Current business environmental forces such as competition, innovation, globalization, technological advancement etc has created major impact on organizational behavior. These changes come in different forms. Sometimes it required to reorganize the structure of the organization and due to this organization may have to introduce new roles and new people. Sometimes it may require to change the culture of the organization. In all these situations HRM function plays a major role. Further recent development of new concepts such as knowledge workers has increased the complexity of HRM function. Nowadays HR has become strategic assets for organizations. From an IT company’s view point intellectual property that is knowledge of the software developers is crucial for their business than the physical asset of the company. This importance has heightened due to the transition of old economic conditions to knowledge based economy where it considers the intellectual property as one of key success factors of the organization. The impact of globalization and the technological advancements were the main contributing factors towards the above transformation.
As a result of the above transformation in the business environment strategic importance of the human resource function has increased in the current business environment. Therefore HRM function can be interpreted as strategic human resource management as well which is known as general approach to the strategic management of human resources in accordance with the intentions of the organization on the future direction where it wants to take. In other words human resources strategies need to be aligned to the corporate strategy of the particular organization. Strategic HRM has evolved based on human resource management principles incorporating the concept of strategy. So if HRM is a coherent approach to the management of people, then the strategic HRM now provide an idea which is done on a planned way that integrates organizational objectives with policies and action sequences. Corporate strategy of the organization is established based on the mission of the organization and later it has been cascade down in to lower level strategies such as business strategies and functional strategies. Therefore effectiveness of achieving the ultimate corporate strategy is depends on how successful in achieving the business and functional strategies of the organization. Therefore one of the driving factors behind the above achievement is the quality of the human capital within the organization. Therefore objective of human resources strategy should be based on company’s objectives and it competent enough to achieve them.