1. Agenda/Topics to be Covered Welcome Course overview and procedures Lecture: Five factors influencing choice of HR policies and processes; the strategic role of HRM Reading: Producing sustainable competitive advantage through the effective management of people. Mini case: The northeast health center

2. Tracy Zhou MW Rm 605 2241-5666 tzhou@business.hku.hk Office hours: Tue 11:30-12:30, Thur 11-12, or by appointments

3. Course procedures Prerequisites How class time will be used Deliverables - 20% Group Case Presentation & Analysis - 30% Group Project - 30% End-of-Term Exam - 20% Class Participation http://www.fbe.hku.hk/Programme/Undergraduate/course_details.cf m?school=SoB&coursecode=BUSI0029A&yearheld=2010-2011

4. Class Participation Assignment Due Date: Tue. Jan 18th, 2011 4 x 6 index card with information Attach a picture Dr. Xiaohua Zhou (Tracy) 22415666 tzhou6@business.hku.hk Ph.D. in Management Financial Corporation My expectation for the course is …..

5. Classroom Courtesy Managers need to establish policies and enforce them Mobile Phone Policy Foods and Drinks Please try to sit with your group members. Participation and learning atmosphere

6. Central themes Emphasis on general manager, not HR specialist HR as source of strategic advantage The whole is greater than the sum of the parts People are an investment HR and the bottom line

7. Does the HR system fit? Do the HR policies fit in the broader context of the organization (Alignment)? To what extent are the individual pieces of the HR system internally complementary or consistent?

8. The five factors External environment: social, political, legal, and economic Workforce: demographics, skill Organization s culture Organization s strategy Technology of production and organization of work

9. Legal environment Pay Hiring Employee voice Firing International differences: US vs. Europe vs. rest of world

10. Economic environment Primary source of production has shifted from physical to intellectual capital Economic paradigm characterized by speed, innovation, short cycle times, quality, and customer satisfaction Globalization and Increased competition Workers more educated Rising pay differences by skill Narrowing gender gap

11. More women Education level Socially homogeneous or heterogeneous Diversity Workforce

12. Culture Creativity vs. conformity Flat vs. hierarchy Co-operation vs. competition Family vs. contract labor

13. Strategy Source of competitive advantage - Quality and service - Cost - Innovation Ability to maintain advantage Long-term objective

14. Key technological factors Privacy/proximity Training Effort-results correlation Interdependence of workers Task ambiguity and discretion

15. Changes in jobs Greater use of computers More work in engineering, R&D settings More teams, TQM Smart skills for what used to be manual jobs An organization s HR practices can be beautifully crafted to fit the broader context of one time and place, but fit less well as conditions shift.

16. Key lessons The five factors are not fixed and unalterable, an organization has some control over them. They are neither infinitely adaptable Fit them to HR practices and HR practices to them to the greatest extent feasible.

17. The field of HRM Recruiting Selection Promotion Training Job design Performance evaluation It consists of various practices used to manage people in organization, and these practices commonly have been grouped into the subdisciplines such as:

18. HR s Strategic Challenges Support corporate productivity and improve performance. HR must be more involved in designing not just executing the company s strategic plan How to match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage.

19. HR and Competitive Advantage Competitive advantage Any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share. Superior human resources are an important source of competitive advantage

20. Strategic Management Process Strategic management tasks Step 1: Define the Business and Its Mission Step 2: Perform External and Internal Audits Step 3: Translate the Mission into Strategic Goals Step 4: Formulate a Strategy to Achieve the Strategic Goals Step 5: Implement the Strategy Step 6: Evaluate Performance

21. Overview of Strategic Management Figure 3–1

22. Strategies in Brief Figure 3–3 Company Strategic Principle Dell Be direct eBay Focus on trading communities General Electric Be number one or number two in every industry in which we compete, or get out Southwest Airlines Meet customers short-haul travel needs at fares competitive with the cost of automobile travel Vanguard Unmatchable value for the investor-owner Wal-Mart Low prices, every day Source: Arit Gadiesh and James Gilbert, Frontline Action, Harvard Business Review, May 2001, p. 74.

23. Types of Strategic Planning Corporate-level strategy Diversification strategy-- that the firm expands by adding new product lines. Vertical integration strategy-- the firm expands by, producing its own raw materials, or selling its products direct. Consolidation strategy-- reduces the companys size Geographic expansion strategy-- takes the company abroad.

24. Types of Strategic Planning Business-level/competitive strategy Cost leadership: become the low-cost leader in an industry. Differentiation: seeks to be unique in its industry along dimensions valued by buyers. Focus: seeks to carve out a market niche, and compete by providing a product or service customers can get in no other way.

25. Types of Strategic Planning (cont d) Functional strategies Identify the basic courses of action that each department will pursue in order to help the business attain its competitive goals.

26. Achieving Strategic Fit Michael Porter Emphasizes the fit point of view that all of the firm s activities must be tailored to or fit its strategy, by ensuring that the firm s functional strategies support its corporate and competitive strategies.

27. Strategic Human Resource Management The pattern of planned human resource deployment and activities intended to enable an organization to achieve its goals. -- Vertically, the linking of HRM with strategic goals and objectives -- Horizontally, the coordination or congruence among the various human resource management practices through a pattern of planned action.

28. Linking Corporate and HR Strategies Figure 3–6 Source: © 2003, Gary Dessler, Ph.D.

29. Traditional HR Versus Strategic HR

30. Basic Model of How to Align HR Strategy and Actions with Business Strategy Figure 3–9 Translating Strategy into HR Policy and Practice

31. Barriers to Strategic HR Short-term mentality / focus on current performance Inability of HR to think strategically Failure to understand general manager s role as an HR manager Difficulty in quantifying many HR outcomes Perception of human assets as high-risk investments Resistance to change that might arise

32. Reading: Effective HRM Practices Mark the sentences or sections that you think are important or impress you most. Please explain why. List these 13 HRM practices in terms of their importance to you from the most critical one to the least critical one. Write down any extra practices that you think can be added to the list. Write your commentary on this article. (If you disagree with the author on certain points please discuss.)