HRM Strategy

Strategy: 1.The process of determining & articulating the organisation’s: vision, mission, values, goals & objectives, and its internal & external environments; then: 2.Formulating plans to attain outcomes consistent with the above; then: 3Implementing those plans (including evaluation)

HR Strategy “The pattern of planned human resource deployments and activities intended to enable the organisation to achieve its goals” Focus: To provide the organisation with sustained competitive advantage …through procurement, development & alingment of people, skills, HR policies etc. Competitive advantage might arise from having best people, but also from being best at managing what you do have

External competitive environment Corporate strategy formulation Corporate strategy implementation HR strateg y Input Division strategies HR FUNCTION OTHER FUNCTIONS Link to Corporate Strategy Evaluation (measurment etc)

Role of HRM in Strategy Formulation HR Function HR Function HR Function HR Function Strategic Planning Strategic Planning Strategic Planning Strategic Planning Administrative linkage One-Way linkage Two-way linkage Integrative linkage

Strategic Formulation: Overview VISION MISSION GOALS / OBJECTIVES EXTERNAL ANALYSIS: Opportunities Threat INTERNAL ANALYSIS: Strengths Weaknesses STRATEGIC CHOICE

Strategic Formulation: ‘Step’ 1: Vision Organisational Vision Core ideology Envisaged future

Core Ideology Core values Core Purpose Essential, enduring tenants What is important? What is inviolate? Reason for being What the organisation offers to society Controlling desire, Dominant aspiration

Examples: Core Purposes 3M: to solve unsolved problems innovatively Hewlett-Packard: to make technical contributions for the advancement and welfare of humanity Mary Kay Cosmetics: to give unlimited opportunity to women Nike: to experience the emotion of competition, winning, and crushing the competition Walt Disney: to make people happy

Example: Core Values Walt Disney: No Cynicism Nurturing & promulgation of wholesome American values Creativity, dreams and imagination Fanatical attention to consistency and detail Preservation and control of the ‘Disney Magic’

Strategic Formulation: ‘Step’ 1: Vision Organisational Vision Core ideology Envisaged future BHAGS Vivid Description

Envisaged Future BHAGS Vivid Description Huge, daunting goals Clear & compelling, tangible Unifying, inspiring, engaging Making goals ‘imaginable’ The ‘mind’s eye’ Hopeful, passionate, inspiring images & symbols 1.Difficult Target 2.Common enemy 3.Role-model 4.Internal - transformation

Examples: BHAGS Ford (1900’s): Democratise the automobile (Target BHAG) (Nike, 1960’s): Yamaha wo tsubusu! We will destroy Yamaha (Common Enemy BHAG) Stanford (1940’s): Become the Harvard of the west (Role-Model BHAG) GE (1980’s): #1 or #2 in every market we serve & revolutionise this company to have the strengths of a big company combined with the leanness & agility of a small company

Examples: Vivid Description Sony: We will create products that become pervasive around the world…We will be the first Japanese company to go into the U.S. market and distribute directly…We will succeed with innovations that U.S. companies have failed at - such as transistor radio…50 years from now our brand name will be as well known as any in the world…and will signify innovation and quality that rival most innovative companies anywhere…’Made in Japan’ will mean something fine, not something shoddy.

Strategic Formulation ‘Step’ 2: SWOT Analysis Brings balance to the more unchanging vision: Organisation’s internal & external environment: Change is often a constant here! SWOTSWOT Internal strengths & weaknesses of organisation External opportunities & threats of organisation

Strategic Formulation: ‘Steps’ 3, 4 & 5: Mission, Goals & Objectives ‘Eternal’ of Vision ‘Now’ of SWOT Mission: What business / markets are we in to realise our vision? Goals: The tasks that need to be done to enable mission Objectives The quantifiable targets that are set through the goals

Examples: Missions Microsoft: A computer on every desktop Saturn:The mission of Saturn is to market vehicles developed and manufactured in the United States that are world leaders in quality and customer satisfaction through the integration or people, technology, and business systems and to transfer knowledge, technology and experience throughout General Motors”. Chevrolet: Manufactirug safe and reliable economy cars, sports cars, sedans and trucks. Electronic Data Systems: Designing & operating information systems for both public and private organisations

Strategic Formulation: ‘Step’ 6: Strategic Choice Vision Mission Goals Objectives Deliberate planning Everyday operations Emergent (organic, evolutionary) strategy + Eventual plans Example: A new customer service process is planned for through consideration of new aims Example: Customer service people discover new process through dealing with customers

HR & Corporate Strategic Choice Deliberate planning Emergent strategy Eventual plans HR Function Limit or enable choices Surface, communicate & integrate suggestions

Strategic Types Categorisations under which any strategy can be typified Porter: Overall cost leadership Differentiation Focus Miles and Snow Defenders Prospectors Analysers Reactors Directional Strategies Concentration Internal growth External growth Divestment

Strategic Implementation: Overview 2nd major part of strategy Implementation by all functions, but six major implementation “musts”: 1)Organisational structure 2)Task design 3)Selection, training & development of people 4)Reward systems 5)Leadership, power & culture* 6)Information & information systems * Not in textbook

HR Function and Implementation HR enables the six implementation musts through various HR tasks: Job analysis and design Recruitment and selection Training & selection Performance management Rewards and benefits Labour relations etc!

Culture, Leaders, Strategy These can support or hinder strategy Culture Strategy Leadership b a d c e There is a complex interaction between culture, leadership & strategy: Culture affects how leaders will lead (a) Leaders can have a hand in shaping culture (b) Culture can have a direct impact on the type of strategies leaders choose now (c) Culture can have an indirect impact on the strategies chosen through historical patterns (d) Strategy can have a hand in shaping future culture (e)

Culture, Leaders, Strategy Culture is influential! Leaders must learn to shape and manipulate corporate cultures: What they pay attention to How they react to critical incidences Deliberate role behaviour Rewarding right things Type of people they work with ETC!!! Leadership = Top management! HR function must shape culture by shaping leadership throughout the organisation: Teaching Enabling Releasing Sharing of knowledge Attitudes ETC!

Strategic Types and HR Tasks Different strategic types work better with some HR practices than others, e.g.: Porter / Miles and Snow Cost / defender = efficiency, consistency Differentiation / prospector = quality, effectiveness, knowledge, creative Focus / analyser = flexibility Directional Strategies Concentration = current skills focus Internal growth = new employees, new targets, new training External growth = harmony, cooperation Divestment = minimising loss (retrenchments, morale, severance)

Strategic Measurement & Control Strategic Formulation Strategic Implementation Sets standards (esp objectives) Measurement of outcomes Strategic evaluation Thus: Evaluation is the judgment of how the standards set in strategic formulation were achieved in strategic implementation Evaluation is fed back into the formulation of plans and the knowledge base of how to implement them