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The Best Fit Approach

                                              The Best Fit Approach

            The best-fit approach emphasizes the importance of ensuring that HR strategies are appropriate to the circumstances of the organization, including its culture, operational processes, and external environment. HR strategies have to take account of the particular needs of both the organization and its people. For the reasons given above, it is accepted by most commentators that ‘best fit’ is more important than ‘best practice’. There can be no universal prescriptions for HRM policies and practices. It all depends. This is not to say that ‘good practice’, or ‘leading-edge practice’ ie practice that does well in one successful environment, should be ignored. ‘Benchmarking’ (comparing what the organization does with what is done elsewhere) is a valuable way of identifying areas for innovation or development that are practiced to good effect elsewhere by leading companies. But having learned about what works and, ideally, what does not work in comparable organizations, it is up to the firm to decide what may be relevant in general terms and what lessons can be learned that can be adapted to fit its particular strategic and operational requirements. The starting point should be an analysis of the business needs of the firm within its context (culture, structure, technology, and processes). This may indicate clearly what has to be done. Thereafter, it may be useful to pick and mix various ‘best practice’ ingredients, and develop an approach that applies those that are appropriate in a way that is aligned to the identified business needs.

                     The discussion between promoters of best practice and best-fit approaches has sparked widespread controversy in the human resource management (HRM) area. The topic has gained much scholarly attention because it not only addresses a theoretical controversy but also possesses a high degree of practical managerial significance. The essay has the aim to analyze best practice and best-fit approaches in HRM of a multinational enterprise. The reader receives insight into Lincoln Electric’s organization through a case-study analysis of practical HR approaches serving as a basis for developing practical managerial implications in the last part of the paper.


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