1. STRATEGIC HUMAN RESOURCES PLANNING, 4E©.

2. Chapter 1
Strategic Management

3. Learning Objectives After reading this chapter, you should be able to:
Discuss why managers need to examine the human resource implications of their organizational strategies
Understand the various terms used to define strategy and its processes
Describe organizational strategies, including restructuring, growth, and stability

4. Learning Objectives After reading this chapter, you should be able to:
Define business strategy and discuss how it differs from corporate strategy.
Discuss the steps used in strategic planning
List the benefits of strategic planning

5. Strategic Human Resources Management
Strategic management of people through HR programs and policies helps to ensure positive organizational outcomes such as:
profitability,
customer satisfaction,
employee performance, and
organizational survival

6. Strategy
Strategy- the formulation of organizational missions, goals, objectives and action plans for achievement that explicitly recognize the competition and the impact of outside environmental forces

7. Mintzberg’s Five Ps of Understanding Strategy
Plan
Purpose
Ploy
Position
Perspective

8. Mintzberg’s Five Ps of Understanding Strategy
Plan: an intended course of action a firm has selected to deal with a situation
Purpose: a consistent stream of actions that sometimes are the result of a deliberate plan and sometimes the result of emergent actions based on reaction to environmental changes or shifting of assumptions

9. Mintzberg’s Five Ps of Understanding Strategy
Ploy: a specific manoeuvre at the tactical level with a short time horizon
Position: the location of an organization relative to its competitors and other environmental factors
Perspective: the gestalt or personality of the organization

10. Descriptions of Strategy
Strategy: A declaration of intent
Strategic intent: A tangible corporate goal; a point of view about the competitive positions a company hopes to build over a decade
Strategic planning: The systematic determination of goals and the plans to achieve them

11. Descriptions of Strategy
Strategy formulation: The entire process of conceptualizing the mission of an organization, identifying the strategy, and developing long-range performance goals
Strategy implementation: Those activities that employees and managers of an organization undertake to enact the strategic plan, to achieve the performance goals

12. Descriptions of Strategy
Objectives: The end, the goals
Plans: The product of strategy, the means to the end
Strategic plan: A written statement that outlines the future goals of an organization, including long-term performance goals
Policies: Broad guidelines to action, which establish the parameters or rules

13. The Reality of the Strategic Process
Intended Strategy- the agreed upon strategy arrived at through the formal planning process
Emergent Strategy- created from new ideas and conditions
Discarded Strategy – deemed inappropriate due to changing circumstances
Realized Strategy- the implemented plan -- what actually happened
© 2010 by Nelson Education Ltd.

14. © 2010 by Nelson Education Ltd.
Strategic Types
Corporate Strategy- organizational-level decisions that focus on long-term survival
Restructuring – includes turnaround, divestiture, liquidation, and bankruptcies
Growth – includes incremental, international, and mergers and acquisitions
Stability – maintains status quo
© 2010 by Nelson Education Ltd.

15. Restructuring Strategies
Turnaround Strategy- an attempt to increase the viability of an organization
Divestiture - the sale of a division or part of an organization
Liquidation - the termination of a business and the sale of its assets

16. Restructuring Strategies
Bankruptcy- a formal procedure in which an appointed trustee in bankruptcy takes possession of a business’s assets and disposes of them in an orderly fashion

17. Growth Strategies
Incremental growth - can be attained by expanding the client base, increasing products/services, changing the distribution networks, or using technology

18. Growth Strategies
International growth - can be attained by seeking new customers or markets by expanding internationally
Acquisition- the purchase of one company by another
Merger- two organizations combine resources and become one

19. Stability Strategies
These are maintenance strategies where companies do not wish to see their companies grow and so their strategic HRM practices remain constant
These can be called status quo, neutral, or do-nothing strategies

20. Business verses Corporate Strategies
Business strategy- plans to build a competitive focus in one line of business

21. Business verses Corporate Strategies
Corporate strategy – examines questions about which competitive strategy to choose for long-term growth and survival
© 2010 by Nelson Education Ltd.

22. Strategic Plan Re-visited
A strategic plan describes the organization’s future direction, performance targets, and approaches to achieve the targets in a formal, written statement
Strategic planning can be a long process that has numerous steps including the following:

23. The Strategic Planning Process
Establish the mission, vision and values
Develop objectives
Analyze the external environment
Determine the competitive position
Identify the competitive advantage
Implement the strategy
Evaluate the performance

24. Purpose of Values Statement
Conveys a sense of identity for employees
Generates employee commitment to something greater than themselves
Adds to the stability of the organization as a social system
Serves as a frame of reference for employees to use to make sense of organizational activities and to use as a guide for appropriate behaviour
© 2010 by Nelson Education Ltd.

25. Porter’s Model of Competitive Strategies
Michael Porter made a major contribution to the field of strategic management by grouping the ways organizations can compete into five generic competitive strategies:
1. Low-cost provider strategy
2. Broad differentiation strategy
3. Best-cost provider strategy
4. Focused or market niche strategy based on lower cost
5. Focused or market niche strategy based on differentiation
© 2010 by Nelson Education Ltd.

26. What is Competitive Advantage?
Competitive advantage – is defined as the characteristics of a firm that enable it to earn higher rates of profits than its competitors by utilizing its resources including:
Tangible assets – the organizational assets that have substance and can be consumed
Intangible assets – the organizational assets that are not concrete, such as reputation, goodwill
Capabilities - the collective skills, abilities and expertise of an organization

27. Benefits of Strategy Formulation
Clarity
Coordination
Efficiency
Incentives
Change
Career Development

28. Errors in Strategic Planning
Relegating the process to official planners and not involving executives and managers
Failing to use the plan as the guide in making decisions and evaluating performance
Failing to align incentives and other HR policies to the achievement of strategy

29. The Strategic HR Planning Model