1-8 Linking Business Strategy and HRM Strategy Flashcards
What is the distinction between corporate strategy and business strategy?
Corporate strategy focuses on company-wide objectives, such as survival and growth (e.g., restructuring or mergers).
Business strategy focuses on how to compete within a single line of business, such as by being a low-cost provider or differentiating products.
What are the two main types of corporate strategies?
Restructuring strategies: Includes turnaround, divestitures, liquidation, and bankruptcy.
Growth strategies: Achieved through incremental growth, international expansion, or mergers and acquisitions.
According to Michael Porter, what are the five ways a business unit can compete?
Low-cost provider (e.g., McDonald’s).
Product differentiation for mass appeal (e.g., Burger King’s Whopper).
Best-cost provider (e.g., East Side Mario’s).
Focus on a niche market with lower costs.
Niche products customized for narrow markets (e.g., FleurBurger for $5,000).
What is competitive advantage in HRM?
Competitive advantage is the capacity or quality that gives an organization an edge over competitors, such as productivity, price, quality, delivery, or service.
How can HRM systems contribute to a firm’s competitive advantage?
By developing employees’ abilities, motivating them, and aligning HRM practices with the organization’s business strategy to achieve success.
Why is aligning HRM strategy with business strategy critical for knowledge-based organizations?
Because the organization’s success relies on the knowledge, skills, and abilities of its employees, who are treated as valuable assets.
What happens when HRM is not linked to business objectives?
The company cannot leverage its knowledge capabilities, lacks innovation, and fails to achieve a competitive advantage.
What are examples of HRM practices supporting business strategy?
Hiring employees with customer service skills for service-focused strategies.
Training programs that align with organizational goals.
Total rewards systems to reinforce desired employee behaviors.
What are emerging HRM trends linked to business strategy?
Flexible work arrangements (e.g., remote or hybrid models).
Strengthening the employee-employer social contract with career development and mental health support.
Diversity, equity, and inclusion initiatives.
Addressing the gender wage gap.
Upskilling employees with micro-learning opportunities.
Using analytics to evaluate and improve HRM practices.
How does increased use of HR analytics benefit organizations?
By proactively identifying trends and evaluating the return on investment in employees, supporting organizational goals and growth.
