Concepts of strategy and planning
&
Alignment of HR strategy with
Corporate strategy
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Strategy
❑ Strategy is the plan for how the organization
intends to achieve its goals.
❑ It formulates organizational missions, goals,
objectives, and action plan.
❑ It maximizes competitive advantage that generate
superior, sustainable financial return, and
❑ Minimize competitive disadvantage.
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Basic strategies can be classified
into:
❖ Corporate Strategy: Those strategies concerned with the
broad and long-term questions of
⚫ What business(es) the organization is in or wants to be in &
what it wants to do with those businesses .
⚫ For e.g. decision to compete internationally or merge with
other company.
❖ Business strategies-is concerned with how the form
competes with a particular industry or market.
❖ Business strategy focus on line of business. For e.g.
Square…
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Corporate strategies usually fit within the
three main categories of:
1. Restructuring Strategies; It includes:
❑ Turnaround:
Turnaround strategy means to convert, change or
transform a loss-making company into a profit-making company.
❑ Divestiture: A divestiture strategy involves the sale of a firm
or a major component of a firm when retrenchment fails.
❑ Liquidation: The termination of business.
❑ Bankruptcies: Legal status of a business or other entity
that cannot repay the debts.
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Corporate Strategy (Cont)
2. Growth Strategies
❑ Incrementally-Expansion client base, product or service base or changing
distribution network.
❑ Internationally- Expanding in international market.
❑ Mergers and acquisitions- Two roughly similar size firms
combine into one. To benefit of synergy.
3. Maintenance Strategies- Philosophy of the
mix strategies.
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Business Strategy
Business strategy refers to the actions and approaches
crafted by management to create successful performance
in one particular line of business. It is also concerned
with creating competitive advantage in each of the
strategic business units of the organization.
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Toyota Georgetown
⚫ “We’ve got nothing, technology-wise, that anyone else
can’t have. There’s no secret Toyota Quality Machine
out there. The quality machine is the workforce -- the
team members on the paint line, the suppliers, the
engineers -- everybody who has a hand in production
here takes the attitude that we’re making world-class
vehicles.”
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Competitive Advantage Through People
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The war for talent
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Aligning HR with Strategy
Strategic HRM is a set of distinct but
interrelated practices, policies, and philosophies
that facilitate the attainment of organizational
strategy. In other word; The use of employees to
gain or keep a competitive advantage, resulting in
greater organizational effectiveness.
For example:
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A good HR strategy:
❑ satisfy business needs
❑ is founded on detailed analysis
❑ can be turned into actionable programmes
❑ is coherent and integrated
❑ takes account of the needs of line managers,
employees and other stakeholders
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Importance of Strategic HR Planning:
1. Encourage proactive behavior- Vision,
active, anticipation
2. Employees as strategic resources
3. Improved goal attainment
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Importance of Strategic HR Planning (cont)
4. The cooperate organization regarding expansion,
diversification, technological change, should be backed
up by the availability of human resources.
5. It suggests modification in the plan when the expected
manpower is not available.
6. It offsets uncertainly and changes to the maximum
possible and enables the society to have right men at
right time and in the right place.
7. It facilitates the control of all functions, operations,
contribution and cost of human
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Downside to Strategic HR planning
⚫ Strategic formulation & Implementation
⚫ Cost-time & energy
⚫ Business knowledge
⚫ Personal credibility
⚫ HR delivery
⚫ HR technology
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Linking HR Process to Strategy
1.
Corporate strategy leads to HR Strategy
2.
HR competencies lead to Business strategy
3.
HR strategy and Corporate strategy
4.
HR becomes a business partner
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Corporate Strategies Leads to HR Strategy
⚫ Benefits
⚫ Internal Methods
⚫ Gaining economies of scale in
⚫ Penetration of existing markets
operations and functions
⚫ Enhancing competitive position
vis-à-vis industry competitors
⚫ Providing opportunities for
employee professional
development and advancement
⚫ Developing new markets
⚫ HR Issues
⚫ Planning for new hiring
⚫ Alerting current employees
⚫ Ensuring quality and performance
standards are maintained
⚫ Developing new products or
services for existing or new
markets
⚫ External Methods
⚫ Acquiring other organizations
⚫ Vertical integration
⚫ HR Issues
⚫ Merging organizations
⚫ Dismissing redundant employees
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Corporate Strategies Leads to HR Strategy(Cont)
⚫ Stability
⚫ Maintaining the status quo due (existing state of affairs) to
limited environmental opportunities for gaining competitive
advantage.
⚫ Few employees will have opportunities for advancement.
⚫ Critical that management identify key employees and develop
specific HR retention strategies to keep them.
⚫ Turnaround or Retrenchment
⚫ Downsizing or streamlining the organization in a cost-cutting
attempt to adjust to the competitive environment.
⚫ Few opportunities and many environmental threats.
⚫ Important to develop HR practices to manage the “survivors.”
For example: McDonald’s , Primark, Islami Bank Hospital BD
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HR Competencies Lead to Business Strategy
⚫ Strategic
Positioned-social, technological, economic,
political, environmental, and demographic trends
⚫ Diversity Management
⚫ Credible Activist-Build personal relationship, trust,
communicate clear and consistent messages with integrity
⚫ Change Champion
⚫ Human Resource Innovator and Integrator-talent sourcing,
talent development, performance appraisal, rewards,,
organization development, and communication
⚫ Technology Proponent-payroll processing, social media
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HR Becomes a Business Partner
⚫ HR desires to be an active participant in the running of the
business.HR becomes a business partner by:
❑ Focusing
on developing HR programs that enhance
organizational performance.
❑ Involving HR in strategic planning at the onset.
❑ Participating in decision making on mergers, acquisitions,
and downsizing.
❑ Redesigning organizations and work processes
❑ Accounting and documenting the financial results of HR
activities.
❑ Emergence of new models-Ulrich’s "three-legged" model.
❑ Cross-functional initiatives19
HR Becomes a Business Partner (cont)
⚫ HR’s success as true strategic business partner dependent
on five specific competencies:
⚫ Strategic contribution - development of strategy
⚫ Business knowledge - understanding nuts & bolts of
organization
⚫ Personal credibility - measurable value demonstrated
in programs & policies
⚫ HR delivery - serving internal customers through
effective & efficient programs
⚫ HR technology - using technology to improve
organization’s management of people
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Why HR is not a strategic partner
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Traditional versus Strategic HR
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Strategic HR Planning Model
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SEVENRepresentative
FORMS OF CAPITAL
Representative Examples
Elements
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Cultural
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Human
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Social
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Knowledge
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Institutional
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Financial
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Physical
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Man-Made
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Natural
Endowments
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Tangible Articulations
Norms
Mental Models
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Health and Population
Education and Training
Attitudes and Motivation
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Qualitative, Quantitative Data
Frameworks and Concepts
Knowledge Generation
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“Good, Clean Governance”
Justice System
Connective Organizations
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Financial Systems
Private Wealth
Public Wealth
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Transportation, Communication
Power
Water and Sewerage
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Ecosystem Services
Raw Materials
Climate and Location
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Respect for Nature, Architecture, Music, Language,
Range of Acceptable Behaviors
Trust, Wealth Creation Attitudes, Long-term Thinking
Nutrition, Medical & Mental Health
Primary & Secondary, Technical
Self-responsibility, action-orientation
Statistics, Opinions, Records
Theories, Processes, Procedures
Universities, R&D, Market Learning
Transparency, No Hidden Costs, Accountability
Property Protection, Predictable Regulations
Chambers of Commerce, Unions
Banks, Stock Markets
Bank Deposits
Bank Reserves, Taxes, Duties, Macroeconomic Stability
Roads, Ports, Telephone Systems
Electric Grids, Generation Capacity
Pipelines, Pumping Stations
Clean Air, Water, Protected Ecosystems
Agricultural, Mineral, Petroleum
Proximity to Markets
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