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Presentation On Strategic Human Resource Management by Dr. Jamnean Joungtrakul President and CEO, BLCI GROUP and Senior Industry Fellow, Graduate School of Business, Curtin University of Technology, Australia 3300/71, 11th Floor, Tower B,Elephant Tower Paholyothin Road, Chompol,

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Presentation

On

Strategic Human Resource Management

by

Dr. Jamnean Joungtrakul

President and CEO, BLCI GROUP and Senior Industry Fellow, Graduate School of Business, Curtin University of Technology, Australia

3300/71, 11th Floor, Tower B,Elephant

Tower Paholyothin Road, Chompol,

Chatuchack, BKK 10900

Tel 02-937-3773 Fax 02-937-3770

Email: jamnean@blcigroup.com

Website: www.blcigroup.com


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Food for Thought

Strategy is very important. But no one knows what it means. Every professor in the worlds has different version of what strategy means. This keeps them in business but does not help management. In answer to the professorial question ‘What is strategy?, there is only one universally accurate answer: ‘It means exactly what you want it to mean to make your own point.’ (Owen, 2002, p. 199)


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Scope of this Presentation

Part-1: The Concept of Strategy

Part-2: Strategic Management

Part-3: Human Resource Management

Part-4: Strategic Human Resource Management

Part-5: Case Study

Part-6: Questions and Answers


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Part-1: The Concept of Strategy


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The Origin of Strategy

The root of strategy can be traced back to the golden era of the development of classical Chinese military strategy back in 772-221 BC.


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The Origin of Strategy

(con’t)

The Sun Tzu Bing-Fa: The Art of War

The Sun Tzu Bing-Fa, allegedly written by the master Sun Tzu in the fourth century BC, is the most complete and reputable book of military strategy that has survived to date


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The Most Famous Quotation from Sun Tzu

“Know your enemy, know yourself, and you can fight a hundred battles with no danger of defeat. When you are ignorant of the enemy but know yourself, your chances of winning and losing are equal. If you don’t know both your enemy and yourself, you are bound to perish in all battles…know the terrain, know the weather, and your victory will be complete.” (Chen, 1995, p. 42)


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The Essence of Sun Tzu’s Art of War

  • The major principles of strategies;

  • The importance of moral influences;

  • The quality a good general should and should not possess;

  • The role of climate and terrain in determining the situation of the battle;

  • The strategy of enlarging one’s comparative strengths;

  • The importance of organization and training;

  • The proper usage of discipline which combines severity and benevolence


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The Principles of Strategies

“With careful and detailed planning, one can win, with careless and less detailed planning, one cannot win. How much less chance of victory has one who does not plan at all! From the way planning is done beforehand, one can predict victory or defeat.” (Chen, 1995)


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Some Critical View Points on Strategy

“Strategy comes from the Greek word strategos, which has its roots in military language. It refers to a general’s grand design behind a war or a battle.” (Noe, Hollenbeck, Gerhart and Wright, 2000, p. 42)

“Business is like a war in one respect, if its grand strategy is correct, any number of tactical errors can be made and yet the enterprises proves successful.” (Wood, cited in Steiner, 1997, p. 5)


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Some Critical View Points on Strategy

“Strategy is grounded in the array of competitive moves and business approaches management depends on to produce successful performance (Thompson & Strickland, 1995, p. 2)

(con’t)


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Some Critical View Points on Strategy

(con’t)

“When you cut away all the jargon, this is what strategy is all about: how you are going to do better by being different.” (Magretta, 2002, p. 72)

“Indeed, the essence of good strategy-making is to build a market position strong enough and an organization capable enough to produce successful performance despite unforeseeable events, potent competition, and internal problems.” (Thompson & Strickland, 1995, p. 3)

“The essence of strategy is choosing what not to do.” (Porter, cited in Magretta, 2002, p. 71)


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The Definition of Strategy

“Of all the concepts in management, strategy is the one that attracts the most attention and generates the most controversy. Almost everyone agrees that it is important. Almost no one agrees on what it is.” (Magretta, 2002, p. 71)


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Some Definitions of Strategy

“Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it.” (Henderson, 1991, p. 5)

“A strategy is an integrated set of choices which identify the positioning and the competitive advantages that beat competition on a sustainable basis in meeting consumer needs.” (Procter & Gamble)


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“A strategy is a commitment to undertake one set of actions rather than another.” (Oster, cited in Thompson & Strickland, 1995, p. 2)

Some Definitions of Strategy

(con’t)


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Some Definitions of Strategy

(con’t)

“…Strategy, in effect, is management’s game plan for strengthening the organization’s position, pleasing customers, and achieving performance targets.” (Thompson & Strickland, 1995, p. 2)

“Strategy has been defined…as ‘the pattern of decisions a firm makes.’” (Hax, cited in Kreitner, 1998, p. 196)


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“Corporate strategy reconciles what a company might do in terms of opportunity, what it can do in terms of its strength, what its management wants it to do, and what it thinks is ethical, legal, and moral.” (Andrews, 1991, p. 450)

Some Definitions of Strategy

(con’t)


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Part-2: Strategic Management


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The Concept of Strategic

Management Application to Business

The pioneering work on which many modern strategy ideas rest took place at the Harvard Business School in the early 1960s lead by Kenneth R. Andrews and C. Roland Christensen(Montgomery & Porter, 1991


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The term strategy was applied to business enterprises in the late 1970s (Magretta, 2002). It became a full fledged management discipline in the 1980s (Montgomery & Porter, 1991)

The Concept of Strategic

Management Application to Business

(con’t)


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Some Definition of Strategic Management

“Strategic management is that set of managerial decisions and actions that determines the long-run performance of a corporation. It includes strategy formulation, strategy implementation, and evaluation and control.” (Wheelen & Hunger, 1990, p. 7)


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Some Definition of Strategic Management

“Strategic Management is an ongoing process of ensuring a competitively superior fit between an organization and its changing environment.” (Teece, 1984, cited in Kreitner, 1998)“Strategic management = Strategic Planning + Implementation + Control.” (Kreitner, 1998, p. 196)

(con’t)


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Strategic Management Process

- Deciding what business will be in and forming

a strategic vision of where the organization

needs to be headed-in effect, infusing the

organization with a sense of purpose, providing

long-term direction, and establishing a clear

mission to be accomplished.

- Converting the strategic vision and mission into

measurable objectives and performance targets


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Strategic Management Process

(con’t)

- Crafting the strategy to achieve the desired results

- Implementing and executing the chosen strategy

efficiently and effectively

- Evaluating performance, reviewing new developments,

and initiating corrective adjustments in long-term

direction, objectives, strategy, or implementation in

light of actual experience, changing condition, new

ideas, and new opportunities

(Thompson & Strickland, 1995, p.3)


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Task 1

Task 2

Task 3

Task 4

Task 5

The Five Tasks of Strategic Management

Developing a

Strategic Vision

and Business

Mission

Setting

Objectives

Crafting a

Strategy to

Achieve the

Objectives

Implementing

and Executing

the Strategy

Evaluating

Performance,

Reviewing New

Developments,

and Initiating

Corrective

Adjustment

(Thompson & Strickland, 1995, p. 4)

Reviews

as Needed

Reviews

as Needed

Improve/Change

as Needed

Improve/Change

as Needed

Recycle to

Tasks 1, 2, 3 or

4 as Needed


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P&G Strategy Deployment System

Strategy Deployment is intended to be used by Categories to drive dramatic Business Results. Strategy Deployment forces choice, it forces measurement of strategy. It is intended for Breakthrough.


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The Seven Steps of Strategy Deployment System

  • Long Term Vision

  • Develop Strategy

  • Deploy Strategy

  • Capability

  • Do the Plans

  • Review and Audit-Monthly

  • Review and Audit-Quarterly


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  • Long Term Vision:

    Define why we exist, where we are

    headed as a Business


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  • Develop Strategy:

    Develops strategy; defines the objectives, goals, strategies, measures. OGSM’s are the building blocks of the system


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  • Objectives: What we are trying to achieve (1 choice) = Words

  • Goals: Howe we will measure the objective = Numbers

  • Strategies: How we will achieve the objective/goals (1-3 choices) = Words

  • Measures: How we will measure the strategies = Numbers


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  • Deploy Strategy:

    - Defines the groups responsible for delivering the strategies/measures, and then translates to actions/measures/accountability for execution.

    - Deployment links strategies throughout the organization and translates to what “I/we can go do.”

    - The emphasis is on what it will take to achieve the strategy, not negotiate to a lower need.


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  • Capability:

    Checks sufficiency of the plans and capability of the organization to deliver the plans


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  • Do the Plans:

    Execute and track


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  • Review and Audit-Monthly:

    - Action Planners ask, “Did we do what we

    said;” they check actual vs. target, analyze

    gaps, and determine adjustments.

    - Reviews are the “heart” of the system,

    where strategy becomes action,

    accountability is established, and learning

    occurs.


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  • Review and Audit-Quarterly:

    - Management and Action Planners ask “Is it

    working, what is needed, what is learned, how

    to maintain the improvement.”

    - Quarterly Reviews are the “test” for leadership’s

    behaviour that creates focus, commitment, and a

    learning environment or lack of focus and

    compliance, or a fear environment.


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Strategy Deployment Flow Chart

LONG TERM VISION

“Defines Winning”

Purpose & Vision & Values

Corp. OGSM

DEVELOP STRATEGY

“What Are We Going For?”“How Will We Get IT?”

Gather Data

Category OGSM

DEPLOY STRATEGY

“How Are We Going to Organize”

Function OGSM

Action Plans

Linkages

“Can We Do the Plan?”

no

CAPABLE?

yes

DO THE PLANS

“Just Do It”

“Did We Do What We Said We’d Do?”

REVIEW & ADJUST MONTHLY

REVIEW & ADJUST QUARTERLY/ANNUALLY

“Is It Working”


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Part-3: Human Resource Management


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What is Human Resource Management?

Human Resource Management is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques (Storey, 1995, p. 5)


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The Major Component of HRM-Beliefs and Assumptions

- That it is the human resource which gives competitive advantage

- That the aim should be not more compliance with rules, but employee commitment

- That therefore employees should be very carefully selected and developed


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The Major Component of HRM-Strategic Qualities

- Because of the above factors, HR decisions are of strategic importance

- Top management involvement is necessary

- HR policies should be integrated into the business strategy-stemming from it and even contributing to it


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The Major Component of HRM-Critical Role of Managers

- Because HR practice is critical to core activities of the business, it is too important to be left to personnel specialists alone

- Line managers need to be closely involved both at deliverers and drivers of the HR policies

- Much greater attention is paid to the management of managers themselves


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The Major Component of HRM-Key Levers

- Managing culture is more important than managing procedures and systems

“Just Do It”

- Integrated action on selection, communication, training, reward and development

- Restructuring and job design to allow devolved responsibility and empowerment (Storey, 1995, p.6)


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Human Resource Management vs. Personnel Management-Similarities

- Both emphasise the importance of integrating personnel/HRM practice with organizational goals

- Both vest personnel/HRM practice firmly in line management

- Both, in the main, stress the importance of individuals developing their abilities fully for their own personal satisfaction to make their ‘best contribution’ to organizational success

- Both identify placing the ‘right’ people into the ‘right’ jobs as an important means of integrating personnel/HRM practice with organizational goals, including individual development (Legge, 1995)


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HRM vs. PM- Differences

- HRM focuses on employees as resources which, like other resources, need to be used efficiently

- Employees are viewed as a key resource, which employers actively pursuing employee commitment to corporate goals and values.

-Only through a systematic sets of policies on recruitment, rewards for performance, staff appraisal, training and development, and effective communication, it is argued, can commitment and excellence be achieved


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HRM vs. PM- Differences

(con’t)

- HRM assumes that personnel management is the responsibility of all line managers rather than of personnel specialists

- There is a preference for individual management communication with employees, rather than relying on collective forms of information exchange through trade unions

- HRM assumes a neo-unitary model of employee relations, in contrast with the pluralist model underpinning traditional personnel management (Farnham, 1997)


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Differences and Similarities between PM and HRM

Source: Farnham, 1990


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Criticism of HRM

- Old wine in new bottles?

- Is it a case of the ‘emperor’s new clothes?

- HRM equates to ‘Human Resource Manipulator’?

- HRM against or avoid trade union?


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My Own Professional Opinion

- I see it as a development of management

- I agree with Legge (1995, p. 75)

“[HRM is], in theory, a more central strategic management task than personnel management in that it is experienced by managers, as the most valued company resource to be managed; it concerns them in the achievement of business gaols and it expresses senior management’s preferred organizational values”.


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An Organization with a Strong Commitment to HRM

- The firm competes on the basis of product quality and differentiation as well as price

- Human resource considerations weigh heavily in corporate strategic decision making and governance processes. Employee interests are represented through the voice of the human resource staff professionals and/or employee representatives consult and participate with senior executives in decision that affect human resource policies and employee interests. In either case, employees are treated as legitimate stakeholders in the corporation


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An Organization with a Strong Commitment to HRM

(con’t)

- Investments in new hardware or physical technology are combined with the investments in human resources and changes in organizational practices required to realise the full potential benefits of these investments

- The firm sustains a high level of investment in training, skill development and education, and personnel practices are designed to capture and utilise these skills fully

- Compensation and reward systems are internally equitable, competitive and linked to the long-term performance of the firm


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An Organization with a Strong Commitment to HRM

(con’t)

- Employment continuity and security is an important priority and value to be considered in all corporate decisions and policies

- Workplace relations encourage flexibility in the organization of work, empowerment of employees to solve problems, and high levels of trust among workers, supervisors and managers

- Worker rights to representation are acknowledged and respected. Union or other employee representatives are treated as joint partners in designing and overseeing innovations in labour and human resource practices (Beaumont, 1995, p.40)


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Part-4: Strategic Human Resource Management


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Strategic Human Resource Management (SHRM):

A pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals (Noe, Hollenbeck, Gerhart & Wright, 2001, p.611)


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Strategic Human Resource:

The process of linking HR practices to business strategy. Strategic HR is owned, directed, and used by line managers to make HR strategies happen. Line managers invest in the HR function through strategic HR. Strategic HR creates a process for moving from business strategy to organizational capability to HR practice. HR planning often describes the processes whereby business strategies results in HR actions. Strategic HR serves stakeholders of the business (investors, customers, and employees) who want the business deliver results (Ulrich, 1997, pp.189-190)


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Strategy Formulation

Strategy Implementation

External Analysis

Opportunities Threat

Human Resources Practices

Recruitment Job Analysis

Training Job Design

Performance Selection

Management Development

LaborPay Structure

RelationsIncentives

EmployeeBenefits

Relations

Mission

Goals

Strategic Choice

Human Resource Needs

Skills

Behaviors

Culture

Firm Performance Productivity Quality

Profitability

Human Resource Actions Behaviors Results (Productivity, Absenteeism,Turnover)

Human Resource Capability Skills Abilities

Knowledge

Internal

Analysis

Strengths

Weaknesses

The Process of Strategic Human Resource Management

Emergent Strategies

(Noe, Hollenbeck, Gerhart & Wright, 2001, p.22)


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Human Resource Strategy Formulation:

The process of deciding on a strategic direction by defining a company’s mission and goals, its external opportunities and threats, and its internal strengths and weaknesses (Noe, Hollenbeck, Gerhart & Wright, 2001, p.611)


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Human Resource Strategy:

-HR strategy refers to building an agenda for the HR function.

-HR strategy creates a purpose and focus for the HR function.

-HR strategy serves HR professionals who want to add value to their business, and it defines the mission, vision, and priorities of the HR function (Ulrich, 1997, p. 190)


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External

Analysis

Opportunities

Threats

Mission

Goals

Strategic Choice

Internal Analysis

Strengths

Weaknesses

The Process of Human Resource Strategy Formulation

(Noe, Hollenbeck, Gerhart & Wright, 2001, p.24)


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Types of Human Resource Strategy Formulation Process

Approaches to Merging Strategic and HR Planning

Ulrich (1997, p.59)


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Motorola Human Resource Strategic Formulation Process

- Identify the organizational unit and organize the workshop

- Prioritize the trends in the business environment

- Specify the sources of competitive advantage and the measurements for each source of competitive advantage

- Define the desired cultural capabilities together with the behavioural expressions of these cultural capabilities

- Identify the HR practices that will have greatest influence on creating and sustaining the desired culture

- Develop an overall implementation plan

Ulrich & Brockbank (2005, pp.152-153)


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Human Resource Strategy Implementation:

The process of devising structure and allocating resources to enact the strategy a company has chosen

(Noe, Hollenbeck, Gerhart & Wright, 2001, p.611)


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Human Resource Organization

-It is the process of diagnosing and improving an HR function to deliver HR services.

-It creates a process that ensures HR strategies happen and, like HR strategy, it serves HR professionals in adding values to their business.

-HR organizations are investments by HR executives in HR professionals

Ulrich (1997, p.190)


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HR Practices

Recruitment Job Analysis

Training Job Design

PerformanceSelection

Management Development

LaborPay Structure

RelationsIncentives

EmployeeBenefits

Relation

Firm Performance Productivity Quality Profitability

Strategic Choice

Human Resource Needs

Skills

Behaviors

Culture

Human Resource Capability

Skills

Abilities

Knowledge

Human Resource

Actions

Behaviors

Results

(Productivity, Absenteeism, Turnover)

Emergent Strategies

Human Resource Strategy Implementation Process:

(Noe, Hollenbeck, Gerhart & Wright, 2001, p.53)


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The Case of Amoco Corporation

Revised People Strategies Driven by Amoco Strategic Framework and

Organizational Capabilities Required to Execute Business Strategies

Ulrich (1997, p.225)


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The Case of Amoco Corporation

(con’t)

Ulrich (1997, p.225)


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Human Resource Strategy Evaluation and Control

- The last part of the strategic management model is the evaluation of performance and the control of work activities

- Control follows planning. It ensures that corporation is achieving what it set out to accomplish

- Just as planning involves the setting of objectives along with the strategies and programmes necessary to accomplish them, the control process compares performance with desired results and provides the feedback necessary for the management to evaluate results and take corrective action, as needed

Wheelen & Hunger (1990, p. 280)


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P&G Do and Review Monthly Model:

“Do what we said we would do”

“Did we do it, is it working?”

Step 1: Are we doing what we said we would do; if not

why? If yes, look at targets vs. actual results

Step 2: Do analysis to determine major cause for gap

vs. target

Step 3: Make adjustments, if needed

Step 4: Make requests on decisions/resources needed

Step 5: Summarize learning


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P&G Review and Adjust Quarterly Model:

Is it working?

Step 1: Review OGSM

Step 2: Overview Action Plan and

Rationale

Step 3: Review Plan vs. Results

Step 4: Review Summary of Causes and

Adjustment


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HR Performance Driver Measures (Sample)

Becker, Huselid and Ulrich, 2001, p. 71


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Part-5: Case Study


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แนวทางการทำกรณีศึกษา

  • แนะนำกรณีศึกษา

  • แบ่งกลุ่มทำกรณีศึกษา

  • นำเสนอผลการทำกรณีศึกษาของกลุ่ม

  • วิทยากรนำเสนอผลการทำกรณีศึกษาของกลุ่ม


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กรณีศึกษา

บริษัท ไทยอุตสาหกรรมพลาสติก จำกัด

  • ข้อมูลทั่วไป

  • เริ่มแรกจดทะเบียนเป็นห้างหุ้นส่วนจำกัด ปี 2520

  • เป็นบริษัทที่ถือหุ้นโดยคนไทย 100%

  • ประกอบกิจการด้านการผลิตบรรจุภัณฑ์พลาสติกสำหรับสินค้าอุปโภคบริโภค

  • การบริหารงานเริ่มแรกเป็นในลักษณะครอบครัว

  • ปี 2523 บริษัทขยายกำลังการผลิต และย้ายที่ตั้งโรงงาน และจดทะเบียนเป็น

  • บริษัทจำกัดด้วยทุนจดทะเบียน 30 ล้านบาท

  • บริษัทขยายกำลังการผลิต และเพิ่มพื้นที่การผลิตและเครื่องจักรอีก 100 %


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  • บริษัทขยายตลาดไปยังต่างประเทศแถบเอเชีย ยุโรป และอเมริกา

  • ปรับเปลี่ยนรูปแบบการบริหารจัดการไปสู่ความเป็นสากลมากขึ้น

  • ปี 2537 เพิ่มทุนจดทะเบียนเป็น 50 ล้านบาท และต่อมาเพิ่มเป็น 70 ล้าน

  • บาทใน ปัจจุบัน

  • ปี 2543 บริษัทขยายพื้นที่การผลิตเป็นแบบระบบ “Clean-Room”

  • (Millennium Plant) ด้วยเทคโนโลยีระดับสูง และห้องตรวจสอบที่ทันสมัย

  • เพื่อรองรับอุตสาหกรรมในปี 2000

  • ปัจจุบันบริษัทมีพื้นที่ทั้งหมด 20,000 ตารางเมตร มีจำนวนพนักงานทั้งสิ้น

  • 700 คน และเครื่องจักรอันทันสมัยอีกกว่า 200 เครื่อง


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  • วิสัยทัศน์ขององค์กร

  • เป็นองค์กรชั้นนำด้านการพัฒนา ออกแบบ และผลิตบรรจุภัณฑ์พลาสติก

  • สำหรับเครื่องสำอาง อาหาร และยาในระดับโลก

  • มุ่งเน้นสร้างคุณค่าความสำเร็จร่วมกับลูกค้าและบุคคลกรขององค์กร

  • มีกรรมวิธีเทคโนโลยีการผลิตร่วมกับการบริหารจัดการที่มีประสิทธิภาพ

  • ด้วยต้นทุนที่เหมาะสม

  • มีการบริหารระบบคุณภาพสากล เพื่อความพึงพอใจสูงสุดของลุกค้า


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  • เป้าหมาย

  • เพิ่มยอดขายไม่ต่ำกว่า 20 % และมีสัดส่วนในกาส่งออกไม่น้อยกว่า 3 ใน

  • 4 ของสินค้าทั้งหมด

  • พัฒนาเทคโนโลยีทางการผลิตอย่างต่อเนื่อง รวมถึงระบบสารสนเทศที่มี

  • ประสิทธิภาพเพื่อเพิ่มขีดความสามารถทางการแข่งขันในตลาดโลก

  • รักษาและขยายฐานลูกคาให้ครอบคลุมทั่วโลก ภายใต้มาตรฐานคุณภาพ

  • ระดับสากล

  • มุ่งเน้นการพัฒนาบุคลากรให้มีทักษะ ความรู้ ความสามารรถ เพื่อรองรับ

  • การเปลี่ยนแปลงทางเทคโนโลยี


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Part-6: Questions and Answers


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