Strategichrm 131009132007-phpapp01
- 2. What is strategy?What is strategy? What is strategy? – Is it a plan? – Does it refer to how we will obtain the ends we seek? Is it a position taken? – Just as military forces might take the high ground prior to engaging the enemy, – might a business take the position of low-cost provider? – does strategy refer to perspective, to the view one takes of matters, and to the purposes, directions, decisions and actions stemming from this view? – Does strategy refer to a pattern in our decisions and actions? – does repeatedly copying a competitor’s new product offerings signal a "me too" strategy?
- 3. Strategy isStrategy is Strategy is all these— it is perspective, position, plan, and pattern. Strategy is the bridge between policy or high-order goals on the one hand and tactics or concrete actions on the other. Strategy and tactics together straddle the gap between ends and means. strategy is a term that refers to a complex web of thoughts, ideas, insights, experiences, goals, expertise, memories, perceptions, and expectations that provides general guidance for specific actions in pursuit of particular ends. Strategy is at once the course we chart, the journey we imagine and, at the same time, it is the course we steer, the trip we actually make. Even when we are embarking on a voyage of discovery, with no particular destination in mind, the voyage has a purpose, an outcome, an end to be kept in view.
- 4. MeaningMeaning Strategy is a term that comes from the Greek strategia, meaning "generalship." In the military, strategy often refers to maneuvering troops into position before the enemy is actually engaged
- 5. definitions in usedefinitions in use Some of the definitions in use include the following: – Strategy is that which top management does that is of great importance to the organization. – Strategy refers to basic directional decisions, that is, to purposes and missions. – Strategy consists of the important actions necessary to realize these directions. – Strategy answers the question: What should the organization be doing? – Strategy answers the question: What are the ends we seek and how should we achieve them?
- 6. What is strategicWhat is strategic management?management? A continuous, iterative process aimed at keeping an organization as a whole appropriately matched to its environment (Samuel C. Certo and J. Paul Peter, Strategic Management) Keeping the business in tune with management and marketing forces both outside and inside the firm
- 7. Competitive strategyCompetitive strategy Competitive strategy leads to competitive advantage – Generates supernormal ROI – Offers services of value – Uses cost effective technology – Avoids erosion of competitive advantage by exploiting and developing a technological base
- 8. Stages in Strategic managementStages in Strategic management Strategic analysis – Environmental analysis – Establish organizational direction Strategy formulation Strategy implementation Strategic control
- 9. Strategy & HRM ?Strategy & HRM ?– NEED FOR STRATEGIC HRM– NEED FOR STRATEGIC HRM Physical assets are viewed as investments Can – superior technology – Superior facility – Superior product Bring about and more importantly sustain competitive advantage? Physical facilities can be duplicated, cloned or reverse engineered and they no longer provide competitive advantage
- 10. Strategy & HRM ?Strategy & HRM ?– NEED FOR STRATEGIC HRM– NEED FOR STRATEGIC HRM Cost of employees as variable cost of production. – No formal recognition of human resource as a key resource – No recognition of firms contribution to training – Cost of recruitment, training and replacement – ROI for investments in human resources “maintainable advantage usually from outstanding depth in selected human skills, logistics capabilities, knowledge bases
- 11. strategic HRMstrategic HRM HRM is a strategic tool only if it contributes to the bottom line. The question is; Does it? – Forecasts of shifts in skill needs from manual to cerebral – Human Resources needs to looked at from an Investment perspective.
- 12. Strategic analysis HRMStrategic analysis HRM “To be competitive, organizations in many industries must have highly skilled. Knowledgeable workers. They must also have a relatively stable labour force since employee turnover works directly against obtaining the kind of coordination and organizational learning that leads to fast response and high-quality products and services” - Edward Lawler
- 13. Human resourcesHuman resources Investment considerationsInvestment considerations Management values Risk return on investments Economic rationale for investment in training Utility theory – Outsourcing as an alternative to investment in Human resources
- 14. Stages in Strategic managementStages in Strategic management Strategic analysis – Environmental analysis human resource environment human resource legal environment – Establish organizational direction Strategy formulation – Human resource planning Strategy implementation – Work force utilisation and employment practices – Reward and development system Strategic control – Performance impact of human resource practices – Human resource evaluation
- 15. Strategy formulationStrategy formulation What are the purpose(s) and objective(s) of the organization? Where is the organization presently going? What critical environmental factors does the organization currently face? What can be done to achieve organizational objectives more effectively in the future?
- 16. Strategy formulation processStrategy formulation process Development of organizational philosophy and mission statement Environmental scanning Analysis of SWOT Formulation of strategic objectives Generation of alterative strategy Evaluation and selection of strategies Informal / incremental strategic planning – Managed/logical incremental planning A strategy is the pattern or plan that integrates an organisation’s major goals, policies, and action sequences into a cohesive whole
- 17. Competitive strategy in BusinessCompetitive strategy in Business UnitsUnits Periodic forward scanning Analysis based on longer time frame Communication about goals and resource allocation Framework for short-term plan evaluation and integration Decisional criteria framework for short term decision making PLANNING IN SBU’S – Base strategy will be integrated with functional specializations to exploit the opportunity seen by the strategy and achieve the goals. – Low cost leadership, differentiation, niche
- 18. HR strategy ?HR strategy ? 'a human resource system that is tailored to the demands of the business strategy' -Miles and Snow 1984 'the pattern of planned human resource activities intended to enable an organization to achieve its goals' - Wright and McMahan 1992 “the pattern planned human resource deployments and activities intended to enable an organisation to achieve its goals”
- 19. SHRM concernSHRM concern SHRM concern is to ensure – HR management is fully integrated with the strategy and strategic needs of the firm – HR policies cohere across policy areas and areas of hierarchy – HR practices are adjusted and used by line manages and employees as part of their everyday work
- 20. Strategic HRMStrategic HRM(IMPORTANCE)(IMPORTANCE) Needs investment –ROI Cost of investment Reduction in total Labour cost Efficiency in operation Optimal use of human resources A source of competitive advantage Technical skills (pace of technological change) Knowledge and capabilities Management of critical and Difficult HR areas Management of change (Resistance to change) Lack of trust Antagonistic labour Motivational problems Management relations Economic turbulence Within the country (turbulence) Globalisation Dramatically changing demographics Differences in workforce values Strategic human resource management and ∟ HRP are considered important to manage uncertainties; HR is integrated with strategy; Integrating and aligning HR function with strategy
- 21. Benefits of SHRMBenefits of SHRM 1. Identifying and analysing external opportunities and threats that may be crucial to the company's success. 2. Provides a clear business strategy and vision for the future. 3. To supply competitive intelligence that may be useful in the strategic planning process. 4. To recruit, retain and motivate people. 5. To develop and retain of highly competent people. 6. To ensure that people development issues are addressed systematically. 7. To supply information regarding the company's internal strengths and weaknesses. 8. To meet the expectations of the customers effectively. 9. To ensure high productivity. 10. To ensure business surplus thorough competency
- 22. HRM Practices Firm strategy Institutional / Political forces HR Capital pool (Skills, abilities) HR behaviors Firm level outcomes (performance, satisfaction, absenteeism etc) Resource based view of the firm Cybernetics Agency/transaction costs Resource dependence institutional Behavioral approach Theoretical frame work of SHRM
- 23. Theoretical frame work of SHRM Strategy driven – Resource based view Competitive advantage based on unique allocation of resources {selection /Compensation package} (TCS) – Behavioral view Control and influence the behaviors of individuals (Infosys) – Cybernetics systems Adoption or abandonment of practices based on feedback on contributions to strategy (Bosch – MICO) – Agency/transactions cost view Use of control systems, performance evaluation and reward systems etc – (In the absence of performance evaluation strategy may not be pursued) Non-Strategy driven – Resource dependence and power theories – Power and politics= legislation, unionization, control of resources, expectations of social responsibility. – Institutional theory – In appropriate performance evaluation dimensions (inertia / rational decision making.appraisal
- 24. International strategyInternational strategy Multinational, global and transnational strategies Strategic alliances Sustainable global competitive advantage Globally competent managers Location of production facilities
- 25. Human resource contributionsHuman resource contributions to strategyto strategy Environmental scanning and competitive advantage Implementation of resource reallocation decisions Lead time for dealing with labour shortages. ..
- 26. Benefits of integrating HRP with StrategicBenefits of integrating HRP with Strategic planningplanning Generates more solutions to complex organizational problems Ensures consideration of human resources in organizational goal setting process Ensures consideration of human resources in assessment of organizational abilities to accomplish goals and implement strategies Reciprocal integration prevents strategy formulation based on personal rigidities/preferences Facilitates concurrent consideration of strategic plans and managerial succession.
- 27. Strategic components of HRMStrategic components of HRM relevant to internal fitrelevant to internal fit Management awareness Management of the function Portfolio of programs Personnel skills Information technology Awareness of the environment
- 28. Requirements for SHR-ManagersRequirements for SHR-Managers Information management skills Planning skills Management skills Integration skills Change management skills
Editor's Notes
- #7: The first definition is one proposed by Samuel Certo and J. Paul Peter in their book Strategic Management: Concepts and Applications. This definition is highlighted by the following statement from Cornell Maiser, the chairman of the board of Kaiser: We have begun implementation of our strategic plan for the decade. Two years in formulation, the plan calls for Kaiser to identify its most promising business and focus its resources on long-term development and profitability. Increased resources will be allocated to business lines where the company believes it has existing strengths, such as superior technology, low costs, or strong market positions. The second definition is a little more down to earth. It shows that the firm’s management recognizes that there are forces which affect the firm and the firm’s profitability both inside and outside of the business’s operations. These forces affect two primary components of the firm. The management component includes the firm’s operations, financial position, labor situation, and overall management structure. The marketing component includes not only the firm’s marketing strategy (including packaging, advertising, customer service, quality control procedures, etc.), but also recognizes the fact that there is competition that the firm must face. This competition exists both inside and outside of the firm. While the firm’s outside competition is fairly obvious, the inside competition most often arises from conflicts between the production and management functions of the business and the marketing functions. In many small businesses, these conflicts often reside within one person.
- #12: The strategic management process is a series of steps that not only formalize the process, but also give a clear path to the firm’s management as to how the process should be completed. Each of these steps is discussed in turn.
- #16: What are the purpose(s) and objective(s) of the organization? – The answer to this question tells management where the organization wants to go. As discussed earlier, appropriate strategy reflect the organization’s mission and objectives. Managers who consider this question during the strategy formulation process are more likely to avoid inconsistencies among the company’s mission, objectives, and strategies. Where is the organization presently going? – This question reveals whether an organization is achieving its goals or at least making satisfactory progress. The first question focuses on where the company wants to go; this question focuses on where the organization is actually going. What critical environmental factors does the organization currently face? – This question addresses both internal and external environments and the factors that are both inside and outside the organization. For example, if a poorly trained middle-management team (internal environment) and an increase in competitive pressure (external environment) are critical strategic concerns, then any strategy formulated should deal with these issues. What can be done to achieve organizational objectives more effectively in the future? – The answer to this question results in the formulation of a strategy for the organization. This, it goes beyond environmental analysis and includes the stages of planning and selection. This question should be answered only after managers have had plenty of opportunity to reflect on the answers to the previous questions. In other words, managers can formulate appropriate organizational strategies only when they have a clear understanding of where the company wants to go, where the organization is actually going, and what the environment in which the organization operates is and is likely to be.
- #18: Inbound logistics All those activities concerned with receiving and storing externally sourced materials Operations The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products) Outbound logistics All those activities associated with getting finished goods and services to buyers Marketing and sales Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) Service All those activities associated with maintaining product performance after the product has been sold Secondary Activity Description Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Management Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business Technology Development Activities concerned with managing information processing and the development and protection of "knowledge" in a business Infrastructure Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management