Strategic Human
Resource Management
Paul L. Schumann, Ph.D.
© 2011 by Paul L. Schumann. All rights reserved.
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Strategic Decisions
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Where should we compete?
• What industries, products, locations, …?
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How should we compete?
• What criteria: cost, product features,
quality, reliability, …?
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With what should we compete?
• What gives us competitive advantage?
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Competitive Advantage
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Unique, sustainable, hard to copy:
• Product or service
• Production or inventory methods
• Distribution methods
• Marketing methods
• Financing methods
• Information management methods
• Human resource management
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Link HRM & Strategy
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Administrative linkage
One-way linkage
Two-way linkage
Integrative linkage
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Generic Strategies (Porter)
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Cost Leadership Strategy
• Control overhead and other costs
• Use efficient, large-scale facilities
• Exploit the experience curve
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Differentiation Strategy
• Differentiate through unique technology,
features, customer service, brand
image, etc.
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Directional Strategies
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External growth
• Mergers & acquisitions (“M&A”)
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Horizontal (M&A involving competitors)
Vertical (M&A involving the supply chain)
Internal growth
• New products, new markets, innovation
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Concentration (focus, niche)
• Cut costs, grow market share in niche
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Downsizing / divesting
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Transforming the HRM Function
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Customers
Products
Methods
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Measuring HRM Effectiveness
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Audit approach
• Measure key indicators & customer
satisfaction
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Analytic approach
• Cost / benefit analysis
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Improving HRM Effectiveness
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Restructure HRM:
• HRM Centers for Expertise (specialists)
• HRM Field Generalists (dual reporting)
• HRM Service Center (specialists)
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Outsource HRM
Process redesign/reengineering HRM
Human Resource Information
Systems (HRIS)
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