Does strategic fit result in better fitting and more successful employees?

Does strategic fit result in better

fitting and more successful

employees?

Author:

Malin Björkhem

Tutor:

Bertil Hultén

Program:

The Economy Program

Subject:

Business Economics

Level and semester: Master level, spring 2008

Baltic Business School

Foreword

This master level thesis has been written within the scope of the master program of Business Economics at the University of Kalmar. The thesis presents ideas about recruitment that are not yet very widely discussed, ideas about strategic fit of employees.

With this thesis I aim to bring forth a discussion about the connection between a company’s business strategy and the selection of employees. It has not been an easy subject to research but it has been very interesting and developing.

I would like to thank everyone who helped me to make this possible by taking the time for interviews, helping me with connections and providing me with facilities for interviews. The time during which I have been writing this thesis has been one of the most challenging periods in my life. There were many moments along the way when I doubted that I would ever gather enough energy to finish the thesis which I am now proudly and happily presenting. I could never have been able to finish this thesis without the positive support that I have received from my family, friends and colleagues. I would like to direct two special thanks to my fiancé David André for all the support and help, and to my tutor Bertil Hultén who has always been positive and encouraging, and who has helped me make this thesis become as good as it could be.

Brussels the 28th of May 2008

Title: Does strategic fit result in better fitting and more successful employees?

Author: Malin Björkhem

Tutor: Bertil Hultén

Subject: Business Economics

Purpose: The main purpose of this thesis is to bring forth the discussion about the

possible connection between the business strategy and selection of employees.

Method: This thesis is based on inductive reasoning and the research is done with a

qualitative research method. The study has been done in the form of a case study and the collection of data has mainly been done through semi-structured qualitative interviews.

Conclusions: At the studied company the personnel working with recruitment are not

intentionally looking for a strategic fit, and the respondents were not sure if strategic fit would be beneficial for the studied company. The highest focus in the recruitment process in this company is given to the job specific requirements and the company values. But after analysing the factors that the respondents are focusing on during the selection process, and the reasons why, my conclusion is that aiming for strategic fit is generally of interest in the selection for all positions in the studied company, although it is more relevant for some positions.

The job specific characteristics are of higher importance though. Without the technical knowledge and skills, and the personality needed to carry out a specific job the strategic fit is not of importance. Due to practical limitations you have to identify the most crucial requirements. Therefore it is necessary to prioritise the requirements to use in the selection, and in this process the strategic fit might get a lower priority and therefore fall out of the scope of the selection.

I believe that strategic fit could lead to both a higher chance of retention and to alignment with the business strategy. The connection between strategy and selection is present, at least at Borealis, through the company values. But this connection is not something that the people are aware of. I believe that it is important to be aware which factors that are affecting the selection and why. Without the awareness and conscious considerations in the choice of requirements, and in the selection, there is a higher risk of mistakes and mismatches. Strategic fit should therefore always be a part of the discussion before recruitment according to me, just like all other factors, even if the strategic fit might not have a place in the final requirements.

1. Introduction ...6

1.1. Human resources in a strategic perspective...6

1.2. Problem discussion ...8

1.3. The significance of the problem ...11

1.4. Research question ...12

1.5. Purpose of the thesis ...12

1.6. Restrictions ...12

1.7. Concepts ...13

1.8. Disposition of the thesis ...15

2. Method ...16

2.1. Research strategy...16

2.2. Qualitative research method ...16

2.3. The research process...18

3. Frame of references ...25

3.1. Strategic fit?...25

3.1.1. How does the strategy affect recruitment? ...25

3.1.2. Should companies aim for strategic fit? ...26

3.2. Which factors are considered in the selection of employees? ...28

3.2.1. Competence ...29

3.2.1.1 Knowledge and skills...30

3.2.1.2 Values, attitudes and behaviours ...31

3.2.2. Motivation ...34

3.3. The connection between the concepts ...36

4. Results...38

4.1. Case Borealis ...38

4.2. Strategic fit?...38

4.2.1. How does the strategy affect recruitment? ...38

4.2.2. Should companies aim for strategic fit? ...40

4.3. Which factors are considered in the selection of employees? ...42

4.3.1. Knowledge and skills...43

4.3.2. Values, attitudes and behaviours ...44

4.3.3. Motivation ...47

5. Discussion ...49

5.1. Which factors are considered in the selection of employees? ...49

5.1.1. Knowledge and Skills...49

5.1.2. Attitudes, Values and Behaviours ...50

5.1.3. Motivation ...51

5.2. Strategic fit?...52

5.2.1. How does the strategy affect recruitment? ...52

5.2.2. Should companies aim for strategic fit? ...52

6.1. Case Borealis ...58

6.2. The research question ...58

6.2.1. Which factors are important to focus on in selection? ...58

6.2.2. Is there a connection between the business strategy and selection?...59

6.2.3. Is strategic fit more important for some positions? ...59

6.2.4. Is strategic fit different from cultural fit? ...60

6.2.5. Does strategic fit result in better fitting and more successful employees?...60

6.3. Suggestions for further research ...61

Figures and tables

Figure 2.3.1 The research process ...18

Figure 3.2.1 Conditions which an employee brings with him/her to a professional context. ..28

Figure 3.3.1 Connections between strategy and selection...37

Table 2.3.1 List of respondents ...21

Table 2.3.2 Examples of interview questions...22

Appendixes

Appendix 2.Worksheet for determining motivational job factors. ...67

1. Introduction

In this first part of the thesis I will introduce the subject and the scope of this thesis. I will start by presenting how the personnel have become such an important strategic resource for the companies. In order to do this I will shortly describe the development of business strategies from the 1940’s until today.

After that I will discuss the central problem of this thesis, namely the selection of employees in relation to the business strategy. The discussion will be followed by a discussion of the significance of the problem. In the end of this chapter I will define the research question and the purpose of the thesis.

1.1. Human resources in a strategic perspective

For a long time it has been publicly accepted that strategies are important to companies in order to survive in the long term. Strategies help companies to establish a focus in their activities. Strategies help develop and manage the business in a way that creates competitive advantages for the companies which supports their survival in the long term.

Because of the changing environment today with rapid technology development, globalisation and changing ways of organising businesses and jobs, the personnel has become a main resource for creating competitive advantage for companies today (Dessler, 2005). It is the internal activities and the competencies of the people performing them that can create competitive advantage today. Because those, in difference from technology and ideas, are hard to copy and be used by other companies (Bengtsson and Skärvard, 2001). Sears presents this by saying that “more often than ever, talent is itself a pivotal competitive differentiator in

business strategies” (2002, p. 28).

As Sears is implying, the human capital part of the businesses has not always been as important for companies as it is today. How to develop the strategy and what kind of strategy one should develop has changed during the years, especially since the middle of the 20th century. The strategic focus on human capital and competences is a result of a century of economic and social development. As society has changed so have the companies and the way to do business. (Sears, 2002; Bengtsson and Skärvard, 2001)

Since the late 1940s many theorists have been analysing and researching about strategies and presented their points of views in order to repeat strategic success or avoid previous business failures. These strategies have developed as society and the economy have changed. New strategies have been created in order to make the companies survive in new competitive environments (Sears, 2002; Bengtsson and Skärvard, 2001). Besides changes in society and the economy strategies have also been used because of popularity. Researchers have been able to find fashion patterns in business strategies (Bengtsson and Skärvard, 2001).

In the middle of the 20th century companies started to be run in a more “scientific” way. People thought that it was possible to predict the future and they used strategies built on this idea. They formulated goals and made action plans in order to exploit the predicted possibilities. The time horizon for the strategies was a couple of years in the future. (Sears, 2002; Bengtsson and Skärvard, 2001)

In the end of the 1960s the long time planning strategies were very popular and trusted (Sears, 2002; Bengtsson and Skärvard, 2001). There was also a belief at this time that if you

have a good general management technique then you can manage any company. Some companies therefore used these planning strategies to spread the economic risk and sustain the business growth by adding other industries to their business. (Sears, 2002)

The diversification strategies lost their popularity quite fast though so in the beginning of the 1970s companies moved towards a more systematic and selective diversification. This was done with the strategy model created by Boston Consulting Group, the growth share matrix. With this matrix companies could analyse their products or different businesses in terms of market growth potential and relative market share. By identifying what kind of products or businesses the company had according to the four kinds presented in the matrix, companies could prioritise, make resource allocations and make decisions about acquisitions or sales (Sears, 2002). The belief during this time was that the key to success was a business decision based on external analysis.

Both the long time planning strategies and the diversification strategies seemed to give a poor result as the business environment changed and the predictions of the future failed. A part of these prediction failures was because of the oil crisis and the enduring inflation in the middle of the 1970s. In the beginning of the 80s significant structural changes took place in the international economy which led to lowered demand on the market and bigger competition from south-Asian countries. This made companies turn to strategic plans with shorter time range and to focus more on the external factors in the business environment; the new trend became positioning strategies. (Sears, 2002; Bengtsson and Skärvard, 2001)

The belief during the 1980s was that the structure of the business environment and the business competition determined in which industries one could run a company and what kind of strategy a company could use within that industry sector. The key to success was a strategy based on competitiveness and positioning of the business in the new tougher market. The strategy theorist Michel Porter created a model for generic strategies. This model says that a company can either compete within an industry sector based on cost advantage, on differentiated and unique product offers or by focusing on a certain customer segment either by cost advantage or differentiation (Sears, 2002; Bengtsson and Skärvard, 2001).

In the end of the 1980s and during1990s a lot of things happened in the international economy. Among other things the global competition tightened, the product life cycles became even shorter, and the pressure to deliver shareholder value enhanced. As a result of that also a lot of changes took place in the field of business strategy. Instead of looking at external factors the companies now started to look inward for strategic success and a lot of different strategy theories emerged. These strategies where based on different ideas about what is the most important for companies to focus on; core competencies, efficiency, customer value, and core processes. (Sears, 2002; Bengtsson and Skärvard, 2001)

What all these strategies and ideas have in common is that the base for competitive advantage no longer lies in technical superiority or “the right” business decisions in regard to positioning and action plans. Instead the key to success is the internal competences and processes; what a company can offer the customer that no other company can (Sears, 2002; Bengtsson and Skärvard, 2001). With this change in society and the world of business the focus has turned from technical solutions to human capital solutions. The main resource for creating competitive advantage is now the personnel. (Dessler, 2005)

As the importance of the personnel has grown, so has the importance given to the human resource functions and departments. This enhanced importance of the personnel and the human resource functions are shown in two ways. First of all by the fact that human resource management (HRM) theories have emerged. These theories are covering everything about personnel management matters from the importance of advertising new positions through suitable channels to developing competences and performance compensation.

It can be seen in the way the role of the HR functions has changed. For the bigger part of the history of human resource management the work of the personnel departments have been focused on administrative tasks. Companies have changed that the latest years. (Lawler and Mohrman, 2003; Evans, 2003). In the 1980’s and 90’s companies realised that the human resource function is more important than that. They realised that the HR department has an important role in for example recruiting the right people and developing them, developing job roles and organisational structures. (Bersin, 2006) The tasks of human resource departments have now become broader and the human resource management has changed direction more and more towards becoming a partly or full strategic business partner for the company. Being a full strategic partner involves being more active in organisational design and development and it also involves an enhanced focus on employee development. (Lawler and Mohrman, 2003; Evans, 2003)

1.2. Problem discussion

If the HR function in a company is fully engaged in the company’s performance in the way that Gary Dessler suggests then the HR function can have a considerable effect on the strategy implementation and company’s performance. Dessler suggests that the HR function should have an active part in making the employees focused on the strategically important activities and behaviours. He believes that the HR function, in addition to recruiting employees and do administrative tasks, should be active in developing and motivating the personnel in order to achieve the strategic goals. (Dessler, 2005) From that point of view and the fact that for many companies the personnel is the most important resource for getting competitive advantage today, the HRM is a crucial issue for companies. But there is still a limit in Dessler’s and many other theorists’ presentations of strategically important HR issues.

The HRM literature has a strategic approach in the way that it is underlining that companies have to make the business strategy pervade all personnel management and that the business strategy should underlie all personnel activities and policies (Dessler, 2005). This is in line with general management theories which also say that the business strategy has to be implemented all through every part of the organisation. (Bengtsson and Skärvard, 200; Dessler, 2005; Olve et.al, 1999) In the HRM literature the strategic approach is limited to implementing strategy through daily processes and reward systems. But when it comes to recruitment this literature is mainly focusing on the technical part of the recruiting process (Arthur, 2005; Dessler, 2005; Lawler and Mohrman, 2003; Outlaw, 1999). After my first literature study I get the impression that the link between strategy and a strategic approach to HRM is missing some of its parts when it limits the strategic part of recruitment to technical issues. From my point of view this creates a gap between the development and the implementation of the business strategy.

Model 1.2.1 shows how I experience the connection between strategy development and strategy implementation in the management literature. I get the impression that the recruitment part of HRM is outside the “focus” of the business strategy and connects to the

strategy implementation first when a new employee has arrived to the company. This is where I see a gap between the development and the implementation of the business strategy in the literature. In the management literature there are no detailed discussions about how to manage the personnel questions. That is probably because this is covered in the HRM and the leadership literature. But in the HRM literature the discussion about getting the personnel aligned with the company’s strategic goals first starts when the employees are already hired. From my point of view the issue about strategy alignment should be discussed already in the recruitment process in order to avoid a gap in the implementation. The lack of business strategic discussions in the literature in relation to the recruitment process is what creates the gap.

Figure 1.2.1 The connection between strategy and strategy implementation

Source: Own

Since the latest trends in strategy development point out the internal resources as the most important ones for the companies’ survival, I wonder if the theory about making the strategy pervade the entire organisation and all the processes shouldn’t also include the recruiting process. After all, the internal resources are built or maintained by the personnel. In a business economic perspective it should therefore be of interest to include the discussion about recruitment and selection as a part of developing the human capital.

The importance of the personnel makes it important for the company to recruit fitting personnel to be able to acquire the competences and personalities that are important for the company (Warner, 2004; Gubman, 1998; Leigh, 2005; Klinvex, 1998). By definition fit means being compatible with or similar to something, or meeting adequate standards for a purpose (wordnet.princeton.edu1). In regards to recruitment of employees achieving fit therefore means finding employees that are compatible with the company and the job and who are meeting adequate requirements to perform the job. But what is not clear and certain is how you know that a candidate is compatible with the company and what the adequate requirements are in order to achieve fit.

Vision Strategy Strategy implementation and business performance Candidate search Selecting Hiring

Some theorists in recruiting believe that what is important to focus on are the competences and behaviours a candidate should have in order to be good fit in the company and the job. Pure technical skills and knowledge are given less importance by these authors. Instead the focus is on how people are as individuals and how they can turn their skills and knowledge into job related competences. (Leigh, 2005; Klinvex, 1998; Dye, 2007; Gubman, 1998). This also seems to be in line with strategy theories saying that it is the competences rather than technological superiority that are important for getting competitive advantage today.

But how do you determine which competences and behaviours are compatible with the company and adequate for being able to do a job? In the search for an answer to this question theorists have been splitting the notion of fit into a few narrower and more easily manageable parts. Many authors write that one should strive for a fit between the employee and the job, the employee and the company, and/or the employee and the culture (Klinvex, 1998; Leigh, 2005; Gubman, 1998). This means that they believe that when recruiting you should search for candidates who have characteristics that are compatible with the requirements for the job, with the characteristics of the company and the company’s culture. By splitting the determination of what kind of competences and behaviours that are compatible and adequate for a fitting employee into job fit, company fit and cultural fit the task becomes clearer and easier. But I am not convinced that these are the only parts that together can lead to finding fitting employees.

The way a company has decided to compete on the market affects what the company decides to do and how activities are carried out. Whether a company decides to compete by being the most cost effective producer of a product or by providing the best quality and product related service makes a big difference on how the business activities are carried out. Thereby it affects the competences and behaviours that the organisation needs its employees to have. I think that this makes it interesting to see if we should also include strategic fit in the search for the fitting employee. With strategic fit I mean to have a personality which is compatible, similar or consistent with the characteristics of the company’s strategic personality.

At this point of my literature study I have only found one theorist who is discussing this idea and that is Edward L Gubman. Gubman (1998) presents a theory where he says that if one truly wants to align the workforce with the strategy, companies should identify their strategic personality and create a culture consistent with the customer environment. He also says that companies should hire people with the same kind of personality as their strategic personality. The strategic personality is how a company operates and presents itself on the market; the characteristics of the company’s way of competing for the customers. Is this the way to integrate the recruiting process in the strategy implementation? Gubman’s theory is one idea of how to link the overall business strategy with recruiting and selection of employees. Maybe the strategic personality of a company affects the answer to what competences and behaviours a candidate needs in order to be a fitting employee.

Even though Edward Gubman presents his theory which says that strategic fit is of interest to a certain level I keep wondering if there is a reason why the idea of strategic fit is not more discussed in the literature. Maybe the combination of cultural fit and company fit automatically include a strategic fit? For instance, if a company has successfully implemented their strategy does that mean that the company also has culture which is supporting the strategy? If that is the case a company and culture fit together with job fit might give the full answer to what competences and characteristics that is needed to be a fitting employee. But if

there is a mismatch with the strategy and the culture should one then consider only the culture when hiring, or only the strategy? Or is it in fact a combination of both?

So, what I find of importance in this discussion is to explore the importance of letting the way the company has decided to compete be a base for the recruiting process too. Is Gubman (1998) right when he says that you should hire employees which are in line with your company’s strategic personality? Is the majority of literature excluding the business strategy from the recruitment discussions because it doesn’t affect the choice of employees or is there a gap between strategy development and strategy implementation?

1.3. The significance of the problem

From what I have seen so far, theories about recruiting seem to have a very technical approach and find it more important to discuss how to recruit and select new employees than to discuss how to identify the competences and behaviour an employee should have. Ignoring the possible connection between business strategies and recruiting fitting employees can be a problem for management theories but most of all for companies and also the affected employees.

For management theories this gap between strategy development and implementation can make this field of theory incomplete. If it turns out that taking the strategy into consideration when selecting and hiring new employees leads to better hiring results then this part of the management theory field would benefit from further development.

If considering the strategy when recruiting would result in better fitting, and therewith more successful, employees for companies, then the way I so far have seen companies and theorists approach recruiting might affect the success of the companies negatively. If striving for a strategic fit leads to better fitting and more successful employees then companies which are not doing that today are missing out from something that can give them a stronger competitive advantage. It might also lead to problems to implement strategies if one happens to hire a person who doesn’t agree with the strategy that the company has chosen and therefore doesn’t support it.

The cost for a non successful recruitment can be high for both the employee and the company. A hiring mistake is said to cost between two month salaries up to two annual salaries (Carson, 2007; Leigh, 2005; Sujansky, 2007). The economical cost can vary depending on the position which is to be refilled, the amount of training that is needed, which recruitment methods you use or other factors. The need for a new recruitment also affects the effectiveness of the department and affects the company’s performance during the learning period for the new employee.

For the employee the costs for a mismatch can contain several factors. If the person stays at the job despite the mismatch he or she might not be satisfied or comfortable at work. If the person gets fired or decides to leave the company due to the mismatch this might be a cost for the person both economically and personally. The person might be without income for a period after loosing or quitting the job. But he or she might also have been giving up a satisfactory job in order to accept the new offer which will also be a loss for the person. If the person, and his or her family, moved in order to get this job the personal costs of the mismatch becomes even higher.

1.4. Research question

Based on the problem discussion I have identified that the question which should lead my research is:

Will companies be able to hire better fitting and more successful employees if they strive for a strategic fit while creating the candidate profile and selecting the new employees?

From this main question a couple of more specific questions can be derived: • Which factors are important to focus on when selecting employees?

• Is there, and/or should there be, a connection between the business strategy and the kind of personalities a company chooses to hire?

• Is a strategic fit more important for some positions in a company than other? • Is strategic fit different from cultural fit?

My contribution

My contribution with this thesis is to help filling the theoretical gap between management theories and human resource theories. Human resource strategies are a part of the implementation of business strategies and I think that there should therefore be a clear connection between those two theoretical fields. I also hope that this thesis will contribute with some new ideas and angles of approach to the recruitment discussions at the studied company and also elsewhere.

1.5. Purpose of the thesis

The main purpose of this thesis is to bring forth the discussion about the possible connection between the business strategy and selection of employees.

The purpose of the thesis is to get more knowledge and insight in this subject by bringing forth the discussion about it. In order to do that I will examine which characteristics of the candidates’ one should focus on when selecting new employees in order to choose the best fitting employee for the company. I will examine that both from the management theories’ and from a practicing company’s points of views.

A third purpose of the thesis is to look for signs that could give more knowledge about whether adapting the candidate profile to the company’s business strategy, when selecting new employees, can result in better fitting and more successful employees. Those signs could then be the base for theses and suggestions for further research.

1.6. Restrictions

The purpose of this thesis is to investigate whether it is important or not for companies today to consider the business strategy when recruiting new employees. The recruiting process is a very extensive process which in general includes recruitment planning, job analysis and creating job descriptions, creating profile of what requirements and competences candidates should have, advertising, selection, interviewing and testing and finally hiring (Dessler, 2005). The parts of this process which I find being of interest, when it comes to the connection between recruiting and business strategy, are the creation of the candidate profile

and the selection of who to hire. These steps of the process are crucial for who a company eventually hires. The candidate profile determines what kind of candidates a company is searching for and it also affects the final selection. Of course all the other steps also affect the result but I consider those two steps to have the clearest connection with the business strategy. I also believe that the profile creation is the step where the business strategy can be discussed and analysed the easiest and thereby be taken into consideration. I am therefore restricting my investigation to the creation of the profile of what competences and personality the company considers is important for the new employee to have and what companies focus on in the actual selection. By doing this I am restricting my thesis to only discuss what kind of people the companies want to recruit and leave out the practical problems of actually finding and recruiting them.

When it comes to strategies and businesses there are always difficulties to execute and communicate the strategy. Whether a company is succeeding to implement their strategy throughout the company or not is of course affecting the actual strategy used in the company and the way things are done. Therewith it is also affecting how a person fits in the company. To be able to focus on the core subject of my thesis I am choosing not to give much weight to this eventual problem and therefore restrict my research to mainly consider the written and planned strategy of the companies.

I will also restrict the thesis to selection of employees and leave out the selection of any level of managers. I have decided to make this restriction because the selection of employees and managers are naturally different and have different kinds of focus. My impression is that the link between strategy and selection is weaker the further down you come in an organisation but I believe that the behaviours and attitudes of employees are important since they have a big influence on how the actual processes are performed and how the companies’ products end up.

1.7. Concepts

Alignment – “… pointing your people in the right direction to do the right things” (Gubman,

1998, p. 31).

Behaviour – “the action or reaction of something (as a machine or substance) under specified

circumstances, manner of acting or controlling yourself, the way a person behaves toward other people” (wordnet.princeton.edu2).

Business strategy – How to compete within the chosen set of industries (Bourne, 2002, p. 8).

“A term used in business planning that implies a careful selection and application of resources to obtain a competitive advantage in anticipation of future events or trends” (www.smbtn.com).

Candidate profile – a description of the different requirements a job candidate should meet

or exceed (Source: Own definition).

Competence – “…clusters of related knowledge, skills, abilities, motivations, and other

requirements necessary for successful job performance” (Klinvex, 1998, p. 4). “Competence is the proven ability to use knowledge, skills and personal, social and/or methodological abilities, in work or study situations and in professional and/or personal development” (www.euro-inf.eu).

Company fit – Company fit is when the personality of a candidate/employee is compatible

with the structure, the politics, and the reward systems of the company (Source: own definition).

Corporate strategy – the decision of what set of businesses the company should be active in

(Bourne, 2002, p. 8).

Culture – “shared norms and values” (Gubman, 1998, p. 33).

Cultural fit – Cultural fit is when the personality of a candidate/employee is compatible,

similar or consistent with the characteristics of the company culture (Source: own definition).

Fit – “be agreeable or acceptable to” “be compatible, similar or consistent, coincide in their

characteristics” “meeting adequate standards for a purpose” (wordnet.princeton.edu1).

Human resource management (HRM) – “the policies and practices involved in carrying out

the ‘people’ or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising” (Dessler, 1995, p. 4).

Human (Resource) Capital – “the skills and knowledge possessed by workers. Workers

acquire these skills both through formal education and through on-the-job and life experiences” (www.economicadventure.org).

Knowledge – “knowledge is part of the hierarchy made up of data, information and

knowledge. Data are raw facts. Information is data with context and perspective. Knowledge is information with guidance for action based upon insight and experience” (servicedesk.unimelb.edu).

Motivation – “the psychological feature that arouses an organism to action toward a desired

goal; the reason for the action; that which gives purpose and direction to behaviour”. (wordnet.princeton.edu3)

Personality – “the complex of all the attributes - behavioural, temperamental, emotional and

mental - that characterize a unique individual” (wordnet.princeton.edu4). “Personal beliefs, expectations, desires, values, and behaviours that derive from the interaction between culture and the individual” (oregonstate.edu).

Skills – “an ability that has been acquired by training” (wordnet.princeton.edu5). “The

abilities acquired by workers through education, training, and experience that permit them to be more productive. Essentially the same as human capital” (www-personal.umich.edu).

Strategic personality/style – “... the characteristic way your company strategizes, operates,

goes to market, and treats employees...” (Gubman 1998, p. 22-23).

Strategic fit – Strategic fit is when the personality of a candidate/employee is compatible,

similar or consistent with the characteristics of the company’s strategic personality (Source: own definition).

Strategy – “…building sustainable competitive advantage that in turn creates above-average

financial performance” (Becker and Huselid, 2006, p. 898).

Successful employees – the employer is satisfied with the employees and they are happy and

stay within the company (Source: own definition).

Talent – “endowment: natural abilities or qualities, a person who possesses unusual innate

ability in some field or activity” (wordnet.princeton.edu6).

Team fit – Team fit is when the personality of a candidate/employee is compatible with the

group of colleagues with which the he or she is/will be working with (Source: own definition).

Values – “beliefs of a person or social group in which they have an emotional investment

(either for or against something)” (wordnet.princeton.edu7). “Representing an organisation's deeply-held and enduring beliefs, an organisation's values openly declare how it expects everyone to behave and are often embedded in its vision” (www.issel.co.uk).

1.8. Disposition of the thesis

The thesis will be presented in the following chapters:

Chapter 1: Introduction – to give the reader an understanding of the context of the thesis, its

relevance and the reasons behind the chosen “path”.

Chapter 2: Research method – to give the reader insight in the research process and the

validity and reliability of the thesis.

Chapter 3: Frame of references – in this chapter I will present some of the theories that exist

in regards to recruitment and selection. This is the theoretical platform which I later on will compare to the empirical research.

Chapter 4: Results – in this chapter I will present the results from the conversations held with

different people in connection to the recruitment and strategy within Borealis.

Chapter 5: Analysis – in this chapter I will connect the presented theory and my results by

interpreting my results in relation to the theoretical platform.

2. Method

In this chapter I will present and explain the way in which the research for this thesis has been conducted. The way the research has been conducted affects the kind of results you get and the extent to which you can generalise them. The presentation and explanations of the way the research has been conducted includes; the research strategy and method and the research process. The research process includes presentations of the development of the research question, the literature study, collection and interpretation of data, and a discussion about the validity and reliability of the research results.

2.1. Research strategy

The purpose of my thesis, “to bring forth the discussion about the possible connection

between the business strategy and selection of employees”, implies that I consider that no

generally accepted or thoroughly discussed theories exist in this theoretical area. To use an inductive reasoning in my research was therefore obvious to me. To use an inductive reasoning means that one starts by analysing the practical experience in order eventually side with general knowledge and theories or develop new theories. To turn to the practical field for an answer to my research question was in my point of view the best approach based on the purpose and the research question of this thesis. (Andersen, 1998) Inductive reasoning is a common approach when performing qualitative research and case studies (Bryman et.al, 2005; Andersen, 1998).

A part of my research must be defined as deductive reasoning though. Before I carried out the interviews I did an extensive literature research in order to develop necessary knowledge in the theoretical area. Without this knowledge I would not have been able to know what to really look for in the interviews and there would have been a big risk of not finding any answer to my question. So when conducting the interviews I did have some knowledge about existing theories and an idea about where to look for and find the answers.

From my own reasoning and the theories I had been studying I tried to find answers to a couple of questions which I believed could help me in my research. I also used the theory of Edward Gubman (1998) as a starting point for discussion about strategic fit during the interviews. But the lack of theories in the specific field of research that I was focusing on makes me consider my research as being based on inductive reasoning despite the extensive literature study pre-interviewing.

In order have a discussion about the possible connection between business strategy and selection we need an understanding of the factors that affects the selection of employees. To be able to reach an understanding in the matter a qualitative research method was necessary to use.

2.2. Qualitative research method

The qualitative research method normally focuses on interpretation and understanding of a socially constructed phenomenon. For a qualitative research the question why and the context of the phenomenon is of high importance. Many qualitative researchers believe that you cannot truly understand a phenomenon without analysing it in the light of its unique context. (Bryman et.al, 2005)

Within the qualitative framework I decided to do a case study of one single organisation. The reason why I decided to do a case study instead of interviewing people from several organisations is that I believe that a more thorough study within the same organisation gives a deeper understanding and a more reliable result. By conducting several interviews within one company it was possible for me to get a good understanding of the context in which these respondents were working. I could therefore analyse the results both based on their explicit opinions and their responses in relation to the context. The case study also allowed me to get a more complete view of the existing ideas and opinions in one organisation instead of a wide range of random samples.

Qualitative research is in most cases unstructured in order to not create wrong limitations in the research. The researcher wants to understand the participants’ roles in the context, understand the phenomenon from the participants’ point of view and eventually develop notions that are derived from the empirical data rather than theories. That’s why the qualitative researcher wants to use unstructured methods; in order to not miss out on aspects which he or she didn’t think about in advance. (Bryman et.al, 2005)

What is positive with the unstructured way of working is that it’s flexible. It is possible to change the focus and the direction during the research depending on the findings in the study. This makes it possible to have a more general approach to the subject in the initial stage of the research and then develop a more focused direction of the research as the study goes on. As the study continues the researcher can develop more specific questions base on the previous data collection. This is how my empirical research developed. During the first interviews the interview template was rather unstructured with open ended questions. As the study went on the interviews became more and more structured and focused due to the data collection and the understanding that I developed. (Bryman et.al, 2005)

Qualitative research sometimes receives critique for being too subjective, being hard to replicate, lacking transparency and lacking the possibility to generalise the results. These critiques are results of the qualitative research’s interpretative approach. The fact that qualitative research is hard to replicate is due to the importance of the researchers experience and interpretation of the collected data which is coloured by that person’s unique theoretical background and past experiences. (Bryman et.al, 2005)

Critics say that the unstructured ways of qualitative research and the personal relationships with the respondents lead to subjective decisions of what is important or not for the research. This accusation of too high subjectivity is also based on the difficulty of following the reasoning behind the final subject of the research which the critics say is common for presentations of qualitative research. This last reason is also a base for the critique that qualitative research is lacking transparency. The critique is then directed to the lack of information about how the research was planned, conducted and analysed. (Bryman et.al, 2005)

The problem to generalise the results of quantitative research is due to the small amount of respondents which is usual for these kinds of studies. When there are only a few respondents or situations studied it is impossible to generalise these results to a population. Instead the results should be generalised to theories or to side with already existing theories. (Bryman et.al, 2005)

These are all factors that I as a researcher have had to have in mind when conducting the research, analysing the data and coming to conclusions. And every researcher who is conducting qualitative research need to take all the steps possible to minimize the effect of these problems.

2.3. The research process

In this chapter I will discuss the different steps in the research process. The model is an overview of the different steps in the process (figure 2.3.1).

Figure 2.3.1 The research process

Source: Own

The analysis of the first two interviews led me to revise the research question again. By comparing the interview result with my theoretical findings I created a new interview template with more relevant questions for the subject of my research.

Choice of subject Theoretical orientation Research question Literature study Creation of interview template Data collection and interpretation Discussion Conclusions Research question

In the initial stage of the research I chose a subject and formulated a preliminary research question. This subject and research question was based on my impression that there was something missing in the literature in the field of business economics. What I though was missing was a complete connection between development and implementation of the business strategy. From what I had seen at that point the strategic discussions excluded recruitment of employees in regards to strategy implementation. This eventual gap interested me and made me want to investigate whether it exists or not.

Based on my preliminary research question I did a first general theoretical research to orient myself in the theoretical field of Human Resource Management. That orientation let me edit my preliminary research question into a clear and relevant research question.

Based on this research question I did a thorough literature study. During this study I found a theorist, Edward Gubman (1998), who presented similar ideas to what I had based my research question on. After the literature study I made a first interview template and had two first interviews with respondent number one. After that I analysed the interviews and tried to identify notions that the respondent was using.

After that step I went through with the rest of the interviews. After every interview I analysed the results and fine tuned the interview template. Some of the questions stayed the same during all the interviews while other questions where altered or exchanged in order to find an answer to the research question.

Literature study

The literature study that I conducted for this thesis was done in three steps. First I did an initial literature study in order to orientate myself in the subject of employee selection and the related factors in recruitment. This initial step was done in order to specify my research question and make it relevant in relation to the existing theories. After the theory orientation I conducted the main study where I let my interest and findings guide me in my search. Ideas that I read about in some sources led me to change my search approach along the way. After all the interviews were done I did a complementary final literature study based on the results of the interviews and the understanding I had reached during the interviewing process.

I started my search in the general HRM literature but realised quite fast that I wouldn’t be able to find much information about the reasons to select personnel based on certain factors in that field of literature. Instead I turned to search for all the kinds of literature that I could find that mentioned recruitment of personnel in general and in connection to strategy. Since my research question is focused on the connection between strategy and selection I also searched for information in management literature regarding different aspects of strategy implementation.

It was not easy to find any literature in which the authors discussed much about how to identify which requirements that one should set up when selecting employees. The focus in the literature that I found concerning recruitment had two main areas of interest; how to attract the candidates that would be good for your company and how to conduct the selection in regards to interviewing and testing.

All the sources that I found turned out to give a very limited room for discussions about the different factors that are used as selection requirements and the reasons why they are used. And the discussions as such were in my point of view rather poor, especially in regards to discussing why one should pay attention to certain factors. Even in the book which later became my main reference in regards to the strategic connection between business strategy and selection this subject was given a rather limited space. The main part of the book was giving attention to how to manage your personnel in order to align them with the strategy. The literary references that I have used are mainly books published between the years 1998 and 2008 and articles published in management and HR magazines between the years 1999 and 2007. I have also been using internet sites as references for definition of notions and general information about the company n the case study, and also two electronically published articles. The search for literature has mainly been limited to the electronic library Ebrary and the search engine for articles Elin@Kalmar which both are available through the website of the University of Kalmar. A part of the literature search has also been conducted at the library at the University of Kalmar.

Critique regarding the literary references

When you use secondary data, already existing data collected by someone else (Andersen, 1998), you have to take into consideration when and why the data was collected and presented. Although some of the sources I have used are relatively old (from 1998) I don’t see

any difference between the ideas in these sources compared to the more recent sources which makes me consider these older sources as valid as the recent ones.

Due to the limited sources of theoretical references that I could find in this area I have not been able to really select among the sources. For the main part concerning recruitment the theorists are presenting similar ideas, and I therefore consider the references reliable. Concerning the connection between strategy and selection not many theories have been presented though, so I find it hard to judge the correctness of the source I used as main reference in this theoretical area. But the ideas Gubman (1998) presents are well argued for and I am using his theories as a reference for an alternative way of thinking which is not well represented in this field of science. For the purpose I am using this reference I consider his book a reliable source.

When using websites as references you need to be even more critical towards the sources. The electronic sources that I have used as references do not seem to have been created for any special purpose that could make the information doubtful. The electronic sources have been used mainly for definitions of notions, but also two times for confirming a piece of information. I have also used the website of the studied company as a reference for the company presentation. I also consider the websites I have been using reliable for the limited purpose they have been used.

Empirical study

The empirical study for this thesis was done by conducting semi-structured qualitative interviews. A part of the data collection also consisted of power point presentations and some other written material for company internal use. These internal documents were mainly used as a basis for my own understanding though.

Selection

The selection of respondents for this study was partly done by the “snowball or chain effect” and partly by theoretical selection. The “snowball or chain effect” means that one respondent suggests further persons which the researcher can contact for more interviews. Theoretical selection means that it’s the theoretical development during the interview process that determines the selection of respondents. When using this approach selection and theoretical reflections are done continuously and you continue to do interviews until the study is considered to be saturated. The theoretical reflections determine whether further data collection is needed or not. When another interview doesn’t seem to contribute with more information to the study the study is considered saturated. (Bryman et.al, 2005)

When I started the interviewing phase of the research I got in contact with an employee in the HR department at the studied company who had the best overview of the local HR department. I had two interviews with her and she then referred me to some other persons in the company working within HR whom I could contact for further interviews.

After the two initial interviews I got some information which made me realise that in order to get all the information I that seemed important I had to interview both HR personnel, managers and some external consultants. This was needed since at some of the company locations of the studied company external consultants are used for the initial selection, and it seemed that the managers are taking most of the decisions regarding requirements and final selection in most cases. In order to see if there were any differences on the different work locations of the studied company I decided to interview two employees at four different

locations. At each location I interviewed one person working within HR and one manager or employee working in the production with experience from recruitment within the studied company.

Further along in the interview process I realised that I also needed to talk to two other persons; one person who knew a lot about the creation of the “Borealis Behaviour Dictionary” and one person who knew more about the strategic work within the studied organisation. The reason for this was that many of the respondents said that they used this behaviour dictionary when selecting behaviour requirements. So I thought that it was of importance to know how and why this behaviour dictionary was developed. The reason why I thought that it was important to talk to someone working with strategic questions was to get a clear definition of the strategy of the studied organisation. I also wanted to see what opinion he had in the subject since he probably had a more theoretical point of view than the persons who actually works with the selection.

At one point of the study I thought I saw indications that there was a difference of opinion between the office in Mechelen, where only office personnel are working, and the production sites. I therefore decided to have one more interview with someone from the HR department in Mechelen. This interview turned out to be an important interview because the result showed that there are no real differences in opinions depending on working place or the positions to which they were used to recruit personnel.

This way of selecting respondents lead to the following list of respondents: Table 2.3.1 List of respondents

Number Position Location Gender

1 HR officer Belgium; Beringen and Mechelen Female

2 HR specialist; Recruitment and Projects

Austria; Vienna Female

3* Project Manager Belgium; Mechelen Male

4 HR Consultant Finland; Porvoo Male

5 HR specialist; Recruitment Austria; Linz Female

6 HR Area Manager Sweden; Stenungsund Female

7 HR Manager Belgium; Beringen Female

8 External Consultant Belgium; Mechelen Female

9 Research Manager Finland; Porvoo Female

10 Production Support (Including Recruitment for Production)

Sweden; Stenungsund Male

11 Training Coordinator and Recruitment

Belgium; Mechelen Female

12** Business HR Manager Austria; Vienna Male

13 External Consultant Austria; Linz Female

14*** Manager, Business Intelligence Business Planning and Analysis

Austria; Vienna Male

15 Team Leader, Central

Development Team

Belgium; Beringen (and Kallo) Male

* Main subject of the interview was job descriptions but also questions regarding selection were discussed. ** Subject of the interview was the behaviour dictionary.

Qualitative interviews

The interviews were done with a qualitative approach since the aim of the research was to reach an understanding of the subject. This means that I asked quite open ended questions and let the respondents partly decide the direction of the discussion. But I still had a set of prepared questions which I aimed to cover during the interview which means that the interviews were semi-structured. (Bryman et.al, 2005)

During semi-structured interviews the order of the questions is not important and instead it is the respondents answer and the discussion that leads the way during the interview. This creates a flexibility which makes it possible for new subjects to enter into the discussion which can turn out to be very important for the study. The semi-structured approach to the interviews also means that the questions were not formulated in the exact same way in all the interviews and all questions were not always asked. (Bryman et.al, 2005) In table 2.3.3 you can see some examples of questions used during most of the interviews.

Table 2.3.2 Examples of interview questions

How does the recruitment procedure look at your site? Which factors do you focus on when you select candidates?

-Why?

Which factor is the most important and determining one in the selection process? Do you think that personality is an important factor in the selection of new employees? Do you use the Borealis Behaviour Dictionary?

-In which way?

How does Borealis strategy affect your work?

Do you think that Borealis hires different kinds of people compared to other companies in the same industry?

Do you think that the culture at Borealis is in line with the strategy? Do you have any examples of successful and not successful employees?

-Do you know why one was successful and not the other?

* One theorist has said that you should hire people with the same personality as the company’s strategic personality. What do you think about that idea?

* In connection to this question a more detailed description of Gubman’s definition of strategic personality and different general personality categories were given. (Gubman, 1998; see chapter 3.1.2)

Most of the interviews were done via telephone due to the location of the respondents. The interviews with respondents working in Mechelen were done at the office there. All the interviews were recorded and transcribed word by word after the interview. I chose to record the interview instead of taking notes so that I could focus on what was said during the interview and ask follow up questions when I found something interesting. This was also done in order to not loose information and to minimise the risk of misinterpretations after the interview.

Critique regarding the empirical references

I don’t see any risk in this specific case that any of the respondents felt the need to alter the answers to my questions for any reason, neither personal nor career reasons nor corporate reasons. The respondents seemed very relaxed during the interviews and the only hesitation in the answers that I could see were in my opinion due to the difficulty and complexity of the questions.

When you record interviews there is always a risk that the respondents restrain themselves (Bryman et.al, 2005). But I could not see any signs of restraint or nervousness in the respondents and I don’t think this choice changed or limited the responses I got.

Where I do see a risk in the empirical study though is that the notions used in this research and discussions were not always well understood by all respondents and were not always used with the same definitions by the respondents and me as a researcher. This is due both to the notions close relations to each other and the amount of slightly different definitions that exists for notions in this science field.

Interpretation of the interviews

Analysis is about categorising collected data with the purpose of describing the results of an empirical study. When we analyse data we simplify it in order to make it understandable. The analysis is always affected by the research question in the sense that the research question identifies the limits of what part of the data that is of importance in a certain context. In qualitative studies the categorising, analysis and interpretation of data are interrelated and done continuously during basically the whole research process. (Andersen, 1998)

I have read through the entire interview transcripts several times in order to avoid missing important information and misinterpreting the data by removing it from its context. During the analyses and interpretation of the interviews I had to try to understand what the respondents meant with their answers rather than only looking at the explicit statement. This is connected to what I mentioned earlier that the notions used were not always well understood or defined. The interpretation was done by thoroughly and repeatedly also analyse the context in which something was said and comparing the responses with the other answers given by the same respondent earlier or later in the interview.

I have let the chapters in the frame of references and the result part of the thesis get their form based on the interpretation of the interviews and the different parts that seem to be important for the purpose of the thesis. The only chapter that has been more shaped by me than the interview result is the chapter about strategic fit. The reason for this is that this subject of discussion did not come naturally for the respondents when talking about selection.

In cases where I have felt insecure about how to interpret a response I have kept the text as close as possible to the original statement or made a quote. Interpreting the interviews and splitting the information into different categories and patterns was necessary in order to reach the understanding I aimed for with this research.

Reliability and relevance

For qualitative research the requirements for reliability and relevance are a bit different compared to quantitative research. Some authors suggest that for qualitative research we should rather be talking about trustworthiness and authenticity. Trustworthiness is about giving correct descriptions, illustrations and interpretations. By letting the studied or interviewed persons confirm that the presented results are correct, and by giving detailed descriptions one can enhance the reliability of the results. (Bryman et.al, 2005)

In order to enhance the reliability of the results that I presented in this thesis I sent copies of the results to all respondents and asked for their opinion on whether I had interpreted their responses correctly. Out of 15 respondents 10 replied to this request (2-6, 8, 9, 12, 13 and 14). Two of them expressed wishes to get one or two statements adjusted in order to give the right

picture of their opinions. During both the data collection and interpretation, and during the analysis of the results I have tried not to let my own opinions affect the process.

Authenticity is about giving a true and fair view of the results (Bryman et.al, 2005). In order to give a true and fair view I have tried not to cluster opinions to a single statement if I haven’t felt totally sure that they all had the same meaning. Instead I have chosen to show the respondents different opinions when there have been some differences between them. I have also to the biggest extent possible tried to keep the presentation of the results as close as possible to the respondents own ways of expressing their opinions. Out of the same intention I created a result table for the most central questions for the thesis where you can see what the respondents answered. By doing this I give the reader a chance to form his or her own opinion in the matter based on the respondents answers.

3. Frame of references

In this chapter I will present what some theorists say about the connection between strategy and selection. After that I will present what the literature says about which factors to take into consideration during the creation of candidate profiles and the selection of new employees. I will also present the reasons why the literature considers these factors important in order to find good and fitting employees for the company.

3.1. Strategic fit?

3.1.1. How does the strategy affect recruitment?

Strategy implies certain employee behaviours

Edward Gubman (1998) says that the key to long term value for a company is to focus on the people in the organisation. He says that “If talent is scarce and valuable, companies win when

they are smarter than the competition in creating an attractive work environment, picking the right people, and getting the most out of them” (Gubman, 1998, p. 3-4). Gubman is a strong

believer in aligning the work force with the company’s strategy. In order to become successful you have to manage the talent according to the strategic style of the company and you have to build a strategic workforce. This should, according to him, be done through creating a work environment and managerial style according to the company’s strategic style and to employ the kind of people who have the same mindset as the company. According to Gubman this will lead to better fit to the job and the company and therefore a greater success in the job. (Gubman, 1998) A more detailed explanation of this theory is presented in sub-chapter 3.1.2.

Sears (2002) believe that in order to strategically manage an organization’s talent resources one need to understand the business strategy. The business strategy directly affects the organization’s priorities and performance focus and the specific behaviours which are important for the organization in order to achieve its strategic goals. One therefore has to translate the business strategy into talent issues and needs in order to achieve strategy success. (Sears, 2002)

Strategy implies certain jobs which implies certain employee behaviours

The connection between strategy and selection can also be seen as a connection between the organisations strategic goals and ensuring that the company has the competences needed to achieve those goals (Lindelöw, 2008; Granberg, 2003). In the competency based theory that Malin Lindelöw has developed for strategic management of the personnel it is not the company’s strategic personality that is of importance when defining the personnel needs of the organisation, but the goals which the organisation has set up to reach success. Instead of looking at the competences and personality needed to be in line with the company’s strategy, as Edward Gubman does, Lindelöw looks more narrowly at the competences and personality needed to be able to achieve the goals that are connected to specific positions. The connection between the strategy and the selection as she sees it is thus that the strategy results in organisation wide goals and you need to perform certain tasks in order to achieve those goals and for those tasks you need certain knowledge, competence and behaviours. (Lindelöw, 2008) Lindelöw thinks about “what” the organisation does while Gubman thinks about “how” it is being done.