Strategic Role of HRM Lecture 2

Learning Outcomes Strategic Management Process Types of strategy Strategic HRM The SHRM tools

Strategic Management Process Strategy- A strategy is a course of action Strategic plan- organization’s plan for how it aims to match or balance its internal strengths and weaknesses with external opportunities and threats to maintain competitive advantages over the long-term Strategic management- the process of identifying and executing organization’s strategic plan by matching the internal competencies with the demands of environment

Strategic Management Process (Cont.) Step 1: Define the Current Business - What products to sell, where to sell and how to differentiate Step 2: Perform external and Internal Audits SWOT analysis for internal audit and external audit PEST analysis for external audit

SWOT Analysis

PEST Analysis

SWOT Analysis

Strategic Management Process (Cont.) Step 3: Formulate New Direction What should our business be Vision Statement (what do we want to become?) Mission Statement (what business are we in?) (Why do we exist?) (Ford- Where QUALITY is job one)

Strategic Management Process (Cont.) Step 4: Translate the Mission into Strategic Goals Ford’s goal- No more than 1 initial defect per 1000 car Step 5: Formulate Strategies to Achieve Strategic Goals Step 6: Implement the Strategies Evaluate Performance Things don’t always turned out as planned Evaluation is the strategic imperative

Types of Strategies Corporate Level Strategy Business 1 Completive Strategy Business 1 Functional Strategy Marketing Dept. HR Dept. Business 2 Competitive Strategy Business 2 Functional Strategy

Corporate Strategies Corporate Strategy Concentration Diversification Vertical Integration Geographical

Competitive Strategy Competitive Strategy Cost Leadership Differentiation Focus

Strategic Human Resources Management SHRM involves formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve the strategic aims. SHRM aligns HR practices with organizational strategic goals http://www.cipd.co.uk/hr- resources/factsheets/strategic-human- resource-management.aspx

SHRM SHRM Strategic alignment Strategic Goals Behavior and skills

Examples of SHRM Ford (reducing defects) Apple (more innovation) John Lewis (great customer service)

SHRM Tools Balance Score Card

HRM Tools

Thank you!