Introduction
Strategy and Strategic Human
Resources Management
Definition
• A strategy is a way of doing something.
It is a game plan for action. It usually
includes the formulation of a goal and a
set of action plans for accomplishment
that goal. It implies consideration of the
competitive forces at work in managing
an organization and the impact of the
outside environment on organization
actions.
Cont…
• It refers to company’s long term plan for
how it will balance its internal strengths
and weaknesses with its external
opportunities and threats to maintain
competitive advantage
• Strategy: a comprehensive plan for
accomplishing an organization’s goals.
Effective Strategy
• A strategy that
promotes a superior
alignment between
the organization and
its environment and
between the
organization and the
achievement of its
strategic goals.
Strategic Management
• Strategic management:
a comprehensive and
ongoing management
process aimed at
formulating and
implementing effective
strategies; it is a way of
approaching business
opportunities and
challenges.
Types of Strategic Alternatives
• Business-level strategy is the set of strategic
alternatives that an organization chooses
from as it conducts business in a particular
industry or market.
• Corporate-level strategy is the set of strategic
alternatives that an organization chooses
from as it manages its organization and
operations simultaneously across several
industries and markets.
Conti…..
• The functional strategy of a company
is customized to a specific industry and
is used to back up other corporate and
business strategies.
Definition of Strategic HRM
• Strategic HRM refers to Formulating and
executing HR systems- HR policies and
activities- that company needs to achieve
its strategic aims.
• In other words, Strategic human resource
management can be defined as the linking
of human resources with strategic goals
and objectives in order to improve business
performance and develop organizational
culture that foster innovation, flexibility and
competitive advantage.
Cont…
• According to Dessler, “Strategic HRM
means making and implementing
practices and policies of human
resource that generates the behaviors
and competencies of employee that the
organization requires to gain its
strategic goals.”
Porter’s Generic Strategies
• Differentiation strategy: a strategy in which an
organization seeks to distinguish itself from
competitors through the quality of its products
or services.
• Overall cost leadership strategy: a strategy in
which an organization attempts to gain a
competitive advantage by reducing its costs
below the costs of competing firms.
• Focus strategy: a strategy in which an
organization concentrates on a specific
regional market, product line, or group of
buyers.
The Miles and Snow Typology
• Prospector strategy: a strategy in which
the firm is constantly seeking new
markets and new opportunities and is
oriented toward growth and risk taking.
• Defender strategy: a strategy in which
the firm concentrates on protecting its
current markets, maintaining stable
growth, and serving current customers.
Miles and Snow Typology (cont’d)
• Analyzer strategy: a
strategy in which the
firm attempts to
maintain its current
businesses and to
create new market
opportunities.
• Reactor strategy: a
strategy in which a firm
has no consistent
approach to strategy.
Formulating Corporate Level Strategies
• Diversification: the number of different businesses
that an organization in engaged in and the extent to
which these businesses are related to one another.
• Single-product strategy: a strategy in which an
organization manufactures just one product or
service and sells it in a single geographic market.
• Related diversification: a strategy in which an
organization operates in several different businesses,
industries, or markets that are somehow linked.
• Unrelated diversification: when a firm operates
multiple businesses that are not logically associated
with one another.
Key Features of Strategic Human
Resource Management
• There is an explicit linkage between HR
policy and practices and overall
organizational strategic aims and the
organizational environment
• There is some organizing schema linking
individual so that they are mutually
supportive
• Much of the responsibility for the
management of human resources is
devolved down the line
Trends in SHRM
• Internationalization of market integration.
• Increased competition, which may not be local
or even national through free market ideology
• Rapid technological change.
• New concepts of line and general management.
• Constantly changing ownership and resultant
corporate climates.
• Cross-cultural issues
• The economic gravity shifting from 'developed'
to 'developing' countries