsipprinsip ajaran katholik kita elaborasi kedalam organizational values (Hs3: 10)
principles of catholic teachings are elaborated into our organizational values (Hs: 10)
Selama tiga tahun ini manajemen memakai nilai-nilai agama [*Islam] untuk memacu
motivasi kerja para pegawai agar semakin bersemangat dalam bekerja sehingga bisa
bersaing dengan RS lain (Hs12: 14)
In the last three years, the management has been using Islamic values to encourage
work motivation of employees so they work harder to compete with other hospitals
(Hs12: 14)

368

Kita memang bukan organisasi yang berbasis agama tapi kita kan eksis di lingkungan
masyarakat yang sangat dipengaruhi agama Hindu makanya nilai-nilai ajaran Hindu pun
kami adaptasikan ke dalam organisasi kami (Ht8: 7)
we are not a religious based organization but we exist in a society that is highly
influenced by Hinduism, so Hindu religious values are adapted into our organization
(Ht8: 7)

3.3. Role of HR Department Staff

1. HR Department Staff Capability
Orang-orang di departemen SDM harus ditempatkan di posisi yang tepat sesuai dgn
keahliannya (Ag3: 5)
HR people should be placed in the right position according to their expertise (Ag3: 5)
Manager SDM harus mampu memberikan bantuan yang diperlukan (Ag6: 10)
A HR manager should be able to give necessary assistance (Ag6: 10)
Ketrampilan, kapabilitas staf-staf kami sangat krusial (Ag8: 5)
Skill, capability of our staff is crucial (Ag8: 5)
Tentu saja tergantung juga pada kemampuan orang-orang kita sendiri (Ag8: 13)/
Of course, depends on the capability of our people [*HR people] (Ag10: 13)
Harus didukung oleh orang-oang HR yg kemampuan analitiknya juga bagus (Ag13: 6)
Should be supported by HR people who have good analytical capability 13: 6)
Kemampuan karyawan departemen SDM sangat menentukan keberhasilan implementasi
strategi (Tx1: 7)
Ability of the HR people determines the success of the implementation of the strategy
(Tx1: 7)
Kemampuan kita dalam menganalisa keadaan akan sangat besar kontribusinya untuk
keberhasilan implementasi (Tx3: 8)
Our ability to analyze the situation will give a high contribution to the success of the
implementation (Tx3: 8)
Yangg paling berpengaruh adalah kemampuan orang-orang SDM itu sendiri (Tx5: 11)
The most influential is the ability of the HR people itself (Tx5: 11)
Utk melaksanakan ini semua [strategi HR*], peran manajer sangat menentukan dan
membantu (Tx8: 5)
to implement a HR strategy, the role of the HR manager is vital (Tx8: 5)

369

Bagaimana menerjemahkannya kedalam aksi, itu sangat tergantung pada kemampuan

kita (Tx10: 9)
How to translate it into action, that deeply relies on our capability (Tx10: 9)
Kalau kita memiliki kemampuan dan keahlian maka hasilnya akan baik (Hs2: 12)
If we [*HR people] have the ability and expertise, the results will be good (Hs2: 12)
Saya rasa itu iya pak. Leadership kita akan menentukan keberhasilan implementasi
(Hs8: 7)
I think so. Our leadership will determine the success of implementation (Hs8: 7)
Wise (bijak), itu penting. Sehingga karyawan bisa menerima kebijakan &
menjalankannya strategi SDM dengan sukarela (Hs9: 10)
To be wise, thats important. So employees are able to accept and implement the HR
strategy (Hs9: 10)
Menguasai apa-apa yang harus kita lakukan dalam proses implementasi, itulah kuncinya
(Hs12: 10)
To understand what should we do in implementation; thats the key (Hs12: 10)
Pengakuan akan datang ketika karyawan melihat kemamapuan konseptual dan
operasional kita (Hs12: 11)
Recognition will come automatically when employees see our conceptual and
operational abilities (Hs12: 11)
Apa yang kita lakukan selalu diperhatikan orang, kita harus mampu menjadi teladan bagi
karyawan yang lain (Hs13: 6)
People always pay attention to what we (*HR people) do so we should be an example
(Hs13: 6)
kita berikan contoh, orang-orang lain akan mengikuti kita (Hs16: 5)
Other people in the organization will follow us (Hs16: 5)
Manager SDM harus menjadi role model (Hs20: 12)
The HR manager should be a role model (Hs20: 12)
Jangan membuat jarak, rangkul mereka maka mereka pun akan berpartisipasi dengan
senang hati (Ht1: 7)
Dont make a gap, embrace them then they will participate with happiness (Ht1: 7)
Pendekatan secara kultural akan sangat membantu untuk mendorong orang-orang dalam
implementasi (Ht3: 12)
Cultural approach is very helpful to encourage people in implementation (Ht3: 12)
Ketika orang percaya akan kemampuan kita maka mereka pun akan mengikuti kita;
percaya deh itu... (Ht6: 9)
When people believe in our ability they will follow us (Ht6: 9)
370

Pemberian contoh-contoh sangat membantu (Ht7: 3)

giving examples is very helpful (Ht7: 3)
Ada saatnya kita hrs tegas, tapi pada saat yang lain kita bisa lebih fleksibel (Ht10: 16)
In certain times we must be firm, in (an) other times we should be more flexible (Ht10:
16)
Sangat tergantung pada kemampuan orang-orang SDM sendiri dalam menjelaskan dan
meyakinkan (Ht13: 7)
Deeply relies on the ability of the HR people to explain and convince (Ht13: 7)
Tergantung bagaimana kita memainkan peran kita sebagai aktor utama (Ht14: 8)
how we play our role as a primary actor (14: 8)
Badilah role model... (Ht18: 10)
Be a role model... (Ht18: 10)
Pahami karakter orang-orang dan beri dorongan kepada mereka (Ht21: 12)
understand peoples characters then encourage them (Ht21: 12)
Pikirkan kita ini seperti mereka sehingga kita tahu bagaimana mengendalikan mereka
(Ht22: 9)
Think of us [*HR people] as they are [*organizations members] so we know how to
drive them (Ht22: 9)
Selalu ingat dalam benak kita bahwa kita mempunyai ketrampilan yang cukup dan
kemampuan untuk mengorganisasikan implementasi (Ht24: 11)
keep in mind that we have sufficient skill and ability to organize the implementation
(Ht24: 11)

2. HR Department Staff Autonomy

Otonomi yang saya miliki cukup besar; hal ini sungguh sangat membantu (Ag1: 6)
I have sufficient autonomy; its really helpful (Ag1: 6)
Saya sangat mempunyai keleluasan untuk mengimplementasikan berdasarkan situasi dan
kondisi organisasi (Ag2: 2)
I really have the discretion to implement the strategy based on the situation of the
organization (Ag2: 2)
Saya mempunyai otonomi tapi pada saat yang sama saya juga mempunyai tanggung
jawab. Yang terpenting adalah bagaimana menggunakan itu (Ag3: 3)
I have the autonomy and responsibility at the same time. The most important thing is
how to use it (Ag3: 3)

371

Kami telah mendapatkan pedoman, kemudian kami mempunyai fleksibilitas dalam

melakukan eksekusi strategi SDM dgn cara yg terbaik menurut penilaian kami (Ag4: 7)
We receive general guidance; then we have the flexibility to execute HR strategies in the
best way based on our judgments (Ag4: 7)
Kami mempunyai ruang [*otonomi] dimana kami bisa menyelesaikan persoalan yang
muncul selama proses implementasi (Ag6: 7)
We have space [*autonomy] to solve problems that occur during implementation (Ag6:
7)
Klo ditanya seberapa jauh otonomy saya? maka jawabannya adalah tergantung seberapa
besar saya mampu menerimanya (Ag8: 4)
How far is my autonomy? It depends on how much I am able to receive it (Ag8: 4)
Ada meeting secara rutin; namun dlm meeting tersebut jarang dibahas yg kecil-kecil yg
masih bisa ditackle manager ybs (Ag10: 6)
there are regular meetings but they werent to discuss small things that could be
handled by managers (Ag10: 6)
Meskipun masing-masing manajer mempunyai otonomi, tapi kita bersinergi antar
departemen-departemen tersebut (Ag11: 15)
Although every single manager has autonomy, but we must have synergy among
departments (Ag11: 15)
Untuk dapat mengimplementasikan strategi SDM dgn baik diperlukan otonomi yg cukup
besar dari orangg HR utk melakukan itu (Ag12: 24)
To implement a HR strategy, we need adequate autonomy to do that (Ag12: 24)
Disini setiap hal yg berkaitan dgn SDM hrs disahkan dept SDM shg kita betul2 punya
otonomi; ini sangat penting (Ag13: 7)
Every HR policy should be authorized by the HR department (Ag13: 7)
Semua keputusan-keputusan berkaitan dengan implementasi diserahkan saya, selama
tidak keluar jalur (Tx1: 7)
All decisions related to implementation is up to us [*HR department]; as long as its on
the right track (Tx1: 7)
Saya butuh otonomi untuk bisa melakukan semua itu [*implementasi strategi] (Tx3: 7)
I need autonomy to implement the strategy (Tx3: 7)
Otonomi? nggak juga penuh! Cenderung fleksibel, tapi cukuplah untuk bisa menunjang
pelaksanaan strategi SDM (Tx4:10)
Autonomy? not fully. It tends to be flexible but thats enough to support the HR strategy
execution (Tx4: 10)

372

Ini sangat critical bagaimana untuk menggunakan otonomi yang kami terima dari
manajemen (Tx5: 11)
Its critical; how to use he tautonomy that we have from the management (Tx5: 11);
Saya membutuhkan otonomi, diberi kewenangan sesuai dengan porsinya sbg manajer
(Tx9: 11)
I need autonomy proportionally as a manager (Tx9: 11)
Kalau sdh diputuskan, kita selalu diberi otonomi untuk menjalankan sesuai area kita
(Tx10: 10)
As long as its already decided; we always receive autonomi to do it within our context
(Tx10: 10)
Setiap manajer membutuhkan otonomi sesuai bidangnya, demikian juga dengan saya
(Tx11: 4)
Every manager needs autonomy according to their field; so do I (Tx11:4)
Kami tidak mempunyai aturan yang rumit, manajemen percaya kami bagimana
melakukannya (Tx12: 11)
We have no complicated rules; the management believe us in how we do it [*autonomy]
(Tx12: 11)
Otonomi itu diperlukan utk membuat pergerakan kami lebih fleksibel (Hs2: 12)
Autonomy is needed to make our moves more flexible (Hs2: 12)
Manajemen percaya kami untuk mengerjakan dengan cara yang terbaik (Hs4: 10)
The management believes in us to do the best (Hs4: 10)
Otonomi memang penting tapi itu juga tergantung bagaimana kita menggunakannya
(Hs5: 9)
Autonomy is important but it depends on us, how to use it (Hs5: 9)
Ada ruang dimana kami bisa membuat penilaian-penilaian (Hs8: 8)
There is space for us to make judgments (Hs8: 8)
Setelah mendapatkan input dari para kolega, ada hak saya untuk mengambil keputusan
(Hs10: 13)
Beyond input from colleagues, there is my right to make decisions (Hs10: 13)
Jelas sekali bahwa otonomi yang kami miliki merupakan faktor yg menentukan
keberhasiln implementasi strategi SDM (Hs12: 18)
Clearly the autonomy that we have is an influential factor for the success of the
implementation of the HR strategy (Hs12: 18)

373

Kita tahu kemana kita seharusnya pergi, dan kami mempunyai hak untuk mengorganisir
bagaiamana untuk pergi kesana (Hs13: 9)
We know where we should go, and we have a right to organize how to go there (Hs13:
9)
mengeksekusi strategi SDM itu lebih rumit makanya kami memerlukan pendekatan yang
flesibel untuk melakukannya (Hs14: 7)
Executing a HR strategy is more complicated, so we need flexible approaches to do it
(Hs14: 7)
Setelah strategi HR diputuskan; itu merupakan arena kami untuk
mengimplementasikannya (Hs 15: 14)
After the HR strategy has been decided; its our arena to implement it (Hs15: 14)
Otonomi sudah kita terima penuh, tapi kita masih ada kesulitan untuk menggunakannya
(Hs16: 5)
We received full autonomy, unfortunately we still have difficulties to use it in practice
(Hs 16: 5)
Ruang otonomi sudah lebih dari cukup (Hs17: 3)
Autonomy our space is more than enough (Hs17: 3)
Oh iya....otonomi itu merupakan bagian penting dari orang-orang manjerial (Hs19: 9)
Autonomy is an important part for people at the managerial level (Hs19: 9)
Tentu selaku manager SDM saya harus jelas otonomi yg dilimpahkan ke saya. Klo
memang ada batasan-batasan tertentu, maka saya akan bergerak dlm batasan tsb (Ht1: 6)
Of course as a manager, my autonomy must be clear. If there are restrictions, I will act
within those restrictions (Ht1: 6)
Sangatlah rasional fleksibilitas ada ditangan kami, karena kami secara langsung terlibat
dalam implementasi strategi (Ht2: 5)//
Its rational for flexibility to be within our hands, since we were directly involved in
strategy implementation (Ht2: 12)
Selagi ada di bidang saya, manajemen memberikan saya otonomi, tetapi saya selalu
mengkonsultasikannya dengan beliau (Ht3: 10)
As long as its in my field; the managemer gives me autonomy, however I always consult
him [*CEO] (Ht3: 10 )
Memang benar, otonomi saya selaku manajer SDM cukup besar tetapi tiap bulan saya
harus melaporkan itu (Ht4: 3)
Thats true, my autonomy as HR manager is great, but I have to report monthly (Ht4: 3)
Kami mempunyai otonomy yang penuh tetapi harus dilaporkan bagaimana kami
menggunakannya (Ht5: 8)
We have full autonomy but should reported on how we use it (Ht5: 8)
374

Keberhasilan
implementasi
SDM
sangat
bergantung
pada
bagaimana
mengorganisasikannya (Ht6: 8)
The success of HR implementation depends on in how to organize it (Ht6: 8)
Kami membutuhkan suatu kepercayaan agar berhasil dalam mengemban misi yang
dibebankan ke kami (Ht7: 6)
We need trust to be succeed in the mission charged to us (Ht7: 6)
Kita diberi otonomi utk mengatur sendiri proses implementasi, yg penting tidak keluar
dari vision, mision dan budget (Ht7: 6)
We have autonomy to organize implementation as long as it doesnt go out of the vision,
mission, and budget (Ht8: 6)

Sepanjang dalam batas otonomy kami, kami bisa bergerak secara fleksibel (Ht9: 5)
As long as its in our autonomy, we may move flexibly (Ht9: 5)
Otonomi kami sangat leluasa. Saya bisa masuk ke semua departement selama
berhubungan dengan SDM (Ht12: 8)
Our autonomy is very flexible. It moves across departments -as long as its related to
HR (Ht12: 8)
Otonomi iya, tapi jangan sampe seseorang diserahi sesuatu diluar kemampuan (Ht13: 8)
Autonomy? Yes, but dont let someone receive something beyond her/his capability
(Hs13: 8)
Jelas...otonomi untuk menjalankan tugas selaku manajer SDM amat sangat dibutuhkan
(Ht15: 5)
For sure, autonomy to do our function as HR manager is extremely needed (Ht 15: 5)
Kami membutuhkannya, sayangnya kadang-kadang management masih tidak
sepenuhnya percaya kepada kami (Ht16: 6)
We need it, unfortunately sometimes the management still do not completely believe in
us (Ht16: 6)
GM memberi kami otonomi untuk membuat keputusan-keputusan yang diperlukan
(Ht17: 8)
The General Manager (GM) gives us autonomy to make decisions when needed (Ht17:
8)
Bagaimana mengimplementasikan strategi SDM diserahkan ke saya, apapun
kebijakannya selama tidak membahayakan perushaan (Ht19: 9)
How to implement HR strategy was handed to me... whatever the policies... as long as
they do not damage the company (Ht19: 9)
GM memberikan otonomy yg penuh kepada saya selaku manajer SDM (Ht20: 11)
The GM gives full autonomy to me as HR manager (Ht20: 11)
375

3. HR Department staffs Commitment

Ini [*implementasi strategi SDM] merupakan tugas kami untuk melakukannya (Ag1: 7)
It [*HR strategy implementation] is our job to do it (Ag1: 7)
Jika diperlukan, penegakan aturan harus dilakukan untuk mendukung keberhasilan
implemntasi strategi SDM (Ag7: 7)
When needed, rule must be enforced to support the success of the HR strategy
implementation (Ag7: 7)
Orang-orang SDM merupakan aktor-aktor utama makanya kita harus commit dengan
apa yang telah organisasi putuskan (Ag8: 13)
The HR people are the primary actors, so we have to commit whit what the organization
has decided [*HR strategy] (Ag8: 13)
Orang-orang SDM harus mempunyai komitmen untuk berubah jika dikehendaki oleh
strategi SDM yg sudah diformulasikan (Ag11: 12)
The HR people must have commitment to change, as is needed by the HR strategy
formulated (Ag11: 12);
... dan komitmen orang-orang SDM untuk mentransfer dari atas ke bawah (Ag12: 24)
...and the commitment of the HR people to transfer from top [*strategy] to bottom
[*policies and practices] (Ag12: 24)
Oh iya...komitmen seorang HR manager itu penting (Tx3: 8)
Oh yes... the HR managers commitment is very important (Tx3: 8)
Komitmen orang-orang SDM perlu untuk ditingkatkan seiring dengan pertumbuhan
organisasi yang semakin complex (Tx5: 11)
The HR peoples commitment should be improved as the organization is getting
complicated (Tx5: 11)
Sebagai bentuk komitmen kami, tidak masalah bagi kami untuk kerja lembur. Yang
terpenting sistem harus berjalan dengan baik (Tx6: 8)
As a form of our commitment, it doesnt matter for us to work overtime. The most
important thing is that the system must be running well (Tx6: 8)
Beberapa perusahaan menawari saya pekerjaan yang lebih bagus tapi ini sudah menjadi
komitmen saya kpd perusahaan; perubahan harus diselesaikan dulu (Tx8: 10)
Some companies offer me better jobs, but it is my commitment to the company; the
change must be completed first (Tx8: 10)
Delapan jam tidak cukup untuk saya; kerja lembur cenderung menjadi rutinitas saya.
Inilah konsekuensi sebagai manajer SDM (Tx10: 13)
Eight hours is not enough for me; working overtime tends to be my routine. Thats my
consequence as the HR manager (Tx10: 13)

376

Kami sudah mendapatkan waktu untuk berbicara kemudian selanjutnya giliran kami
untuk berkomitmen (Tx11: 5)
We already had a time to speak, then its our turn is to have commitment (Tx11: 5)
Kita harus mempunyai orang-orang dari top, middle, dan low level yangg commit untuk
melaksanakan apa yang telah kita putuskan (Tx12: 7)
We should have people from the top, middle, and low level, who commit to do what we
have decided (Tx12: 7)
Tidak ada waktu untuk menyerah, kita harus terus berusaha apapun kesulitannya (Hs1:
15)
There is no time for giving up; we have to try, whatever difficulties there are (Hs1: 15)
Komitmen, tentu saja sangat kritikal untuk keberhasilan implementasi (Hs2: 12)
Commitment, of course, is very critical to the success of implementation (Hs2: 12)
Komitmen itu mudah untuk diucapkan tapi susah untuk dilaksanakan. Akan tetapi kita
harus melakukannya karena sangat penting (Hs5: 9)
Commitment is easy to be said but difficult to be done. However we must do it because
its very important (Hs5: 9)
Kalau kita nggak punya komitmen untuk mengimplementasikannya, bagaimana dengan
yang lain (Hs8: 11)
if we dont even have commitment to implement it [*HR strategy], what about others
(Hs8: 11)
Komitmen dari orang-orang SDM sangat dibutuhkan (Hs10: 15)
Commitment of the HR people is very (demanding) necessary (Hs10: 15)
Atasan harus mempunyai komitmen untuk berhasil (Hs15: 11)
Superiors must have a commitment to succeed (Hs15: 11)
Untungnya, orang-orang kita komitmennya sangat bagus sehingga membuat saya lebih
mudah dalam pengimplementasian strategi (Hs16: 5)
Luckily, our peoples [*HR people] commitment is very good so it makes it [*HR
manager] easier for me in implementing the strategy (Hs16: 5)
Apa yang kita bikin, apa yang kita ikuti (Hs17: 3)
what we have done, that we will follow (Hs17: 3)
Meskipun komitmen kami bukanlah satu-satunya variabel untuk kesuksesan, tapi itu
sangat penting (Hs19: 13)
Although our commitment is not the only variable for success; but its very important
(Hs19: 13)

377

Faktor penentunya adalah para manajer kami mempunyai satu komitmen yang sama
(Ht1: 4)
The determinant factor is that our managers have the same commitment (Ht1: 4)
Tidak diragukan lagi, komitmen orang-orang SDM sangat dibutuhkan (Ht3: 22)
There is no doubt that the commitment of the HR people is very needed (Ht3: 22)
Departemen SDM sangat penting untuk memperhatikan secara kontinyu berkaitan
dengan konsistensi dalam implementasi startegi SDM (Ht6: 22)
The HR department should pay attention continuously regarding consistency in the HR
strategy implementation (Ht6: 22)
Jadi bisa dibilang strategi apapun yg paling canggih klo kita nggak bisa jadi role model
nggak ada gunanya pak... (Ht7: 20)
It can be said that, however good a strategy is, but if we [*HR people] are not able to be
a role model, it will be nothing (Ht7: 20)
Orang-orang kami mesti punya dedikasi utk melaksanakan apa yang telah kami
formulasikan (Ht9: 5)
Our people should have dedication to do what we have formulated (Ht9: 5)
Ketegasan mengimplementasikan strategi harus dilakukan secara konsisten (Ht11: 24)
Assertiveness to implement a strategy should be done consistently (Ht11: 24)
Komitmen tidak hanya berkaitan dengan kami tapi bagi seluruh anggota organisasi
(Ht14: 4)
Commitment is not only about us [*HR people] but for all of the organizations
members (Ht14: 4)
Itu merupakan tanggung jawab semua & kita hrs komit (Ht15: 8)
Thats our responsibility; we must have commitment (Ht15: 8)
Kalau sudah ada keputusn kita harus punya komitmen untuk melakukannya, kalau
mencla-mencle nggak ada dukungan (Ht16: 6)
When there is a decision, we must have commitment to do it. If we are inconsistent;
others will follow us (Ht 16: 6)
Itu merupakan tanggung jawab semua & kita hrs komit (Ht19: 14)
Thats our responsibility; we must have commitment (Ht19:14)
Konsistensi kami akan mempengaruhi yang lain untuk melakukan hal yang sama (Ht21:
10)
Our consistency will influence others to do the same thing (Ht21: 10)

378

Strategi yang bagus, orang yang bagus, lingkungan yang mendukung, komitmen tinggi;
itulah yang kita butuhkan untuk keberhasilan impelementasi strategi SDM (Ht25: 9)
Good strategy, good people, good environment, high commitment; thats what we need
to be successful in HR strategy implementation [Ht25: 9]
Sebagai komandan, saya harus mampu memperlihatkan bahwa saya melaksanakan apa
yang telah saya putuskan (Ht28: 13)
As a commander, I [*HR manager] should be able to show that I do what I decided
(Ht28: 13)

379

Appendix 3
CHARACTERISTICS OF THE BEST PRACTICES
Industry

Recruitment

Selection

Ag1

Internal channel

Administrative,
attitude

Ag2

Internal channel

Administrative,
attitude

Ag4

Internal channel

Ag7

Tx2

Training &
Development
Skill improvement

Compensation

Performance Appraisal

Incentive focus
Insurance, health,
superannuation

Every 3 months
By supervisor
Diligence, attendance,
attitude, development

Skill improvement

Performance based
Insurance
Pickup cars,
equipments, health,
superannuation

By supervisor
Discipline, attendance,
motivation

Education, skill,
attitude

Team work building

Export standard

By supervisor
Performance

Internal channel

Administrative, skill

Skill improvement

Inflation based
Performance based
Insurance, health,
superannuation
Incentive focus
Insurance, health,
superannuation

Internal channel

Administrative,
skill, motivation

Skill improvement
Understanding rules

To be continued in the next page

380

Monthly package plus

incentive
Insurance, health,
superannuation

Every 6 months
By supervisor
Discipline, attendance,
loyalty
By line supervisor
Attitude & performance

Appendix 3 continued.
Industry

Recruitment

Selection

Tx6

Internal channel

Administrative,
written test,
interview
Attitude & skill

Tx8

Applicants,
advertising

Education, attitude,
skill

Hs4

Internal channel

Hs5

Hs16

Training &
Development
Skill improvement

Compensation

Performance Appraisal

Monthly package plus

performance
Insurance, health,
superannuation

Supervisor

Skill improvement,
product standard

Monthly package

Supervisor
Daily performance

Administrative,
written test,
practical test,
interview
Attitude, skill

Skill, quality of
services

Monthly package
Performance
Insurance, health,
superannuation

Supervisor
Every year

Internal channel,
church network

Health, skill,
attitude, knowledge,

Skill improvement,
understanding rules,
discipline

Monthly package,
functional, structural
Insurance, health,
superannuation,
pension

Supervisor
Based on daily report,
patients satisfaction index

Internal channel,
group network

Attitude, skill,
knowledge

Skill improvement,
delivering services

Monthly package
Insurance, health,
superannuation

Supervisor
Yearly
Discipline, attitude,
patients
complaints

Source: compiled from interviews transcriptions

381

Appendix 4
PROTOTYPES OF SHRM ACROSS INDUSTRIES
No

Industry

Code

1
2
3
4
5
6
7
8
9
10
11
12
13

Agriculture
Ag1
Agriculture
Ag2
Agriculture
Ag3
Agriculture
Ag4
Agriculture
Ag5
Agriculture
Ag6
Agriculture
Ag7
Agriculture
Ag8
Agriculture
Ag9
Agriculture
Ag10
Agriculture
Ag11
Agriculture
Ag12
Agriculture
Ag13
Total Agriculture

14
15
16
17
18
19
20
21
22
23
24
25

Textile
Textile
Textile
Textile
Textile
Textile
Textile
Textile
Textile
Textile
Textile
Textile

Tx1
Tx2
Tx3
Tx4
Tx5
Tx6
Tx7
Tx8
Tx9
Tx10
Tx 11
Tx12

Approach
Best
Best Fit
Practice

4
9

Role of HR Department
Two-way
Integrative
Linkage
Linkage

4
9

Total Textile

Total Manufacturing

18

10

15

To be continued in the next page.

382

Appendix 4 continued
No

26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63

Industry

Code

Hospital
Hs1
Hospital
Hs2
Hospital
Hs3
Hospital
Hs4
Hospital
Hs5
Hospital
Hs6
Hospital
Hs7
Hospital
Hs8
Hospital
Hs9
Hospital
Hs10
Hospital
Hs11
Hospital
Hs12
Hospital
Hs13
Hospital
Hs14
Hospital
Hs15
Hospital
Hs16
Hospital
Hs17
Hospital
Hs18
Total Hospital
Hotel
Ht1
Hotel
Ht2
Hotel
Ht3
Hotel
Ht4
Hotel
Ht5
Hotel
Ht6
Hotel
Ht7
Hotel
Ht8
Hotel
Ht9
Hotel
Ht10
Hotel
Ht11
Hotel
Ht12
Hotel
Ht13
Hotel
Ht14
Hotel
Ht15
Hotel
Ht16
Hotel
Ht17
Hotel
Ht18
Hotel
Ht19
Hotel
Ht20
Total Hotel
Total Services
Total Industry

Approach
Best
Best Fit
Practice

3
15

0
20
3
35
10

53
63

383

Role of HR Department
Two-way
Integrative
Linkage
Linkage

5
13

0
20
5
33
15

48
63

Appendix 5
LIST OF PUBLICATIONS
Publications of Research Methodology:
1. Hartono, A. (2010). Putting Organizational Studies in Indonesia into the Right
Track: Dialectic between Positivism and Interpretivism. National Seminar and
Call for Paper, Department of Management, Faculty of Business and Economics,
Universitas Islam Indonesia, Yogyakarta, Indonesia, 4-5 February 2010.
2.

Hartono, A. (2007). Developing a Model of the Indonesian Business

Management: A Methodological Perspective. The 1st PPM National Conference
on Management Research, Jakarta, Indonesia, 7th November 2007.

3. Hartono, A. (2006). Doing Grounded Research Manually: a Lonely Journey of

Pain and Joy. 7th International Interdisciplinary Conference Advance in
Qualitative Research, Surfer Paradise, Australia, 13-16 July 2006.
Publications of Findings and Discussion:
1. Hartono, A. (2010). Paradigm Shift of Human Resource Management in the
Indonesian Organizations. Second Annual International Conference on Global
Business Riyadh (ICGB2010), Riyadh, Saudi Arabia, 16-18 June 2010.
2. Hartono, A. & Scott-Ladd, B. (2008). The Determinants of Human Resource
Strategy Implementation: An Indonesian Case Study. International Conference
on Business and Management, Bandar Seri Begawan, Brunei Darussalam, 8-9
January 2008.
3. Hartono, A. & Scott-Ladd, B. (2007). The Role of Human Resource Managers in
Strategic Decision Making Process: An Indonesian Case Study. Global Academy
of Business and Economic Research (GABER) Conference, Bangkok, Thailand,
27-29 December 2007.
4. Hartono, A. & Entrekin, L. (2006). The Investigation of the Model of Strategic
Human Resource Management in Indonesia. 1st International Management and
Business Research Conference, Denpasar-Bali, Indonesia, 23-24 August 2006.
5. Hartono, A. (2006). Local Culture Adaptation to the Management of People
in the Workplace: An Indonesian Case. Asia Pacific Week, Australia National
University (ANU), Canberra, 29 January-2 February 2006.
Note:

Paper entitled The Investigation of the Model of Strategic Human Resource

Management in Indonesia had been selected as the best paper in the HRM
stream.

384