Chapter # 2 The Human Resource Management Process. 2 Strategy-Driven Human Resource Management.

Human Resources and Management Differentiation

(1) differentiator strategy, we're going to be more concerned with employees who are flexible and adaptable, who have the ability to innovate and create new processes, and who can work in uncertain environments within cross-functional teams. (2) In a differentiator organization, we will most likely have much broader job classifications, as well as broader work-planning processes. Individuals will be hired and paid based on individual knowledge and skill sets, not specifically based on skills related to the job they fill upon entering the organization. (3) Here, our incentive programs will reward innovation and creativity. (4) in the differentiator organization, performance appraisals will generally be used as a tool to develop the skill sets of the valuable knowledge workers within the organization, not as a tool to punish and weed out poor performers. (5)So you can see very quickly that HRM will need to do its job in a significantly different way based on the type of generic strategy that the company decides to follow.

Human Resource Management and Cost Leadership

(1) we are going to be most interested in minimizing all internal costs, including employee costs. So we are concerned with maximum efficiency and effectiveness. (2) we are concerned with maximum efficiency, we will probably create highly specialized jobs within the organization so that we have people doing the same thing repeatedly. (3) This will generally cause employees to get much better and faster at their jobs. We will also have a specific job description for each position and job-specific training with very little, if any, cross-training. (4) We will hire new workers based on technical skills and abilities, and we will most likely emphasize performance pay by which the employees get paid more if they perform their job faster and better. (5) We will also provide incentives that emphasize cost controls and efficiency. (6) Finally, it's quite likely that managers will use performance appraisals as a control mechanism to allow them to weed out less efficient and less effective employees.

Five Force Analysis

(1)Rivalry among st competitors (2)Threat of substitute product and services. (3) Potential new entrants (4) Power of Suppliers (5) Power of buyers

Three major strategic questions to analyze what kind of strategic plan we need to write?

1.What is our present situation (where are we now)? 2.Where do we want to go? 3.How do we plan to get there?

Visions and Missions

A vision and a mission are 2 of the most most critical components of any successful corporate strategy. Together they provide information necessary to focus every employee on the company's goals and objectives.

The Vision

A vision is what we expect to become as an organization at a particular point in time in the future. The vision by necessity is a fuzzy thing; it is not specific in that it doesn't say how we're going to achieve it. But we identify the vision as a future state of being. It is who we are, what we stand for, what we believe in, and what we want to become. Despite their fuzziness, visions are very powerful when used correctly. A vision provides a focus point for the future; it tells the company where it is headed.33 It allows the company leaders to look into the future and see what they want to look like as a company at that time—basically, it lets them answer the question of what they want to be when they "grow up." If everyone is focused on the same future end state, they will work toward that same end state.

The External Environment customers competition suppliers labor force shareholders society technology the economy governments

Applying the concept

Controlling.

As strategies are implemented, they must also be monitored and evaluated. Controlling is the process of establishing and implementing mechanisms to ensure that objectives are achieved. An important part of controlling is measuring progress toward the achievement of the objective and taking corrective action when needed. Another important part of controlling is staying within budgets when appropriate or changing them when necessary to meet changes in the environment.

Assumptions

Assumptions are values and beliefs that are so deeply ingrained that they are considered unquestionably true. Because assumptions are shared, they're rarely discussed. They serve as an automatic pilot to guide behavior. In fact, people often feel threatened when assumptions are challenged. If you question employees about why they do something or suggest a change, they often respond with statements like "That's the way it's always been done." Assumptions are often the most stable and enduring part of culture and are difficult to change. Assumptions, values, and beliefs affect behavior, not the other way around; in other words, cause and effect work from the bottom up.

Level 1 : Behavior

Behavior includes the observable things that people do and say or the actions employees take. Artifacts result from behavior and include written and spoken language, dress, material objects, and the organization's physical layout. Heroes, stories, slogans, symbols, and ceremonies are all part of behavior-level culture. The behavior level is also called the visible level. Values, beliefs, and assumptions are considered the invisible level, as you cannot actually observe them.

Big Data

Big data involves the collection of extremely large data sets—so large, in fact, that data analytics on these data sets would have been impossible until very recently, since we just did not have the computing power or the programs available. With the advent of faster computers and new analytics programs, we can now find patterns in these massive data sets that allow us to make important organizational decisions—especially strategic decisions.

The External Environment The Competition

Businesses must compete for customers and their performance is not simply a function of their own actions. Each firm's actions must be understood relative to the actions of its competitors.

Centralization

Centralization, the third major component of organizational structure, is the degree to which decision making is concentrated within the organization. The degree of centralization in an organization has to do with dispersion of authority for decision making and delegation of authority. If we can concentrate authority in decision making with one or a few individuals, we can concentrate on hiring people who are very good at making business decisions in those few positions and not worry about the decision-making skills of the rest of our employees. Centralization of decision making tends to create greater control within the organization, because the organization's few decision makers will soon find that they make similar decisions over and over. They thereby become very good at determining the best course of action in a particular situation. In other words, there is a learning curve in decision making. The more decisions you make, the better you get at making high-quality decisions. As the organization gets larger, we may have to go through many layers of the organization in order to get a decision made. This can slow down the processes within the firm—in some cases, to such an extent that by the time a decision is made, it becomes irrelevant. For example, TEPCO was criticized for having a complex bureaucratic decision-making process that led to the meltdown of three reactors at one of its nuclear plants in Japan. So we have to balance centralization and decentralization within our firms, and the current trend is toward decentralization. However, we know that centralized decision making gives us greater control and thus generally tends to lower our costs for decision making. So other things being equal, we would rather have highly centralized decision making.

The internal Environment Strategy

Chinese military strategist Sun Tzu (ca. 500 BCE) as the developer of "the Bible" of strategy... Sun Tzu's principles are divided into two components: 1) knowing oneself 2) knowing the enemy

Threats of Substitute products and services

Companies in other industries may try to take a company's customers away. For example, newer methods of storing and playing music and videos—like the streaming music services iHeartRadio and Pandora—are taking significant market share from manufacturers of MP3 players, which previously took significant market share from CD and DVD manufacturers.

Basics of organizational structure

Complexity Formalization Centralization

Complexity

Complexity, the first major component of organizational structure, is the degree to which three types of differentiation exist within the organization. These three types of differentiation are vertical differentiation, horizontal differentiation, spatial differentiation. Each of these three sub components demonstrates a way in which we break the organization up into smaller and more differentiated pieces. How one does this is very important. For example, Microsoft is currently working through how it wants to change its organizational structure under new CEO Satya Nadella because its historical structure has become too expensive.

____ 10. Wal-Mart

Cost Leadership

Cost Leadership

Cost leaders do everything that they can to lower the organizational costs required to produce their products or services. However, cost leaders do not necessarily provide their products or services to the customer for a lower price. They can choose to keep their prices down and maintain the same margin as their higher-cost competitors, or they can choose to charge the same price as their competitors and thus increase their profit margin above that of their competitors on each of the goods or services they sell.

___ 19. "Walking around the office, I realized that I would have to wear a jacket and tie every day."

Culture

The External Enviroment

Customers Competition Suppliers Labor Force Share Holders Society Technology Economy Governments.

The External Environment. The Customers

Customers have more power today than ever before, as they have a major affect on the organizations performance through their purchase of products. Without customers, their is no need for an organization. Therefore, companies must continually improve products and services to create value for the customers.

HR Data Analytics

Data analytics has a place in HRM, just as it does in other areas of management. HR managers must become comfortable with collecting and analyzing big data to drive results. Analytics tools and processes can be used for many HR functions, such as talent acquisition and management, training and development, work and job analysis, productivity analysis, motivation, retention, and engagement. However, according to a recent set of studies from Accenture and the United Kingdom's Chartered Institute of Personnel and Development (CIPD), organizational silos, skills shortages, and suspicion about reducing human beings to data points are "preventing HR departments from effectively using talent analytics. The convergence of HRM and big data is sometimes called workforce science. Peter Capelli, director of the Center for Human Resources at the University of Pennsylvania at Wharton, says, "This is absolutely the way forward." The ability to measure actions and reactions in large numbers and find patterns in them is going to change the management of people in organizations—not just in the long term, but in the immediate future. Google uses data analysis in HR just as much as it does in the marketing of products and services. Google knows, for instance, that its most innovative workers "are those who have a strong sense of mission about their work and... have autonomy.

____ 6. iPhone

Differentiation

____ 8. Rolex watches

Differentiation

____ 9. TOMS shoes

Differentiation

____ 6. iPhone

Diffrentiation

Human resources Promote Strategy

Do HR managers need to recruit, select, train, evaluate, and interact with employees differently based on different organizational strategies? Of course they do We showed you earlier how we might manage people differently based on different generic strategies. The same holds true when looking at different sets of objectives, different competitors, different organizational strengths and weaknesses, and many other industry and company characteristics. If the objective is to win a race, you wouldn't hire a cab driver to drive a Formula One race car! Both the cabbie and the Formula One driver can drive, but they do it differently to achieve different goals. HR managers have to evaluate all of the organizational characteristics to determine what kinds of people to bring into the organization and then how to maintain those people once they have become a part of the company. This is the reason that it's so critical for HR managers to understand organizational strategy In fact, as you go through the remainder of this book, you will see continuing references to how HRM will affect the company's ability to do its work over the long term. Everything that HR does must mesh with the chosen strategy to provide the right kinds of employees, who will learn and do the right types of jobs so that the company can achieve its goals.

Organizational Culture

Every group of humans that gather together anywhere at any point in time create a unique group culture. They have their own group standards, called norms, which create pressure for the group's members to conform. Social groups have societal cultures, nations have national cultures, and organizations have their own distinct organizational cultures.

Implementing, Monitoring and executing the strategy

Execution of the plan is the key. The last items in the strategic planning process are implementing and then monitoring and evaluating the plan's success. The goal here is to ensure that the mission and objectives of the organization are achieved. Successful implementation of strategies requires effective and efficient support systems throughout the organization. It also requires a dedication to the plan at all levels of the organization. Although strategic planning usually goes well, implementation is often a problem. One reason is that strategic plans often end up getting buried in bottom drawers; all too frequently, no action is taken to implement the strategy.

The External Environment Technology

Few organizations operate today as they did even a decade ago. Products not envisioned a few years ago are now being mass-produced. New 3-D printers can even make a car body from basic materials (e.g., the new Urbee by KOR Ecologic). Computers and the Internet have changed the speed at which and the manner in which organizations conduct and transact business, and they are often determining factors in the firm's business processes. Changing technologies require technologically savvy employees who have the ability to adapt to new processes. Without employees who are comfortable with changing technologies, organizations today will soon find themselves unable to compete.

____ 7. Bodybuilder magazine

Focus or Niche

____ 9. TOMS shoes

Focus or Niche

Formalization

Formalization, the second major component of organizational structure, is the degree to which jobs are standardized within an organization, meaning the degree to which we have created policies, procedures, and rules that "program" the jobs of the employees. If we make things routine by creating standard operating procedures and other standard processes, we can usually increase the efficiency and effectiveness of the people within the organization, in turn making the entire organization more productive on a per-unit basis. So the more that we can formalize the jobs within the organization, the easier it is to manage the people in those jobs. We also tend to see lower costs in organizations that are highly formalized, because jobs in such organizations are done in a routine, repetitive manner—at least when it is possible to do so. As a result, we generally want to formalize all of the processes that we can within the organization, but we can't always formalize everything that we do. How much we're able to formalize jobs within the organization depends on what the organization is designed to do. If the organization is designed to do the same thing over and over, such as producing a low-cost commodity, then we can usually formalize many of its procedures. On the other hand, if the organization is designed to do unique and non routine things as a differentiator (meaning it never does the same thing twice), then we will probably not be able to formalize very much of what the organization does.

___ 2. GE wanted to acquire our company, but the SEC said that would be in violation of antitrust laws, thereby preventing the deal.

Governments

HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)

HR serves as a broad-based organizational system using data to influence business performance. As a result, most organizations today use complex computer systems to manage and manipulate those data. Human resource information systems (HRIS) are one type of system used to manage and analyze data in organizations.

Example of Objectives

Here is a model adapted from Max Weber to help you write effective objectives, followed by a few company examples. To + action verb + singular , specific , measurable result + target date Honda: To +(action Verb) introduce + (singular)12 new Honda models (specifics) for Chinese markets + (measurable Result) over 3 years , (Target Date) beginning in 2013 Nike: To (action Verb) +increase (singular) + annual (Specifics) revenues (Measurable results)to $ 36 billion + (Target Date) by 2017 Dell: (action Verb) To Cut + (singular) costs + (Specifics, measurable results) by $ 4 billion + Target Date) in 2011

Horizontal Differentaition

Horizontal differentiation identifies how we break the organization up horizontally. We usually do this by breaking the organization up into departments. For example, HR is commonly a department within the organizational structure, advising and assisting all the other departments in the firm. But there are other ways in which we can segment the organization horizontally, including by customer type, product or process type, geographic divisions, etc. Zappos just recently changed to a "holacracy," meaning a structure in which there are no departments, job titles, or managers. This is a radical way to wipe out vertical and horizontal differentiation.

Potential new entrants

How difficult and costly is it for new businesses to enter the industry as competitors? Does the company need to plan for new competition? Are there significant barriers to entry that would prevent such new competition? In many industries today, all it takes to enter is the ability to create and host a website. If it is easy to enter an industry and profitability is significant, then the threat of new entrants is much higher. If it's more difficult to enter an industry, for instance because of high capital equipment costs or other barriers to entry, and profitability is lower, possibly because the product is a commodity (think about the steel manufacturing industry), then the threat of new entrants is significantly lower.

Power of Buyers

How much does our business depend on its buyers? If one buyer or a few large buyers purchase most of what we provide, then the buyer has significant bargaining power over our company. As an example, almost every business student has heard of the power Wal-Mart holds over its suppliers because of the volume of goods that it buys. However, if we provide products or services to many different buyers, none of which provides us with a major portion of our business, then the buyers may have very little bargaining power

Power of Suppliers

How much does our business depend on its suppliers? If the business has only one major supplier of a critical component, with no alternatives available, then the supplier has greater bargaining power over the business. However, if our business can get its major supplies from any one of many different suppliers, then the suppliers will have very little power over the business.

What is HRIS

Human resource information systems (HRIS) are interacting database systems that "aim at generating and delivering HR information and allow us to automate some human resource management functions. 100 Some of the most common features in HRIS include modules for tracking attendance and leave, job, and pay history and logging appraisal scores and review dates. Others include modules for benefits enrollment and tracking, succession management, training management, and time logging. There are additional modules available depending on the size and type of the organization

Structure effect HRM

In a small entrepreneurial firm, there usually is no HRM department, but someone has to perform the HR functions. Would you need to recruit and hire different types of people in a bureaucratic organization than you would in an entrepreneurial organization? Indeed, you would. In the more bureaucratic organization, you would most likely look for and hire people who had significant depth of expertise in a narrow area within their field of knowledge, so that they could apply that expertise in a highly efficient manner. That would make the organization more productive over the long term. Your training programs would also probably be more specific and geared toward particular jobs. In addition, your performance appraisal processes would be aimed at evaluating more specific tasks and functions than would be the case in the entrepreneurial organization. In fact, the organizational structure will affect virtually every function of the HR manager. So in order to be a successful HR manager, you have to understand and adapt to the particular organizational structure of your firm.

____ 14. To decrease the number of sales returns by year end of 2016

Measurable

Mission

Mission, we get to the specifics. The mission statement lays out our expectations of what we're going to do in order to become the organization that we have envisioned. The mission statement is a statement of what the various organizational units will do and what they hope to accomplish, in alignment with the organizational vision. The mission is generally narrower and more specific than the vision, which means that it generally must be a bit longer-winded. The mission statement takes into account things like whom we serve (in terms of customer groups, types of products and services, technologies we use, etc.) and how we serve them. Fundamentally, it answers the question "What do we need to do in order to become what we have envisioned?"

The External Environment Government

National, state, and local governments all set laws and regulations that businesses must obey. According to a CNBC story, for small firms, the annual cost of complying with government regulations is $10,585 per employee. The Occupational Safety and Health Administration (OSHA) sets safety standards. The Environmental Protection Agency (EPA) sets pollution standards that must be met. Companies like Pfizer, Novartis, and Merck cannot market drugs without Food and Drug Administration (FDA) approval. As a result, to a large extent, business may not do whatever it wants to do; the government tells business what it can and cannot do. So government matters. as it affects how business is conducted.27 Due to the recent financial crisis, Congress decided to create new financial regulations to help prevent another crisis and recession. One was the Regulatory Flexibility Act, which lowered costs of compliance for small businesses by about $2.5 billion in 2013.28 Federal and state governments create both opportunities and obstacles for businesses.

The External Environment. The Economic. Major Factor when performing strategic planning activities.

No organization has control over economic growth, inflation, interest rates, foreign exchange rates, and so on. In general, as measured by gross domestic product (GDP), businesses do better during times of economic growth than during recessions. During periods of inflation, businesses experience increased costs. When interest rates are high, it costs more for companies to borrow money. Foreign exchange rates also affect businesses both at home and abroad. Thus, the economy has a direct impact on the firm's performance and profits. We always have to take the economy into account when performing strategic planning activities

Objectives

Objectives state what is to be accomplished in a singular specific and measurable terms, with a target date. The organization has to write at least one objective for every major goal that is set forth in its strategy. You must begin with the end in mind, and objectives do not state how they will be accomplished—just the end result you want to accomplish.

What is Organizational Culture

Organizational culture consists of the values, beliefs, and assumptions about appropriate behavior that members of an organization share. Culture describes how employees do what they do (behavior) why they do what they do (values, profits, customers, employees, society). Every organization has a culture, and success depends on the health and strength of its culture. Therefore, leaders should spend a lot of time building the organization's culture. Organizational culture is primarily learned through observing people and events in the organization.

The External Environment. The Suppliers

Organizations buy resources from the suppliers. Therefore partnership with suppliers also affect firm's performance. It is important to develop close working relationships with the suppliers. In order to do that, it is required that the employee holds the ability to communicate, empathize, negotiate, and come to mutually advantageous agreements.

The external Environment. The Society

Our society to a great extend, determines what acceptable business practices are. Individuals and groups of stake holders work to pressure businesses to make change.

Rivalry amongst competitors

Porter calls this scrambling and jockeying for position. Businesses do this in different ways, including competing for customers on the basis of price, quality, or speed of delivery How much rivalry there is among competitors determines things like how competitive the industry is and which competitors are targeting the same customer groups. Rivals need to anticipate each other's moves. Coke and Pepsi are long-time rivals in the soft drink industry. Nissan and Toyota are long-time rivals in the auto industry.

Quality Management

Quality management is one example of where the controlling process allows the company to adjust its internal processes to reach a predetermined level of quality control. Quality must consistently be monitored—because while quality costs, lack of quality costs much more. So as part of strategy execution, we always need to watch quality through the controlling process.

Organization's Internal Environment

SWOT analysis Strength Weakness Opportunities Threats

SWOT analysis

SWOT analysis is a tool to analyze the organization's internal environment, meaning its specific capabilities and limitations. In the process of SWOT analysis, the organization creates a list of its strengths, weaknesses, opportunities, and threats. For a format in which to list SWOT. Once this list is created, the organization evaluates each of the sections of the list in order to decide where it can use its resources most effectively. If, however, we have strengths on our list that no longer provide us with the potential for advantage over our competitors, then we may choose not to use organizational resources to maintain those strengths. So as you can see, the process of SWOT analysis is a process of balancing our available resources in order to make the most of our strengths and opportunities and to minimize any danger to the organization from its weaknesses and threats.

____ 1. The CEO was fired by the owners because our company is not profitable. _

Shareholders

____ 12. To double ticket sales

Singular Measurable, Target Date

____ 11. To start working out aerobically within a few weeks

Singular, Measurable and Target date

____ 15. To be perceived as the best restaurant in the Boston area by 2017

Singular, Measureable

Complexity

So complexity involves the way in which we divide the organization into different segments, both physically and within artificial boundaries such as departments. Why does this matter to the organization's managers? The more the organization is broken into segments, the more difficult it becomes to manage within it. If we have many vertical layers in the organization (vertical differentiation) and many horizontal divisions of the organization (horizontal differentiation), and if the organization has many different physical locations (spatial differentiation), then it is much more difficult to conduct business than if there were fewer divisions. More complexity makes it more difficult to communicate between the different parts of the organization, makes it more difficult to make decisions within the organization, and makes it more difficult to find information that we need when it's in another part of the organization. In fact, duplication of processes is a common problem in highly complex organizations. As a result of this difficulty in making decisions and communicating, the cost of managing an organization goes up as it becomes more complex and bureaucratic. As an example, in a February 2014 article, Bloomberg noted that as college and university bureaucracies in the United States get larger, the cost of college goes up for students. This means that we want to minimize complexity as much as possible in order to minimize organizational costs.

Measurement Tools for Strategic HRM

Some of the most common tools are economic value added (EVA) balanced scorecards, including organizational scorecards HR scorecards, return on investment (ROI).

Spatial Differentiation

Spatial differentiation deals with the physical separation of different parts of the organization. For instance, we may have headquarters in Los Angeles, California, while we may have a production plant in Indonesia. Spatial differentiation can make it much more difficult to manage the organization due to the fact that the organization is spread out among many locations. For example, GE operates in more than 160 countries. Now that is complex!

." ____ 18. "At Ford, quality is job one."

Strategy

____ 16. "At Victoria's Secret, we focus on selling clothes and other products to women

Strategy

The Internal Environment

Strategy Structure Culture

____ 17. "At the SEC, we have several layers of management."

Structure

____ 20. "I work in the production department, and she works in the marketing department."

Structure

Setting Objectives

Successful strategic management requires a commitment on the part of managers to a defined set of objectives. Successful managers have a goal orientation,50 which means they set and achieve objectives. Goal orientation can also be learned.

____ 5. Our purchasing agent just closed a deal that will let us buy sugar for a few cents less per pound, saving us thousands of dollars per year.

Suppliers

____ 3. Karen bought a new oven that will cook our pizza in half the time and make it taste even better.

Technology

The Balance Scorecard

The balanced scorecard (BSC) measures financial, customer service, internal process, and learning and growth (or sustainability) measures. All four dimensions of the scorecard are equally important, because the results in each area affect the other areas of performance.

The External Environment Labor Force

The employees of and the talent pool available to an organization have a direct effect on the organization's performance. Management recruits human resources from the available labor force outside the company's boundaries, so slow population growth will limit the available talent pool. Unions can provide employees for the organization, but they are considered an additional external factor because they run collective bargaining for those employees. Nevertheless, some companies are growing rapidly even in the current labor market. Living Social is an example of a fast-growing company that recruited thousands of new workers in 2013.

Shareholders

The owners of a corporation known as shareholders influence management. Most shareholders of large corporations are generally not involved in the day to day operation of the firm, but they do vote for the directors of the firm.

Three Levels of Culture

The three levels of culture include behavior, values beliefs, and assumptions.

Artifacts of organizational Culture

There are five artifacts of organizational culture that help employees learn the culture: (1) Heroes, such as founders Steve Jobs of Apple, Sam Walton of Wal-Mart, Herb Kelleher of Southwest Airlines, Frederick Smith of FedEx, made outstanding contributions to their organizations. (2) Stories, often about founders and others who have made extraordinary efforts. These include stories about Sam Walton visiting every Wal-Mart store yearly, or someone driving through a blizzard to deliver a product or service. Public statements and speeches can also be considered stories. (3) Slogans, such as at McDonald's. Q, S, C, V (or quality, service, cleanliness, and value) (4) Symbols, such as plaques, pens, jackets, or a pink Cadillac at the cosmetics firm Mary Kay. (5) Ceremonies, such as awards dinners for top achievers at Mary Kay.

Strategy Analysis

There are two primary components of strategic analysis used by most organizations. (1) The first is called five-forces analysis, and it is a tool that organizations use to analyze the external competitive environment. (2) The second is called SWOT analysis (SWOT stands for strengths, weaknesses, opportunities, and threats), and it is used to analyze the company-specific (internal) environment.

Differentiation

This strategy attempts to create an impression of difference for the company's product or service in the mind of the customer. The differentiator company stresses its advantage over its competitors. If the company is successful in creating this impression, it can charge a higher price for its product or service than can its competitors. Differentiation, it should be noted, is not necessarily based on real difference but on the perception of difference, which is often created through advertising

Level 2: Values and Beliefs

Values represent the way people believe they ought to behave, and beliefs represent "if, then" statements like "If I do X, then Y will happen." Values and beliefs provide the operating principles that guide decision making and shape the behaviors that result in level-1 culture. Values and beliefs cannot be observed directly; we can only infer from people's behavior what they value and believe. Although organizations use heroes, stories, symbols, and ceremonies to convey important values and beliefs, slogans are critical to level-2 culture. A slogan expresses key values. Slogans are part of organizational mission statements, while a philosophy (e.g., FedEx's philosophy of people-service-profit) is a formal statement of values and beliefs.

Vision and Mission together

Vision + Mission = Focus

Structure and Employee Behavior

We now know that structure is made up of complexity, formalization, and centralization. Does the way in which we combine these components cause employees within the organization to act in different ways? In fact, it does. Think for a second of an organization that in your mind is a bureaucracy. It might be a government agency, a corporation that you've worked for, or the college or university at which you study. Chances are that this organization is highly complex, has many standard procedures or ways of doing things (formalization), and is probably at least partially centralized (meaning only certain individuals can make major decisions). If you are part of this organization and someone asks you to do something that is outside the scope of your job, then you most likely would say, "That's not my job," and tell them to go to a different person to accomplish that task. You don't have the authority or the knowledge to be able to help them. Now let's look at a different kind of organization. You have taken a job with a brand-new, entrepreneurial firm—like Zappos. There are no departments or standard procedures, and you were hired at least in part because of your ability to "think on your feet" and make decisions. Someone again asks you to do something that is outside the scope of your normal job. In this environment, you're much more likely to take upon yourself the task of figuring out a way to assist the other person instead of passing them to someone else. The structure of the organization has changed the way that you react to a request to do something that is outside the scope of your job. Either that, or the request becomes your job.

Focus or Niche

With this strategy, the company focuses on a specific portion of a larger market. For instance, the company may focus on a regional market, a particular product line, or a buyer group. Within a particular target segment or market niche, the firm may use differentiation or a cost leadership strategy. Businesses can win big by thinking small.

____ 4. eHarmony online dating service is losing some customers to other services focusing on Christian, African-American, and older people seeking matches.

competition

Identify which strategy is used by each brand or company listed and write the letter corresponding to the company's strategy by the company's name.

cost leadership differentiation focus or niche

vertical differentiation

deals with how we break the organization up vertically, meaning how many layers there are in the organization from the top to the bottom. How many bosses are there, and whom does each one report to? Whom does the HR manager report to? You also need a clear overall boss who is accountable for results. The organizational chart is typically used to show the chain of command.

EVA Economic Value added

is a measure of profits that remain after the cost of capital has been deducted from operating profits. EVA = Net operating profit after tax − ( Capital used × Cost of capital )

Data Analytics

is the process of accessing large amounts of data in order to analyze those data and gain insight into significant trends or patterns within organizations or industries. Computing power has obviously been increasing at a remarkable rate for the past 20 years, as has the ability to both create and store large amounts of data and information. This ability to create huge amounts of data has led to the concept of "big data."

Organizational Structure

refers to the way in which an organization groups its resources to accomplish its mission. There must be a sound organizational structure if a strategy is to be successfully implemented. Why do you see firms that seem to be equal in size and capability execute at different levels of efficiency? The answer lies in how their resources are differently structured and managed. Thus, the selection of a proper organizational structure is critical to business success. In HRM, managers need to have an understanding of organizational structure to do their jobs correctly. An organization is a system that is typically, but not always, structured into departments such as finance, marketing, production, human resources, and so on. Each of these departments affects the organization as a whole, and each department is affected by the other departments. Organizations structure their resources to transform inputs into outputs. All of an organization's resources must be structured effectively if it is to achieve its mission. As a manager in any department, you will be responsible for part of the organization's structure.

____ 13. To sell 7% more sandwiches and 15% more chips in 2016

singular

What is strategy and how do we implement strategy?

strategy is a plan of action designed to achieve a particular set of objectives. And what does strategy take into account? It looks at the external (industry and macro-) environment and the internal (organizational) environment in order to create strategic advantage. Strategic advantage occurs when you analyze the environment better and react to it quicker than your competitors do while using all of your internal resources efficiently, thus creating the sustainable competitive advantage.

Return on Investment

the concept of ROI is, at its core, very simple. Return on investment (ROI) is a measure of the financial return we receive because of something that we do to invest in our organization or its people. ROI = Gain from investment − Cost of investment Cost of investment. ROI = $3,000,000 − $1,000,000 $1,000,000 = $2,000,000 $1,000,000 = 2 or 200% in this case, our return on investment over the course of 1 year is 2 times the cost of the investment. It is always important to calculate at least a rough ROI for any investment in organizational resources. There's a definite need to understand how much we get in return for an investment in our people. Don't just assume that the return on investment is always positive—because it's not.

Strength, opportunities, weaknesses and threats

we have an organizational strength that is critical to maintain in order to serve our most important customer groups, then we will allocate resources toward maintenance of that strength So as you can see, the process of SWOT analysis is a process of balancing our available resources in order to make the most of our strengths and opportunities and to minimize any danger to the organization from its weaknesses and threat