ABSTRACT
Research evidence (see Budhwar and Sparrow, 1997, 2002b; Budhwar and Khatri, 2001) regarding the strategic nature of HRM in Indian national firms suggests that there is a low representation of the personnel function at board level, and few organizations have devised formal corporate strategies. Of these, a handful seem to consult the personnel function at the outset (this compares to a norm of around 50 percent in European organizations), many involve personnel in early consultation while developing corporate strategy and many also involve personnel during the implementation of that strategy. It seems that the status of the personnel function in India has improved over a short span of 10 years or so. The number of personnel specialists moving to the position of CEO has increased over the last few years, such that one out of every six CEOs of the top fifty Indian companies has been reported as a personnel specialist (Venkata Ratnam, 1996). On the other hand, it seems that Indian firms are witnessing a significant devolvement of responsibility of HRM to line managers. This is noticeable in the areas of pay determination, recruitment, training, industrial relations, health and safety and expansion/reduction decisions. Moreover, Indian firms have been showing an increased emphasis on training and development of HR (see Budhwar and Sparrow, 2002b). However, if a strategy of devolvement is not associated with a closer integration of HRM into the business planning processes, it may create a situation of chaos in organizations as they attempt to cope with HRM implications of liberalization. Hence, the way forward is the adoption of a more strategic approach to HRM. Perhaps this agenda is already on the move and is being put into practice (see Agarwala, 2003; Singh, 2003). Certainly, this is the case with the MNCs operating in the country (see Budhwar and Björkman, 2003).
