Strategy Flashcards
Benefits of Strategy Formulation
Clarity of purpose
Efficiency
Incentives
Can help identify the need to Change
Career development
Aligning HR Strategy with Business Strategy - 3 ways
1) Create HR strategy based on existing business strategy
2) Create business strategy based on required HR strategy
3) Develop HR and business strategy simultaneously/iteratively
HR’s Role in Strategy
HR needs to act as a strategic business partner
Ability to engage in concurrent strategy formulation
Flawless execution of HR administration
Must be able to speak the language of all aspects of the business
Develop HR metrics to demonstrate value
Understand how to measure and mitigate risk
Major Environmental factors affecting HR Trends
Economic factors
Globalization
Political/legislative factors
Technological
Demographic
Social/cultural
Corporate strategies (organization-level decisions that focus on long term survival)
1) Restructuring - looking at the bigger picture, how HR can assist in smoothing the transitions
2) Growth - manage functional overlaps/redundancies and what culture to adopt, adaptability, HR as a change agent
3) Stability - advising management on various costs, lowering succession planning, gathering info from departments
Domestic Growth Strategy → Domestic HR Strategy
Companies export their goods abroad to seek new international markets
HR not needed internationally as the production happens locally
Multi-domestic Growth Strategy → Adaptive HR Strategy
Subsidiaries. Produce within market where goods are sold
Production happens internationally, therefore local HR country approach is needed
Multinational Growth Strategy → Exportive HR Strategy
Standardized products/services and HR systems internationally for efficiency and reduced cost
HR approach not adaptive to local environments, a standard approach is applied across the board
Global Growth Strategy → Integrative HR Strategy
Culturally sensitive products/services in selected countries with the least amount of cost
Combine home HR practices with HR practices and select the best HR practices from foreign subsidiaries
Int’ HRM Recruitment Options
Host-country nationals (HCNs) - candidates from subsidiary country who know the foreign cultural environment
Parent-country nationals (PCNs) - candidates country in which the head office resides (familiar with company’s products/services/company culture)
Third-country nationals (TCNs) - candidates from a third country with extensive international experience who know the corporate culture from previous work experience
Int’ HRM Compensation Policy Options
Home Based Policy - links base salary to salary structure from home country and retains home country salary structure for int’ supplements (housing, schooling, etc)
Host Based Policy - links base salary to salary structure from host country while retaining home country salary structure for int’ supplements
Region Based Policy - higher compensation to expats based on the region/location where they are assigned
Strategic Planning Process
1) Establish mission, vision and values
2) Develop objectives
3) Analyze the environment - SWOT
4) Identify the competitive advantage
5) Determine the competitive position
6) Implement the strategy
7) Evaluate performance
Errors in Strategic Planning
Not involving key people
Failing to use the strategic plan you developed as a guide
Failing to align incentives, other HR programs and policies to achievement of strategy
Corporate Int’ Business Strategies
Domestic Growth Strategy → Domestic HR Strategy
Multi-domestic Growth Strategy → Adaptive HR Strategy
Multinational Growth Strategy → Exportive HR Strategy
Global Growth Strategy → Integrative HR Strategy
