Prepared by Joseph B. Mosca, Monmouth University & Marla M. Kameny, Baton Rouge Community College PowerPoint Presentation Design by Charlie Cook, The University of West Alabama Prepared by Joseph B. Mosca, Monmouth University & Marla M. Kameny, Baton Rouge Community College PowerPoint Presentation Design by Charlie Cook, The University of West Alabama © 2012 South-Western, Cengage Learning, Inc. All rights reserved.

4–2 Learning Objectives After studying this chapter, you should be able to: 1.Describe the strategic context of human resource management. 2.Identify three types of strategies and relate each to human resource management. 3.Discuss human resource strategy formulation and relevant organizational factors. 4.Discuss the processes through which human resource strategy is implemented. 5.Discuss how the human resource function in organizations can be evaluated.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–3 The Competitive Environment for Human Resource Management  HRM occurs not in a vacuum, but in a complex and dynamic milieu of forces within the organizational context.  HR managers now have a strategic perspective that recognizes the critical links between organizational strategy and HR strategy. The Competitive Environment for Human Resource Management  HRM occurs not in a vacuum, but in a complex and dynamic milieu of forces within the organizational context.  HR managers now have a strategic perspective that recognizes the critical links between organizational strategy and HR strategy.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–4 Strategic Human Resource Management

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–5  If we examine fundamental HRM practices, it seems reasonable to suggest two points: Formal performance appraisals are better than none. Using systematic selection techniques is better than hiring based on intuition. Beyond the Book: Considering Fundamental HRM Practices

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–6 A Strategic Perspective What is meant when we refer to strategy and a strategic perspective.  All firms exist in a competitive environment, with competitors trying to attract the same customers.  Therefore, a firm implements a strategy that its competitors are unable to implement. What is meant when we refer to strategy and a strategic perspective.  All firms exist in a competitive environment, with competitors trying to attract the same customers.  Therefore, a firm implements a strategy that its competitors are unable to implement.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–7 The Influence of Organizational Purpose and Mission What is an organization’s purpose?  It is the organization’s basic reason for existence. What is an organization’s mission?  It is the organization’s statement of how it intends to fulfill its purpose. Both purpose and mission affect an organization’s HR practices. What is an organization’s purpose?  It is the organization’s basic reason for existence. What is an organization’s mission?  It is the organization’s statement of how it intends to fulfill its purpose. Both purpose and mission affect an organization’s HR practices.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–8 Starbucks Corporate Mission Statement

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–9 What Is a Top Management Team? The organization’s group of senior executives responsible for the overall strategic operation of the firm.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–10 Beyond the Book: Organizational Culture and HRM Success Sets the tone for the organization Plays a major role in shaping its culture Have a vision of where firm is going Have a vision of how firm should get there Understanding the Cultural Environment

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–11 Corporate Strategy and HRM Corporate Strategy  Deals with determining what businesses the corporation will operate. Growth Strategy  Focuses on growing and expanding the business, which can be pursued through joint ventures or acquisitions. Corporate Strategy  Deals with determining what businesses the corporation will operate. Growth Strategy  Focuses on growing and expanding the business, which can be pursued through joint ventures or acquisitions.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–12 Corporate Strategy and HRM (cont’d) Retrenchment Strategy  Occurs when an organization operations are not effective and changes are required. Stability Strategy  Maintains the status quo. Retrenchment Strategy  Occurs when an organization operations are not effective and changes are required. Stability Strategy  Maintains the status quo.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–13 Diversification Strategies Diversification Strategy  Occurs when an organization adds new products and services. Related Diversification  Occurs when a firm achieves synergy among the various businesses it owns. Unrelated Diversification  Is used when a firm operated several unique businesses in different unrelated markets. Diversification Strategy  Occurs when an organization adds new products and services. Related Diversification  Occurs when a firm achieves synergy among the various businesses it owns. Unrelated Diversification  Is used when a firm operated several unique businesses in different unrelated markets.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–14 Business Strategies (cont’d) Adaptation Model  Is an approach to business strategy where a firm seeks ways to adapt to its environment. Basic Strategy Alternatives:  Defender strategy  Prospector strategy  Analyzer strategy Adaptation Model  Is an approach to business strategy where a firm seeks ways to adapt to its environment. Basic Strategy Alternatives:  Defender strategy  Prospector strategy  Analyzer strategy

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–15 Business Strategy Alternatives Defender Strategy Works best in an environment with little uncertainty and risk and a high degree of stability Prospector Strategy Works best in dynamic and growing environments with much uncertainly and risk Analyzer Strategy Work best in stable conditions with a moderate degree of uncertainly and risk.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–16 Cost leadership strategy Focus strategy Differentiation strategy Other Competitive Strategies

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–17 Human Resource Strategies

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–18 What Is Organizational Design? The framework of jobs, positions, clusters of positions, and reporting relationships among positions that are used to construct an organization.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–19 U-form (unitary/functional) H-form (holding company) M-form (multidivisional) Organization Design Forms The Impact of Organization Design

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.2–20 HR Strategy Implementation Psychological ContractPsychological Contract  The overall set of expectations held by the individual that they can contribute to the organization. PersonalityPersonality  The stable set of psychological attributes or traits that distinguish one person from another. Psychological ContractPsychological Contract  The overall set of expectations held by the individual that they can contribute to the organization. PersonalityPersonality  The stable set of psychological attributes or traits that distinguish one person from another.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.2–21 HR Strategy Implementation (cont’d) CommunicationCommunication  The exchange of information and shared meaning  HR managers are responsible for coordinating communication among employees. CommunicationCommunication  The exchange of information and shared meaning  HR managers are responsible for coordinating communication among employees.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–22 Motivation is:  The set of forces that causes people to behave in certain ways.  A major determinant of individual performance.  What causes an employee to choose to expend effort to support an organizational activity. Motivation is:  The set of forces that causes people to behave in certain ways.  A major determinant of individual performance.  What causes an employee to choose to expend effort to support an organizational activity.

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–23 Understanding Stress Stress  A person’s adaptive response to a stimulus that places excessive psychological or physical demands on that person. Managing stress requires understanding:  The causes of stress  How stress affects individuals  How organizations and individuals can better cope with stress Stress  A person’s adaptive response to a stimulus that places excessive psychological or physical demands on that person. Managing stress requires understanding:  The causes of stress  How stress affects individuals  How organizations and individuals can better cope with stress

© 2012 South-Western, Cengage Learning, Inc. All rights reserved.4–24 Human Resource Management Practices That May Lead to Improved Firm Performance