Human Resource Educators' Association of the Philippines, Inc.

(HREAP) Assessment Reviewers: SET A

STRATEGIC MANAGEMENT o “What are we now as a business and

where do we want to be?”
PROCESS
• Strategy
Basic Management Process o course of action

• Five Steps in the Basic Management • Strategic Management

Process o process of identifying and executing

o Setting objectives the strategic plan by matching the

o Making basic planning forecasts company’s capabilities with the

o Reviewing alternative courses of demands of the environment

action o Note: A strategic plan contains

o Evaluating which options are best strategies to reach the end goal. The

o Choosing and implementing your strategies will be executed in strategic

plan management

• Hierarchy of Goals • Strategic Management Process

o views the goals from the top of the 1. Define the company’s current business
firm down to frontline employees as
• What products are they selling?
a chain
• How are they being sold?
o The company president sets a long-
• How do the products differ from other
term goal, then the vice president
competitors?
sets their own goal according to the
initial goal set, and so on and so 2. Perform external and internal “audits”
forth down the line of employees • Study both the firm’s environment and the
until even their subordinates have internal strengths and weaknesses
their own goals in line with the top • Methods
goal o Environmental scan worksheet
• Policies ▪ includes economic, competitive, and
o broad guidelines delineating how political trends
employees should act ▪ has information on the company’s
• Procedures environment (external)
o spell out what to do in a specific o SWOT Analysis (Strengths,
situation Weaknesses, Opportunities, Threats)
▪ Strengths and Weaknesses (internal)
Strategic Planning
▪ Opportunities and Threats (external)
• Strategic Plan
o PEST Analysis (Political, Economic,
o company’s overall plan for matching its
Social, Technological)
internal strengths and weaknesses
▪ all external factors
with the external opportunities and
threats in order to maintain a 3. Formulate a new direction

competitive position • What should our business be?

2 – STRATEGIC MANAGEMENT PROCESS

Human Resource Educators' Association of the Philippines, Inc. (HREAP) Assessment Reviewers: SET A

• Essence of the business is divided into smaller goals (strategic

• Vision Statement goals). These smaller goals are further
o general statement of the firm’s intended broken down into specific tasks
direction (strategies). After the goals and tasks
o what the company wants to become have been laid out, the strategies will
o future-oriented then be executed and eventually
• Mission Statement evaluated. Repeat step 5 if strategic
o what the company’s main tasks are goals are not met.
today o From specific to broad: strategy ⇒
o present-oriented strategic goals ⇒ mission statement

4. Translate the mission into strategic goals Types of Strategies

• What would the mission statement mean for • Corporate Strategy

each department? o identifies portfolio of businesses that, in total,
• Laid out goals in accordance with the broad comprise the company and how these
mission statement task businesses relate to each other
o Concentration Strategy
5. Formulate strategies to achieve strategic
▪ single-business
goals
▪ one product line in one market
• Having specific courses of action in order to
o Diversification Strategy
achieve strategic goals
▪ expansion by adding new product lines
6. Implement the strategies ▪ example: Apple introducing self-driving cars
• Putting plans into action o Vertical Integration Strategy
▪ expansion by producing its own raw
7. Evaluate performance
materials or by directly selling their
• Assessment of the progress of their products
strategic decisions ▪ example: Apple stores being established
• If it doesn’t work out as planned, re- o Consolidation Strategy
strategize ▪ Reducing company size by merging with
o Note: Summary is, the company should other business units or companies into a
first define what their business is single, larger organization
currently. They then branch into ▪ operational efficiency, eliminating
identifying strengths and weaknesses competition, and getting access to new
(internal) and general company markets
environment (external). Given this data, ▪ example: Disney acquiring Marvel and Fox
the company should formulate a NEW o Geographic Expansion
direction by identifying what they want to ▪ entering new territorial markets
become (vision) and what they should ▪ example: Jollibee in USA and UAE
do in order to be what they want to • Competitive Strategy
become (mission). Given the mission, it

2 – STRATEGIC MANAGEMENT PROCESS

Human Resource Educators' Association of the Philippines, Inc. (HREAP) Assessment Reviewers: SET A

o identifies how to build and strengthen the o produce HR policies and practices to
business’ competitive position in the produce said competencies and
marketplace behaviors
o how one company competes with another • Tools
company o Strategy Map
o Competitive Advantage ▪ summarizes the role of each
▪ factors that allow a company to differentiate department in achieving the
its product or service from those of its company’s strategic goals
competitors to increase market share ▪ clarifies employees’ “line of sight” by
▪ what makes a company better than other visually linking efforts with company’s
companies? ultimate goals
o Three Standard Competitive Strategies o HR Scorecard
▪ Cost leadership - becoming the low-cost ▪ process for assigning financial and
leader in the industry; prices nonfinancial goals or metrics to the
▪ Differentiation - seeks to be unique along strategy map chain of activities
dimensions valued by buyers; innovation required for achieving company
▪ Focus - market niche; targeting specific strategic goals
markets (often minorities) ▪ “Balanced scorecard” planning
• Functional Strategy approach - balances hard data
o what each department must do to help the (finances) with soft data (customer
business accomplish its strategic goals satisfaction) to measure overall
performance
Strategic Human Resource Management
▪ a specific evaluation standard for
• formulating and executing human resource activities in the strategic map
policies and practices that produce employee
• standards in the HR scorecard
competencies and behaviors the company
must be met in order to assume
need to achieve its goals
that the activity in the strategy
• Dynamic, not Static map is executed successfully
o this means that HR managers should o Digital Dashboards
identify where each HR activity is now ▪ desktop graphs and charts showing
and where it should be to support how the company is doing on all
strategic goals metrics from the HR scorecard
o how to transform HR activities in order to ▪ specific measurement of
align with and support the company goals performance in one activity in the
• Process strategy map according to the
o identify company’s strategic goals metrics set in the HR scorecard
o determine employee competencies and
HR Metrics, Benchmarking, and Data Analytics
behaviors required to achieve the goal
• Human Resource Metrics

2 – STRATEGIC MANAGEMENT PROCESS

Human Resource Educators' Association of the Philippines, Inc. (HREAP) Assessment Reviewers: SET A

o quantitative gauge of a human resource • engaged employees = high connectivity with

management activity work tasks = more effort to accomplish task-
• Benchmarking related goals
o comparing the results of high-performing • Managers can improve employee engagement
companies to current company to through supportive supervision
understand what makes them better o focusing support and coaching on
• Strategy-Based Metrics employees’ strengths
o measures the activities that contribute to o make sure employees understand how
achieving a company’s strategic goals their departments contribute to company
o measure of internal performance as goals
opposed to comparison with other o make sure employees see how their efforts
companies contribute to achieving company goals
• HR Audit o make sure employees get a sense of
o analysis of the completeness, efficiency, accomplishment from working in the
and effectiveness of HR functions company
o generally, involves using a checklist to o make sure employees are involved
review functions and ensuring adherence
to federal law and company policies

High Performance Work Systems

• set of HRM policies and practices that

produce superior employee performance
• Managers use HR metrics to assess
company performance and compare them
with other firms
• The steps in ensuring high-performance
systems must be illustrated
o can be in the form of hiring based on
validated tests and extensive training for
employees
• High-performance work systems aspire to
encourage employee involvement and self-
management
o They aim to nurture a motivated
workforce

Employee Engagement

• being psychologically involved in, connected

to, and committed to getting one’s jobs done

2 – STRATEGIC MANAGEMENT PROCESS