Strategy in Action 13: Resourcing Strategies

Learning Outcomes (1) Analyse the resource management issues that are important to achieving strategic success in four key resource areas: The management of people Access to and processing of information to build capabilities and change business models and/or managerial processes 13-2

Learning Outcomes (2) The management of finance to create financial value, fund strategic developments and address the differing financial expectations of stakeholders The management of technology to address changing competitive forces on an organisation and improve strategic capability Address the integration of resources and competences across resource areas to underpin the success of strategy 13-3

Exhibit 13.1 Resourcing Strategies Information People Organisational strategies Finance Technology 13-4

What are Resourcing Strategies? Resourcing strategies are concerned with the two-way relationship between overall business strategies and strategies in separate resource areas such as people, information, finance, and technology. 13-5

Exhibit 13.2 Strategy and People as a resource Strategy People and behaviour Organising people 13-6

Traditional HR Activities Viewing People as Resources Audits Goal-setting and performance assessment Planning of rewards Recruitment and retention Training and development plans 13-7

People and Behaviour Understanding the need to change organisational paradigms Seeing role as ‘shapers of context’ Understanding the relationship between behaviours and strategic choices Being realistic about the difficulty and time-scales in achieving change Being able to vary style of managing change 13-8

Roles of the HR Function Service provider Regulator Advisor Change agent 13-9

Customer Relations at KLM Were KLM’s HR policies adequate for delivering on the promise of the Reliable Airline? How did the behaviour of front-line staff influence the actual service delivery? What could be changed to improve the consistency of service delivery? 13-10

Exhibit 13.3 Competitive Advantage Through People 13-11

Exhibit 13.4 Strategy and Information 13-12

Information and Strategic Capability Improving product/service features Competitive performance Ease/difficulty of imitation Competitive positioning 13-13

Information and Product/Service Features Lower prices Improved pre-purchase information Easier, faster purchasing Shorter development times Product or service reliability Personalised products Improved after-sales service Use Amazon. Begin with 1:58 – key challenge and go to 2:50. 13-14

What is Data Mining? Data mining is the process of finding trends, patterns, and connections in data in order to inform and improve competitive performance. 13-15

Information and Competitive Positioning Routinisation – Cost Reduction Mass customisation – more Product Features Customisation – advanced information 13-16

Information and Business Models Electronic processing Extended functions New functions Internal changes 13-17

Exhibit 13.5 Changing Business Models 13-18

ZOPA Leverages DIY Craze How has ZOPA changed the business model for lending and borrowing? List the advantages and disadvantages for lenders and borrowers of dealing with ZOPA instead of a bank. How could the banks respond? 13-19

Exhibit 13.6 Strategy and Finance Managing for value Strategy Funding strategies Financial expectations 13-20

What is Managing for Value? Managing for value is concerned with maximising the long-term cash-generating capability of an organisation. 13-21

Value Creation Funds from operations Investment in assets Financing costs 13-22

Exhibit 13.7 Financial Aspects of Value Creation 13-23

Funding Strategies Business and Sources of funds financial risks Portfolio issues Mergers and acquisitions 13-24

Exhibit 13.8 Balancing Business and Financial Risk 13-25

Exhibit 13.9 Strategy and Technology Technology and the competitive situation Strategy Technology and strategic capability Organising technology 13-26

Exhibit 13.10 Matching Technology Strategies to Markets 13-27

Exhibit 13.11 Developing or Acquiring Technology 13-28

Organising Technological Development Location and funding Global vs local development Organisational processes 13-29

Exhibit 13.12 Funding and Location of R&D 13-30

What is a Stage-Gate Process? A stage-gate process is a structured review process to assess progress on meeting product performance characteristics during the development process and ensuring that they are matched with market data. 13-31

Exhibit 13.13 Resource Integration in a New Product Launch 13-32

Chapter Summary (1) There is a two-way relationship between resource management and strategic success In all resource areas, the critical question is how resource management systems contribute to the creation and integration of knowledge People affect success both formally and informally Information is a key resource of particular importance given the advances in information technology 13-33

Chapter Summary (2) Finance is a resource of central importance in all organisations Technology development affects the competitive forces of an organisation and its strategic capability Organisations needs to be able to integrate resources and competences across resource areas to support current and new strategies 13-34

Key Debate: Resources or Revolution? Compare the resources of Nestle and Starbucks in the late 1980s and early 1990s. Why didn’t Nestle lead in the creation of the coffee bar fashion? What implications does the failure of Nestle have for other powerful incumbents in their present markets? 13-35

Case Example: Video Games Identify how the ‘business model’ for the industry changed as information technology capability improved. Where might the next changes of business model be? What were the human resource implications of the changing ‘shape’ of the games industry to the different ‘players’? 13-36

Case Example: Video Games Use Exhibit 13.8 to undertake a critique of the extent to which financial strategies are appropriate to the industry. 13-37