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HRM Strategy

HRM Strategy. Strategy:. 1. The process of determining & articulating the organisation’s: vision, mission, values, goals & objectives, and its internal & external environments; then:. 2. Formulating plans to attain outcomes consistent with the above; then:.

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HRM Strategy

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  1. HRM Strategy

  2. Strategy: • 1. The process of determining & articulating the organisation’s: • vision, mission, values, goals & objectives, and • its internal & external environments; then: 2. Formulating plans to attain outcomes consistent with the above; then: 3 Implementing those plans (including evaluation)

  3. HR Strategy “The pattern of planned human resource deployments and activities intended to enable the organisation to achieve its goals” Focus: To provide the organisation with sustained competitive advantage …through procurement, development & alingment of people, skills, HR policies etc. Competitive advantage might arise from having best people, but also from being best at managing what you do have

  4. Link to Corporate Strategy External competitive environment Corporate strategy formulation Input Input HR FUNCTION OTHER FUNCTIONS HR strategy Division strategies Corporate strategy implementation Evaluation (measurment etc)

  5. Role of HRM in Strategy Formulation HR Function Strategic Planning Administrative linkage HR Function Strategic Planning One-Way linkage HR Function Strategic Planning Two-way linkage HR Function Strategic Planning Integrative linkage

  6. Strategic Formulation: Overview VISION EXTERNAL ANALYSIS: Opportunities Threat INTERNAL ANALYSIS: Strengths Weaknesses MISSION GOALS / OBJECTIVES STRATEGIC CHOICE

  7. Strategic Formulation: ‘Step’ 1: Vision Core ideology Organisational Vision Envisaged future

  8. Core Ideology Core values Core Purpose Essential, enduring tenants Reason for being What the organisation offers to society What is important? What is inviolate? Controlling desire, Dominant aspiration

  9. Examples: Core Purposes 3M: to solve unsolved problems innovatively Hewlett-Packard: to make technical contributions for the advancement and welfare of humanity Mary Kay Cosmetics: to give unlimited opportunity to women Nike: to experience the emotion of competition, winning, and crushing the competition Walt Disney: to make people happy

  10. Example: Core Values • Walt Disney: • No Cynicism • Nurturing & promulgation of wholesome American values • Creativity, dreams and imagination • Fanatical attention to consistency and detail • Preservation and control of the ‘Disney Magic’

  11. Strategic Formulation: ‘Step’ 1: Vision Core ideology Organisational Vision Envisaged future BHAGS Vivid Description

  12. Envisaged Future BHAGS Vivid Description Huge, daunting goals Making goals ‘imaginable’ Clear & compelling, tangible The ‘mind’s eye’ Unifying, inspiring, engaging Hopeful, passionate, inspiring images & symbols • Difficult Target • Common enemy • Role-model • Internal - • transformation

  13. Examples: BHAGS Ford (1900’s): Democratise the automobile (Target BHAG) (Nike, 1960’s): Yamaha wo tsubusu! We will destroy Yamaha (Common Enemy BHAG) Stanford (1940’s): Become the Harvard of the west (Role-Model BHAG) GE (1980’s): #1 or #2 in every market we serve & revolutionise this company to have the strengths of a big company combined with the leanness & agility of a small company

  14. Examples: Vivid Description Sony: We will create products that become pervasive around the world…We will be the first Japanese company to go into the U.S. market and distribute directly…We will succeed with innovations that U.S. companies have failed at - such as transistor radio…50 years from now our brand name will be as well known as any in the world…and will signify innovation and quality that rival most innovative companies anywhere…’Made in Japan’ will mean something fine, not something shoddy. 

  15. Strategic Formulation ‘Step’ 2: SWOT Analysis Brings balance to the more unchanging vision: Organisation’s internal & external environment: Change is often a constant here! S W O T Internal strengths & weaknesses of organisation External opportunities & threats of organisation

  16. Strategic Formulation: ‘Steps’ 3, 4 & 5: Mission, Goals & Objectives ‘Eternal’ of Vision ‘Now’ of SWOT Mission: What business / markets are we in to realise our vision? Goals: The tasks that need to be done to enable mission Objectives The quantifiable targets that are set through the goals

  17. Examples: Missions Microsoft: A computer on every desktop Saturn: The mission of Saturn is to market vehicles developed and manufactured in the United States that are world leaders in quality and customer satisfaction through the integration or people, technology, and business systems and to transfer knowledge, technology and experience throughout General Motors”. Chevrolet: Manufactirug safe and reliable economy cars, sports cars, sedans and trucks. Electronic Data Systems: Designing & operating information systems for both public and private organisations

  18. Strategic Formulation: ‘Step’ 6: Strategic Choice Vision Mission Goals Objectives Everyday operations Emergent (organic, evolutionary) strategy + Deliberate planning Eventual plans Example: A new customer service process is planned for through consideration of new aims Example: Customer service people discover new process through dealing with customers

  19. HR & Corporate Strategic Choice Deliberate planning Limit or enable choices Eventual plans HR Function Surface, communicate & integrate suggestions Emergent strategy

  20. Strategic Types Categorisations under which any strategy can be typified Porter: Overall cost leadership Differentiation Focus Miles and Snow Defenders Prospectors Analysers Reactors Directional Strategies Concentration Internal growth External growth Divestment

  21. Strategic Implementation: Overview 2nd major part of strategy Implementation by all functions, but six major implementation “musts”: • Organisational structure • Task design • Selection, training & • development of people • Reward systems • Leadership, power & culture* • Information & information systems * Not in textbook

  22. HR Function and Implementation HR enables the six implementation musts through various HR tasks: • Job analysis and design • Recruitment and selection • Training & selection • Performance management • Rewards and benefits • Labour relations • etc!

  23. Culture, Leaders, Strategy These can support or hinder strategy b Leadership a c Culture d Strategy e • There is a complex interaction between culture, leadership & strategy: • Culture affects how leaders will lead (a) • Leaders can have a hand in shaping culture (b) • Culture can have a direct impact on the type of strategies leaders choose now (c) • Culture can have an indirect impact on the strategies chosen through historical patterns (d) • Strategy can have a hand in shaping future culture (e)

  24. Culture, Leaders, Strategy Culture is influential! Leaders must learn to shape and manipulate corporate cultures: • What they pay attention to • How they react to critical incidences • Deliberate role behaviour • Rewarding right things • Type of people they work with • ETC!!! Leadership = Top management! • HR function must shape culture by shaping • leadership throughout the organisation: • Teaching • Enabling • Releasing • Sharing of knowledge • Attitudes ETC!

  25. Strategic Types and HR Tasks Different strategic types work better with some HR practices than others, e.g.: Porter / Miles and Snow Cost / defender = efficiency, consistency Differentiation / prospector = quality, effectiveness, knowledge, creative Focus / analyser = flexibility Directional Strategies Concentration = current skills focus Internal growth = new employees, new targets, new training External growth = harmony, cooperation Divestment = minimising loss (retrenchments, morale, severance)

  26. Strategic Measurement & Control Strategic Implementation Strategic Formulation Strategic evaluation Sets standards (esp objectives) Measurement of outcomes • Thus: • Evaluation is the judgment of how the standards set in strategic formulation were achieved in strategic implementation • Evaluation is fed back into the formulation of plans and the knowledge base of how to implement them

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