Abstract
Over time organizations form stable operating configurations that influence their actions in the marketplace. These configurations are shaped by interactions among variables in four areas: operating environment, business strategy, HRM practices, and senior managers’ values and behaviors regarding employees. More often than not they emerge in a piecemeal rather than planned fashion. However, once established, the configurations or patterns guide employee behavior, are resistant to change, and are associated with different levels of organization effectiveness. HR managers may use these configurations to diagnose their organizations’ present state and orchestrate changes to increase competitive advantage.