During my interaction with the M. Com students of SHRM, one student raised a question about the distinction between HR’s supportive, strategic, and business roles. I addressed the question in class but also asked her to follow up by email. Her subsequent email revealed an understanding shaped by her prior experience in the corporate sector, which she gained between her graduation and enrollment in the M. Com program. Her concerns were genuine, and I felt it would be beneficial to respond to them for the interest of all HR students.

Leveraging my personal experience in the exploration, instruction, and study of Human Resources, I will use this post to make a case for designating HR as a fundamental business function. I intend to articulate the rationale for this recognition, outlining both the multifaceted benefits and the practical challenges of such an elevation, thereby amplifying the views of others who advocate for this perspective. Furthermore, it is asserted that central to this argument is the necessity for all managers, irrespective of their field—such as marketing, finance, production, operation, or research and development—to take on HR responsibilities, ensuring the pervasive embedment of human capital throughout the organizational structure.

The role of Human Resources (HR) has long been misunderstood and relegated to a transactional, administrative support function. However, contemporary scholarship and business practice advocate for a far more strategic positioning of HR—as a core business function integral to competition, innovation, and organizational sustainability.

Jeffrey Pfeffer, a seminal voice in HR research, insists that “people matter” and that organizations must treat employees as valuable assets to gain competitive advantage. This principle anchors the shift toward Strategic Human Resource Management (SHRM), a concept advanced notably by scholars like Lepak and Snell, who emphasize that human resources—categorized as unique assets and social capital—must be managed with a deliberate alignment to company strategy. The elevation of the Chief Human Resources Officer (CHRO) to the C-suite further exemplifies HR’s transition from peripheral support to strategic leadership.

Echoing this strategic diffusion, Dave Ulrich argues that HR is no longer solely housed within the HR department but is a responsibility shared by all line managers. Ulrich advocates for managers’ active involvement in talent acquisition, development, performance management, and employee engagement, asserting that “every manager is a people manager.” Vineet Nayar’s radical management philosophy (EFCS or Employees First Customers Second) at HCL Technologies further concretizes this notion, demonstrating how distributing HR responsibilities throughout managerial roles empowers employees, fosters transparency, and accelerates innovation.

This decentralized approach ensures that human capital considerations infuse everyday decision-making, resulting in real-time alignment between workforce actions and key business goals. It elevates HR from a siloed function into an organizational mindset, accelerating business responsiveness and cultural coherence.

The resource-based view (RBV) of the firm, popularized by Jay Barney and embraced by Lepak and Snell, posits that human resources—when rare, valuable, and inimitable—form the cornerstone of sustained competitive advantage. This paradigm demands that organizations emphasize talent management integrated into overall business strategy. Indian corporate exemplars such as Tata Group, Reliance Industries, and Infosys epitomize this view, embedding HR into strategic processes to nurture leadership and talent agility critical for long-term success.

Organizational culture and ethical standards serve as vital intangible assets. Pfeffer highlights that culture influences productivity and turnover, while Ulrich stresses HR’s role as cultural steward. As companies navigate increasing demands for diversity and inclusion, HR’s function as a catalyst for creating inclusive and ethical environments has become indispensable.

Organizations today face unprecedented environmental uncertainties. HR’s role in fostering flexibility through workforce redeployment and skill redevelopment gains prominence especially from strategic point of view. Though, HR plays a critical role in mitigating operational and legal risks related to labor laws, workplace safety, and ethical standards, thus safeguarding organizational reputation and continuity, yet its role as strategic partner for improving organizational decision making holds valid case for its consideration as a core business function. Further, such risk management also forms a strategic element in protecting shareholder value and sustaining long-term viability.

The rise of HR analytics enables business leaders to make informed decisions regarding talent acquisition, development, and succession planning—transforming HR from intuition-driven to evidence-based strategy. Data empowers organizations to align people management intricately with business imperatives and optimize talent investments.

The Indian corporate landscape offers tangible examples that validate these theoretical assertions articulating HR function beyond support and compliance:

• Tata Group integrates HR leadership at the highest strategic levels, prioritizing leadership development and global talent management aligned with business imperatives.
• Reliance Industries exemplifies how HR drives transformation by aligning workforce capabilities to diversification strategies under CHRO stewardship.
• Infosys embraces technology-enhanced HR practices that develop a globally competitive workforce, underscoring the strategic role of HR leadership.
• HCL Technologies followed EFCS and transformed the company by empowering employees at the “value zone” where value is created, through radical transparency, trust, and inverted accountability, embedding HR deeply into business strategy and operational excellence.

In India roughly around one third of the companies have shown that they involve HR heads in strategic decision making and integrating HR function with the corporate strategies.  I believe that if other companies follow the suit by making some interventions leading towards consideration of HR as Core Business Function, it shall help them in elevating organizational performance.  They would have improved employee engagement levels enhancing productivity, innovation, and customer satisfaction which is fundamental to sustainable financial outcomes.

Such an approach shall help the companies gain competitive advantage through people as unique human capital resources and shall offer defensible market differentiation. It shall boost employee development and retention leading to improved career growth and loyalty, and reduce costs associated with turnover.

This shall pose a corporate challenge as expectations from HR shall rise resulting in risk overburdening HR professionals and managers without clear boundaries or adequate resources.  Organizational inertia and traditional silos might impede broad HR integration.  However it shall boost inclusive culture and drive people to take care of processes and products.  Strategic HR shall require continuous investments in capabilities, technology, and staffing to fulfill its potential.

All said and done, it shall be very important for HR to improve articulation of its impact in clear business terms to gain full leadership buy-in.

The scholarly canon and business practice converge to affirm that HR’s strategic evolution mandates its recognition as a core business function. The diffusion of HR responsibilities to all managers, deepens human capital integration across organizational functions. Indian corporate exemplars reflect the practical viability and success of embedding HR in strategic imperatives. Overcoming cultural, communicative, and resource barriers is critical; yet the benefits—in competitive advantage, agility, employee engagement, and risk mitigation—are profound. Thus, organizations must embrace HR as an indispensable strategic partner to navigate complexities and secure sustainable success.

Hope her anxieties are responded.

[Pfeffer, J. (1998). The Human Equation: Building Profits by Putting People First. HBS Press/Lepak, D. P., & Snell, S. A. (1999). The Human Resource Architecture: Toward a Theory of Human Capital Allocation and Development. AMR, 24(1), 31–48/Ulrich, D. (1997). Human Resource Champions: The Next Agenda for Adding Value and Delivering Results. HBS Press/Nayar, V. (2010). Employees First, Customers Second: Turning Conventional Management Upside Down. HBR Press]

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also read:

• Towards a new world of work
• Future is here: HR Perspective
• A new look at Capability Approach: Strategic HR Perspective
• The future of now