5 The Human Resource function today continues to play an increasingly visible role in the strategic planning and management process. The HR function requires a new level of skill and competency among HR professionals. HR managers must develop measureable strategies that convincingly showcase the impact of HR on business performance. Successful Human Resource managers have adopted a perspective that focuses on how their departments can play a central role in implementing strategy.
7 Strategic planning is important because in a well-run organization the goals come from the top of the organization downward. The process forms a hierarchy of goals. These goals, in turn, should guide everyone in the organization in what they do.
8 The Strategic Management Process StrategyA course of actionStrategic PlanHow an organization intends to match its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantageStrategic ManagementThe process of identifying and executing the organization’s mission by matching its capabilities with the demands of its environment
9 Business Vision and Mission A general statement of an organization’s intended direction that evokes emotional feelings in its membersMissionSpells out who the company is, what it does, and where it is headed
12 The logical place to start is by defining one’s current business The logical place to start is by defining one’s current business. What products do we sell and where? How do our products or services differ from our competitors?Perform external and internal auditsThe next step is to ask, “Are we heading in the right direction?”Formulate a new directionThe question now is, what should our new business be? Translate the mission into goals.Next ,translate the mission into strategic objectives.Formulate strategies to achieve the strategic goalNext, the manager chooses courses of action that will enable the company to achieve its strategic goals.Implement the strategyStrategy execution means translating the strategies into action and trying them out.Evaluate performanceThings don’t always turn out as planned. At this point, the strategies are tested against reality. If changes are needed, the entire process may be repeated from an earlier step.
16 In practice, managers formulate three strategies In practice, managers formulate three strategies. There is corporate-wide strategic planning, business unit (or competitive) strategic planning, and functional (or departmental) strategic planning. We’ll look at each.
18 Corporate-level strategy identifies the portfolio of businesses that comprise the company and the ways in which these businesses are related to each other.Managers endeavor to achieve competitive advantages for each of their businesses. Competitive advantages enable a company to differentiate its product or service from those of its competitors. Such differentiation allows a company to increase its market share.
22 Devising a strategic plan is top management’s responsibility Devising a strategic plan is top management’s responsibility. Because the consequences of a poor choice can be dire, few top managers delegate total responsibility for strategic planning.The departmental managers’ strategic planning roles involve:Helping devise the strategic planFormulating supporting, functional/departmental strategiesExecuting the plansFew people know as much about the firm’s competitive pressures, vendor capabilities, and concerns than do the company’s department managers.
23 Achieving Strategic Fit The ‘Fit’ Point of View (Porter)All of the firm’s activities must be tailored to, or fit, the chosen strategy such that the firm’s functional strategies support its corporate and competitive strategies.Leveraging (Hamel and Prahalad)‘Stretch’ in leveraging resources – supplementing what you have and doing more with what you have – can be more important than just fitting the strategic plan to current resources.
25 We’ve seen that once a company decides how it will compete, it turns to formulating functional departmental strategies to support its competitive aims. One of those departments is human resource management. Its functional strategies are human resource management strategies.
27 Management formulates a strategic planand measurable strategic goals or aims. The plans imply certain work force requirements required to achieve the firm’s strategic aims. Given these workforce requirements, HR management formulates strategies. These HR policies and practices (strategies) help produce the desired workforce skills, competencies, and behaviors.
28 Strategic Human Resource Management The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibilityInvolves formulating and executing HR systems – HR policies and activities – that produce the employee competencies and behaviors that the company needs to achieve its strategic aims
30 Strategic Human Resource Challenges Corporate productivity and performance improvement effortsIncreased HR team involvement in design of strategic plansBasic Strategic ChallengesExpanded role of employees in the organization’s performance efforts
31 Human Resource Management’s Strategic Roles Strategic Planning RolesStrategy Execution RoleStrategy Formulation Role
33 Once a company decides how it will compete, it turns to formulating functional departmental strategies to support its competitive aims. One of those departments is human resource management. Its functional strategies are human resource management strategies
35 The strategy map shows the “big picture” of how each department’s performance contributes to achieving the company’s overall strategic goals. Many employers quantify and computerize the map’s activities. The HR Scorecard helps them to do so.