emerging challenges of hr in singapore.docx
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Emerging issues in strategic HRM in Singapore
Khatri, Naresh .International Journal of Manpower 20. 8 (1999): 516-
530.
Turn on hit highlighting for speaking browsers
Show duplicate items from other databasesNaresh Khatri: Nanyang Business School, Nanyang Technological University, Singapore
The forces of globalization are sweeping across the world and national borders are
disappearing. One major outcome of this change is that competition has intensified
greatly. In the past, inefficient companies could survive because they were protected by
national boundaries. This may not be possible any more. In the global era, companies
have to be able to take on other companies located in any part of the world. They need to
be supple and adaptable to meet the competitive challenge.
Naturally, the question arises of how companies can face the competitive threats posed by
globalization. The premise of this paper is that people are one of the most important
factors providing flexibility and adaptability to organizations. For example, a chief
executive of a big company in Asia noted that, in tapping the many new opportunities in
the growth corridor of the Asia-Pacific region, or even the world, it is the human matrix
that determines the success of the ventures (The Straits Times, 1995). Further, one needs
to bear in mind that people (managers), not the firm, are the adaptive mechanism in
determining how the firm will respond to the competitive environment (Rundle, 1997).
Perhaps the field of strategic human resource management has emerged mainly in
recognition of the fact that human resources need to be managed strategically for the firm
to enjoy sustainable competitive advantage over competition. Several scholars have noted
that managing people is more difficult than managing technology or capital (Barney, 1991;
Lado and Wilson, 1994). However, those firms that have learnt how to manage their
human resources well would have an edge over others for a long time to come because
acquiring and deploying human resources effectively is cumbersome and takes much
longer (Wright et al., 1994).
HR managers in Singapore and many other Asian countries are facing difficult challenges.
However, with challenges come opportunities. For example, MacLachlan (1996) noted that
East Asia is the best place in the world to be an HR manager because of the focus on
recruiting, developing, and retaining staff. However, at present, HR managers in Singapore
and other Asian countries are not up to the challenge because of the lack of strategic
approach to HRM and lack of HR competencies (Cunningham and Debrah, 1995; Debrah,
1994; Khatri, 1998, 1999). For example, Debrah (1994) found that the ad hoc nature of
HRM policies and practices of companies in Singapore contributes significantly to the job-
hopping phenomenon. Cunningham and Debrah (1995) reported that line managers and
executives took over some of the functions of HR managers because HR managers lacked
the skills necessary to perform their duties competently. Khatri (1998) noted that
companies in Singapore under-practice strategic HR activities in two important areas:
recruitment/selection and training/development. Companies were found to use
employment tests rarely and give little emphasis, if any, to the validity of selection
instruments. The most common approach to selection was the use of unstructured
interviews and unstructured interviews have very low, if any, validity. The author
concluded that job-hopping in Singapore could be attributed to a significant extent to poor
recruitment and selection practices. Further, the author found that companies in Singapore
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neglect some critical aspects of training and development such as evaluation of training
programs, training needs analysis, and cost-benefit analysis. In another study, Khatri and
Chong (1999) found that poor management practices had much greater influence on
employee turnover than bad attitude of employees. Factors under the control of
management contributed a unique variance of 37.6 per cent and uncontrollable factors
(bad attitude and labor shortage) a meager 5 per cent of the unique variance to theturnover model. All the above studies suggest that HRM in Singapore is not a particularly
well-managed function. Given the competitive environment companies in Singapore face
now, they will contribute to their own demise by ignoring the vital role of strategic HRM.
The remainder of the article discusses issues critical in managing human resources in
Singapore companies strategically. It suggests that business strategy, organizational
culture, competency levels of HR managers, and presence of HR strategy are the four most
important factors for managing HRM strategically. One other major issue, HR outsourcing,
that is being widely discussed in both academic and practitioner circles is also dealt with.
The arguments are organized in the form of propositions around the above five issues.
Organizational strategy
P1: Strategic archetypes affect the integration of HR management with organizational
strategy.
Following the contingency perspective, firms that achieve a tight vertical fit between
strategy and HR management perform better than their counterparts who have a
disjointed linkage (Baird and Meshoulam, 1988; Boxall, 1991; Truss and Gratton, 1994).
While the relationship between HR practices and organizational performance has received
much empirical investigation (Arthur, 1994; Terpstra and Rozell, 1993; Huselid, 1995;
Youndt et al., 1996; Huang, 1998; Lahteenmaki et al., 1998; Wright et al., 1998),research on the relationship between strategy and HR practices is predominantly
theoretical in nature, with efforts generally focusing on normative frameworks on how HRM
should be integrated with business management processes (Miles and Snow, 1984; Baird
and Meshoulam, 1988; Lengnick-Hall and Lengnick-Hall, 1988; Schuler, 1992).
Surprisingly, there are few studies that look beyond what the vertical link actually
comprises (Golden and Ramanujam, 1985; Buller, 1988; Ropo, 1993; Bennett et al.,
1998). Thus, we know relatively little about what factors affect the degree of vertical
linkage and how they do this (Truss and Gratton, 1994; Bennett etal., 1998; Wright et al.,
1998).
Golden and Ramanujam (1985) noted that the HR function needs to address issues whichvary accordingly to the type and level of strategy and thus the HR system has to develop
different degrees of linkage to deal with those issues specific to the strategy. Buller (1988)
contends that firms engaging in a diversification strategy would have a looser HR-strategy
linkage than firms concentrating on their core business. This is because the strategic
conditions of the diversification do not allow the HR system and programs to be developed
and applied company-wide.
In a recent study, Wright et al. (1998) found that strategic HR involvement is more
prominent when companies are pursuing product innovation strategies. Bennett et al.
(1998) used Miles and Snow's (1978) typology and established that analyzers exhibit
higher levels of HR-strategy integration than either defenders or prospectors. They also
found that the level of HR integration between defenders and prospectors was virtually
identical. This is surprisingly different from Miles and Snow's (1978) proposition that
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defender and prospector exist as opposite ends of a continuum, with the analyzer in the
middle.
Miles and Snow's (1978) strategic typology is regarded as a relatively comprehensive
model, richly describing firm characteristics and the strategy configurations of each type of
organization. It is widely used in strategy literature because of its ability to generalizeacross a wide variety of organizations and industries. The typology is used here to
illustrate how strategic archetypes may influence the link between HRM and strategy.
It could be argued that different strategic archetypes differ in their approaches to acquiring
and developing human resources and thus require different degrees of integration between
the HR function and the organizational strategy. For example, defenders operate in a
relatively stable product-market domain and focus on developing employees to create and
support efficiency. Thus, HR practices are reactive, structured and well defined.
Prospectors face a more unpredictable and uncertain task environment than defenders and
thus desire to create and maintain flexibility in the workforce. To support this strategy, HR
function works in a manner that is proactive and less structured so as to identify anddevelop quickly critical human resources required by the ever-changing needs.
Analyzers, on the other hand, are expected to have greater integration because of the
need to design HR practices to strike a balance between the two sets of skills needed by
the unique array of defenders and prospectors. To fulfill the stringent requirements, The
HR function is expected to establish a stronger linkage with the corporate strategy.
Khatri (1999), in a sample of the 200 largest companies in Singapore, found that HR
practices of companies in Singapore varied according to their strategies. However, no
study in Singapore has examined the influence of organizational strategy on the
integration of HR practices with organizational strategy. It is argued that the integration ofHR with overall strategy in Singapore, like in the western companies discussed above, may
well depend upon strategic archetypes.
Organizational culture: control-based or commitment-based
P2: Organizational culture (control-based versus commitment-based) determines the
status of HR function and its integration with the rest of the organization.
Organizational culture is one of the most important factors of the internal organizational
environment that have a great bearing on SHRM (Buller, 1988; Truss and Gratton, 1994;
Gennard and Kelly, 1995; Aryee, 1991). Organizational culture exists in the form of
norms, values and rules used by organizational members to interpret and evaluate their
behaviors as well as those of others. At the same time, culture provides a system that lets
people function in a way coherent to the publicly and collectively accepted meanings
operating for a given group at a given time.
In examining the effect of culture, Truss and Gratton (1994, p. 675) commented that "the
type of culture an organization has can exert a strong influence on the nature of its
strategy (e.g. defender, prospector or analyzer) and also on its chosen HR strategy".
Similarly, one would expect the characteristics of the HR department and its activities to
alter following a change in organizational culture. This is because different organizational
cultures emphasize varying level of "shared vision" and "understanding of organizational
goals and values" (Lundberg, 1985), and thus place different needs and expectations on
the HR department (Buller, 1988). With this change of needs and expectations, the HR
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function would need to be transformed accordingly to reinforce or develop the
organizational culture.
Evans (1986) observed that organizational culture is managed partly through human
resource management practices such as selection, development and reward, and employee
retention (Wilkins, 1984). HR practices can be used effectively to reinforce the culture.
However, little is known about the relationship between culture and HRM. Issues such as
"What type of impact culture has on the HR practices and how great that impact would be"
are not well-examined (Aryee, 1991; Lundberg, 1985). Likewise, it is not known what role
HR function plays in different cultural contexts. Therefore, organizational culture, with
regard to managing HR strategically, is too powerful an issue to be ignored.
Following the globalization wave and the change in management thought, organizations
are gradually moving away from the centralized, top-down, ruled-based culture (control-
based) to adopting a decentralized, bottom-up and flexible culture (commitment-based)
(Walton, 1985). Walton's (1985) paper on control-based versus commitment-based HRMsystems is widely regarded as the classic statement of this position (Boxall, 1996; Lundy
and Cowling, 1996). The author noted that firms are experiencing a transition from
imposing control to eliciting commitment when managing their workforce. This is because
a model (control) that assumes low employee commitment and that is designed to produce
reliable if not outstanding performance simply cannot match the standards of excellence
set by world-class competitors (Walton, 1985, p. 79).
Organizations employing a control-based culture differ in their basic approach to managing
human resources from organizations having a commitment-based culture (Walton, 1985;
Arthur, 1994). For instance, employees are required to be efficient and behave in an
orderly manner in a control-based culture. To monitor and control effort, the hierarchy istall, roles are specialized, status symbols are emphasized, prerogative lies with the
management, and adversarial labor-management relations exist. In contrast,
commitment-based culture concentrates on attracting, satisfying and motivating highly
skilled employees. The focus of management is to minimize the status differences
presented in the organization, engage in activities such as employee involvement,
information sharing, job security guarantees, and extensive employee benefits. Further,
the organization emphasizes joint problem solving and planning, and invests in developing
harmonious relationships with employees (Walton, 1985; Arthur, 1992). In sum, the
commitment model represents a shift in societal values away from the traditional authority
and compliance.
According to the behavioral perspective, the control and commitment cultures require
different sets of HR programs and policies to elicit those characteristics, behaviors and
attitudes desired (Cappelli and Singh, 1992). In a control-based culture, since the
objective of the organization is to "control", the HR function takes on the "stick approach".
Much of the initiative comes from the top management, and the system is characterized by
stringent rules and procedures (Walton, 1985). HR practices are structured, reactive and
well-defined and thereby minimize the role of HR in the organization and the need for
managing HR strategically.
On the other hand, the goal of the commitment-based culture is to promote mutuality of
interest between employer and employee. This is achieved by increasing autonomy,
responsibility and influence of employees at all levels. Employees are extensively involved
in managerial decisions and formal participation programs and there is a higher
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percentage of group problem solving and socializing activities than in the control-based
culture (Arthur, 1992; 1994). To elicit the required behaviors, HR practices are flexible,
proactive and strategically inclined (Walton, 1985). Hence, it is expected that in a
commitment-based culture, the HR function plays an important role and that strategic
HRM would be more widely adopted.
At present, Singapore companies are relying mostly on control-based management
philosophy and thus one would expect a secondary role for HRM function in the majority of
the organizations (Khatri, 1999). This indeed is the case. HR function in most
organizations in Singapore is performing a routine, supportive, and fire-fighting role
(Debrah, 1994; Cunningham and Debrah, 1995; Khatri, 1999; Khatri and Chong, 1999).
The trend now is that HR function is seen to be playing an important role and there is
much emphasis on employee participation and involvement. Thus, organizations are
moving toward a commitment-based philosophy. Companies in Singapore are also
realizing the importance of organizational commitment because of chronic problem of job-
hopping. They ignored the importance of commitment-based culture and relied heavily on
monetary rewards and top-down mechanisms to tide over job-hopping only to realize thatsuch measures have only limited impact. For instance, an essential aspect of the
Singapore Government's human resource development program is to encourage managers
to adopt human management techniques to build "worker loyalty" and "team spirit"
(Cunningham and Debrah, 1995). It is argued that if companies had used theHR function
as a tool to create commitment-based culture, companies would have been more
successful in overcoming job-hopping (Khatri and Chong, 1999).
Competency level of HR managers
P3: The competencies/skills of HR managers determine the status of HR function and its
linkage with organizational strategy.
Human resource can be a potent source of sustainable competitive advantage to an
organization (Barney, 1991; Wright et al., 1994). Consequently, the firm's HR function,
which has much responsibility in managing this important resource, should receive more
commitment from the organization. However, Barney and Wright (1998) pointed out that
the real scenario is quite contrary to the above view. They observed that organizational
decisions do not reflect this stated commitment to people or a respect for the HR function.
They argue that the fault could lie in part with the competency level of HR managers. If
the HR managers are competent enough to focus attention and activities towards those
aspects that will truly develop and maintain sources of competitive advantage, the status
of the HR department would be heightened (Barney and Wright, 1998, p. 37). Similarly,Kelly and Gennard (1996, p. 19), through the use of extensive interviews with the HR
managers, concluded that the initial condition to enhance the status of HR managers in the
eyes of other directors was that "HRM directors should be competent and have a record of
achievement in their own basic field".
Apart from enhancing the status of the HR department, past research also suggests that
the competency level of HR managers has a major influence on the level of integration
between HR management and strategy (Golden and Ramanujam, 1985; Buller, 1988;
Truss and Gratton, 1994). Golden and Ramanujam (1985) commented that the
demonstration of expertise by HR managers resulted in a significant uplift of HR stature
and also tightened the HR management and strategy linkage. Ropo (1993, p. 51) stressedthat "the internal dynamism of the HR function (in this case, the presence of competent
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managers) serves as the most critical mechanism to keep the integration process going
after it has been started under favorable organizational and strategic circumstances".
Choosing the right HR managers is important to the strategic management of the HR
function. If HR professionals do not have the right skills, and are not able to think on a
macro-business level, the HR function would be relegated to a supportive/secondary role.On the other hand, if HR managers can re-evaluate their priorities and acquire a new set
of professional and personal competencies, the HR function would be able to ride the wave
of business evolution proudly with other functions in the organization (Ulrich, 1996;
Purcell, 1989; Ulrich et al., 1995; Becker and Gerhart, 1996; Barney and Wright, 1998;
Wright et al., 1998). As noted by Barney and Wright (1998), one of the reasons why HR
executives are not invited to the strategic planning table is that they are unable to display
the required competencies. Ulrich (1996) and Ulrich et al. (1995) have identified four sets
of HR competencies needed: knowledge of HR practices, knowledge of business, personal
credibility and ability to manage change.
One of the most important reasons for the low status of the HR function in Singapore isthe lack of competencies of HR managers (Cunningham and Debrah, 1995; Khatri, 1999).
For example, Cunningham and Debrah (1995), in a study of HR managers in Singapore
companies, found that when HR managers lack the necessary skills to perform their duties
competently, line managers and executives take over some of the functions of HR
managers. The authors observed that HR managers were excluded from the strategic
planning committees and meetings because they were perceived to lack the necessary
competence, authority, and influence to be involved in important organizational decision
making.
HR strategy
P4: HR strategy or lack of it affects vertical and horizontal fits of SHRM.
Apart from seeking a vertical fit between HR management and organization strategy,
achieving horizontal fit among individual HR practices is equally important. This is because
the full impact of HR practices on firm performance arises when HR practices exist as a
coherent system within a particular system strategy (Wright and Snell, 1991; Grundy,
1998).
Although past studies indicate that a coherent HR system maximizes the effectiveness of
the HR practices (Wright and Snell, 1991; Lado and Wilson, 1994; Huselid, 1995; Becker
and Gerhart, 1996), there are few empirical studies that looked at the factors affecting the
horizontal fit. Research on SHRM fit has mostly concentrated on testing whether firms'
policies are aligned with the overall strategy or whether benefits are derived (Morris and
Pinnington, 1998). Baird and Meshoulam (1988) proposed that it is equally important to
look at how individual HR practices can be effectively aligned.
An important contribution by Grundy (1998) sheds some light on why congruency is
lacking among HR practices: HR practices are viewed in segregation, and HR strategy is
frequently owned by HR managers and not shared with other functional managers. The
author also concluded that in the absence of a clear link between HR strategy and
corporate strategy, there would be a lack of synergies among HR practices. In other
words, HR strategy is important in achieving horizontal congruence among the individual
HR practices.
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Similarly, Tyson (1995, p. 169) defined HR strategy as being "the intentions of the
corporation, both explicit and covert, towards the management of its employees,
expressed through philosophies, policies and practices". In the absence of an HR strategy,
HR practices are likely to be inconsistent with one another because there is no broad
framework to guide individual HR practices. In other words, the presence of HR strategy,
formal or informal, explicit or implicit, serves as an "over-arching" framework which guidesthe individual HR practices to integrate and exist as a coherent system. Hence, one would
expect an organization having an HR strategy to have consistent and non-fragmented HR
initiatives (Massey, 1994).
The implications of the above argument fall into two areas: the presence of HR strategy,
whether formal or informal, explicit or implicit, helps to manage HR strategically and
organizations that manage HR strategically have consistent HR initiatives and thus their
HR practices are coherent with one another. This is because a strategic approach to HR
management would allow an organization to understand that its HR activities are inter-
related, and recognize the synergies or conflicts among HR practices (Wright and Snell,
1991). At the same time, the presence of an HR strategy might tighten the vertical linkagebetween HR practices and organizational strategy.
What is the Singapore scenario? Cunningham and Debrah (1995) noted that HR managers
in Singapore companies may be able to deal effectively with HR problems if they assume
broader and expanded roles in strategic HRM. That is, HRM needs to be included in the
formulation and implementation of organizational and HRM strategies. For example, HR
managers need to formulate and implement HR strategies to cope with the tight labor
market that could create and sustain competitive advantage for the organization. Such an
approach would help to minimize the erosion of the HRM role and the status of HR
managers as a result of the intrusion of line managers in HRM issues. Properly formulated
HR strategies could also curtail the ambiguity in the HRM role and increase the authorityand influence of HR managers in organizations.
HR outsourcing
P5: The outsourcing of HR activities or programs depends on (a) organizational strategy,
(b) organizational culture, (c) competencies/skills of HR managers, and HR strategy.
An increasing trend in many organizations is to outsource HR work (Lever, 1997), in
particular, administrative and high transaction cost activities (Grundy, 1998; Klass et al.,
1998). Much of the motivation originates from organizational desire to minimize the
workload of regular workers, reduce cost, reap economies of scale, improve quality andefficiency, and gain expertise from outside vendors (Laabs, 1993; Lever, 1997; Ulrich,
1996; Klaas et al., 1998). Others argue that HR outsourcing represents a strategic tool for
achieving competitive advantage. Their argument is that outsourcing the transaction-
based HR activities (e.g. benefit administration) frees HR managers and other managers to
grapple with strategic business issues (Switser, 1997).
Generally, some aspects of the HR functions are judged as cost centers (e.g. benefit
administration) but other elements of an HR system create value as part of a firm's
strategic infrastructure (Huselid, 1995). Decisions with respect to outsourcing might be
straightforward at the two ends of the cost-value continuum, but for many elements of an
HR system, the decision is not so clear. As a firm assumes a strategic perspective for its
HR system, HR activities like recruiting and selection, which used to be the potential
candidates for outsourcing when quantified against a cost standard, might be retained if
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their fit with the remainder of the HR system is a critical source of value for the entire HR
system (Becker and Gerhart, 1996). Outsourcing of these firm-specific skills would
represent short-sightedness on the part of the organization (Barney and Wright, 1998) and
would impede the ability of the organization to develop unique competencies within its
workforce (Ulrich, 1996).
There are few empirical studies on HR outsourcing, especially on factors influencing the
level of outsourcing activities, to provide possible answers. A study conducted by Klass et
al. (1998) used transaction-cost economies to explain why firms differ in their reliance on
HR outsourcing. They found that in those firms where decision makers perceive having a
unique HR, positive HR outcomes, lots of internal promotional opportunities, and
comparatively fewer competitors involving in HR outsourcing, would rely less on HR
outsourcing. In firms where the demand for labor fluctuates and the pay remuneration
leads, reliance on HR outsourcing would increase.
Firms may vary in their propensity to outsource the number, type and kind of HR
activities. However, little is known about what factors cause firms to outsource more orless of their HR activities and also which HR activities are most frequently outsourced.
Organizational strategy may be one of these factors. Miles and Snow (1984) match
different HR strategies with the three strategic archetypes. The fact that different
strategies differ in their requirements for HR practices may imply varying needs for HR
outsourcing. For example, in firms that have a strategy emphasizing the criticality of the
HR function, one would observe less reliance on HR outsourcing. Likewise, for a strategy
that regards the HR function as administrative and relatively unimportant, one would
observe more outsourcing of HR activities.
Often, one of the weaknesses of outsourcing is the inability to reinforce and preserve thecorporate culture (Quinn and Hilmer, 1994). In other words, there would be greater level
of HR outsourcing if outside vendors are able to replicate the corporate culture.
Competencies possessed by the HR managers may also affect the level of HR outsourcing.
Laabs (1993) asserts that activities should be in-sourced if companies can perform them
cheaper, better and in a more timely manner. And if HR managers have the critical
competencies and experience to manage an outsourcing project at a lower cost and higher
efficiency, most likely the project would be conducted in-house. Therefore, the presence of
a competent HR manager may reduce the likelihood for HR outsourcing.
The presence of HR strategy may also affect the outsourcing of HR activities. If the HR
practices of an organization exist in a coherent system, the level of strategic activities
would go up. Outsourcing vendors would then find it difficult to replicate those strategic HR
activities and firms would also be unwilling to outsource HR activities that would have an
added advantage to them (Becker and Gerhart, 1996).
In Singapore, at present the state of HR function and competencies of HR managers are
not satisfactory. As a result, line managers have much say in HR decisions and they want
to avoid the involvement of HR function as they see it as bureaucracy or burden. So, the
tendency may be to outsource a lot of HR activities/programs. However, doing so may be
more expensive than organizations realize. In view of the changing role of HR function in
Singapore, the strategic HR activities would be performed more and more inside and
routine HR activities would be more and more outsourced. Vaidyanathan (1992, p. 34)
puts it nicely:"Things are looking up . . . their (line management) attitude will change in
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the coming years, simply because Singapore has no resources other than its people . . .
So, if an HR manager is capable of performing effectively as an in-house consultant linking
his/her people with the productivity or performance of the organization, the role he/she
plays will be pretty much indispensable."
Implications and conclusions
Despite many theoretical and empirical studies in strategic HRM, no coherent theoretical
framework has emerged in the field. This paper discussed various propositions on key
strategic HRM issues. It is hoped that an understanding of these issues would go a long
way in developing a coherent body of knowledge in the field.
Further, all the above issues would lend themselves better to a qualitative study. A major
limitation of prior work in the strategic HRM area is the lack of in-depth qualitative studies
(Dyer, 1985; Guest, 1991; Boxall, 1996; Becker and Gerhart, 1996; Guest, 1997). This
form of research is very much needed in strategic HRM in developing comprehensive and
more valid models and frameworks. This is because the long-term, multidimensional andpolitical nature of both business and human resource strategies require such form of
research methodology (Boxall, 1993; Ropo, 1993; Kelly and Gennard, 1996; Tyson, 1995).
Qualitative research also shifts focus from content to process and is consistent with the
shifting focus of the field from planning to strategizing. For instance, Dyer (1985, p. 26)
argued that "the immediate need is for descriptive research aimed as much as possible at
providing accurate descriptions of what is in a variety of settings . . . such research, by its
very nature, is exploratory and being pursued through qualitative methods, principally in-
depth case studies. Once the territory begins to become better known, and descriptive
theories begin to emerge, attention can turn to smaller-scale measurement and hypothesis
testing studies . . ." Becker and Gerhart (1996, p. 796) also suggested that "deeper
qualitative research is needed to complement the large-scale, multiple-firm studies thatare available in order to find out managers' HR decision making process". Guest (1997, p.
274) complemented the view by writing that "case study research can help to generate
insights which can be more extensively tested". In a manner similar to Dyer (1985), Guest
(1991) proposed that more detailed case study research on HRM strategy is needed.
Unfortunately, response to these increasing calls for more case study research has been
quite disappointing. "What is lacking is not an understanding of this need (for case study
research), but the commitment of academics to take it more seriously" Boxall (1993, p.
658).
Further, most of the studies in the strategic HRM field are based on the Western context
and there is relatively little research in the eastern context. Boxall and Dowling (1990)noted that the seminal HRM texts are all American and the most significant critical
responses to date have been British. Boxall (1993) suggested that globalization and
increasing environmental complexity have called for the development of a comparative and
international stance on the subject. Likewise, Guest (1997) emphasized that researchers
need to ensure that the studies are not confined to the USA only. Therefore, conducting
strategic HRM studies in other parts of the world, for example Asia, would help to meet the
shortage of empirical work in the field in those parts of the world and also serve as a
vehicle for comparative studies.
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Some future directions of human resource practices in Singapore
Chew, Irene ;Goh, Mark .Career Development International 2. 5 (1997):
238-244.Turn on hit highlighting for speaking browsers
Show duplicate items from other databasesAbstract (summary)TranslateAbstract
It is argued that the regionalization and globalization of companies in the Asia Pacific region is forcing
human resource managers and general managers to rethink their systems of management. A survey of
HRM practices and policies in Singapore was conducted recently with the purpose of enabling
managers , faced with the increasing regionalization of firms, to understand better the role of HR
development.
Full Text TranslateFull text
Irene Chew: National University of Singapore, Faculty of Business Administration,
Singapore
Mark Goh: National University of Singapore, Faculty of Business Administration, Singapore
Introduction
In an increasingly competitive global economy, managers at all levels are seriously looking
for practices, procedures and policies to use to gain a competitive advantage. One area of
focus is the more effective management and use of human resource (Ferris, Russ,
Albanese and Mortoccio, 1990). Indeed, human resource management (HRM) has
increasingly become important to the organization. It has evolved from a traditional role of
just handling employee welfare and compensation to the current major functions of
recruiting, manpower planning, training and development. In the past, Tung (1984)
asserts that HR practitioners generally are less active in the strategic planning and
implementation of the organization, and are often regarded as "glorified file clerks".
Traditional HR managers simply assist in the hiring function of the organization by
screening applicants and handling mundane tasks like company payroll and other
compensation benefits (Laurent, 1986; Lorange, 1985).
Today, HRM, in many countries, is undergoing rapid development and fundamental change
(Bevort, Peterson and Sundbo, 1992; Gunnigle, 1992; Papalexandris, 1992). Singapore is
no exception. In Singapore, HRM development has undergone many phases in recent
years (Chew and Teo, 1991). The reasons underpinning this change in HRM practices and
policy are attributed to two main factors - internal and external. Regionalization of local
companies and the international economic forces at work contribute to the external push
factors. The tight labour market, a better educated workforce, an ageing workforce and
the better quality of work life are just some internal factors. In total, these factors present
new challenges to HRM. Few would dispute that companies which can overcome these
challenges and harness the human resources to their fullest potential can only stand to
gain from the quantum leap in productivity improvement and achieve a competitive edge
over competition.
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This empirical paper examines the extent to which the traditional role of HR practices are
present in Singapore. It also asks if differences exist in the HR practices between
organizations with and without HR departments, and the HRM practices and policies
organizations focusing on. For instance, is the HR function perceived as an integral part of
a company's operations and are the requisite skills and knowledge required of HR
practitioners to enhance the level of professionalism?
We attempt, through this study, to offer an insight into the role and representation of the
HR function in organizations, current HRM practices of companies in Singapore as well as
anticipated future practices. On HRM policies, the survey covers a wide range of topics,
including recruitment and selection, performance appraisal, incentive schemes, labour-
management relations, employee involvement and communications. The coverage allows
for provision of information on the similarities and differences in HRM policies and practices
between companies with HR departments and companies without.
Research methodology
The data presented in this study were collected by means of structured personal
interviews. The sample was selected from the National Productivity Board's database of
organizations and the Singapore Business Listing. The sample frame contained business
establishments of all industry sectors but excluded establishments employing fewer than
ten people. A total of 2,042 establishments were contacted. Of these, 408 companies
participated in the study, yielding a response rate of 20 per cent. Of the 408 companies,
190 respondents were reported to have either a personnel or human resource department
in which HR functions are carried out formally. The rest of the sample do not have a formal
HR department. Further investigation on this subset revealed that either the HR function is
carried out by the CEO or in an ad hoc manner mainly by the finance department.
Profile of respondents
Companies from the manufacturing sector constituted 30 per cent of the total sample, and
those from the commerce, and finance and business services sectors comprised 25 per
cent each.
The majority of companies with HR departments were from the manufacturing sector (35
per cent) followed by those from the commerce sector (26 per cent). As for companies
without HR departments, the majority were from the financial and business services (28
per cent) sector, followed closely by the commerce (27 per cent) and manufacturing (26
per cent) sectors. These results are exhibited in Table I.
Ownership
Slightly more than half of the companies were locally owned. Foreign-owned companies
constituted about a third. Half the companies with HR departments were local firms, and
about 40 per cent were foreign-owned. For companies without HR departments, there was
a larger proportion of locally owned companies which made up 57 per cent of the total
sample, and the foreign-owned ones accounted for 29 per cent.
Company size
About six in ten companies were small and medium-sized firms (SMEs), with less than 100
employees. Companies with 500 or more employees accounted for 12 per cent of the
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sample. The majority (65 per cent) of the companies with HR departments were fairly
large firms with at least 100 employees. For companies without HR departments, SMEs
constituted a large proportion (81 per cent) of the total sample.
Role and representation of HR functions
Person in charge of HR functions
The study was targeted at the person in charge of the organization's overall HR functions.
About one-third of the 408 respondents identified themselves as CEOs, indicating that
CEOs sometimes take charge of the responsibility of personnel or HR matters. Another 25
per cent were HR managers. Most of the respondents in companies with HR departments
were HR managers (49 per cent). On the other hand, for respondents in companies
without HR departments, the majority were CEOs (42 per cent) followed by
administrative/finance managers (19 per cent) and executives (18 per cent).
Profile of HR practitioners
Of the HR managers 59 per cent were in the 36-40 age group. HR executives were
relatively younger as most (57 per cent) of them were between 21 and 35 years old. On
the length of service with current organization, half of the HR managers have one to five
years service and 40 per cent have six years or more. As for HR executives, 40 per cent
have one to five years service and 49 per cent have six years or more. In general, half of
the managers and executives are university graduates and 40 per cent have either a
diploma or A-level qualifications.
Most HR managers have less than ten years of working experience in directing HR
functions, including present and previous organizations while most of the HR executives
(51 per cent) have less than five years.
Personnel in HRM
Overall, about 40 per cent of companies have a position of personnel or HR manager,
while half of them hold executive positions. All companies have at least a position of
personnel or HR clerk. Not surprisingly, companies with HR departments were likely to
have designated managers or executives handling HR functions than companies without.
Academic qualifications required
To take up either the post of personnel or HR manager, the minimum academic
qualification specified by 21 per cent of the companies was a degree. However, there was
a good proportion (15 per cent) of companies that specified a diploma qualification,
preferably one in HRM.
For the post of executive, most companies prefer a diploma holder. As to the post of HR
clerk, half the respondents would look for a person with O-level qualification or equivalent,
while another 43 per cent did not specify any qualification. Companies with HR
departments were more likely to specify a minimum qualification for the post of clerk than
companies without. This suggests that the former were relatively more stringent in the
recruitment of HR personnel.
Skills and knowledge required by HR practitioners to enhance professionalism
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The five major skills or knowledge that HR practitioners feel they require to enhance
professionalism in the next three years were effective communication, human resource
development, knowledge of employment act and industrial relations, computing and
technology, and recruitment and selection. Given the continuous advance of HRM
techniques and computer technology coupled with the growing emphasis on HR
development in Singapore, it is likely that these major skills would continue to exert theirpresence on the need for the HR profession to upgrade periodically.
Human resource practices and policies
Before examining the various HR policies and practices, respondents were first asked to
indicate the major functions currently performed, and their relative importance now and
over the next three years (Table I).
HR function currently performed
The five most commonly performed HR functions, as cited by over 80 per cent ofrespondents, were recruitment and selection, welfare and benefits administration, wage
administration, performance appraisal and employee communication. Among the least
performed functions were industrial relations and liaison with unions (which depended on
whether the company was unionized), productivity promotion, job evaluation,
promotion/career planning, and manpower planning. The incidence of the functions being
practised was significantly higher in companies with HR departments than companies
without. More than half of the former group performed at least one of these functions. The
biggest gaps - by as much as 40 percentage points - were seen in industrial relations,
transfer and rotation, manpower planning, promotion and career planning, and HR policy
formulation.
Importance of HR functions now
Considering the current tight labour market situation, it was not surprising that
recruitment and selection function was, given the highest rating in terms of importance by
HR practitioners. The other important HR functions were training and development, wage
administration, performance appraisal and manpower planning.
The pattern differed from the previous one where respondents were asked to indicate the
various functions performed currently. For instance, training and development was the
sixth most frequently performed function, but it was rated second in terms of importance.
Similarly, although manpower planning was not as popularly practised by companies, it
was nonetheless an important function for those companies which practised it.
The welfare and benefits administration function, on the other hand, was given a lower
priority when compared to other HR functions, even though it was one of the most widely
performed HR functions.
Importance in the next three years
All the companies surveyed predicted a substantial increase in the importance of training
and development - from the second most important ranking currently to the number one
position in the next three years. During the same period, an increasing emphasis will also
be placed on manpower planning which rose to third position from its current fifth position.
The other three functions, viz. recruitment and selection, wage administration and
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performance appraisal, will remain among the top five most important HR functions in
future.
Although functions such as .job evaluation, career planning and productivity promotion
would maintain their relatively low popularity, more companies are however beginning to
give more emphasis to them. The priority of HR functions now and in the next three yearsis exhibited in Table II.
Written policies on HRM practices
Over 80 per cent of the respondents maintained some written HR policy. Many companies
tend to have written policies on welfare and benefits (69 per cent), wages (60 per cent)
and performance appraisal (59 per cent). Training and development, although accorded a
high priority among the various HR functions, were guided by written policies by only six in
ten companies. The non-existence of written policies was also detected in the areas of
promotion/career planning and transfer and rotation - functions which currently received
little attention by most companies.
As expected, companies with HR departments were likely to have a formalized system of
dealing with HR matters. For instance, while over 90 per cent of companies with HR
departments maintained some sort of HR policies, only seven in ten companies without did
so. The biggest disparities were seen in the areas of training and development,
recruitment and selection, and performance appraisal.
Recruitment and selection
The recruitment and selection function is expected to be the most pressing challenge
facing HR practitioners in the 1990s. Current skill shortages and predictions of a huge drop
in the number of job entrants point to rapidly deteriorating recruitment prospects. Clearly,
the situation looks bleak for those employers who fail to change their ways or are slow to
use a more innovative form of employment.
As earlier stated, recruitment and selection was the most performed function among
companies. It was considered by most HR practitioners to be one of the most important
functions currently, and continue to be so. It is therefore appropriate to examine the
various methods that have been adopted to identity and recruit the three major employee
groups, namely the managers, supervisors, and the rank and file.
In general, employers generally used a wide variety of recruitment methods. On average,
a company used at least four channels. Several other points about the findings are worth
noting. First, newspaper advertisements were most frequently used to identity and
recruitment employees across the occupational groups, irrespective of the HR department
status. Second, employee recommendations were the second most popular source of
recruiting all three occupational categories. This suggests that employers relied heavily on
internal sources of labour market information, and perhaps they used these sources before
searching for employees in the external labour market.
Third, the use of executive search firms and professional societies were more popular to
recruit employees higher up the organization. For example, over half of companies use
executive search firms to recruit managers as compared to only 20 per cent and 14 per
cent to recruit supervisors and the rank and file respectively. Fourth, walk-ins were the
third most popular source to identify and recruit supervisors and the rank and file.
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Companies with HR departments tended to use them to recruit the rank and file more than
companies with none.
Fifth, pamphlets, sign and bus advertisements, and radio and television advertisements
were among the least popular recruitment methods, with less than 20 per cent of
companies using any one of these methods.
Effectiveness of various recruitment methods
A comparison of each employee group revealed that newspaper advertisements were
considered by most companies to be effective in recruiting managers. Employee
recommendations and executive search firms came in a distant second and third in the
ranking of effectiveness. Newspaper advertisements and employee recommendations were
also rated highly by companies for its effectiveness in recruiting supervisors. For the rank
and file, newspaper advertisements, employee recommendation and walk-ins were rated
highly on effectiveness. An interesting finding is that many of the companies which relied
on employee recommendations to recruit the rank and file found it effective - more so formanagers and supervisors.
Selection procedure
Respondents were asked to indicate which procedures were used in selecting job
applicants for the three employee groups. Weighted application forms, reference or record
checks, unstructured and structured interviews and medical examinations were among the
most frequently used methods. Between 20 per cent and 30 per cent of the companies
adopted these methods to select the three employee groups. However, some discernible
features associated with each group can be observed. Reference/record checks were more
popularly used to select manager (58 per cent), compared with supervisors (46 per cent)and rank and file (37 per cent). On the other hand, performance tests/work samples, job
knowledge tests and physical ability tests were more frequently used to select the rank
and file.
Companies with HR departments showed a greater reliance than companies without on the
following methods: personality tests on managers, reference and weighted application
forms for both managers and supervisors; performance tests/work samples on the rank
and file; and structured interviews and medical examination for all three employee groups.
Interview procedures
Respondents were also asked to indicate the methods used to interview applicants for each
of the three job categories. Multi-stage interviews were most heavily used in the case of
managerial jobs (40 per cent), followed by group panel interview (24 per cent) and one-
to-one interviews by the prospective immediate supervisor (25 per cent). For supervisory
jobs, group panel interviews were less often used compared with multi-stage interviews
(28 per cent) and one-to-one interviews by either the immediate supervisor (29 per cent)
or manager above immediate supervisor (25 per cent). As for rank and file jobs, one-to-
one interviews were the most frequently used by firms, with the interview likely to be
conducted by an HR representative (31 per cent).
In companies with HR departments, group panel and multi-stage interviews were more
heavily used than companies without, particularly so for managerial positions.
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Promotion policies and practices
The study showed that seven in ten companies have a policy of promoting employees from
within. About a similar proportion of companies included a promotion potential rating in
the appraisal of employee performance. On promotion practices, about two of three
companies filled most jobs within, and a slightly smaller proportion promoted employeeswith more than five years of service at least once. Also, about three-fifths of the
companies informed the staff on promotion policies.
When comparing companies with HR departments and those without, significant
differences were observed in all promotion practices and policies except for the practice of
promoting from within. This might indicate that companies with HR departments provided
more structured job ladders and promotion paths for its employees than companies
without.
Training and development
Formal training for employees
A large proportion (83 per cent) of companies provided some sort of training for their
employees. On the type of training, a quarter of the companies relied on external training
resources and only a small proportion (2 per cent) turned to in-house facilities. The
majority of companies (60 per cent) used a combination of both types. As expected,
companies with HR departments provided more training opportunities than those
companies without.
Almost 40 per cent of the companies expended 1 to 4 per cent of total payroll on off-the-
job training while another two-fifths did not expend any amount. A further breakdown
showed that a significantly larger proportion (35 per cent) of companies without HR
departments did not expend any amount of training as compared to companies with HR
departments (16 per cent).
Hours spent on training
In general, the rank and file spent longer hours on training than supervisors and
managers. Of 40 per cent of companies indicated that rank and file spent up to 59 hours of
training a year while 17 per cent indicated they spent between 60 and 299 hours. The
comparative figures for the supervisors were 31 per cent and 14 per cent, and for
managers 36 per cent and 10 per cent respectively.
Pay and incentive systems, and evaluation
Incentive schemes implemented
Many companies used some form of incentive pay to motivate their employees. Only
between one-tenth and two-tenths of companies did not provide incentive payments to
any one employee group.
By far, individual performance pay was the most widely used type of scheme, with
relatively small differences in access to such schemes across occupations and HR
department status. Productivity incentive pay was the next popular scheme. The rank and
file and supervisors tended to benefit from it more than managers. When it comes to
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giving employees a share in the profits, a larger proportion of companies preferred to
motivate their managers this way than the other two employee categories.
Small-group incentive, where the pay-out depends on the performance of the whole work
unit, was less used than the first three schemes. When used, they tended to be offered to
the rank and file and supervisors. The least frequently used scheme was stock ownershipthrough ESOP where only about one-tenth of companies provided them, particularly to
managers.
Compensation policies and practices
For those companies which did not implement incentive schemes, most cited the lack of
top management support as a reason. Other reasons were the difficulty in setting the
formula, lack of definite and accurate measures of performance and ineffective schemes.
Performance appraisal
Formal appraisals were conducted for managers (78 per cent), supervisors (77 per cent)
and the rank and file (83 per cent). The study showed that about nine in ten companies
with HR departments indicate that managers, supervisors and the rank and file were
appraised as compared to about seven in ten companies without.
In general, companies appraised employee performance once a year. A few companies
indicated that the rank and file, and supervisors were appraised quarterly or monthly.
Methods used in performance appraisal
Rating scales using standard form were the most commonly used methods for assessing
employee performance for the three employee categories. The least used methods were
point system and ranking or paired comparison. Further analysis of the data showed that
employee goal setting or management by objective was more frequently used among
higher-ranking than the lower-ranking employees.
Employee relations, communications and employee participation
State of labour-management relations
Employee relations is an important topic in the domain of personnel and HRM. It has been
a major element of traditional HRM, largely because of the central role of collective
bargaining in areas such as pay setting, training and health and safety. About three-
quarters of respondents described their state of labour-management relations as co-
operative, i.e. ones that have acceptance and teamwork between labour and management.
Extent of communication
Among the various factors that affect employee relations, employee communication plays
an important role. The study showed that employees used a wide variety of
communications channels to get their message through to employees. The most commonly
used communications channels were departmental meetings, notice boards, letters to
individuals and briefing groups. A breakdown by HR departmental status revealed that
companies with an HR department were more likely to use some form of communications
channel than companies without. Among the larger differences between the two groups
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was the use of newsletters or house journals, employee handbooks, videos, tapes/slides
and union representative.
Importance of communication channels used
Respondents were also asked to rate the relative importance of those channels being used.The three channels ranked in order of importance were notice boards, departmental
meetings and letters by individuals. This pattern was different from one that was ranked in
order of usage indicating that employers felt that widely used channels such as
departmental meetings need not necessarily be effective in getting the information across
to a wide spectrum of employees.
Extent of information on HR matters being discussed
Respondents were also asked to indicate to what extent the following five different HR
matters: salary scales and ranges, career development, training needs and plans,
performance/production issues and welfare and benefits. It was found that the first threeareas were least open to employees for discussion. Over half the companies surveyed
indicated they either never discussed or discussed very little the salary scales and ranges
with staff. About two in five companies expressed similar comments for career
development. Interestingly, given the current emphasis on HR development, career
development and training needs and plans were not given high priority for discussion by
employers.
Employee participation programmes implemented by companies
One area that can affect the quality of work life is the extent of employee participation in
productivity improvement. Some of these programmes are as small group activities like
quality circles (QCCs), joint consultation and suggestion schemes.
The two most popular employee participation programmes, as cited by about half of the
companies surveyed, were employee communication meetings and suggestion schemes.
These were followed by employee attitude survey (23 per cent), QCCs (21 per cent) and
work restructuring/job design groups (5 per cent). The study further revealed that more
than two-thirds of companies with HR departments have implemented QCCs, autonomous
work groups and labour-management consultative committees (such as Work Excellence
Committees, Work Councils), as compared to less than a third for companies without.
Manpower planning
Manpower or HR planning was conducted by seven in ten companies. Of those that did not
conduct manpower planning, a large proportion indicated the small company size as a
reason. Improper company policies were also cited as a reason for not having such a
practice. A small percentage of the companies did not see the necessity to do so.
Of the 70 per cent that conducted manpower planning, about half of them had their
manpower planning conducted jointly by the department in charge of HR functions
together with other relevant departments. In addition, there was a fairly high proportion
(34 per cent) of individual departments doing their planning independent of the HR
department. Very often, as the study showed, manpower planning was seldom conducted
solely by the HR department or senior management.
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HR information systems
Helping HR functions to improve productivity in a more cost-effective manner is the
computer. Computerization of HR functions in companies generally encompasses two
areas: HR records and payroll administration.
Overall, about half of the companies surveyed had a computerized system of HR records.
Companies with HR departments showed a higher incidence of usage than companies
without. Seven-tenths of the former group had computerized its HR records whereas only
one-third of the latter had done so. Among those companies without a computerized
system of HR records, company size and the availability/knowledge of computer were cited
as the two main reasons for not computerizing.
As expected, most of the computerization was by the departments in charge of HR
functions and to a lesser extent by departments such as administration.
If there is a need to computerize HR functions, companies are more likely to do so for theirpayroll administration. Of the companies 72 per cent have computerized their payroll
administration as compared to half for HR records. As in the case of HR record
computerization, companies with HR departments were more likely to have a computerized
system of payroll administration as compared with companies without.
Among those companies without a computerized system of payroll administration, small
company size and the lack of availability of computer knowledge were the two main
reasons given for not computerizing. Most respondents, with a computerized payroll
administration, cited that non-HR departments such as the account and finance
departments were responsible for the computerization.
Conclusion
HRM occurs at all levels of the organization. In Singapore, with a tight labour market,
there is a greater need to manage HR not only for operational efficiency but also for
strategic effectiveness. HRM rarely emerges as a fully formed set of practices but the trend
is changing. The survey results indicate a shift from the traditional or conscious economic
strategy to the new techno-human paradigm. HRM is in a state of rapid development as
well as fundamental change.
HRM practices are changing, though slowly. The professional body, the Singapore Institute
of Human Resource Management (SIHRM) changed its name in 1993. Originally, when
founded, it was known as the Singapore Institute of Personnel Management. This is in
keeping with assertions by McLaughlin (1983) that the field of HRM was known as
Personnel Management more than two decades ago. Today, companies whose HR
departments are named personnel department tend to treat HR practices and policies in
the traditional sense, performing a maintenance and firefighting function. For an
organization to remain globally competitive, its HRM practices have to adopt a more
strategic role as Lundy (1994) has argued. Strategic human resource management is a
new concept which bridges HRM and strategy.
The changing role is for HR practitioners to be partners in the global business strategy of
the company, i.e. to take a more proactive role in the five major HR functions of selection,
manpower planning, training and development, career development and compensation. It
is asserted by Pucik (1992) that the process of globalization not only brings the HR
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function closer to the strategic core of business, but also changes the scope and content of
human resource management. This survey has indicated that this changing role would be
more forthcoming from companies which already have HR departments, where HR
directors report directly to the CEO and the board of directors. The study also suggested
that more foreign-owned companies will take a lead role in this than local-owned
companies. Further, the trend would also change as more business graduates becomeinterested in the HR function and regard HR as a profession. The HR positions in the past
were mainly occupied by production personnel from the rank and file.
Hence we conclude that companies in Singapore have a long way to go in turning the
traditional HRM to the strategic HRM. Very few HR directors are involved in business
strategy, although the majority of HR practitioners are becoming aware of the importance
of strategic HRM. Therefore the HR function of firms in Singapore needs to shift from an
administrative to a process orientation so that it can flexibly reconcile the organizational
paradoxes inherent in the activities of global firms (Pucik, 1992).
Singapore in transition: from technology to culture hub
Caroline Y.L. Wong ;Carla C.J.M. Millar ;Choi, Chong Ju .Journal of
Knowledge Management10. 5 (2006): 79-91.
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This paper aims to present an approach to the knowledge-based economy that focuses on the
developmental synergies between technology (especially information and communication
technologies), culture and place (hub) as expressed in the innovative milieu of the inner city. This
paper draws on research in city and urban planning, which emphasizes the importance of quality of a
place, location or city and the more intentional emphasis given to development of human and cultural
resources, which are conducive to innovation, learning, creativity and change in a knowledge-based
economy. Singapore is chosen as a case study of analysis for a knowledge-based economy in transition
because of its developmental approach and strategic shift from one focused on technology-intensive
sectors to one focused on high knowledge-intensive companies and towards a free-spirited dynamic
creative hub in the making. It displays many characteristics typical of a knowledge-based economy in
which people, their ideas and capabilities are the key sources of wealth and opportunities. This paper
observes a missing link in the transition from technology to knowledge to culture hub, which might
have implications for Singapore's effort towards establishing itself as a cultural industries metropolis, a
renaissance city using culture to re-position its international image as a global city for the arts. The
originality and value of this paper lie in this analysis, which makes one conclude that, although
Singapore's developmental model had created benefits in many ways, it had also negatively constrained
its development, particularly in the area of knowledge creation and application to entrepreneurship,
innovation and creativity.
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Knowledge Cities 2006. Professor Francisco Jaview Carrillo
Introduction
In the post-industrial economy, knowledge-related activities have become central to
creating national wealth and sustaining economic growth in the so-called "knowledge
economy", also variously known as "knowledge-based economy" (KBE), "knowledge-driven
global economy", "new networked economy" or the "new economy" ([63] Ofori, 2003).
The sustenance of these knowledge-related activities requires continuous renewal of
human and organizational capacities and creating environments, which are conducive to
creativity, innovation, learning, and change ([44] Knight, 1995, p. 226). Researchers in
city and urban planning such as [28] Florida (2002), [58] Mendieta (2001), [38] Hall
(1998) and [70] Saxenian et al. (2002) have emphasized the importance of quality of a
place, location or city in attracting talented knowledge workers such as those in theconsulting, investment banking, law, science and technology industries. Global cities such
as Paris, New York, London and Sydney are increasingly viewed as crucibles in the
development and utilization of knowledge as a resource, and the term "knowledge city"
has been used to define cities that are purposefully designed to encourage the nurturing of
knowledge ([24] Edvinsson, 2002). These cities have also been associated with an
intentional emphasis on the development of human and cultural resources ([44] Knight,
1995).
Singapore makes for an interesting case study for a knowledge-based economy in
transition because of its developmental approach and strategic shift from the technology
intensive sectors to one focused on high knowledge intensive companies ([54] Loo et al. ,2003) and towards a free-spirited dynamic creative hub in the making. It displays many
characteristics typical of a knowledge-based economy such that people and their
capabilities are the key sources of wealth and opportunities ([9] Chia, 2000). The World
Economic Forum ranked Singapore as one of the most network-ready nations in the world
in its Global Information Technology Report 2003-2004, coming in a close second to the
US ([87] (The) World Economic Forum, 2003).
Singapore also has a dynamic business environment that spawned a well established IT
and telecommunications infrastructure and services including over 6,000 multinational
companies (MNCs) and 100,000 local enterprises comprising small- and medium-sized
enterprises (SMEs) and large local corporations ([18] EDB Media Releases, 2003a). In2001, the Swiss-based Institute for Management Development ranked Singapore third in
R&D in its global location attractiveness rankings. The impressive economic growth record
of Singapore in the last four decades has been achieved through continuous industrial re-
structuring and technological upgrading ([89] Wong, 2001). The knowledge-based
industries as defined by the OECD have increased their percentage of GDP from 48 percent
between 1983 and 1985 to 56 percent in 2001 ([2] APEC Economic Committee Report,
2003). Singapore's commitment to knowledge-based economic development in the past
decade has enabled it to make a rapid and successful transition to a newly industrialized
economy. The future growth of sectors such as healthcare, information and communication
technologies (ICT), education services, photonics, nanotechnology identified by the
economic review committee as being crucial is dependent on Singapore's knowledgecapabilities. This is where knowledge creation, acquisition, dissemination and application
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interact with each other in the economy to create the main drivers of growth, wealth
creation and employment across all industries ([1] APEC Economic Committee Report,
2000). Singapore's information society development trends have been shaped by its
developmental state ([90] Wong, 2004) and though it has created benefits in many ways,
it has also negatively constrained its development, particularly in the area of knowledge
creation and its application to entrepreneurship and creativity.
Creativity has been deemed important in the knowledge economy and the creative
industries development strategy was developed on analyses conducted by the [23]
Economic Review Committee (ERC) (2002) to enable Singapore to compete globally ([22]
Economic Review Committee (ERC) Reports, 2001). Although Singapore displays many
characteristics typical of a knowledge-based economy, Singapore's new economy
seemingly lacks a stimulating climate conducive to imagination, innovation and adventure
that will attract and retain globally mobile talent ([80] Tan, 2003, p. 403), in other words
the lack of cultural and environmental institutions, which determine the quality of life and
buzz of the city-state.
This paper seeks to analyze the seemingly missing link in the transition from technology to
knowledge to culture hub, which might have implications for Singapore's effort towards
establishing itself as a cultural industries metropolis, a renaissance city using culture to re-
position its international image as a global city for the arts. The challenges to the city-state
were outlined in the end together with some recommendations.
The role of ICT: from technology to culture hub
The [64] Organisation for Economic Co-operation and Development (OECD) (1996) defines
a knowledge-based economy as one in which the production, distribution and use of
knowledge are the main drivers of growth, wealth-creation, and employment for allindustries. An important part of the knowledge-based economy is formed by knowledge
intensive business services (KIBS) which include legal services, management consulting,
IT services, market research, engineering services, architectural, quantity surveying,
building and appraisal services ([92], [93] Wong et al. , 2005a, b). Such services
concerned with the supply and management of knowledge and intangible assets are often
seen as a driving force in the spread of new knowledge through information and
communication technologies (ICT) ([3] Aslesen, 2003). In that regard, many authors
identify ICT and globalization as key drivers of the knowledge-based economy ([17]
Economic and Social Council, 2000). The rise of ICT gives the KBE a new and different
technological base that changes significantly the conditions for the production and
distribution of knowledge ([9] Chia, 2000) to the extent that location and the ability tocombine and manipulate new knowledge has become increasingly important ([3] Aslesen,
2003). Such a development has already stimulated considerable interest among
governments and policy communities within the Asia-Pacific including Singapore, Japan,
Malaysia, Hong Kong and China ([41] Hutton, 2004). In recent years, ICT has also been
deployed as a key instrument of urban transformation and modernization with both
substantive effects (like higher p