Chapter

Chapter 3:3:
Strategic
Strategic
Management
Management

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
••What
What is
is the
the ‘Strategy’
‘Strategy’ ??
•• (a
(a la
la corporate
corporate cultue)
cultue)

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Strategic
Strategic Management
Management
•• Strategic
Strategic Human
Human Resource
Resource Management
Management
•• Involves
Involvesaligning
aligninginitiatives
initiativesinvolving
involvinghow
howpeople
peopleare
are
managed
managedwith
withorganizational
organizationalmission
missionand
andobjectives
objectives
•• Strategic
Strategic Management
Management Process
Process
•• Determining
Determiningwhat
what needs
needsto tobe
bedone
donetotoachieve
achieve
corporate
corporateobjectives
objectives over
over33-- 55years
years
•• Examining
Examiningorganization
organizationandandcompetitive
competitiveenvironment
environment
•• Establishing
Establishingoptimal
optimalfit
fit between
betweenorganization
organizationand
andits
its
environment
environment
•• Reviewing
Reviewingandandrevising
revisingstrategic
strategicplan
plan

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The
The Process
Process of
of Strategic
Strategic Management
Management

•• Mission
Mission statement
statement
•• Environmental
Environmental analysis
analysis
•• Organizational
Organizational self-assessment
self-assessment
•• Establishing
Establishing goals
goals and
and objectives
objectives
•• Setting
Setting Strategy
Strategy

Identify
Identify Assumptions
Assumptions

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit
Exhibit 3.1:
3.1: The
The Process
Process of
of Strategic
Strategic
Management
Management

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Mission
Mission Statement
Statement

•• Explains
Explains purpose
purpose and
and reason
reason for
for
existence
existence
•• Usually
Usually very
very broad
broad
•• No
No more
more than
than aa couple
couple of
of
sentences(paragraphs)
sentences(paragraphs)
•• Serves
Serves as
as foundation
foundation for
for everything
everything
organization
organization does
does
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Microsoft
Microsoft
Mission
Mission
Statement
Statement

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Analysis
Analysis of
of Environment
Environment

•• Critical
Critical components
components of
of external
external
environment
environment
•• Competition
Competition
•• Industry
Industry structure
structure
•• Government
Government regulations
regulations
•• Technology
Technology
•• Market
Market trends
trends
•• Economic
Economic tends
tends

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Organization
Organization Self-Assessment
Self-Assessment (1)(1)
•• Identify
Identify primary
primary strengths
strengths and
and weaknesses
weaknesses
•• Find
Find ways
ways toto capitalize
capitalize on
on strengths
strengths
•• Find
Find ways
ways toto improve
improve or
or minimize
minimize weaknesses
weaknesses
•• Examine
Examine resources
resources
•• Physical
Physical
•• Human
Human
•• Technological
Technological
•• Capital
Capital

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Organization
Organization Self-Assessment
Self-Assessment (2)(2)

•• Examine
Examine internal
internal management
management
systems
systems
•• Culture
Culture
•• Organization
Organization structure
structure
•• Power
Power dynamics
dynamics and
and policy
policy
•• Decision-making
Decision-making processes
processes
•• Past
Past strategy
strategy and
and performance
performance
•• Work
Work systems
systems
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Establishing
Establishing Goals
Goals and
and Objectives
Objectives

•• Goals
Goals should
should be:
be:
•• Specific
Specific
•• Measurable
Measurable
•• Achievable
Achievable
•• Relevant
Relevant
•• Time-bound
Time-bound

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Corporate
Corporate Strategies:
Strategies: Growth
Growth
•• Benefits
Benefits •• Internal
InternalMethods
Methods
•• Gaining
Gainingeconomies
economiesofofscale
scaleinin •• Penetration
Penetrationofofexisting
existingmarkets
markets
operations
operationsandandfunctions •• Developing
functions Developingnew
newmarkets
markets
•• Enhancing
Enhancingcompetitive
competitiveposition •• Developing
position Developingnew
newproducts
productsoror
vis-à-vis industry competitors services
vis-à-vis industry competitors servicesfor
forexisting
existingorornew
new
•• Providing
Providingopportunities
opportunitiesfor
for markets
markets
employee
employeeprofessional •• External
development
professional ExternalMethods
Methods
developmentand andadvancement
advancement •• Acquiring
Acquiringother
otherorganizations
organizations
•• HR
HRIssues
Issues •• Vertical
Verticalintegration
integration
•• Planning
Planningfor
fornew
newhiring
hiring •• HR
HRIssues
IssuesininM&A
M&A
•• Alerting
Alertingcurrent
currentemployees
employees •• Merging
Mergingorganizations
organizations
•• Ensuring
Ensuringquality
qualityand
and •• Dismissing
Dismissingredundant
redundant
performance
performancestandards
standardsareare employees
employees
maintained
maintained

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Corporate
Corporate Strategies:
Strategies: Stability
Stability

•• Maintaining
Maintaining status
status quo
quo duedue to
to limited
limited
environmental
environmental opportunities
opportunities forfor gaining
gaining
competitive
competitive advantage
advantage
•• Few
Few employees
employees willwill have
have opportunities
opportunities forfor
advancement
advancement
•• Critical
Critical that
that management
management identify
identify key
key
employees
employees and and develop
develop specific
specific HRHR
retention
retention strategies
strategies toto keep
keep them
them

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Corporate
Corporate Strategies:
Strategies:
Turnaround
Turnaround or
or Retrenchment
Retrenchment
•• Downsizing
Downsizing or or streamlining
streamlining organization
organization in
in
cost-cutting
cost-cutting attempt
attempt to
to adjust
adjust to
to
competitive
competitive environment
environment
•• Few
Few opportunities
opportunities and
and many
many
environmental
environmental threats
threats
•• Important
Important to
to develop
develop HRHR practices
practices to
to
manage
manage “survivors”
“survivors”

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Business
Business Unit
Unit Strategies:
Strategies: Cost
Cost
Leadership
Leadership
•• Increases
Increases in in efficiency
efficiency and
and cutting
cutting of
of costs,
costs, then
then
passing
passing savings
savings to to consumer
consumer
•• Assumes
Assumes price
price elasticity
elasticity in
in demand
demand for for products
products
or
or services
services isis high
high
•• Assumes
Assumes thatthat customers
customers are are more
more price
price
sensitive
sensitive than
than brand
brand loyal
loyal
•• HR
HR strategy
strategy focuses
focuses on on short-term
short-term performance
performance
measures
measures of of results
results and
and promoting
promoting efficiency
efficiency
through
through job
job specialization
specialization and and cross-training
cross-training

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Business
Business Unit
Unit Strategies:
Strategies:
Differentiation
Differentiation
•• In
In order
order to
to demand
demand aa premium
premium price
price from
from
consumers
consumers
•• Attempting
Attemptingtotodistinguish
distinguishorganizational
organizationalproducts
productsor
or
services
servicesfrom
from other
othercompetitors
competitors oror
•• Creating
Creating perception
perception of
of difference
difference
•• Organization
Organization offers
offers employees
employees incentives
incentives and
and
compensation
compensation forfor creativity
creativity
•• HR
HR strategy
strategy focuses
focuses on
on external
external hiring
hiring of
of unique
unique
individuals
individuals and
and on
on retaining
retaining creative
creative employees
employees

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Business
Business Unit
Unit Strategies:
Strategies: Focus
Focus
•• Business
Business attempts
attempts to to satisfy
satisfy needs
needs of
of only
only aa
particular
particular group
group oror narrow
narrow market
market segment
segment
•• Strategic
Strategic intent
intent is
is to
to gain
gain consumer
consumer loyalty
loyalty of
of
neglected
neglected groups
groups of of consumers
consumers
•• Strategic
Strategic HR
HR issue
issue is is ensuring
ensuring employee
employee
awareness
awareness of of uniqueness
uniqueness of of market
market segment
segment
•• Thorough
Thoroughemployee
employeetraining
trainingand
andfocus
focuson
oncustomer
customer
satisfaction
satisfactionare
arecritical
criticalfactors
factors
•• Hiring
Hiringmembers
membersof of target
target segment
segment whowhoare
are
empathetic
empatheticto tocustomer
customerin intarget
target segment
segment

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Benefits
Benefits of
of aa Strategic
Strategic Approach
Approach to
to HR
HR

•• Facilitates
Facilitates development
development of of high-quality
high-quality
workforce
workforce through
through focus
focus on
on types
types of
of
people
people and
and skills
skills needed
needed
•• Facilitates
Facilitates cost-effective
cost-effective utilization
utilization of
of
labor,
labor, particularly
particularly inin service
service industries
industries
where
where labor
labor is
is generally
generally greatest
greatest cost
cost
•• Facilitates
Facilitates planning
planning andand assessment
assessment of of
environmental
environmental uncertainty
uncertainty andand adaptation
adaptation
of
of organization
organization to to external
external forces
forces
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
••Case
Case Study
Study

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.