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HRM

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)
HR 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
Link to Corporate
Strategy

External competitive environment

Corporate
Input strategy Input
N
S
formulation IO
T
N
C
HR FUNCTIO
U
F
Corporate
HR Division
R
strategy
strateg strategies
H
E
implementation
y O
T

Evaluation
(measurment etc)
Role of HRM in
Strategy Formulation

HR Strategic Administrative
Function Planning linkage

HR Strategic One-Way
Function Planning linkage

HR Strategic Two-way
Function Planning linkage

HR Strategic Integrative
Function Planning linkage
Strategic Formulation:
Overview
VISION

EXTERNAL INTERNAL
ANALYSIS: ANALYSIS:
Opportunities Strengths
Threat Weaknesses

MISSION

GOALS / OBJECTIVES

STRATEGIC CHOICE
Strategic Formulation:
‘Step’ 1: Vision

Core
ideology

Organisational
Vision

Envisaged
future
Core Ideology

Core values Core Purpose

Essential, enduring Reason for being


tenants

What the
What is organisation
important? offers to society

What is Controlling desire,


inviolate? Dominant aspiration
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


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’
Strategic Formulation:
‘Step’ 1: Vision

Core
ideology

Organisational
Vision

Envisaged
future

BHAGS
Vivid Description
Envisaged Future

BHAGS Vivid Description

Huge, daunting Making goals


goals ‘imaginable’
Clear & compelling,
tangible
The ‘mind’s eye’
Unifying, inspiring,
engaging

1. Difficult Target Hopeful,


2. Common enemy passionate,
3. Role-model inspiring
4. Internal - images & symbols
transformation
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
 
 
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. 
Strategic Formulation
‘Step’ 2: SWOT Analysis
Brings balance to the more
unchanging vision:

Organisation’s internal & external


environment:
Change is often a constant here!

S Internal strengths &


W weaknesses of organisation

O External opportunities &


threats of organisation
T
Strategic Formulation:
‘Steps’ 3, 4 & 5: Mission,
Goals & Objectives
‘Eternal’ of ‘Now’ of
Vision SWOT

Mission:
What business / markets are we
in to realise our vision?

Goals:
The tasks that need to be done
to enable mission

Objectives
The quantifiable targets that are
set through the goals
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
Strategic Formulation:
‘Step’ 6: Strategic Choice
Vision Everyday
Mission operations
Goals
Objectives

Emergent
Deliberate
planning
+ (organic,
evolutionary)
strategy

Eventual plans

Example: Example:
A new customer Customer service
service process is people discover
planned for through new process
consideration of through dealing
new aims with customers
HR & Corporate
Strategic Choice

Deliberate
planning

Limit or
enable choices

HR Eventual
Function plans

Surface,
communicate
& integrate
suggestions
Emergent
strategy
Strategic Types

Categorisations under which any


strategy can be typified

Porter:
Overall cost leadership
Differentiation
Focus
Miles and Snow
Defenders
Prospectors
Analysers
Reactors

Directional Strategies
Concentration
Internal growth
External growth
Divestment
Strategic
Implementation:
Overview
2nd major part of strategy

Implementation by all functions,


but six major implementation “musts”:

1) Organisational structure
2) Task design
3) Selection, training &
development of people
4) Reward systems
5) Leadership, power & culture*
6) Information & information systems

* Not in textbook
HR Function and
Implementation
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!
Culture, Leaders, Strategy
These can support or hinder strategy

b Leadership
a
c
Culture
d Strategy
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)
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
ETC!
•Releasing
•Sharing of knowledge
•Attitudes
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, consistency


Differentiation / prospector = quality,
effectiveness, knowledge, creative
Focus / analyser = flexibility

Directional Strategies

Concentration = current skills focus


Internal growth = new employees, new
targets, new training
External growth = harmony, cooperation
Divestment = minimising loss
(retrenchments, morale, severance)
Strategic Measurement
& Control
Strategic Strategic
Formulation Implementation

Strategic
evaluation

Sets standards Measurement


(esp objectives) of outcomes

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