Name: Trần Như Phương

ID: B1121813099

CHAPTER 2: STRATEGIC HUMAN RESOURCE MANAGEMENT

What Is a Business Model?

-A business model is a story of how the firm will create value for customers
and, more important, how it will do so profitably. We often hear or read of
companies that have “transformed their business model” in one way or
another, but what that means is not always clear. To understand this, we
need to grasp a few basic accounting concepts.
-Fixed costs are generally considered the costs that are incurred
regardless of the number of units produced.
-You have a number of variable costs, which are those costs that
vary directly with the units produced.
-The concept of “contribution margins,” or margins. Margins are
the difference between what you charge for your product and the variable
costs of that product.

Strategic Management?

-A process, an approach to addressing the competitive challenges an

organization faces. It can be thought of as managing the “pattern or plan that
integrates an organization’s major goals, policies, and action sequences into a
cohesive whole.” These strategies can be either the generic approach to
competing or the specific adjustments and actions taken to deal with a particular
situation.

The Difference between strategy formulation and strategy implementation.

- Strategy formulation is crafting a combination of strategies and picking

out the best one to achieve the organizational goals and objectives and
thereby reaching the vision of the organization. It involves a number of
steps which are performed in chronological order. In this case is GM
want to sell 4 million units at a reasonably high margin, and thus
completely cover its fixed costs to make a strong profit. On the other
hand, strategy implementation is the execution of the opted strategy,
which mean it converts the chosen strategy into action, for the realization
 of organizational goals and objectives. “However, the reality was that its
products didn’t sell at the higher prices, so to try to sell4 million vehicles,
GM offered discounts, which cut into its margins. When GM ended up
selling only 3.5 million vehicles, and those were sold at a lower margin,
the company could not cover its fixed costs, resulting in a $9 billion loss
in 2008”.
The components of strategic management.

- In strategic management there are:

1. Mission
2. Goal
3. External Analysis
4. Internal Analysis
5. Strategic choice
The linkages between HRM and strategy formulation

- The administrated linkage: the HRM function’s attention is focused on

day-to-day activities. The HRM executive has no time or opportunity to
take a strategic outlook toward HRM issues. The company’s strategic
business planning function exists without any input from the HRM
department. Thus, in this level of integration, the HRM department is
completely divorced from any component of the strategic management
process in both strategy formulation and strategy implementation. The
department simply engages in administrative work unrelated to the
company’s core business needs.

- One-way linkage: the firm’s strategic business planning function

develops the strategic plan and then informs the HRM function of the
plan.
 - Two-way linkage: it allows for consideration of human resource issues
during the strategy formulation process. This integration occurs in three
sequential steps. First, the strategic planning team informs the HRM
function of the various strategies the company is considering. Then HRM
executives analyze the human resource implications of the various
strategies, presenting the results of this analysis to the strategic planning
team. Finally, after the strategic decision has been made, the strategic
plan is passed on to the HRM executive, who develops programs to
implement it.

- Integrative linkage: it is dynamic and multifaceted, based on continuing

rather than sequential interaction. In most cases the HRM executive is an
integral member of the senior management team. Rather than using an
iterative process of information exchange, companies with integrative
linkage have their HRM functions built in to the strategy formulation and
implementation processes.

The different HRM issues and practices associated with various directional
strategies.
- As discussed earlier in this chapter, strategic typologies are useful for
classifying the ways different organizations seek to compete within an
industry. However, it is also necessary to understand how increasing size
(growth) or decreasing it (downsizing) affects the HRM function. For
example, the top management team might decide that they need to invest
more in product development or to diversify as a means for growth. With
these types of strategies, it is more useful for the HRM function to aid in
evaluating the feasibility of the various alternatives and to develop
programs that support the strategic choice.