Affiliations: [a] School of Management Studies, University of Twente, P.O. Box 217, 7500 AE Enschede, The Netherlands. Tel.: +31 53 4893480; Fax: +31 53 4339885 | [b] Rotterdam School of Management and Tilburg University, The Netherlands
Abstract: When building competitive advantage the actions of successful firms influence and actually change market demands. This complex interaction between firms and markets leads to an evolutionary process, during which companies – by a process of organizational learning – pass through evolutionary phases of efficiency, quality, flexibility and innovativeness, in that order. Just as technology is the driving force in the evolution, customers are the deciding force and, last but not least, employees are the decisive force. Fundamental strategic changes, effecting structure as well as culture of organizations, and which have taken place at practically all major organizations, are characteristic of the evolutionary process. This paper shows that the disappointing results of many such strategic changes must be sought in insufficient involvement of, and insufficient changes in Human Resource Management. Also, the challenges posed to both top-management and HRM to remedy such failures are described.
