Chapter Two Flashcards
Changing Views of Human Capital
Over 90% of CFO’s now believe that having the right employees has a positive impact on customer service.
Two-thirds of corporate executives now view HR expenditures as an investment, not a cost to be minimized.
[Statistics from the 2016 edition of our textbook.]
Strategic Planning and HRP – Closely Linked
Strategic Inputs
Mission, Vision, Values External Analysis (O, T) Internal Analysis (S, W) Strategy Formulation Strategy Implementation Strategy Evaluation
Senior Executives
Purpose, Long-term direction (Mission, Vision) Opportunities + Threats Strengths + Weaknesses; core competencies Corporate strategy; business strategy Structure, resources, leadership Alignment; assessment
HR
Codify underlying philosophy Demographic trends; labour supply Employee competencies Employee fit with proposed strategy Reconcile supply and demand: downsizing, etc. Human capital metrics; Balanced Scorecard
External Analysis: “PEST”
Political: 2015 federal and 2017 provincial elections; change of government federally and in British Columbia
Economic: Low CAD until very recently; dollar now rising; interest rates (now increasing due to strong second quarter results); global economic conditions (Greece)
Social: Environmental concerns (global warming)
Workforce trends in Canada:
Current labour participation is 18 million (67% of adults)
20% of jobs are part-time. 2017 data to end of August:
22,000 jobs created in August; BUT:
YTD 88,000 full time jobs have been eliminated; replaced with 120,000 part time jobs
5% of workers hold 2+ jobs
Median retirement age is 61 (increasing)
Immigration is 225,000 annually; may increase under Liberal government
Technological: Mobile everything, social media
Output: Opportunities and Threats
International
Legal
External Analysis: Porter’s Five Forces
Rival Firms
New Entrants Customers Substitutes Suppliers
Internal Analysis: The “3 C’s”
Capabilities (Distinguishing feature that deliver value to customers)
Composition (strategic knowledge worker: unique skills linked to company strategy)(Core Employees: valuable skills but not hard to replace)(Supporting employees: less strategic skills and widely available for the labor market ex. clerical workers)(External partner: lawyer)
Culture (Values assumptions and beliefs shared with in an organization)
Capabilities
People are a strategic resource that helps the organization build and sustain a competitive advantage
To do this, people resources must be:
Valuable: Provide something unique to customers; decrease costs
Rare: Have knowledge or expertise that competitors don’t have
Difficult to imitate: Embodied in unique culture (e.g., WestJet)
Organized: Easily recombined and redeployed to new assignments (no silos)
Composition: Human Capital Architecture
Strategic (Unique)
Core (Not Unique)
Support Workers
External Partners
Culture: How Employees View the Firm
CULTURE
Values
Assumptions
Beliefs
Expectations
Cultural Audits
--Clan culture - closely knit, great concern for
customer
--Adhocracy culture - risk taking
--Market Culture - competitive result orientated
behaviors
--Hierarchical culture - formal companies where
stability and structure are highly valued
SWOT Analysis: The Output from Internal and External Analysis
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
Mission and Vision
Output from PEST, SWOT, and Five Forces Analysis
Mission: why company is in business
Vision : where the company sees it self
Types of Labour Forecasting
Qualitative
Management opinions
Delphi Technique
Delphi oracle or technique – smart person able to predict future ( create more accurate forecast by getting everyone perspective on how much labour and what kind of labour needed) after find common trends in ideas to find an average in reason
Quantitative
Trend Analysis: forecast labour needs with different index’s ex. labour
Staffing table: looks at how many people have been hired and let go
Skill inventories: organizes employees with certain skills in categories
Replacement charts: same as succession planning
Succession planning: person in mind for each position in company in case the current person leaves
Human Capital Readiness: Gap Analysis
Employees Required (with certain skills) Employees Available (how many people in organization could do task)
Strategy Formulation
Corporate Strategy
Whole organization
Focus: Markets to compete in; how to compete
Business Strategy
Divisions in the organization
Focus: Competitive Advantage
Corporate Strategy - Decisions
Make products or Buy?
Vertical integration(make your self)?
Buy from others?
Diversification (own one company or have a large portfolio)?
Core business only?
Unrelated businesses?
Partnering?
Mergers/Acquisitions
Strategic Alliances
Joint Ventures
Business Strategy - Decisions 3
Cost Leadership
Low prices
Efficiency
Examples: McDonald’s, Walmart
Differentiation
Unique products; superior service
Examples: Apple (anything); Blackberry security features
Focus
Best in a targeted market
Example: Porsche
