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Table of Contents
Unit 1
Introduction 2
Basic Characteristics of the business environment
Globalization 2
Technological Trends 3
Nature of Work 3
Strategic Human Resources Management
Definition of Strategic management 3
Strategy Formulation 4
Strategy Implementation 7
HR Role in Creating Competitive Advantage 8
Definition of Strategic Human Resources Management 8
Human Resources Strategic Management Process 9
Strategic Human Resources Management Challenges 9
The Role of Human Resources Professionals
Strategic Role 10
Role of Managing a Diverse Workforce 12
Innovator Role 12
Change and Knowledge Facilitator Role 12
Measuring Human Resources Management Effectiveness 13
Human Resources Professionals Proficiencies 13
As such, the human resource professional has to evolve to become a strategic partner, an
employee sponsor or advocate, and a change mentor within the organization i.e. An effective
human resource professional must be business driven function with a thorough understanding
of the organization’s big picture in order to be able to influence key decisions and policies.
The tendency to extend sales, ownership, manufacturing to new markets abroad. Firms go
abroad for:
Globalization means:
Technological trends
The increased reliance on virtual on line communities to improve efficiency. For example,
Zara no longer relies on inventories as it operates a worldwide distribution network linked to
checkout registers at its stores around the world. This helps in:
Computerized manufacturing system swings its action when an item runs out of a
store.
The manufacturing process is done in accordance and the item is directly sent to the
store.
Nature of work:
The technological change had a huge impact on how people impact on how people work, their
skills and training needed. Today, business environment needs:
High tech jobs where knowledge intensive high tech manufacturing systems are
replacing traditional jobs.
Service jobs where globalization will shift production to low labor cost areas added
to it technological changes that increase productivity. For example, Just -in-time
manufacturing will reduce inventory cost and consequently fewer employees will be
required.
Knowledge work and human capital: The jobs that remain require continuous
education and skills enhancement and, thus, growing emphasis on human capital.
Systematic analysis of the factors associated with customers and competitors (the
external environment) and the organization itself (the internal environment) to
provide the basis for rethinking the current management practices. Its objective is to
achieve better alignment of corporate policies and strategic priorities.
Strategy Formulation
Definition of Mission: Spells out who the company is, what it does, and where it’s
headed.
Internal Environment S W
External Environment O T
Strengths: Internal resources and capabilities that can be used as a basis for
developing a competitive advantage.
Threats: External changes in the environment that prevents or slows down the
organization’s ability to achieve its aims.
- Global Standardization
- Creative Process
- Diversification
Disneyland weaknesses
- High Investment
Disneyland opportunities
Disneyland threats
- Employee Retention
- Brand Consistency
- Product Differentiation
Types of strategies
Vertical integration strategy; the firm expands by producing its own raw
material or selling its products direct.
Competitive Strategy: It identifies how to build and strengthen the business's long-
term competitive position in the market place i.e. how the company will achieve a
competitive advantage – how it will differentiate its products or services from those
of its competitors to increase market share. There are several competitive strategies
that can be used:
Functional Strategy: It identifies the basic course of action each department will
pursue in order to help the business attain its competitive goals.
How an organization intends to balance its internal strengths and weaknesses with its external
opportunities and threats to maintain a competitive advantage over the long-term.
Analysis reveals that there are opportunities that could be pursued but the company
does not have the required strengths and assets.
Analysis reveals that there is a threat that the company has overwhelming
weaknesses.
1. Fit: Michael Porter emphasizes the "fit" point of view i.e. firm's functional strategies
should fit (align) with and support its corporate and competitive strategies.
2. Leverage: Hamel and Prahalad argue that preoccupation with "fit" can limit the
organization's growth. Though alignment is important, yet leveraging resources can
be more important (supplementing what you have and /or doing more with what you
have?)
Strategy Implementation
The pattern of decisions and actions that are intended to carry out the plan. It involves:
Performance evaluation
In most firms today, it is the employees' skills and commitment, and the management system
that produces them that makes the difference and not the technology in itself. This is simply
because the technology is available to all organizations. Thus operational flexibility is what
counts (plant operators and managers who use the technology) first and then equipment and
computer integration comes second.
It refers to the specific human resource management courses of action the company
pursues to achieve its strategic aims.
Formulating and executing human resource policies and practices that produce the
employee competencies and behaviors the company needs to achieve its strategic
aims.
Example 1:
FedEx strategic aim: Achieve superior levels of customer service and high profitability
through a highly committed workforce preferably in non-union environment.
Utilize promotion from within which allows employees to realize their full potential
Example 2:
Southwest Airline strategic aim: To deliver low cost, convenient service on short haul routes
by:
High compensation
Cross training
Company's
Competitive environment
Company's
Company's HR Strategies
Internal environment
What are the Basic courses of
"Strengths and weaknesses" action HR will pursue to ensure
that the HR systems will achieve
the company strategic plan.
ORGANIZATIONAL
PERFORMANCE
How the firm makes money: Human resource units must be more involved in
designing the organization's strategic plan i.e. Human resource managers need to
fully understand the value creating proposition of the firm.
Mrs. Hala Omar Unit 1 - 9
THE ROLES OF HUMAN RESOURCES PROFESSIONALS
The Strategic Role
They should be part of the company's strategic planning team in order to identify
human issues that are vital to the business strategy.
Human resource managers should work closely with senior management in both
formulating and implementing their firm's strategic plans.
Employee behavior
Employee competencies, values, motivation and behavior required by the
company's strategic plan
- Extensive training
- Labor-management cooperation
- Commitment to quality
The future success of any organizations relies on the ability to manage a diverse
body of talent that can bring innovative ideas, perspectives and views to their work.
Thus:
Search for human resources requirements globally and then organize the
pool of diverse talents strategically for the organization.
Today, organizations are asking their HR departments for innovative approaches and
solutions to improve productivity and the quality of work life while complying with the law in
an environment of high uncertainty, energy conservation, and intense international
competition. This means that human resources departments should continually streamline
their operations and redesign the way work gets done.
It's increasingly necessary for organizations to adapt new technologies, structures, processes,
cultures, and procedures to meet the demands of intense competition. Organizations look to
the human resource department for
Human resource managers are expected to show in specific and measurable terms how human
resource activities contribute to the firm's profit i.e. Human resource manager should show in
measurable terms how the human resource system is supporting the employer's strategic aims,
productivity indicators for example.
Leadership proficiencies: Refers to the ability to work with and lead management
groups and to drive change.
Learning proficiencies: Refers to the ability to learn and apply new technology.