HR Strategy - Formulation Flashcards
Strategy Formulation
Gather and analyze internal and external information to determine the organization’s current position and capabilities, opportunities, and constraints.
- Concept of systems thinking (related parts, input-process-output) and components of an organizational system (e.g. interdependence, the necessity of feedback, differentiation of units)
- Mission, vision, and values and relation to strategic management
- Strategic planning analysis frameworks (PESTLE analysis, SWOT analysis, Industry analysis, Scenario planning, Growth-share matrix)
- Systems theory and input-process-output model
Systems Theory
Because the system of an organization is dynamic, changes in one part can affect the other parts. (Internally or externally)
Systems Thinking
Organizations are composed of interacting and sometimes interdependent parts that together create a dynamic internal environment.
Internal environments are created by the varying ways that all of these interdependent units (areas of the business) interplay.
Systems Theory
What are the parts of an organization as a system?
- External environment
- (e.g. Government, society, culture, economics)
- Internal environment
- Leadership
- Operations
- Finance and administration
- Facilities and information systems
- Sales and customer relations
- Human Resources
IPO
Input-Process-Output
Those who plan and implement strategies use this.
Environmental Analysis Tools
- PESTLE
- SWOT
- Growth-Share Matrix
- Scenario Analysis
Environmental Scanning
Process of systematically surveying and gathering data, from both internal and external sources*, that can be *analyzed to identify opportunities and threats and to strengthen strategic plans and goals.
Acronym: PESTLE Analysis
A strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future.
Goes well with SWOT because it identifies opportunities and threats
These are all macro-economic factors that cannot be controlled by a business
- Political
- Economic
- Social
- Technological
- Legal
- Environmental
PESTLE
(Examples of Political)
Influences of government policies, laws, and regulations
- Regulatory environment and actions
- Taxation policies
- Treaties and tariff structures
- Immigration policies
- Governance legislation
- Government stability
- Levels of corruption
PESTLE
Examples of Economic Influences
- Business forecasts
- Labor availability and cost
- Price for services and materials
- Inflation/deflation rates
- Household income
- Consumer confidence
- Availability and cost of capital
- Income disparities
PESTLE Analysis
Examples of Social Influences
- Demographic shifts in age, ethnic background
- Education and skills profiles
- Housing patterns
- Patterns of discrimination
- Family structure
- Values
- Lifestyles and purchasing habits
- Media use
- Effect of globalization on local culture
PESTLE Analysis
Examples of Technology Influences
- New centers of technological training and expertise
- Innovative technology and applications of technology
- Unequal access to technology
- New or changing technical standards
- Technological vulnerability
PESTLE Analysis
Examples of Legal Influences
- Trends in patent law and intellectual property protection
- Increased civil litigation in workplaces
- Increased shareholder legal actions
- Unequal access to legal representation
- Trends in evidence requirements and penalties
- Increased cost for defense
- Trends in findings for corporate negligence
PESTLE Analysis
Examples of Environmental Influences
Essentially corporate social responsibility
- Decreasing carbon consumption limits
- Increased use of alternative-fuel vehicles
- Need for innovative technology and practices to decrease use of resources or environmental impact
- Unequal effect of environmental damage or policies
- Vulnerability of reliable and potable water supplies
- Increased interest in environmental impact
Demographics
Shifts in age, ethnic background
SWOT analysis
What are external?
Opportunities and Threats
Growth-Share Matrix
AKA - BCG Matrix
Used by larger organizations to find where the greatest value in their organization lies.
