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STRATEGIC HR & LEADERSHIP

Dr. Shazia Akhtar


PhD ( Human Resource Management)

Strategic Human Resource Management


The process of taking a long-term approach

to human resource management through the


development and implementation of HR
programs that address and solve business
problems and directly contribute to major
long-term business objectives.

Involves aligning initiatives involving how

people are managed with organizational


mission and objectives

Strategic Management Process


Determining what needs to be done to
achieve corporate objectives, often over
3 - 5 years
Examining organization and competitive
environment
Establishing
optimal
fit
between
organization and its environment
Reviewing and revising strategic plan

The theory of the strategic HR planning is that the

closer the alignment between HR and the


business strategy, the better is the ability to adapt to
client needs and thus maintain competitive advantage.
HR role includes developing a plan of HR
initiatives to achieve and promote the behaviors,
culture and competencies to help the organization
achieve its goals.
To develop systems that reflect the organizations
mission, vision and values and, in conjunction,
supports
employee
performance
at
the
organizational, team and individual level.

Process of Strategic Management

Models of Strategy
Industrial Organization (I/O) Model
External environment is primary determinant
of organizational strategy rather than internal
decisions of managers
Environment
presents
threats
and
opportunities
All competing organizations control or have
equal access to resources
Resources are highly mobile between firms

Resource-Based View (RBV)


An

organizations resources and capabilities, not


external environmental conditions, should be
basis for strategic decisions
Competitive advantage is gained through acquisition
and value of organizational resources
Organizations can identify, locate and acquire key
valuable resources
Resources
are
not
highly
mobile
across
organizations, and once acquired are retained
Valuable resources are costly to imitate and nonsubstitutable

Contrasting the Two Approaches


Research

provides

support

for

both

positions
What drives strategy?

I/O: External considerations

RBV: Internal considerations

I/O: Strategy drives resource acquisition


RBV: Strategy determined by resources

Corporate Strategies: Growth


Benefits
Gaining

economies of scale
in operations and functions
Enhancing competitive
position
Providing opportunities for
employee professional
development and
advancement
HR Issues
Planning for new hiring
Alerting current employees
Ensuring quality &
performance standards are
maintained

Internal Methods
Developing

new markets
Penetration of existing
markets
Developing new products or
services for existing or new
markets
External Methods
Acquiring other organizations
Vertical integration
HR Issues
Merging organizations
Dismissing redundant
employees

Traditional HR Versus Strategic HR


Traditional HR

Strategic HR

Responsibility for HR

Staff Specialists

Line Managers

Focus

Employee relations

Partnership with internal


&external customers

Role of HR

Transactional, change
-follower

Transformational, change
leader

Initiatives

Slow,reactive,fragmented

Fast, proactive, Integrated

Time Horizon

Short-term

Short, medium, long (as


necessary)

Control

Bureaucratic

Organic, flexible

Job design

Tight division of labor

Flexible, teams

Key Investments

Capital, products

People, knowledge

Accountability

Cost centre

Investment centre

Exhibit 4-7

Outcomes of Strategic HR

Benefits of a Strategic Approach to


HR

Facilitates

development of high-quality
workforce through focus on types of
people and skills needed

Facilitates cost-effective utilization of labor,

particularly in service industries where labor is


generally greatest cost
Facilitates planning and assessment of

environmental uncertainty, and adaptation


of organization to external forces

Barriers to Strategic HR
Short-term

mentality/focus

on

current

performance
Inability of HR to think strategically
Lack of appreciation for what HR can
contribute
Failure to understand line managers role
as an HR manager
Difficulty in quantifying many HR outcomes
Perception of human assets as higher-risk
investments

HR and Leadership
HR professionals are uniquely well placed to

help current leadership produce the next


generation of leaders by establishing
leadership brand, assessing the gaps in the
present leadership against this brand and
investing in future leaders.

(Source: Ulrich, D., & Brockbank, W. (2005). The HR value proposition.


Boston: Harvard Business School Press. )

The Strategic HR Function


Establishing a strategic HR function requires

proactive, capable leadership.


HR professionals at all levels must understand
the business requirements to best align their roles,
objectives and priorities.
Research shows that HR professionals play three
roles:
strategic
partner/change
agent,
administrative expert and employee champion.
Developing human resource leaders through
focusing on leadership competencies is critical to
achieve a strategic HR function.

Strategic partner

HRs

leadership
in
organization
development is also essential for the
organizations success.

Effective HR leaders align their departments

with the organizations they serve and match


their resources with business requirements.

At the top, HR needs to help make the

whole corporation greater than the sum of


its parts and to implement practices that
support
corporate
strategies,
build
shareholder value and shape the
corporate image.
At the business unit level, HR needs to
focus on strategic objectives, identifying
and serving target customers, creating
wealth in the marketplace and delivering
an employee value proposition

Human Resource Leadership


Capabilities
Shaping
Business
Strategy

Developing Leading
HR
Change
Strategy

Aligning
HR
Processes

Achieving
Results

Understand
the business
context and
develop
plans to
achieve
competitive
advantage.

Identify
peoplerelated
issues and
formulate
plans to
address
them.

Change
roles,
activities and
systems to
achieve
desired
outcomes.

Implement
actions and
processes to
achieve
results.

Enable the
organization
to implement
change
effectively

Source: Adapted from Human resource leaders: Capability, strengths and gaps.
(2003). In Building a strategic HR function. New York: The Human Resource
Planning Society.

Conclusion
The

role of HR has transitioned from an


administrative function to the opportunity to be a
true strategic business partner.
With the movement toward demonstrating HR
strategic leadership capabilities, the demand on
HR professionals to expand their leadership skills
and competenciesincluding business acumen
is increasing.
Ultimately, the future of HR may well depend upon
the degree to which it adds value to the
organization.