Human Resources Management 12e Gary Dessler Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler Chapter 2 . Human Resources Management Strategy Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler LEARNING OUTCOME 1- what is the meaning of strategic plan and strategic planning. 2-Explain each of the seven steps in the strategic planning process. 3-List the main types of corporate strategies and competitive strategies. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler LEARNING OUTCOME . 4- Discuss the role of departmental managers in strategic planning. 5- Define strategic human resource management and explain its link to the organization's overall strategy . 6- explain the tools of HRM strategy Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

What is the meaning of Strategic planning Human Resources Management 12e Gary Dessler Strategic Plan Is the organization’s plan for how it will match its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage over the long term. Strategic planning ask A QUESTION “where are we now as business,’ “where we want to be “ and “how should we get there”. The manager then formulates specific plans to take the organization from where it is now to where he wants it to be. . In practice, determining what the organization’s long-term, overall plan should be requires some special tools. For example, you need to be able to systematically review the competitive landscape and analyze what your best strategic, long-term courses of action might be. Strategic planning, which we turn to now, provides these special tools. We’ll start with some definitions. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–5 The Strategic Management Process Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler 1- Define the current business What products do we sell……..where do we sell them. and how our products or services differ from our competitors. 2- Perform external and internal audits: The next step is to ask: are we heading in the right direction?.. The answer is, we have to evaluate what is happing in the environment. How ? . In practice, determining what the organization’s long-term, overall plan should be requires some special tools. For example, you need to be able to systematically review the competitive landscape and analyze what your best strategic, long-term courses of action might be. Strategic planning, which we turn to now, provides these special tools. We’ll start with some definitions. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–7 SWOT Matrix, with Generic Examples SWOT Strengths Example: High quality products Strong research group Skilled workers Weaknesses Management turnover Large inventories Opportunities New overseas markets Diversification Competitors failing The SWOT chart in Figure 3-7 is used in strategic planning by managers to compile an estimate of the company strengths, weaknesses, opportunities, and threats when creating the firm’s strategy. SWOT helps identify the factors that will allow a company to differentiate its product or service from those of its competitors to increase market share and gain a competitive advantage. Threats Market saturation Merger of two competitors to form single strong one Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler 3- Formulate a new direction or business . The question is: based on the environmental scan and “SWOT” analysis What products we will sell, where we will sell them and how our product will differ from the competitors. This is called “firm’s vision statement” is a general statement about the direction firm in the future “what the business should be” In contrast mission statement defines the specific business and the main tasks of the firm. . In practice, determining what the organization’s long-term, overall plan should be requires some special tools. For example, you need to be able to systematically review the competitive landscape and analyze what your best strategic, long-term courses of action might be. Strategic planning, which we turn to now, provides these special tools. We’ll start with some definitions. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler 4- translate the mission into strategic goals: for example the strategic goal for the organization is producing 100,000 televisions. 5- Formulate strategies to achieve the strategic goals. Perhaps open two new high technology factories or reduce the number of televisions lines to better focus on just a few. . In practice, determining what the organization’s long-term, overall plan should be requires some special tools. For example, you need to be able to systematically review the competitive landscape and analyze what your best strategic, long-term courses of action might be. Strategic planning, which we turn to now, provides these special tools. We’ll start with some definitions. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler 6- implement the strategies by translating them into actions by building or closing factories, adding or eliminating products, hiring or firing workers, 7- evaluate performance to be sure that the company chose the right direction. . In practice, determining what the organization’s long-term, overall plan should be requires some special tools. For example, you need to be able to systematically review the competitive landscape and analyze what your best strategic, long-term courses of action might be. Strategic planning, which we turn to now, provides these special tools. We’ll start with some definitions. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–8 Type of Strategy at Each Company Level In Figure 3-8 we see the three types of strategies that managers use, one for each level of the company. There is corporate-wide strategic planning, business unit (or competitive) strategic planning, and functional (or departmental) strategic planning. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Types of Corporate Strategies Human Resources Management 12e Gary Dessler Types of Corporate Strategies Concentration Vertical integration Diversification Corporate Strategy Consolidation Geographic expansion Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler A concentration strategy, offers one product usually in one market. A diversification strategy expands by adding new product lines. . A vertical integration strategy expands by producing its own raw materials, or selling its products directly. A consolidation strategy focuses on reducing a firm’s size Geographic expansion is taking the business abroad. . Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Types of Competitive Strategies Human Resources Management 12e Gary Dessler Types of Competitive Strategies Cost leadership Differentiation Competitive Strategies Focus These strategies identify how a firm can build its competitive position in the marketplace.( how Toshiba will compete with Dell) Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler Cost leadership: means a firm is seeking to become the overall low-cost leader in an industry. differentiation strategy means a firm is seeking to be unique in their industry along dimensions that are widely valued by buyers. Mercedes stresses the safety of its cars focus strategy means a firm attempt to compete in a narrow market by providing a product that their customers can’t get from their competitors such as ferrari and toyota. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler Help creating the strategic plan Formulate supporting, departmental strategies Roles of Departmental Managers’ in Strategic Planning Execute the strategic plans Departmental managers can play big roles in strategic planning . they help the top managers to create the strategic plan, formulate departmental plans that support the overall strategic plan, and then execute the plans. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Strategic Human Resource Management Human Resources Management 12e Gary Dessler Strategic Human Resource Management It means formulating and implementing HR policies and activities—that produce the employee competencies and behaviors necessary to achieve its strategic goals. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–10 The Linking between Company overall strategy and HR Strategies Figure 3-10 demonstrates the relationship between human resource strategy and the company’s strategic plans. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–11 Basic Model of How to Align HR Strategy and Actions with Business Strategy formulating business strategy and putting the strategic goals of the business Identifying workforce requirements, what HR must deliver to enable the business to reach its goals. formulating HR strategies (policies and practices) to produce the desired workforce. (competencies and skills). Finally, the human resource manager identifies the measures and tools he can use to ensure the new policies and practices are actually producing the required employee skills and behaviors Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler Strategic HRM Tools Strategy map HR scorecard Strategic HRM Tools Digital dashboard Managers use several tools to help them translate the organization’s strategic goals into specific human resource management policies and practices. Three important tools include the strategy map, the HR scorecard, and the digital dashboard. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–15 Three Important Strategic HR Tools HR Scorecard Strategy Map Digital Dashboard . A graphical tool summarizes the chain of activities that contribute to a company's success, and so shows employees the "big picture" of how their performance contributes to achieving the company's overall strategic goals. An technology tool that provides managers with desktop graphs and charts , so they get a picture of where the company has been and where it's going, in terms of each activity in the strategy map. scorecards measure the relationships between 1- HR activities, 2- and employees behaviors resulting (in customer service) and 3- the strategic outcomes of the firm (profitability.) Figure 3-15 summarizes the three important strategic HR tools. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall scorecards quantify the strategy map. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

HR Metrics and Benchmarking - HR metrics is a quantitative measure used to evaluate a firm’s HR performance and to compare it with another firm’s HR performance. Benchmarking means comparing the practices of high performing firms to your firm in order to understand what they do that makes them better. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler K E Y T E R M S business plan management by objectives (MBO) strategic plan strategy strategic management vision statement mission statement corporate-level strategy competitive strategy competitive advantage functional strategies offshoring strategic human resource management strategy map HR Scorecard digital dashboard high-performance work system human resource metric value chain HR audit Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Building A High-Performance Work System Human Resources Management 12e Gary Dessler Building A High-Performance Work System High-Performance Work System (HPWS) A set of human resource management policies and practices that promote organizational effectiveness. High-Performance Human Resource Policies and Practices Emphasize the use of relevant HR metrics. Set out the things that HR systems must do to become an HPWS. Foster practices that encourage employee self-management. Practice benchmarking to set goals and measure the notable performance differences required of an HPWS. High-performance work systems became popular in the 1990s. Faced with global competition, U.S. companies needed ways to improve quality, productivity, and responsiveness. Characteristics of high-performance work organizations include multi-skilled work teams, empowered front-line workers, extensive training, labor-management cooperation, commitment to quality, and customer satisfaction. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Building A High-Performance Work System Human Resources Management 12e Gary Dessler Building A High-Performance Work System High-performance work systems became popular in the 1990s. Faced with global competition, U.S. companies needed ways to improve quality, productivity, and responsiveness. Characteristics of high-performance work organizations include: multi-skilled work teams, empowered front-line workers, extensive training, labor-management cooperation, commitment to quality, and customer satisfaction. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Strategic planning process Human Resources Management 12e Gary Dessler Strategic planning process Goal sitting and the planning process 1 3 2 Set an objective. 4 Make basic planning forecasts 5 Determine alternative courses of action. Evaluate the alternatives which options are best. The Planning Process People make plans every day, often without giving it a thought. We plan our routes to school, what courses to take, and what to do on Saturday night. Underlying all those plans, however, is an often unstated planning process. Once implemented, plans must be evaluated to see if they must be revised to better fit changing competitive conditions. Implement and evaluate your plan. Planning is always goal - directed Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Why Strategic Planning Is Important To All Managers Human Resources Management 12e Gary Dessler The organization’s strategic plan guides all what done to accomplish organizational goals. Decisions made by managers depend on the goals set at each organizational level. Management experts said that management “. . . is the responsibility for execution.” Managers are judged by the extent to which they accomplish their department’s goals. Those aims or goals—and the hard work they put into accomplishing them—all depend on the organization plans for the future. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Review The hierarchy of goals In companies, it is traditional to view the goals from the top of the firm down to front-line employees as a chain or hierarchy of goals. Copyright © 2013 Pearson Education

How Managers Set Objectives: SMART Goals Human Resources Management 12e Gary Dessler How Managers Set Objectives: SMART Goals S Specific make clear what to achieve M Measureable A Attainable Setting SMART Goals Setting effective goals is an essential management skill. Experienced managers have a simple and effective way to check whether their goals are good or not—they use the acronym “SMART.” Good goals are specific (), measurable, attainable; relevant (in terms of what you’re setting the goal for), and timely (they have deadlines and milestones). R Relevant Related to the issue which sitting the goal for T Timely Have deadlines Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Human Resources Management 12e Gary Dessler FIGURE 3–11 Basic Model of How to Align HR Strategy and Actions with Business Strategy Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

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