FINAL PROJECT

1. How do HR strategies and practices might impact the company’s organizational culture
and performance?

Human resource manager has a major hand in deciding the company’s performance and output
given by the employees. HR tries to maintain a healthy environment and manage organizational
performance by applying a few strategies. These strategies can be beneficial and can boost the
company’s performance if applied in a correct manner. These strategies can have a negative
effect too if not implied correctly. Human resources act as a source of competitive advantage.
Human resource strategies can contribute to sustained competitive advantage through facilitating
the development of firm-specific competencies. Major strategic goals that an HRM has to
achieve include encouragement of employees to engage wholeheartedly in their job and give
their best outputs; to invest in employers and give them training to boost capability and align
their skills to organizational needs; to define the behavior needed for organizational success and
to ensure that the employer’s hard work is valued and rewarded.

Strategies are very important for the growth of any business. For example:

i. Strategies related to tying performance and compensation makes employees amenable

and they try to work for the growth of the company’s output sincerely. An essential
part of this strategy is examination and evaluation of employee’s performance and
then rewards are given on the basis of output given by each member of the working
staff.
ii. Strategies related to the improvement of employee-employer relation and working
atmosphere. This strategy tends to strengthen employer’s and employee’s relation and
to maintain positivity in the workplace which improves the efficiency of the workers.
iii. Human resource manager builds the strategies to recruit an ideal team. HR team
conducts various rounds of interview to judge the capabilities of the candidate. A
group of perfect candidates will definitely boost the company’s success rates. Strategy
related to retention and separation is also very important. This strategy helps to
differentiate between efficient and non-efficient employees.

 The company has taken into consideration for this project: BIG BAZAAR

Big Bazaar is an Indian retail store founded by Kishore Biyani under his parent chain
organization Future Group which works as a chain of a department store, grocery stores,
and hypermarkets

2. Recommend the HRM strategy the company should implement to align HRM practices
with organizational strategy.

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The HRM strategy that I will recommend that the company should implement is a cost
leadership strategy. Cost leadership is a term used when a company or organization projects itself
as the cheapest manufacturer of a particular product in competition. The HR management must
constantly work on reducing the cost to remain competitive without sacrificing the quality of the
end goods. As Big Bazaar is a huge company which has a major hand in daily needs industry
with numerous competitors such as Wal-Mart, IKEA, Vishal mega mart etc., the company must
implement such types of strategies to gain the top spot. Although Big Bazaar is currently doing a
great job, the operating cost is high due to which company is facing a huge competition by
various MNCs in recent years. If Big Bazaar deploys this strategy then the sale of its products or
goods will increase drastically. To implement this strategy, Big Bazaar has to produce goods
which are of acceptable quality and specific to a set of customers at a price which is much lower
or competitive than other companies producing the same product. The company could be the
lowest cost producer yet not offer the lowest-priced products or services which will eventually
give higher than average profitability. When effectively managed, cost leadership companies can
become highly successful and generate tremendous profits. However, they also face complex
challenges that necessitate significant risk-taking. The cost leadership strategy also makes it
difficult for new companies to enter the market because of thin profit margins.

3. Identify at least one to two competitive challenges the company is facing currently.

i. Big Bazaar is currently facing no growth problem due to immense competition from the
foreign companies majorly by Wal-Mart.
ii. Big Bazaar is also currently facing a lack of revenues problem which means the company
doesn’t have enough financial resources to invest or to buy shares which ultimately
results in no growth.

4. Explain how the specific practices related to the HRM strategy you recommend will
address the competitive challenge(s) you identified.

Practice mentioned above is cost leadership which is a strategy that tends to increase efficiencies
and reduce production cost below the industry average. Cost leadership is a method to reduce
costs and produce the least expensive goods in a market in an effort to gain market share.
Consumers always wish to increase their purchasing power and if that cannot be achieved
through an income increment, then buying more at a lower price is the next best alternative.
Companies who seek to be cost leaders tap into this opportunity to offer the average consumers
great products at great prices.

If Big Bazaar makes its operations so efficient and built such a large distribution network that
they are able to get preferential pricing on goods and sell them to consumers for less than other
retailers than more and more customers will get attached to the brand and this will definitely
boost the brand’s performance and the growth will not be stagnant anymore.

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The second major problem that the brand is facing currently is that its financial resources are
getting exhausted and the company is not able to collect desired revenue. If Big Bazaar tries to
limit the number of employees in their stores and allow customers to serve themselves then there
will be a cut in operational cost and some of the financial resources can be saved. These cost-
cutting measures allow them to offer goods that are of a certain quality at an affordable price.

Thus HR plays an important role in developing an efficient cost leadership model in which costs
of the product will be reduced without affecting the quality of the goods. And to limit the number
of employees HR must keep an eye on employee’s performance and implement retention and
separation policies accordingly.

5. Support your recommendations with specific examples from the Learning Resources and
from your own experience.

Few examples of the companies which have successfully implemented the cost leadership
strategy in their industries are:

i. McDonald’s
McDonald’s has been extremely successful with this strategy by offering fast food meals
at cheap rates. They minimize their costs by keeping up a division of labor that allows
them to utilize and train inexperienced staff instead of skilled ones.
ii. IKEA
IKEA is a Swedish company which sells furniture. They have transformed the furniture
industry by selling stylish furniture at cheap rates. They source its products in low wage
nations and offer a very basic level of service and thus are able to reduce its cost and
implement a cost leadership strategy in a beneficial way.
iii. Home renovation companies
A lot of money is needed to hire contractors. Suppliers and labors are costly and extra
resources are required when contractors consider insurance and authorizing segments of
the business. But few renovation companies have made a mark in the market by
specializing in one aspect of the renovation like kitchen specialists, bathroom specialists
etc. Specializing helps them work with wholesale distributors to get the best pricing on
the standard package which they sell to the customers. Working with wholesalers gives
them deeper discounts on products and as a result, they cut their profit margin to sell their
package to the clients for less money.

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