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HR And Corporate Strategy
HR strategy relates to selection, development and motivation of the right candidates for the job. According to Michael Porter, “corporate strategy is the overall plan for diversified business”. There are 3 different types of corporate strategies. They are: Growth Stability Retrenchment
Effective planning is utmost important for the success of growth strategy.Growth Growth strategy helps employees to develop skills and contribute to the overall performance of the organization. Growth can be achieved by developing new products and by training &developing its employees. .
Stability Stability is another corporate strategy where an organization adopts a status quo and sees very few opportunities for growth. Such organizations lack upward mobility and there are limited opportunities for growth and may leave the organization. .
Retrenchment should not affect the morale of the employees. In retrenchment organization goes in for cost cutting and downsizing takes place.Retrenchment Retrenchment is used when the organization realizes that it is unable to compete in the global market. Retrenchment is mainly adopted to stream line operations and strengthen organizations competency. .
Business unit strategies are of 3 types: Cost leadership Differentiation Focus .HR And Business Strategy Corporate strategy is the overall strategy related to business interests Business Strategy is designed to serve the interests of a particular business unit.
. In this strategy. Employees are also cross trained to build customer loyalty. customers are perceived to be price sensitive and not brand loyal.Cost Leadership Organizations focusing on cost leadership are customer-oriented & keep manufacturing costs low to gain a competitive advantage. As efficiency is taken into account job assignments are more specialized.
. These organizations require creative and innovative people to contribute to new product development. Employees should be empowered and motivated.Differentiation In this strategy organizations differentiate their products from that of the competitors by adding extra features or benefits. Company should follow a recruitment procedure.
. Employees should be aware of the of the particular market and frame strategies accordingly.Focus An organization concentrates on one market and maximizes its profit from that segment.
It identifies three separate strategies Inducement Involvement Investment strategy The typology is based on the assumption that HRM’s role is to develop policies &practices that will have direct employee development & support to achieve organizational goals.Dyer And Holder Typology For Strategies An important business strategy was developed by Dyer&Holder in 1998. .
Inducement strategy aim at retaining the employees by encouraging loyalty& commitment. Involvement strategy is used by organizations that give importance to both innovation and cost-cutting. encourage creativity and also show concern for compensation packages.An investment strategy is used by those organizations that focus on changing market . .
Steps in the strategy framework are: External Environmental Scan Internal Capital assessment .Human Resource Strategy Frame work The human resource strategy framework shows the interaction between a firm and its environment.
Steps in external environmental scan: Competitor/industry analysis Stakeholder analysis PEST analysis Environmental situational factors .External Environmental Scan External environmental scan is the analysis of the external environmental forces that have an impact on the organizations functioning.
Competitor/Industry Analysis It is the analysis of the firms operations and the competitive pressures it is facing Michael Porter has proposed 5 factors that shape the business strategy 1. Threat of new entrants/barriers to entry 3.Bargaining power of buyers . Threat of substitutes 4. Bargaining power of suppliers 5. Intensity of rivalry 2.
Stake Holder Analysis A stake holder analysis identifies &assesses the importance of key people. . It is important for the manager to frame a HR strategy that includes expectations of all the stake holders. This includes different expectations the stakeholders from a company in terms of performance and effectiveness. groups of people for organizations success.
PEST analysis helps an organization to assess external factors that have an impact on the framing of organizational strategies. Technological advancements have changed the work performance &revolutionized the work place. . Economic and demographic patterns affect an organization. social.PEST ANALYSIS Pest analysis is important for analyzing the fit between HR and organizational strategy It is concerned with the analysis of political. HR practices &policies that guide employees have to be framed keeping in view technological changes. Political &legal environment have an impact on the framing of strategies. economic and technological factors that influence organizational strategies.
2 major challenges that the human resources field has to face are: Managing Diversity Demographic Trends .Environmental Situational Factors The changing environment is also bringing a change in the human environment.
Reasons for the evolution of the diverse workforce: Shift from manufacturing to service economy Globalization of markets Changing business strategy Mergers and acquisitions Changing labor market .Management Of Diversity Diversity enhances work performance and innovation. Ex:Lucent Technologies reward employees when they achieve diversity objectives.
Thomas &Robin there are 3 paradigms which guide initiatives in an organization: Discrimination & Fairness Paradigm Access and legitimacy paradigm Learning and effectiveness paradigm . According to David A.Managing Diverse Paradigms Managing diverse employees is a strategic issue that has an impact on an organizational productivity and success.
Diversity Processes Diversity processes are developed by organizations to manage diversity. Organizations can use any of the diversity processes or a combination of all: Cultural audit surveys Awareness training Skill building training Diversity enlargement hiring strategies .
Most present day organizations have been successful in managing diversity programs. They have done this by redesigning the human resources policies and practices which include: Creating diversity awareness Involving top management in the diversity initiative program Developing a plan of action for diversity programs Identifying the changes required in the human resource functions .
project teams. networking groups. self-managed teams. Unlike composition of teams in the past. beliefs of an organization. Most of the organizations use cross-functional and selfmanaged teams.Management Of Work Teams Important aspect of diversity is the evolution of work teams and virtual teams. Modern organizations use many work teams such as task forces. modern organizations were having teams that were diverse in terms of demographics. Unlike traditional project teams new teams have new values. . quality teams &cross functional teams.
&manufacturers with customers. Criteria on which a team is evaluated includes both organizational and individual outcomes. . The increased emphasis on customer satisfaction enables companies for teaming up their marketing experts.The reason for growing importance of work teams is the emphasis on customer satisfaction. There is no guide for managing a diverse work team.
Team should have an efficient leader to guide & coach. Teams should have clearly defined responsibilities for all team members.Characteristics Of Effective Work Teams In The Organizational Context Team members should have appropriate knowledge. skills. feedback &rewards towards the effective performance. . support. Team should have clearly defined mission objectives which are specific. abilities to perform the task. Teams should provide employees with autonomy.
Individual team member is accountable &responsible for his work &should actively participate in discussions & decision-making. Each member of the team should be receptive to each other’s ideas &should be committed to work.Characteristics Of Effective Work Teams In The Team Context A systematic well-defined plan that can enable members to use effective communication skills &reduce distortions. .
Ex: Deloitte &Touché . job design. Planning and design are the key to the success of virtual teams. Virtual teams create a distance between employees &their organizations. But have to share information constantly. The important elements for the successful implementation of virtual teams are organizational design. team design and coordination of work of employees with the aid of technology. The demerit of virtual teams is it is difficult to communicate with people who have never met each other. project or ongoing function in the organization.Management Of Virtual Teams Virtual teams can be described as a group of geographically or organizationally dispersed employees to address a specific task.
Impact Of Demographic Trends On HR Strategy Formulation Demographic changes create a number of challenges for the HR management. Generation X (born in 1970’s&early 1980’s) individuals bring in advanced technologies into the work atmosphere. Project teams have come forward to motivate &manage &retain such teams. . there are fewer positions available. As one moves up in the management hierarchy . Incentive programs have to be developed so that baby boomers (1946-1964) retire and opportunities may be created for baby busters. Employees of this generation like to be empowered and require autonomy. HR strategy formulation should also take into consideration the diverse demographics of employees.
&the changes to be implemented in culture &technology to be used for effective performance of employees. International capital assessment helps analyze a firm’s strengths &weaknesses in financial. dynamic organization structures that facilitate change &acceptance to change. Internal Capital Assessment . Human resource assessment includes the analysis of workforce. technological and human resources. Technology has created flexible. organizational culture. analysis of cash flows. Financial assessment included the balance sheet. Technological revolution brings change in employee skills and training &also leads to collaborative work &downsizing.
and positions it plans to achieve in its field. Mission corresponds basic philosophy or vision underlying business. The next step is to develop future projections &strategy through which it plans to achieve these projections.Strategy Formulation After successful identification of internal & external capabilities. The next plan is to integrate the HR plans with organizational plans . . The final step is to allocate organizational resources developing processes &systems to support the HR roles. weaknesses organization has to have a mission &vision for the successful implementation of HR strategy. Mission describes the company’s business activities. Vision presents core ideology and envisioned future for the organization.
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