CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Every organization has a goal to address issues by providing products, services, or a combination of both. This objective shapes the organization's mission, vision, and values. Human effort is essential in achieving this goal as humans possess valuable knowledge and expertise that organizations can and should utilize. Therefore, in the present context, the recruitment and retention of such capable employees play a crucial role (De Kok and Uhlaner, 2001).
The crucial role of Human Resource Management (HRM) lies in ensuring that organizations attract and retain the right talent necessary for their success. HRM involves various activities such as hiring, training, compensation, policy creation, and the formulation of strategies to retain employees. Over the last two decades, HRM has undergone significant transformations, making it even more essential in today's organizational landscape (University of Minnesota, 2023).
Traditional HRM procedures like recruitment, employee training, and development were time-consuming and required substantial manual effort. Specifically, the recruitment process involved sifting through numerous resumes, conducting interviews, and making subjective judgments based on limited information.
The synchronization of corporate strategy with HRM plays a vital role in determining an organization's success. Corporate strategy refers to a distinctive, long-term plan or framework aimed at achieving a competitive edge over other market players while fulfilling commitments to customers, clients, and stakeholders (i.e. shareholder value). Another simpler interpretation of corporate strategy is viewing it as a series of decisions that guide a company's future direction. As organizations have limited resources, they must make decisions on how to prioritize and allocate these resources effectively (Burnie Group, 2023).
Successful organizations excel by identifying and efficiently utilizing their available resources, which include financial, physical (buildings, equipment, and facilities), human capital, customer base, technology, and knowledge assets. These resources are highly valuable and sought after, enabling organizations to maintain a competitive edge in the market. However, mere acquisition of these resources does not guarantee organizational superiority; their optimal utilization is the key to enhancing competitiveness.
In essence, the ability to attract and harness these resources to generate maximum value for the organization is the cornerstone of excellence and success. Among these resources, manpower holds utmost importance, demanding significant attention from organizations to develop suitable strategies for its guidance and management. By effectively utilizing this valuable resource, organizations can achieve their business objectives, implement strategies, outperform competitors, and secure a larger market share. Forward-thinking organizations increasingly acknowledge that while various factors contribute to their functioning, the human element holds significant importance. Irrespective of an organization's size, nature, activities, or operating environment, its success hinges on the decisions made by managers and the behaviors they encourage among employees. Therefore, a critical source of competitive advantage for organizations is not solely reliant on having innovative product designs, strong strategies, effective marketing, or robust financial management, but also on having well-designed HRM systems.
Establishing alignment and consistency between the HRM strategy and the overall business strategy is a crucial aspect that profoundly impacts performance and productivity improvement within organizations. The underlying assumption is that when an organization's business strategy is not in sync with its HRM strategy, there will be a decline in performance. Therefore, to achieve enhanced productivity and better overall performance, organizations must strive for coherence and coordination between their overarching business strategy and the functional strategies employed in HRM (Murray and Kotabe, 2005).
It is based on this background that this study seeks to explore the influence of MTN's corporate strategy on its HRM practices.
1.2 Statement of the Problem
The telecommunications industry has witnessed significant growth and transformation over the past few decades, driven by rapid advancements in technology and changes in consumer behavior (Stone, 2015). One prominent player in this industry is MTN (Mobile Telecommunications Network), a multinational mobile telecommunications company operating in various countries across Africa and the Middle East (MTN, 2023).
As a market leader, MTN's corporate strategy plays a crucial role in shaping its overall direction and influencing various aspects of its operations, including Human Resource Management (HRM). Despite the recognized significance of the relationship between corporate strategy and HRM, there is a lack of comprehensive research specific to the case of MTN. This study aims to bridge this knowledge gap by conducting an in-depth analysis of the influence of MTN's corporate strategy on its HRM practices.
1.3 Aim of the Study
The primary aim of this research is to examine and understand the influence of MTN's corporate strategy on its Human Resource Management practices.
1.4 Objectives of the Study
The specific objectives of the study are as follows:
- To analyze MTN's corporate strategy, including its goals, focus areas, and approaches to achieve a competitive advantage.
- To examine the key HRM practices implemented by MTN, such as recruitment, training, performance management, and employee development.
- To assess the alignment between MTN's corporate strategy and HRM practices.
- To identify the strengths and weaknesses of the existing HRM practices in relation to the corporate strategy.
- To propose recommendations for enhancing the synergy between corporate strategy and HRM to improve overall organizational performance.
1.5 Research Questions
To achieve the stated objectives, the study will address the following research questions:
- What are the main elements of MTN's corporate strategy, and how does it contribute to the company's competitive advantage?
- What are the key Human Resource Management practices implemented by MTN?
- How well are the HRM practices aligned with the corporate strategy of MTN?
- What are the strengths and weaknesses of the current HRM practices concerning the corporate strategy?
- How can the alignment between corporate strategy and HRM be improved to enhance organizational performance?
1.6 Research Hypothesis
The research hypothesis is formulated as follows:
H0: There is no significant influence of MTN's corporate strategy on its Human Resource Management practices.
Ha: There is a significant influence of MTN's corporate strategy on its Human Resource Management practices.
1.7 Justification of the Study
The study's significance lies in its contribution to both academic knowledge and practical implications. From an academic standpoint, this research will add to the limited body of literature on the influence of corporate strategy on HRM, specifically within the context of MTN. It will serve as a valuable reference for researchers, students, and practitioners interested in the telecommunications industry and strategic HRM.
Practically, the findings of this study will be beneficial to MTN's management and human resource professionals. Understanding how corporate strategy affects HRM practices will enable the company to make informed decisions about optimizing its workforce and improving overall performance. Additionally, the study's insights can help other organizations in the telecommunications sector and beyond to enhance their HRM practices based on their specific corporate strategies.
1.8 Scope of the Study
This study focuses solely on MTN as a case study and examines the influence of its corporate strategy on HRM practices. The research will primarily draw data from MTN's official documents, annual reports, HRM policies, and relevant academic literature. While the telecommunications industry is dynamic and subject to constant change, this study's scope is limited to the available data up to the current date.
