The Nexus between Human Resource Management and Competitive Intelligence: An International Perspective

By Hannon, John M. | Management International Review, Annual 1997 | Go to article overview

The Nexus between Human Resource Management and Competitive Intelligence: An International Perspective


Hannon, John M., Management International Review


Introduction

One widely acknowledged prerequisite for organizational success is that everyone in the company must continuously scan the external environment to have a current, accurate grasp of what is transpiring around them (Prescott/Gibbons 1993). However, for many multinational corporations, particularly those headquartered in the U.S., this may be a goal that has yet to be attained (Herring 1992b).

Indeed, many companies targeted by their competitors, particularly U.S. ones, are oblivious to the fact that they are being singled out and scrutinized so aggressively and systematically (McDermott 1994; Eftimiades 1994). When it comes to protecting their business interests, most large U.S.-based firms seem to adopt an "ivory tower" approach (Mintzberg 1994).

On the other hand, multinationals elsewhere in the world, especially those headquartered in Europe and Asia, systematically leverage the eyes, ears, and intelligence of their people in the field, both employees and executives alike (Hannon/Sano 1994). In contrast, U.S. companies have frequently relied on salespeople, but more often than not have used elite groups of MBA graduates to collect, analyze, and distribute competitive intelligence information (Mellow 1989).

In spite of this more `professional' approach, there are many who have argued that efforts and results in this arena have "failed to meet expectations" (Mellow 1989). Some scholars even lament that professional business strategists presently are more preoccupied with strategic programming than strategic thinking (Mintzberg 1994). The purpose of this study, one of the first of its kind, is to empirically examine the nexus between international human resource management (HR) and competitive intelligence (CI) from an international perspective.

There are a number of reasons to believe that business executives, managers, and scholars have not considered how their HR policies and practices can compliment their competitive intelligence activities (Hannon 1997). To address this gap, the current study examines the link between CI and HR from the perspectives of executives (the Chief HR Officers, typically the Vice President of HR) representing 50 U.S. multinational corporations and future managers (150 students attending a prominent MBA program).

To begin, the next section introduces and briefly outlines the concept of competitive intelligence. Then, the relationship between competitive intelligence and HR in the international context is reviewed. Thereafter, I present the results from a survey of HR executives and MBA students addressing the relationship between International HR and CI. Finally, the outcomes from this study, and their implications for researchers and practitioners, are discussed.

Competitive Intelligence

For the purpose of this study, competitive intelligence is defined as the acquisition, analysis, and distribution of information pertaining to (1) a company's resources and capabilities, (2) the current and potential resources and capabilities of its competitors, or (3) the external business environment in which the company operates -- in other words, it gauges the impact that customers, regulations, industries, cultures, and other forces will have on its current and future market opportunities (Ghoshal/Westney 1991).

Conceivably, any person or any department in an organization can perform intelligence activities (Ghoshal/Kim 1986). Traditional competitive intelligence activities, unlike acts of corporate espionage, range from obtaining publicly disseminated or publicly accessible information about competitors (such as annual reports or proxy statements) to obtaining competitors' products in markets (such as buying and testing a competitor's newest product). Generally, most people view these activities as being both legal and ethical (Sammon/Kurland/Spitalnic 1984). Indeed, according to McDermott (1994, p. …

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