Transcript Chapter 1

STRATEGIC HUMAN
RESOURCES PLANNING, 4E
©.
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Chapter 1
Strategic Management
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Learning Objectives
After reading this chapter, you should be able to:
• Discuss why managers need to examine the human
resource implications of their organizational
strategies
• Understand the various terms used to define strategy
and its processes
• Describe organizational strategies, including
restructuring, growth, and stability
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Learning Objectives
After reading this chapter, you should be able to:
• Define business strategy and discuss how it differs
from corporate strategy.
• Discuss the steps used in strategic planning
• List the benefits of strategic planning
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Strategic Human
Resources Management
• Strategic management of people
through HR programs and policies helps
to ensure positive organizational
outcomes such as:
– profitability,
– customer satisfaction,
– employee performance, and
– organizational survival
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Strategy
• Strategy- the formulation of
organizational missions,
goals, objectives and action
plans for achievement that
explicitly recognize the
competition and the impact
of outside environmental
forces
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Mintzberg’s Five Ps of
Understanding Strategy
1.
2.
3.
4.
5.
Plan
Purpose
Ploy
Position
Perspective
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Mintzberg’s Five Ps of
Understanding Strategy
1. Plan: an intended course of action a
firm has selected to deal with a situation
2. Purpose: a consistent stream of actions
that sometimes are the result of a
deliberate plan and sometimes the result
of emergent actions based on reaction to
environmental changes or shifting of
assumptions
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Mintzberg’s Five Ps of
Understanding Strategy
3. Ploy: a specific manoeuvre at the
tactical level with a short time horizon
4. Position: the location of an organization
relative to its competitors and other
environmental factors
5. Perspective: the gestalt or personality
of the organization
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Descriptions of
Strategy
Strategy: A declaration of intent
Strategic intent: A tangible corporate
goal; a point of view about the
competitive positions a company hopes
to build over a decade
Strategic planning: The systematic
determination of goals and the plans to
achieve them
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Descriptions of
Strategy
• Strategy formulation: The entire process of
conceptualizing the mission of an
organization, identifying the strategy, and
developing long-range performance goals
• Strategy implementation: Those activities
that employees and managers of an
organization undertake to enact the strategic
plan, to achieve the performance goals
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Descriptions of
Strategy
• Objectives: The end, the goals
• Plans: The product of strategy, the
means to the end
• Strategic plan: A written statement that
outlines the future goals of an
organization, including long-term
performance goals
• Policies: Broad guidelines to action,
which establish the parameters or rules
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The Reality of the
Strategic Process
• Intended Strategy- the agreed upon strategy
arrived at through the formal planning process
• Emergent Strategy- created from new ideas and
conditions
• Discarded Strategy – deemed inappropriate due
to changing circumstances
• Realized Strategy- the implemented plan -- what
actually happened
© 2010 by Nelson Education Ltd.
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Strategic Types
•
Corporate Strategy- organizational-level
decisions that focus on long-term survival
1. Restructuring – includes turnaround,
divestiture, liquidation, and bankruptcies
2. Growth – includes incremental,
international, and mergers and
acquisitions
3. Stability – maintains status quo
© 2010 by Nelson Education Ltd.
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Restructuring
Strategies
• Turnaround Strategy- an attempt to
increase the viability of an organization
• Divestiture - the sale of a division or
part of an organization
• Liquidation - the termination of a
business and the sale of its assets
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Restructuring
Strategies
• Bankruptcy- a formal
procedure in which an
appointed trustee in
bankruptcy takes
possession of a
business’s assets and
disposes of them in
an orderly fashion
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Growth Strategies
• Incremental growth
- can be attained by
expanding the client
base, increasing
products/services,
changing the
distribution
networks, or using
technology
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Growth Strategies
• International growth - can be attained
by seeking new customers or markets
by expanding internationally
• Acquisition- the purchase of one
company by another
• Merger- two organizations combine
resources and become one
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Stability Strategies
• These are maintenance strategies
where companies do not wish to see
their companies grow and so their
strategic HRM practices remain
constant
• These can be called status quo, neutral,
or do-nothing strategies
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Business verses
Corporate Strategies
• Business strategyplans to build a
competitive focus in
one line of business
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Business verses
Corporate Strategies
• Corporate strategy
– examines
questions about
which competitive
strategy to choose
for long-term growth
and survival
© 2010 by Nelson Education Ltd.
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Strategic Plan Re-visited
• A strategic plan describes the
organization’s future direction,
performance targets, and approaches to
achieve the targets in a formal, written
statement
• Strategic planning can be a long
process that has numerous steps
including the following:
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The Strategic Planning
Process
1.
2.
3.
4.
5.
6.
7.
Establish the mission, vision and values
Develop objectives
Analyze the external environment
Determine the competitive position
Identify the competitive advantage
Implement the strategy
Evaluate the performance
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Purpose of Values
Statement
1. Conveys a sense of identity for employees
2. Generates employee commitment to
something greater than themselves
3. Adds to the stability of the organization as a
social system
4. Serves as a frame of reference for
employees to use to make sense of
organizational activities and to use as a
guide for appropriate behaviour
© 2010 by Nelson Education Ltd.
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Porter’s Model of
Competitive Strategies
• Michael Porter made a major contribution to
the field of strategic management by grouping
the ways organizations can compete into five
generic competitive strategies:
1.
2.
3.
4.
Low-cost provider strategy
Broad differentiation strategy
Best-cost provider strategy
Focused or market niche strategy based on lower
cost
5. Focused or market niche strategy based on
differentiation
© 2010 by Nelson Education Ltd.
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What is Competitive
Advantage?
•
Competitive advantage – is defined as the
characteristics of a firm that enable it to
earn higher rates of profits than its
competitors by utilizing its resources
including:
1.
2.
3.
Tangible assets – the organizational assets that
have substance and can be consumed
Intangible assets – the organizational assets that
are not concrete, such as reputation, goodwill
Capabilities - the collective skills, abilities and
expertise of an organization
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Benefits of Strategy
Formulation
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•
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Clarity
Coordination
Efficiency
Incentives
Change
Career
Development
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Errors in Strategic
Planning
• Relegating the process to official
planners and not involving executives
and managers
• Failing to use the plan as the guide in
making decisions and evaluating
performance
• Failing to align incentives and other HR
policies to the achievement of strategy
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The Strategic HR
Planning Model
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