Wrms implement HR practices that encourage employees to engage in creative
behavior, cooperate and share ideas with others, and retain a long-term focus
(Wright and McMahan 1992 ). Based on this, we might expect to see more pervasive
use of the commitment-based and collaborative HR systems for all employees as
these HR conWgurations focus on creating and transferring knowledge whereas
productivity-based and compliance-based HR systems do not.
In contrast, a low-cost strategy is likely to involveWrms orienting their workforce
more toward productivity and eYciency concerns (Miles and Snow 1984 ; Porter
1985 ; Schuler 1992 ). As noted by Wright and McMahan ( 1992 : 304 ), a cost strategy
‘requires such things as repetitive behaviors, a short-term focus, autonomous
activity, high concern for quantity, moderate concern for quality, and low risk
taking.’ If managers are focused on eYciency and productivity maximization for all
employees, they might establish more short-term performance horizons for indi-
viduals in the top two quadrants of the matrix than is normally anticipated (i.e.
managing them more like employees in the bottom quadrants). Further, managers
focused on low costs may not be willing to expend the resources necessary for
training and knowledge development (an expense that might diminish proWt
margins in the short run). In this case, we might expect to see more reliance on
productivity-based and compliance-based HR conWgurations for all employee
groups than commitment and collaborative HRM.
While organizations may adopt an overarching orientation toward managing all
employees via higher levels of commitment and collaboration or productivity and
compliance, we anticipate that adopting an HR architecture perspective adds
additional complexity to the inXuence of strategy. Rather than focusing solely on
which overarching HR orientation to adopt, an architectural perspective also
directly raises the issue of how diVerent employee groups add value. In the HR
architecture, there are two key issues that emerge that complicate this discussion.
First, diVerent strategies emphasize diVerent internal business processes for com-
petitive advantage. Second, not all skill sets groups are equally critical for value
creation among diVerent internal business processes and, ultimately, competitive
diVerentiation.
DiVerences in the strategic objectivesWrms pursue directly inXuence the relative
role and value of diVerent business processes in the value chain. For example,Wrms
focused on product leadership (and innovation) are likely to depend most critically
on diVerent processes fromWrms focused on operational excellence (cost). And
Wrms focused on customer intimacy compete on a diVerent set of processes as well.
While there certainly may be many more strategic objectivesWrms may pursue, the
key point is that the pursuit of diVerent strategic objectives inXuences which
processes within the value chain are most critical for a competitive advantage
based on the strategic objective.
By extension, the relative employee groups oriented toward various business
processes are likely to vary in their potential contributions toward critical value
220 david lepak and scott a. snell