Strategic Management

© 2010 by Nelson Education Ltd. 1

LEARNING OBJECTIVES
After reading this chapter, you should be able to:

• Discuss why managers need to examine the human resource implications of their
organizational strategies

• Understand the various terms used to define strategy and its processes

• Describe organizational strategies, including restructuring, growth, and stability

© 2010 by Nelson Education Ltd. 2

LEARNING OBJECTIVES
After reading this chapter, you should be able to:

• Define business strategy and discuss how it differs from corporate strategy.

• Discuss the steps used in strategic planning

• List the benefits of strategic planning

© 2010 by Nelson Education Ltd. 3

WHAT DO WE MEAN BY STRATEGY ?
• What is our present situation?
– Business environment and industry conditions
– Firm’s financial and competitive capabilities
• Where do we want to go from here?
– Creating a vision for the firm’s future direction
• How are we going to get there?
– Crafting an action plan that will get us there
WHAT IS STRATEGY ABOUT?
• Strategy is all about How:
– How to outcompete rivals.
– How to respond to economic and market conditions and growth
opportunities.
– How to manage functional pieces of the business.
– How to improve the firm’s financial and market performance.
WHY DO STRATEGY ?
A firm does strategy:
– To improve its financial performance.
– To strengthen its competitive position.
– To gain a sustainable competitive. advantage over its market rivals.

A creative, distinctive strategy:

– Can yield above-average profits.
– Makes competition difficult for rivals.
STRATEGY AND COMPETITORS
♦ Strategy is about competing differently from rivals—
● Doing what they don’t do or doing it better!
● Doing what they can’t do!
● Doing that which sets the firm apart and attracts customers.
● Doing what we should or should not do to produce a competitive edge.
STRATEGY
• Strategy- the formulation of
organizational missions, goals,
objectives and action plans for
achievement that explicitly
recognize the competition and
the impact of outside
environmental forces

© 2010 by Nelson Education Ltd. 8

TYPES OF STRATEGY
Corporate strategies Business strategies
• Turnaround • Cost
• Divestiture
• Differentiation
• Focus
• Liquidation
• Geographical expansion
• Merger and acquisition

© 2010 by Nelson Education Ltd. 9

The Strategy-Making, Strategy-Executing Process
STRATEGIC MANAGEMENT PROCESS MODEL
Strategy Formulation Strategy Implementation
HR Practices
• Recruiting
External Analysis • Training
•Opportunities • Performance management
•Threats • Labor relations
• Employee relations Firm
• Job analysis
• Job design Performance
• Selection • Productivity
HR • Development • Quality
Strategic Needs • Pay structure • Profitability
Mission •Skills • Incentives
Goals Choice •Benefits
•Behavior
•Culture
HR
Internal Capability HR Actions
Analysis •Skills, •Behaviors
•Strengths •Abilities •Results
•Weaknesses •Knowledge

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