Organisational Strategic Human Resource Management - the Case of Lehman Brothers

By Lim, Weng Marc | Journal of Management Research, April 1, 2012 | Go to article overview

Organisational Strategic Human Resource Management - the Case of Lehman Brothers


Lim, Weng Marc, Journal of Management Research


Abstract

The emergence of the subprime mortgage crisis - an ongoing economic problem of contracted liquidity in the global credit markets and banking system, in the U.S. has wracked the operations of Lehman Brothers tremendously as their finances were dealt with a huge blow. Continuous hardcore influence of the external environment has further pressurised the human resource aspect of Lehman Brothers. Indefinite effects such as layoff backfire, workers' dissatisfaction, and employment law issues were faced by the once high-flying investment bank. This paper looks at the influence of the external business environment on the human resource management activities using Lehman Brothers as a short case study. The organisational strategic human resource management application is explored and recommendations are presented on how organisations can address human resource challenges from the business environment.

Keywords: Organisational strategic human resource management, Lehman Brothers

1. Introduction

Lehman Brothers Holdings Inc., founded in 1850, is a highly diversified global financial services firm based in the U.S. (New York Stock Exchange, 2008). As an innovator in global finance, Lehman serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide (Lehman Brothers, 2008). With a long-established reputation for excellence, Lehman is undeniably one of the most pre-eminent franchises in the global equity market.

Yet, it is arguable that the once high-flying investment bank is currently facing its toughest moment since its listing on the New York Stock Exchange Index in 1994 (Anderson & Dash, 2008). The emergence of the subprime mortgage crisis - an ongoing economic problem of contracted liquidity in the global credit market and banking system, in the U.S. has wracked the operations of Lehman tremendously as their finances were dealt a blow. The undervaluation of real risk in the subprime market would eventually lead to cascades and ripple effects affecting the global economy in which this pre-eminent franchise should be crucially aware of as they operate multinationally. Ultimately, Lehman has been force into a lay off for 1500 workers - 6% of Lehman's workforce (Boyd, 2008).

It is undeniable that the continuous hardcore influence of the external environment would further pressurise the human resource aspect of Lehman. Indefinite effects such as layoff backfire, workers' dissatisfaction, and employment law issues would be some potential affairs in which Lehman would be facing. Hence, essential management theories and concepts ranging from analytical framework of Jackson and Schuler's (1995) and Kochan and Barocci (1985) to internal human resource management (HRM) practices of Human Resource Planning and Workplace Participants' Rights and Responsibilities can be exercise to address the intimidating threat faced by Lehman. Accordingly, this paper attempts to shed some light on the organisational SHRM application and the recommended organisational HRM response in the case of Lehman Brothers. Insights from this paper will provide organisations and human resource decision makers with informed insights on the application of SHRM and a clearer picture on its application using a short case study.

2. Discussion

Following the event of the subprime mortgage crisis, Lehman has been forced into a rethink of the way in which their organisation is managed. Strategic Human Resource Management (SHRM) and HRM has been one of the major developments of this rethinking process.

3. The Organisational SHRM Application

Jackson and Schuler (1995) suggest that the adoption of an organisation's particular HRM practices, policies and philosophies and, subsequently, organisational performance are resulted from the various macro-level environmental influences. It was obvious in the context of Lehman that they should opt for the practice of organisational rightsizing in response to the derailing economic environmental condition (Blumberg, 2008). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Organisational Strategic Human Resource Management - the Case of Lehman Brothers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.