Firms with effective HRM tend to link the HRM with the overall strategy in the organization. Firms with effective HRM practices and policies integrate all the strategies in either changing the corporate culture or reinforcing the corporate culture. Integration is essential in two ways: Incorporation if the HRM concerns in the firms strategic plans and accepting and including the HRM in decision making process panels of firms.



The HRM course of action need to be consistent with the underlined firm strategies and has to reflect the firms core values but occasionally there arise problem when the HRM is integrated in a business which deals with various products since its hard to match the HRM policies with those of different business operations of business. In ER there is some contradiction as the HRM is integrated with the business policies which may call for cost reduction meaning that the employees are resources and through increasing their flexibility, commitment can enhance their values, however, this contradiction is re-solved by people who claim that business can only be successful if the employees are well developed. If one of the policies of the firm is cost cutting then dispensing the non performers is not unethical however this is reconciled by business initiative to adjust the firm's strategy through more employee commitment, involvement and training.

The HRM has the responsibility of building a strong corporate culture that is aimed at uniting all the employees by sharing the managerial values like quality, innovation and service among others. This is aimed at identifying the employer interests together with those of the employees. However, a strong organizational culture is face with the challenge of adapting to the changes in the environment due to its inflexibility. Firms like IBM are faced with this challenge of responding to the swift market changes from the main frames to customized computers (personalized computers) which are demanding the salesmen to act like the management consultant to the customers who are need quality services and products. Nevertheless, a strong corporate culture is given preference to a weak one in the long run. There are number of paradoxes in firms with strong employee commitment and strong culture, employees tend to respond slowly in unfamiliar changes but very fast to familiar changes which is the opposite in the firms with weak culture which usually has low employee commitment. From the cost point of view a strong culture and employee commitment come along with higher cost but its an investment to organizations.

Effective HRM has changed the perception of viewing the personnel as a social resourceful capital from the notion of employees as variable costs and this has resulted to competitive advantage that is achieved through a well trained, educated, motivated and committed employee in all levels. In the end of 1980, most leading firms in USA, Japan and Germany spent more than 3% of their turnover on employee development and training. The economic performers of Asia such as Singapore, Malaysia, Japan, Hong Kong, Taiwan have invested heavily in employee training and education while others have put HRM in the national strategic plan, Indonesia is an example.

Though this has been true in the past, the HRM is ensuring that this is not so by identifying and promoting common interests, training has been used as a tool to increase the job security, increase employee earning and this results to increases the employee value which in turn leads boosts the productivity and performances. The HRM may set goal via dual communication with the employees which results to unified objectives and goal and by employee participation setting of goals and decision making he gets intrinsic rewards.

To ensure proper ER, the idea of keeping power in control by the HRM is being replaced with sharing of knowledge and information; this has the capability of increasing the productivity because of enabling commitment and trust. This enables flexibility to adapt to changes in the policies and strategies. The Japanese firms have introduced this idea of sharing information and two way system of communication.