I apply a stakeholder perspective to SHRM and propose that the extent to which stakeholder interests are considered in the design and deployment of HRM processes is positively related to these practices' contribution to building required organizational capabilities. I distinguished between internal stakeholders and external stakeholders and found that stakeholder oriented HRM practices have an effect on organizational effectiveness through enhanced organizational capabilities. Data were obtained from 2,849 line managers and 201 senior HR executives from 201 business units, representing North America, Latin America, Europe, China and Australia.