hrm strategy. strategy: 1.the process of determining & articulating the organisation’s:...
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HRMStrateg
y
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Strategy:Strategy:1. The process of determining &
articulating the organisation’s:
• vision, mission, values, goals & objectives, and • its internal &external environments; then:
2. Formulating plans to attain outcomes consistent with
the above; then:
3 Implementing those plans(including evaluation)
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HR StrategyHR Strategy“The pattern of planned human resource deployments and activities intended to enable the organisation to achieve its goals”
Focus: To provide the organisation with sustained competitive advantage
…through procurement, development & alingment of people, skills, HR policies etc.
Competitive advantage might arise from having best people, but also from being best at managing what you do have
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External competitive environment
Corporate strategy
formulation
Corporate strategy
implementation
HRstrateg
y
Input Input
Divisionstrategies
HR FUNCTION
OTHER
FUNCTIO
NS
Link to Corporate Link to Corporate StrategyStrategy
Evaluation (measurment
etc)
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Role of HRM inStrategy
Formulation
HR Function
HR Function
HR Function
HR Function
StrategicPlanning
StrategicPlanning
StrategicPlanning
StrategicPlanning
Administrative linkage
One-Way linkage
Two-way linkage
Integrative linkage
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Strategic Formulation: Overview
VISION
MISSION
GOALS / OBJECTIVES
EXTERNAL ANALYSIS:OpportunitiesThreat
INTERNAL ANALYSIS:StrengthsWeaknesses
STRATEGIC CHOICE
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Strategic Formulation:‘Step’ 1: Vision
OrganisationalVision
Coreideology
Envisagedfuture
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Core Ideology
Core values Core Purpose
Essential, enduring tenants
What is important?
What isinviolate?
Reason for being
What the organisation
offers to society
Controlling desire,Dominant aspiration
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Examples: Core Purposes
3M: to solve unsolved problems innovatively
Hewlett-Packard: to make technical contributions for the advancement and welfare of humanity
Mary Kay Cosmetics: to give unlimited opportunity to women
Nike: to experience the emotion of competition, winning, and crushing the competition
Walt Disney: to make people happy
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Example: Core Values
Walt Disney:
• No Cynicism • Nurturing & promulgation of
wholesome American values• Creativity, dreams and imagination• Fanatical attention to consistency and detail• Preservation and control of the ‘Disney Magic’
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Strategic Formulation:‘Step’ 1: Vision
OrganisationalVision
Coreideology
Envisagedfuture
BHAGSVivid Description
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Envisaged Future
BHAGS Vivid Description
Huge, daunting goals
Clear & compelling, tangible
Unifying, inspiring,engaging
Making goals ‘imaginable’
The ‘mind’s eye’
Hopeful, passionate,
inspiringimages & symbols
1. Difficult Target2. Common enemy3. Role-model4. Internal -transformation
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Examples: BHAGS
Ford (1900’s): Democratise the automobile (Target BHAG)
(Nike, 1960’s): Yamaha wo tsubusu! We will destroy Yamaha (Common Enemy BHAG)
Stanford (1940’s): Become the Harvard of the west (Role-Model BHAG)
GE (1980’s): #1 or #2 in every market we serve & revolutionise this company to have the strengths of a big company combined with the leanness & agility of a small company
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Examples: Vivid Description
Sony:
We will create products that become pervasive around the world…We will be the first Japanese company to go into the U.S. market and distribute directly…We will succeed with innovations that U.S. companies have failed at - such as transistor radio…50 years from now our brand name will be as well known as any in the world…and will signify innovation and quality that rival most innovative companies anywhere…’Made in Japan’ will mean something fine, not something shoddy.
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Strategic Formulation‘Step’ 2: SWOT
AnalysisBrings balance to the more
unchanging vision:
Organisation’s internal & external
environment:Change is often a constant
here!SW
OT
Internal strengths & weaknesses of organisation
External opportunities &threats of organisation
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Strategic Formulation:‘Steps’ 3, 4 & 5: Mission,
Goals & Objectives
‘Eternal’ ofVision
‘Now’ ofSWOT
Mission:What business / markets are we in to realise our vision?
Goals:The tasks that need to be done
to enable mission
ObjectivesThe quantifiable targets that are
set through the goals
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Examples: Missions
Microsoft: A computer on every desktop
Saturn: The mission of Saturn is to market vehicles developed and manufactured in the United States that are world leaders in quality and customer satisfaction through the integration or people, technology, and business systems and to transfer knowledge, technology and experience throughout General Motors”.
Chevrolet: Manufactirug safe and reliable economy cars, sports cars, sedans and trucks.
Electronic Data Systems: Designing & operating information systems for both public and private organisations
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Strategic Formulation:‘Step’ 6: Strategic Choice
VisionMissionGoals
Objectives
Deliberateplanning
Everydayoperations
Emergent(organic,
evolutionary)
strategy
+
Eventual plans
Example:A new customer
service process is planned for
through consideration of
new aims
Example:Customer service people discover
new process through dealing with customers
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HR & Corporate Strategic Choice
Deliberate planning
Emergent strategy
Eventual
plans
HRFunction
Limit or enable choices
Surface, communicate& integrate suggestions
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Strategic Types
Categorisations under which any strategy can be typified
Porter:Overall cost leadershipDifferentiationFocus
Miles and SnowDefendersProspectorsAnalysersReactors
Directional StrategiesConcentrationInternal growthExternal growthDivestment
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StrategicImplementatio
n: Overview2nd major part of strategy
Implementation by all functions, but six major implementation “musts”:
1) Organisational structure2) Task design3) Selection, training &
development of people4) Reward systems5) Leadership, power & culture*6) Information & information systems
* Not in textbook
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HR Function andImplementation
HR enables the six implementation musts through various HR tasks:
•Job analysis and design•Recruitment and selection•Training & selection•Performance management•Rewards and benefits•Labour relations•etc!
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Culture, Leaders, Strategy
These can support or hinder strategy
Culture
Strategy
Leadershipba
d
c
e
There is a complex interaction between culture, leadership &
strategy:
•Culture affects how leaders will lead (a)•Leaders can have a hand in shaping culture (b)•Culture can have a direct impact on the type of strategies leaders choose now (c)•Culture can have an indirect impact on the strategies chosen through historical patterns (d)•Strategy can have a hand in shaping future culture (e)
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Culture, Leaders, Strategy
Culture is influential! Leaders must learn to shape and manipulate corporate cultures:
•What they pay attention to•How they react to critical incidences•Deliberate role behaviour•Rewarding right things•Type of people they work with•ETC!!!
Leadership = Top management!
HR function must shape culture by shaping leadership throughout the organisation:
•Teaching•Enabling•Releasing•Sharing of knowledge•Attitudes
ETC!
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Strategic Types and HR Tasks
Different strategic types work better with some HR practices than others, e.g.:
Porter / Miles and Snow
Cost / defender = efficiency, consistencyDifferentiation / prospector = quality, effectiveness, knowledge, creativeFocus / analyser = flexibilityDirectional Strategies
Concentration = current skills focusInternal growth = new employees, new targets, new trainingExternal growth = harmony, cooperationDivestment = minimising loss (retrenchments, morale, severance)
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Strategic Measurement
& ControlStrategic Formulatio
n
StrategicImplementation
Sets standards(esp
objectives)
Measurementof outcomes
Strategic evaluation
Thus:Evaluation is the judgment of how the standards set in strategic formulation
were achieved in strategic implementation
Evaluation is fed back into the formulation of plans and the knowledge
base of how to implement them