Midterm Flashcards
What is strategy
The formulation of organizational objectives, scopes, and action plans for gaining advantage
What are some positive organizational outcomes?
Profitability
Customer satisfaction
Employee performance
Organizational survival
Typical events that can change strategy
Changing market conditions
New technology
Emerging markets
New moves of competitors
What is emergent strategy
The plan that changes incrementally due to environmental changes
Intended strategy
The formulated plan
Realized strategy
The implemented plan
Strategy
A declaration of intent
Strategic intent
A tangible corporate goal; a pov aboutthe competitive positions a company hopes to build over a decade
Strategic planning
The systematic determination of goals and the plans to achieve them
Strategy formulation
The entire process of conceptualizing the mission of an organization, identifying the strategy, and developing long range performance goals
Strategy implementation
Those activities that employees and managers of an organization undertake to enact the strategic plan, to achieve the performance goals
Objectives
The end , the goals
Plans
The product of strategy, the means to the end
Strategic plan
A written statement that outlines the future goals of an organization, including long term performance goals
Policies
Broad guidelines to action, which establish the parameters or rules
Discarded strategy
Deemed innapropriate due to changing circumstances
The relating of the strategic process
- Intended strategy
- Emergent strategy
- Discarded strategy
- Realized strategy
Corporate strategy
Organizational level decisions that focus on long term growth and survival
Options within corporate strategy:
Restructuring
Growth
Stability
What are the restructuring strategy options?
Turnaround
Divestiture
Liquidation
Bankruptcy
Turnaround strategy
An attempt to increase the viability of an organization
Turnaround methods include:
Getting rid of unprofitable products
Imposing layoffs
Making the organization more efficient
Attempting to reposition it with new products
Divestiture
The sale of a division or part of an organization
Liquidation
The termination of a business and the sale of its assets
Bankruptcy
A formal procedure in which an appointed trustee in bankruptcy takes possession of a businesss assets and disposed of them in an orderly fashion
In what ways can growth be achieved?
Incrementally
Internationally
Mergers and acquisitions
How is incremental growth attained?
By expanding the client base, increasing products/services, changing the distribution networks, or using technology
How can international growth be attained?
By seeking new customers or markets by expanding internationally
Acquisition
The purchase of one company by another
Merger
Two organizations combine resources and become one
What is the effect on Hr of acquisitions and mergers?
They eliminate the duplication of functions, meld benefits and labour relations practices and create a common culture
What are stability strategies
Maintenance strategies where companies do not wish to see their companies grow and so their strategic HRM practices remain constant.
Stability strategies can be called:
Status quo
Do-nothing strategies
Pause and proceed with caution
Harvest strategy
Status quo
Do not wish to see their companies grow; content to keep market share; doing what it has been doing
Do-nothing strategy
Don’t do anything different; make no change
Pause and proceed with caution
Temporary strategy-until environmental conditions are more favourable for growth
Harvest strategy
Choose to milk the investment as current profitable situation will not last forever
Business strategy
The action plan for a single line of business to gain competitive advantage
Business vs. Corporate strategy
Each business may have its own strategy
What is a strategic plan
Describes the organizations future direction, performance targets, and approaches to achieve the targets.
What are the steps in the strategic planning process
- Establish the mission, vision and values
- Develop objectives
- analyze the external environment
- Identify the competitive advantage
- Determine the competitive position
- Implement the strategy
- Evaluate the performance
Mission statement
An articulation of the purpose of the organization and the value it creates for customers
Vision statement
A clear and compelling goal that serves to unite an organizations efforts
Values
The basic beliefs that govern individual and group behaviour in an organization
What are the purposes of a value statement?
- Conveys a sense of identity for employees
- Generates employee commitment to something greater than themselves
- Adds to the stability of the organization as a social system
- Serves as a frame of reference for employees to use to make sense of organizational activities and to use as a guide for appropriate behaviour
Hard objectives
Goals that are an expression in measurable terms of what an organization intends to achieve; include numbers
Soft objectives
Goals that define the targets of social conduct for the organization and may not always be quantifiable
How to analyze the external environment
Managers must be aware of threats and opportunities in the external environment
Should scan and monitor technology, laws and regulations, the economy, sociocultural factors, and changing demographics
Use this info to make reactive and proactive changes to the strategic plan
Competitive advantage
The characteristics of a firm that enable it to earn higher rates of profit than its competitors by utilizing its resources
Competitive advantage resources are:
Tangible assets
Intangible assets
Capabilities
Tangible assets
Organizational assets that have a substance and can be consumed
Intangible assets
Organizational assets that are not concrete, such as reputation, goodwill
Capabilities
Collective skills, abilities, and expertise of an organization
Four criteria of sustained competitive advantage
Valuable
Rare
Inimitable
Organized
Valuable
Are the resources and capabilities able to help generate value/reduce cost
Rare
Are the resources and capabilities not available to competitors
Inimitable
Are the resources and capabilities hard to copy by competitors
Organized
Are the resources and capabilities able to be exploited by the firm
Core competencies
Organizational resources and capabilities that serve as a firms competitive advantage. A competitively important activity that directly contributes to a company’s strategy
Dynamic capabilities
Organizational capabilities to adapt and renew competencies in accordance with the changing business environment
What is SWOT
Used to analyze the company’s resource capabilities and deficiencies and its market opportunities and threats in the future
What is Swots acronym
Strengths
Weaknesses
Opportunities
Threats
Value proposition
A statement of the fundamental benefits of the products or services being offered in the market place
Porters five generic competitive strategies:
- Low cost provider strategy
- Broad differentiation strategy
- Best cost provider strategy
- Focused on market niche strategy based on lower cost
- Focused or market niche strategy based on differentiation
Strategy implementation
Is the process by which the strategy is put into action - sometimes called operational planning; consisting of programs, budgets and procedures
Program
Outlines the steps or activities necessary to accomplish the goal
Procedures
Lists the steps required to get the job done
Benefits of strategy formulation
Clarity Coordination Efficiency Incentives Adjustment to change Career development
Errors in strategic planning
Relegating the process to official planners and not involving executives and managers
Failing to use the plan as the guide to making decisions and evaluating performance
Failing to align incentives and other HR policies to the achievement of the strategy
HRM is an umbrella term that encompasses:
Overarching HR philosophies
Formal HR policies
Specific HR practices
Strategic HRM
Interrelated philosophies, policies, and practices that facilitate the attainment of organizational strategy
What is the resource based view
Suggests that the management of resources and capabilities will lead to competitive advantage, resulting in superior performance and value creation
A firms human resources can create sustained competitive advantage if they meet the four criteria:
Valuable-employees are valuable due to superior performance
Difficult for competitors to imitate-training
Rare-in terms of talent
Hard to substitute
Typical resources in the resource based view may include?
Human resources
Proprietary knowledge
Reputation
Typical capabilities in the resource-based view may include:
Adaptability
Flexibility
Speed of bringing new products to market
Contingency perspective
Blends both the human capital and behavioural theories
Refers to the need to modify HR strategies relative to its business and organizational strategies
Human capital
The collective sum of employees attributes, experience, knowledge, and commitment invested in the organization
Three types of resources used in the production of goods and services:
Land
Labour(human capital)
Capital
Human capital also includes:
Knowledge Education Vocational qualifications Professional certifications Work-related experience Competence of an organizations employees
Human capital roi can be calculated by
Total revenue-(operating expenses - total compensation costs)/total compensation costs
The behavioural theory
Suggests that different Hr strategies are required to influence the diverse behaviours of employees
What is HRs role within the behavioural theory
To reinforce certain behaviours via hr practices such as recruitment, selection, training, compensation, and performance
What are the two reasons hr planning is important
1) employees help an organization achieve success because they are its strategic resources
2) the planning process itself results in improved goal attainment
Risks to strategic HR planning
Time and energy in making decisions
Information overload potential
Impossible commitments to employees
Over concern with employee reactions
Potential job losses
Myopia developed from commitment to one strategy
Inability to see and adapt to changes developing in environment
What is an apt cliche for organizations and planning
An organization that fails to plan, plans to fail
What are three ways you can align HR strategy with business strategy
- Start with organizational strategy and then create HR strategy
- Start with HR competencies and then craft corporate strategies based on these competencies
- Do a combination of both in a form of reciprocal relationship
An example of a corporate strategy leading to an HR strategy
Low cost strategy plan will need a low cost labour strategy like McDonald’s
What is the idea behind hr competencies leading to business strategies
An organization cannot implement a strategy if it does not have the necessary human capital
A skills determine strategy outlook
What are some drawbacks of competencies leading to strategy
Over reliance on employee capabilities
Not enough environmental analysis
Changing hr practices
What is reciprocal interdependency
The fact that hr strategy influences business strategy or vice versa but he strategy should be built around the issues facing a business
What is concurrent strategy formulation
Strategy development is conducted at the same time that HRM issues are considered
What are the characteristics of an effective HRM strategy
External fit
Internal fit
Focus on results
What is external fit
Fit hr and organizational strategies
What is internal fit
Link hr programs to other functional areas
What is focus on results
Results must be measured and tracked
What is the HR program linkage
Hr program-> employee human capital and behaviours -> organizational strategy -> organizational outcome
What is environmental scanning
Systematic monitoring of trends affecting the organization
What is the external environment
Anything outside organizational boundaries that might influence an organization
The analysis of the external environment consists of these stages:
Scanning
Monitoring
Forecasting
Assessing
What are some sources of info in environmental monitoring?
Publications
Professional associations
Conferences/seminars
Professional consultants
What is competitive intelligence
A formal approach to obtain information about competitors
What are two important questions when it comes to competitive intelligence?
- Is the source reliable
2. What is the likelihood of the information being correct?
What are some examples of competitive intelligence acts
Study competitors websites for product launches
Have employees ask suppliers about clmpetitors
Hire employees who have worked for competitors
What are the challenges in environmental scanning?
Inability to accurately oredict the future
Inability To isolate what really is important to hr
Technology telecommuting outsourcing downsizing
Isolating critical from insignificant
Few trends exist in isolation
For every trend there is a counter trend
What are the major environmental factors
Economic climate Globalization Political and regulatory context Issues related to technology Demographic factors Social values and norms
What is the economic climate
Anything to do with the economy that affects HR management. Like unemployment, globalization, interest rates, strength of the Canadian dollar
What is globalization and how does it affect hr scanning
It is the growth in flows of trade and financial capital across borders
It affects prosperity jobs wages and social legislation
What are the political/legislative factors of scanning
Provincial and federal governments influence organizations with changes to laws and regulations
Governments can influence job creation with tax incentives and job training opportunities
What are technological factors in scanning
The process by which inputs from an organizations environment are transformed into outputs
Issues include:online hr functions, infor privacy, identity theft and elearning
What are the demographic factors
The study of population statistics including Age Gender Family status Education Economic status Labour market
Labour market as a demographic factor:
Most important demographic factor, influencing an organizations ability to implement strategy
Examples: unemployment rate, graduation rates, provincial, global regions
What is diversity as a demographic factor
Increasing it in the workplace. Minority and majority have lost their meansing. Organizations need to tap into underutilized pools of highly educated minority’s groups
What are the generational differences in demographic factors
Greatest trend is writing baby boomers huge impact on job vacancies and the whole structure of what will follow
What are the social/cultural factors of environmental scanning
Includes all the social trends that occur regionally and nationally
Right to privacy
Laws and regulations in effect, but still questions as to employers moral right to monitor employees activities
Work life balance
Quality time with families while pursuing a career
Desire to have a better quality of life:elder care, child care, flextime, reduced hours, part time hours, job sharing
Contingent workers
Aimed at part time, seasonal, temporary and contract workers
Issues include employee commitment, loyalty and productivity
What are stakeholders
Groups of people who have vested interested in an organizations decisions. Also known as consituent group
Stakeholders can consist of what
The board of directors and senior executives Senior management Supervisors Employees Unions
Other stakeholders include
Customers Suppliers Governments Regulatory agencies The public NGO's Anyone who can influence or be affected by managements decision making
What is the issues priority matrix
Used to determine the important trends that may affect an organization
Managers rate the trends from high to low based on:
- The probability of these trends actually occurring
- The likely impact of each of these trends on the organization
Why is strategic HR planning important to organizations?
It attempts to balance between the work that needs to be done and the workforce that performs the tasks
Insufficient work and too many employees leads to inefficiencies and lower productivity
Employees may become bored and unmotivated and engage in counterproductive activities or vice versa and will compromise Ann organization to meet its goals and objectives
What are the forecasting activity categories
Transaction based forecasting
Event based forecasting
Process based forecasting
What is transaction based forecasting
Focused on tracking internal change instituted by the organizations managers
What is event based forecasting
Is concerned with changes in the external environment
Process based forecasting
Not focused on a specific internal organization even but in the flow or sequencing of several work activities
What are the benefits of HR forecasting
Reduces costs of hr
Increases organizational flexibility
Ensures a close linkage to the macro business forecasting process
Ensures that organizational requirements take precedence over issues of resource constraint and scarcity
What is human resources supply
The source of workers to meet demand requirements, obtained either internally or from external agencies
What’s I human resources demand
The organizations projected requirements for human resources
What are the key personnel analyses conducted by HR forecasters
- Specialist/technical/professional personnel
- Employment equity designated group membership
- Managerial and executive personnel
- Recruits
What is a designated group
Identifiable grouped deemed to need special attention because they typically receive the most discrimination within organizations
In Canada what are the four designated groups
- People of aboriginal descent
- Women
- Persons with disabilities
- Members of visible minorities
Organizational factors affecting hr forecasting
Corporate mission, strategic goals Operational goals, production budgets HR policies Organizational structure, restructuring Worker KSAOs, competencies, expectations HRM's level of development Organizational culture, climate, job satisfaction, communications Job analysis: workforce coverage, current data
Environmental factors affecting HR Forecasting
Economic situation Labour makers and unions Government laws and regulations Industry and product life cycles Technological change Competitor labour usage Global market for skilled labour Demographic changes
Hr forecasting time horizons
Currents forecast-up to 1 year
Short run forecast- from 1 to 2 years
Medium-run forecast: from 2-5 years
Long run forecast: for 5 or more years
Outcomes of forecasts
Prediction
Projection
Envelope
What is prediction
A single numerical estimate of hr requirements associated with a specific time horizon and set of assumptions
What is a projection
Incorporates several HR estimates based on a variety of assumptions
What is the envelope term
An analogy in which one can easily visualize the corners of an envelope containing the upper and lower limits or bounds of the various hr projections extending into the future
Steps in determining net HR requirements
Determine HR demand
Ascertain HR supply (includes internal supply and external supply) and skills inventory-personal database record on each employee
Determine NET HR requirements
Institute HR programs: HR shortage and HR surplus
What are the two supply options in ascertaining HR supply
- Internal supply
2. external supply
What is internal supply
Current memeber if the organizational workforce who can be retrained, promoted, transferred, to fill anticipated future HR requirements
What is external supply
Potential employees who are currently undergoing training, working for competitiors, are elements of unions or professional associations, or are in a transitional stage, between jobs or unemployed
