HR Strategic Planning
Value drivers
Actions, processes, or results that are needed to deliver a desired value.
Compensation
All financial returns (beyond any tangible benefits payments or services), including salary and allowances.
A small publishing firm believes that it is too small to benefit from strategic planning. Which short-term benefit is the best choice for HR to use in influencing leaders to begin the strategic planning process?
Allocating resources more effectively Rationale: The strongest reason for senior management to engage in the strategic planning process is a more focused allocation of resources and potentially increased profitability. Strategy does not necessarily result in increased engagement or corporate social responsibility.
Strategic management refers to the actions that leaders take to move their organizations toward strategic goals and creating value for stakeholders. Which is considered a benefit of strategic management?
Allowing for consistent decision making Rationale: When managers are mindful of the organization's strategic goals, management decisions throughout the organization will be more consistent, with each manager assessing his or her alternatives against the same set of goals and objectives. Systems thinking and a focus on core competencies are critical in strategic planning-in determining what the organization will work toward and how its parts will work together. Strategic management encourages less waste, but this does not mean the organization will use fewer resources.
Which organization is least likely to succeed in its strategic planning and management?
An organization that shares strategic plans with top management only to preserve its competitive edge Rationale: The only poor strategic planning practice here is to communicate strategic plans within just a small leadership group. The organization will benefit from having all employees understand how their work relates to and supports the strategy.
Organizational values
Beliefs and principles defined by an organization to direct and govern its employees' behavior.
In a growth-share analysis which business would be considered a question mark?
Business line with steady growth in new market segment Rationale: A question mark in the growth-share matrix may be a winner or a loser with an unclear future. As this business line is showing growth in a new market, it would be a question mark. There is an uncertain future in the new market.
How should an HR leader best address the perception of HR as a cost center?
By ensuring that HR services are aligned to the organizational strategy Rationale: The best response to this perception is to demonstrate the strategic value of HR services such as recruiting and onboarding. Increasing efficiency and decreasing costs will not change the organization's financial structure. Charging for HR services is a management decision.
A strategic project meets the defined objectives but is unsuccessful in its impact to the strategy. Which action in the project planning process has the project manager overlooked?
Collaboration and agreement on how the project purpose supports the overall strategy Rationale: Collaboration and agreement on how project objectives are related to the organization's strategy are critical in the planning stage of a project. If the connection is not clear, all objectives may be met but the initiative may not affect the strategy. Therefore, clear alignment on the objectives and how success will be measured must be considered at the start of the project.
Mission statement
Concise outline of an organization's strategy, specifying the activities the organization intends to pursue and the course its management has charted for the future.
Which is an example of an economic factor that should be included in an environmental scan?
Consumer price index data Rationale: Consumer price index data is an example of an important economic factor that should be included in an environmental scan. It is an indication of economic health, signaling inflationary and deflationary forces and possible changes in consumer spending habits. Regulatory changes represent a political factor, which may or may not have economic implications. Similarly, geographic shifts in population are social changes that may or may not affect the organization's workforce. Changes in workplace design and practices, such as telecommuting or the growth of mobile computing, could be social or technological.
An international discount supermarket chain's competitive strategy is to provide the lowest-price products by minimizing operational overhead. Which generic competitive strategy is it using?
Cost leadership Rationale: To achieve cost leadership, an organization must be the low-cost producer in its industry. Sources of cost advantage vary depending on the industry; it may originate from economies of scale, proprietary technology, preferential access to raw materials, or reduced costs in advertising and research, among other factors. Successful low-cost producers use all sources of cost advantage.
Which three generic strategies for success are identified in Michael Porter's model?
Cost leadership, differentiation, focus Rationale: According to Michael Porter, there are three potentially successful generic strategies: cost leadership, differentiation, and focus.
A project manager must form a cross-departmental team to implement a new program. Which steps should be taken first to ensure that the project is completed on time and in scope?
Define tasks, communicate expectations, assign tasks, and monitor progress. Rationale: Defining tasks, communicating expectations, assigning tasks, and monitoring progress are the first steps in the project management process. The other answer choices are incorrect because the steps listed within them occur either before the task force is assembled or after the initial launch of the project.
What guidance from HR is useful to an organization that has decided to pursue a greenfield operation?
Demographic characteristics of the new location Rationale: The demographics in the location is useful information when an organization has decided to build from the ground up. A new staff will be required, and tapping into the local market will be necessary. Data about current skill sets is not applicable in a greenfield operation, as this strategy requires building from the ground up. There is no existing workforce. While recommendations about talent management concerns are helpful with any growth strategy an organization may decide to use, the selection of companies to pursue for an alliance is not within the purview of HR. In addition, a greenfield operation does not involve alliances or partnerships with other organizations. Best practices regarding how to implement a greenfield operation are not the responsibility of the HR department.
Vision statement
Description of what an organization hopes to attain and accomplish in the future, which guides it toward that defined direction.
Which activity is critical to ensure that strategy is implemented effectively?
Feedback on strategic initiatives is obtained on a regular basis from all parts of the organization. Rationale: Effective strategic implementation requires two-way communication: communication of the strategic objectives and plans to the organization and feedback from the organization to those plans. The communication plan for strategic initiatives should include ongoing opportunities for feedback. This enhances understanding and improvement of the strategy.
What term refers to a company building a new global location from the ground up?
Greenfield operation Rationale: A new facility may be constructed on what was once a "green field." A new global location built from the ground up is often referred to as a greenfield operation.
After a company lays off 40% of its workforce, organizational output decreases by 20%. In order to better understand these changes, the HR director tasks the HR manager with improving the employee attitude survey response rate by 15% in the next quarter. What should the HR manager do first?
Identify the survey response rates before the layoff to note any trends. Rationale: Response rates need to be compared before any further action should be taken. Offering group bonus incentives, forming a focus group, and having the CEO send a memo should occur after the response rates have been compared.
During which stage of strategic planning do managers develop action plans and assign staff members to projects?
Implementation Rationale: During the strategy implementation phase of strategic planning, the plan is put into action. Managers develop action plans and allocate resources toward achieving organizational objectives.
During what phase of the strategic planning process does motivating employees to work toward organizational goals take place?
Implementation Rationale: Implementation reflects the process of strategic management. This requires clear communication of objectives to teams, coordination and support of their efforts, and control of resources.
What type of business problem is solved most appropriately by using Six Sigma tools?
Improving quality Rationale: Quality issues can be solved by using Six Sigma tools. Six Sigma is a strategy that identifies and removes the causes of defects and errors in manufacturing and business processes. Other business problems that can be solved by using Six Sigma include too much variation, challenging root cause identifications, numerous technical considerations, and other complex issues. Lean Six Sigma is a strategy that eliminates waste and improves process flows.
How does the use of benchmarking improve the creation of an organizational strategy?
It allows for an understanding of best practices Rationale: Benchmarks are aspirational in that they are intended to improve performance. They must, therefore, be based on best practices drawn from the activities and achievements of organizations. Performance can be affected by culture. Even statistics can be culturally biased. For example, in some cultures statistics such as health-care cost per employee or employee tenure may not be meaningful. Benchmarks often address values, such as customer service, ethical behavior, or quality. They are goals and do not replace financial measures, which provide valuable snapshots of performance.
Why is it important that employees understand how day-to-day activities support the strategic goals of the organization?
It drives employee behavior, as the connection to how they are able to contribute is evident. Rationale: Employees are more motivated and driven to perform when they understand how the work they do supports the organization's strategy. This is one of five elements needed for the effective implementation of strategy.
Which characteristic is associated with the Six Sigma project management approach?
It measures value and uses evidence-based analysis Rationale: The Six Sigma approach to project management is focused on measuring the return of value that allows empirical analysis to inform decision making. Limited resources assigned to overlapping tasks is more associated with the critical chain project management approach, as resources are not increased to meet deadlines. The critical chain approach best accounts for dependencies when there are limited resources. Carefully allocating and monitoring resources is a characteristic of any approach that is taken to project management. There is no specific emphasis on this important aspect of project management in the Six Sigma approach. Having several versions of the deliverable is associated with the agile approach to project management. Iterations are continuously improved.
Which of the following is a primary advantage of the balanced scorecard?
It relates the performance of business functions to the organization's mission. Rationale: The balanced scorecard links business strategies with day-to-day activities and aligns business function measurements with organizational strategies. As a result, an organization can track progress, reinforce accountability, and prioritize improvement opportunities. The scorecard includes four related perspectives (finance, customers, internal business processes, and learning and growth) rather than just a financial perspective.
Which is the most low-risk strategy for global market expansion?
Licensing Rationale: Licensing does not take a large initial investment or major organizational commitment. It is, therefore, a relatively low-risk way to expand globally.
Which corporate activity requires an HR strategy of organizational growth?
Mergers and acquisitions Rationale: Organizations often use mergers and acquisitions as part of a growth strategy. Divestitures are part of a retraction strategy. Centers of excellence and shared services are structural alternatives rather than growth or retraction strategies.
SWOT analysis
Method for assessment of an organization's strategic capabilities through use of the environmental scanning process, by which internal and external factors affecting achievement of organizational goals are identified and considered.
Which specific and measurable strategic aspect serves as the basis for implementation decisions?
Objectives Rationale: Objectives tie to strategic goals, which in turn relate to the mission statement. Objectives are the most specific and measurable of the strategic statements.
An organization is looking for ways to reduce costs and increase performance in its automotive parts manufacturing division and is considering staff reduction as an option. Which key performance indicators should be compared to determine the impact of staff reduction?
Past production vs. projected future production Rationale: Comparing past production to future production measures performance based on different time periods. Comparisons of the employee production rate vs. the employee turnover rate and of the product cost vs. revenue generation do not measure or place a value on performance. Division head count vs. total company head count does not value performance or address cost.
Balanced scorecard
Performance management tool that depicts an organization's overall performance, as measured against goals, lagging indicators, and leading indicators.
Strategy
Plan of action for accomplishing an organization's overall and long-range goals.
Benchmarking
Process by which an organization identifies performance gaps and sets goals for performance improvement by comparing its data, performance levels, and/or processes against those of other organizations.
Systems thinking
Process for understanding how seemingly independent units within a larger entity interact with and influence one another.
Strategic planning
Process of setting goals and designing a path toward a competitive position.
Environmental scanning
Process that involves a systematic survey and interpretation of relevant data to identify external opportunities and threats and to assess how these factors affect the organization currently and how they are likely to affect the organization in the future.
An executive team in the midst of refining the organization's strategic plan is currently in the implementation phase. Which activity should occur during this phase?
Providing clear communication of objectives to teams and coordinating their efforts Rationale: Providing clear communication and coordinating the teams' efforts describes the movement and management of tactics, and it occurs in the implementation phase of strategic planning. Organizing ideas and useful perspectives to inform planning, while possibly helpful, is not a strategic planning and management task. Analyzing information to determine current position, opportunities, and constraints occurs during the formulation phase, and determining the strategy's effectiveness occurs during evaluation.
PESTLE analysis
Scanning process that searches for environmental forces in political, economic, social, technological, legal, and environmental categories.
Strategic fit
State in which an organization's strategy is consistent with its external opportunities and circumstances and its internal structure, resources, and capabilities.
A new CEO is selected to lead an organization that has grown over time but has not revisited staffing structure or responded to industry changes. What may be hindering the organizational strategy?
Strategic drift Rationale: Strategic drift occurs when an organization fails to recognize and respond to changes in its environment (such as a stagnant organizational culture) that necessitate strategic change.
An organization hires only experienced people who tend to stay with the organization at least five years. Where would this information be identified in a SWOT analysis?
Strength Rationale: An organization completes a SWOT analysis to analyze internal strengths and weaknesses and external threats and opportunities. The organization's experienced, loyal workforce would be considered a strength.
A three-year-old company has achieved excellent results through perceptive market timing and aggressive marketing. Which type of strategy is the company following?
Successful differentiation strategy Rationale: Differentiation strategies focus on setting a product or service apart from its competition by giving it unique characteristics that consumers value. Differentiation comes from a variety of factors, including product/service features, marketing approach, and delivery system.
Strategic management
System of actions that leaders take to drive an organization toward its goals and objectives.
What indicates that an organization is using strategic planning and management?
The organization's structure, resources, and policies are aligned to meet agreed-upon goals. Rationale: Strategic planning and management are distinguished by the way assets, structure, and policies are focused and integrated to achieve goals. The mere existence and communication of the mission and the vision does not mean that an organization is using strategic planning and management. The organization's core competencies may be distributed across multiple functions; they will probably not be the same in each function. A cross-functional team pointed toward problem resolution does not distinguish an organization as having a strategic plan that is well managed.
Why is it important to involve stakeholders at various points in a project?
They can increase acceptance of the project's eventual outcome. Rationale: The best answer is that stakeholder involvement can improve and increase acceptance of the project's outcome. Stakeholders do not always contribute to budget or have access to management. They can be users rather than influencers or funders.
Which best describes how an organization should use a growth-share matrix?
To prioritize investment in and allocation of resources Rationale: The growth-share matrix and similar tools are used to prioritize investment by identifying where in the organization the greatest value lies. The assumptions are that a growth trend (rather than stasis or decline) predicts greater value and a larger market share indicates a stronger competitive position.
Lagging indicator
Type of metric describing an activity or change in performance that has already occurred.
Leading indicator
Type of metric describing an activity that can change future performance and predict success in the achievement of strategic goals.
A service organization determines that it has limited international experience and knowledge and that this is preventing it from delivering services to those in need on a global basis. What does this exemplify?
Weakness Rationale: This is an example of an internal problem or weakness. In a SWOT analysis, strengths and weaknesses reflect the internal environment of the organization and opportunities and threats pertain to the external environment.
