Human Resource

Management
TWELFTH EDITION
1
GARY DESSLER
BIJU VARKKEY

Part 1 | Introduction

Chapter 3

The Manager’s Role in Strategic Human Resource

Management
Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd
Authorized adaptation from the United States edition of Human
Resource Management, 12/e
 After reading this chapter, you should be able to:

1. Outline the steps in the strategic management process.

2. Explain and give examples of each type of
companywide and competitive strategy.
3. Explain what a strategy-oriented human resource
management system is and why it is important.
4. Illustrate and explain each of the eight steps in the HR
Scorecard approach to creating human resource
management systems.

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–2
 Goal Setting and the Planning Process
• A plan shows the course of action for getting from where you are to where
you want to go in other words, to the goal.
• Planning is always goal-directed

• Planning process - setting objectives, making basic planning forecasts,

reviewing alternative courses of action, evaluating which options are best,
and then choosing and implementing your plan

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–3
 The Hierarchy of Goals

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–4
 The Strategic Management Process
• Strategic Management
 The process of identifying and executing the organization’s
mission by matching its capabilities with the demands of its
environment.
• Strategy
 A chosen course of action.
• Strategic Plan
 How an organization intends to balance its internal strengths
and weaknesses with its external opportunities and threats to
maintain a competitive advantage over the long-term.
 Where are we now as a business, where do we want to be and
how?

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–5
 FIGURE 3–5 The Strategic Management Process

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–6
 Strategic Planning Process
• Step 1: Define the current Business
• The logical place to start is by defining one’s current business.
• Specifically, what products do we sell, where do we sell them, and how do our
products or services differ from our competitor’s.
• Casio and Rolex

• Step 2: Perform External and Internal Audits

• Are we heading in the right direction?

• Managers need to audit both the firm’s environment, and the firm’s strengths and

weaknesses

• Which analysis?

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–7
 FIGURE 3–7 A SWOT Chart

Strengths Weaknesses

Example: Market leadership Example: Large inventories

Opportunities Threats

Example: New overseas markets Example: Market saturation

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–8
 SWOT of Pepsi

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–9
 Strategic Planning Process
• Step 3: Formulate a new direction
• What should our new business be, in terms of what products we will sell,
where we will sell them, and how our products or services will differ from
competitor’s products?
• Vision and Mission

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–10
 Business Vision and Mission
• Vision (Essence of the business)
 A general statement of an organization’s intended direction that evokes
emotional feelings in organization members.
 Pepsi: Performance with purpose – Human, environmental and talent
sustainability.

• Mission
 Spells out who the company is, what it does, and where it’s headed.
 Pepsi: Create more smiles with every sip and every bite. By creating
joyful moments through our delicious and nourishing products and
unique brand experiences

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–11
 Strategic Planning Process
• Step 4: Translate the mission into the strategic
goals
• Ford - Quality Job One mean for each department in terms of how they
would boost quality?
• The answer is that its managers had to meet strict goals such as no more
than 1 initial defect per 10,000 cars.

• Step 5: Formulate strategies to achieve the

strategic goals
• Open two new high-tech plants, reduce the number of car lines to better focus on
just a few, and put in place new more rigorous employee selection, training, and
performance appraisal procedures

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–12
 Strategic Planning Process
• Step 6: Implement the strategies
• Strategies translation into action

• Step 7: Evaluate Performance

• Things don’t always turn out as planned.
• Ford bought Jaguar and Land Rover as a way to reduce reliance on lower-profit
cars. With auto competition brutal, Ford announced in 2009 it was selling Jaguar
and Land Rover (to Tata, a company in India).

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–13
 Assignment
• With a group of two members, form a strategic
management group for your university. Your
assignment is to develop the outline of a strategic
plan for the university.
• This should include such things as mission and vision
statements and strategic goals.
• In preparing your plan, make sure to show the main
strengths, weaknesses, opportunities, and threats that
your university faces, and which prompted you to
develop your particular strategic plans

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–14
 FIGURE 3–8 Relationships Among Strategies in Multiple-Business Firms

Types of
Strategies

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–15
 Types of Strategies

How many and what kind

Corporate-Level of business should we be
Strategies in?
(portfolio of businesses)

Diversification Vertical Consolidation

Integration Geographic
Strategy Strategy or
Strategy Expansion
(Add new product Concentration
(raw materials and retail Strategy
lines) (One product or line)
shops)

Pepsi – Frito Lays, Apple – Apple stores Ford – Sold out jaguar Air bnb
Pepsi Co. Beverages, Sabroso and K&Ns Airlift – closed its mart Toyota
Quaker Oats. Zomato (consolidation) Qurshi
Guard Group – ICI paints
Lubricants, rice, wheat,
air filters

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–16
 Types of Strategies (continued)

Business-Level/ A competitive strategy identifies

how to build and strengthen the
Competitive business’s long term competitive
position in the market place
Strategies

Cost Leadership Differentiation

Focus/Niche
(low cost) (Uniqueness)

Walmart Papa John’s Ferrari

Khaadi Tesla Netsol

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–17
 Functional Strategy
• Functional strategies identify the broad
guidelines that each department will follow in
order to help the business accomplish its
competitive goals
• Walmart – Bulk buying
• HR – low pay and anti union

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–18
 Achieving Strategic Fit

The “Fit” Point of View (Porter) consists of the

idea that each department’s strategy needs to fit
the parent business’s competitive aims.

South western Airlines

•High Pay to Highly Productive Ground Crews to
Frequent Departures to Low Costs

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
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 Comparative Advantage
• A competitive advantage enables a company to
differentiate its product or service from those of its
competitors
• The competitive advantage need not be tangible
• GE airfoils plant - The teams run computer-controlled
machine tools, interview prospective team members,
and adjust assembly lines to maximize production
• Apple – Steve Jobs
• Human capital - knowledgeable, skilled, engaged
employees working hard and with self-discipline

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–20
 Role of managers
• Top managers?
• Department managers’ strategic planning role

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
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 Strategic Human Resource Management
• Strategic Human Resource Management
 The linking of HRM with strategic goals and
objectives in order to improve business performance
and develop organizational cultures that foster
innovation and flexibility.
 Involves formulating and executing HR systems—HR
policies and activities—that produce the employee
competencies and behaviors that the company needs
to achieve its strategic aims.

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–22
 FIGURE 3–6 Linking Company-Wide and HR Strategies

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Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–23
 Creating the Strategic Human Resource
Management System

Components of a
Strategic HRM System

Human Resource Employee

Human Resource
Policies and Behaviors and
Professionals
Practices Competencies

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–24
 FIGURE 3–10
Strategy
Map for
Southwest
Airlines

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd Source: Adapted from “Creating a Strategy Map,”
Authorized adaptation from the United States edition of Human Ravi Tangri, Team@TeamCHRYSALIS.com.
Resource Management, 12/e
3–25
 KEY TERMS

strategic plan
strategic management
vision
mission
SWOT analysis
strategy
strategic control
competitive advantage
strategic human resource management

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
3–26