Strategic management includes
- having the goal -> deploy and allocate resources -> competitive advantage
- Integrally involving the HRM function (input, knowledge, requirement, program)
- using a business model -> value for customers
Strategic Management
- Process
- Approach -> address the competitive challenges
- Managing the pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole
- Developing strategies for achieving the company’s goals in light of its current environment
Strategic HRM
- The pattern of:
+ planned human resource deployments (sự triển khai)
+ and activities intended to enable an organization to achieve its goals - Strategic management is a process to address the organization’s competitive challenges by integrating goals, policies and action sequences into a cohesive whole.
Components
of the Strategic Management Process
- Strategy Formulation: Strategic planning groups decide on strategy
- Strategy Implementation: Organization follows through on the strategy
Linkage
Between HRM and the Strategic Management Process
- Strategic choice:
+ Where to compete? In what market?
+ How to compete? On what criterion or differentiating characteristic?
+ With what will we compete? What resources to beat our competitors? How to acquire, develop and deploy resources?
Role of HRM in Strategy Formulation
- With what will we compete?
- Four levels of integration between HRM and the strategic management function (the link between strategic planning and HRM function) \+ administrative linkage \+ one-way linkage \+ two-way linkage \+ integrative linkage
Strategy Formulation based on
- External analysis (Opportunities, threats),
- Internal analysis (Strengths, Weaknesses),
- Missions,
- Goals
- > strategic choice
Strategy Implementation
Strategic choice -> Human resource needs (skills, behaviors, cultures) -> HRM practices -> Human resource capability, human resource actions -> Firm performance
Strategic implementation requires that
- An organization has a variety of structural forms and organizational processes to choose from when implementing a given strategy
- Five variables
Pay Structure, Incentives, and Benefits
- High pay and/or benefits relative to competitors can help a company attract and retain high-quality employees, but might have a negative impact on overall labor costs
- Tying pay to performance can elicit specific activities and levels of performance from employees
Labor and Employee Relations
- Employees - asset or expense?
- How much should employees participate in decision-making?
- What rights do employees have?
- What is the company’s responsibility to employees?
- The approach a company takes in making these decisions can result in successfully achieving its short and long term goals or ceasing to exist
Strategic Types
Porter’s Cost and Differentiation:
- Value can be created by:
+ reducing costs
+ differentiating a product or service -> charge a premium price relative to its competitors
HRM Needs in Strategic Types
Role
Behaviors:
Behaviors required of an individual in his or her role as a job holder in a social work environment
+ Cost strategies - high concern in quantity, short time - companies define the skills they require and invest in training employees in these skill areas
+ Differentiation strategies skills include cooperating with others, developing new ideas, and taking a balanced approach to process and results
Directional Strategies
- Concentration
- Internal Growth
- Mergers and Acquisitions
- Downsizings
Concentration Strategies
focusing on:
- increasing market share,
- reducing costs,
- creating and maintaining a market niche for products and services
+ Require that the company maintain the current skills that exist in the organization
+ Need for skill-based training and fair compensation
Internal Growth Strategies
A focus on new market and product development, innovation, and joint ventures
+ Companies must constantly hire, transfer and promote individuals
+ Compensation weighted towards achievement
+ Joint ventures require conflict resolution
Mergers and Acquisitions
- An emphasis on acquiring vendors and suppliers or buying businesses that allow a company to expand into new markets
- On the increase
- HR needs to be involved (People issues can cause problems, Different organizational cultures, Conflict resolution)
Downsizing
- The planned elimination of large numbers of personnel, designed to enhance organizational effectiveness
- Trend has slowed since 2008 as it falls short of meeting companies’ financial and organizational objectives, and has negative effects on employee morale and productivity
- The HRM function must “surgically” reduce the workforce by cutting only the workers who are less valuable in their performance
- Survivor morale issues
Emergent Strategies
- Consist of the strategies that evolve from the grassroots of the organization
- Can be thought of as what organizations actually do, as opposed to what they intend to do
- Usually identified by those lower in the organizational hierarchy
Intended Strategies
The result of the rational decision making process used by top managers as they develop a strategic plan
Enhancing Firm Competitiveness
- Develop a human capital pool that gives the company the unique ability to adapt to an ever changing environment.
- Learning organization
Strategy implementation includes structuring an organization and allocating resources
True
Company attracts high-quality employees
?
When Clean Motors condensed all its parts factories into one large location, the company increased research and development and customer service, and decreased its sales force. How would this practice help the company to become a low-cost producer?
The company constructed efficient large-scale facilities.
