HRM Ch 2 (exam 1)
Two-way linkage allows for consideration of human resource issues during the strategy formulation process. What are the three sequential steps this integration occurs in?
1) First, the strategic planning team informs the HRM function of the various strategies the company is considering. 2) Then HRM executives analyze the human resource implications of the various strategies, presenting the results of this analysis to the strategic planning team. 3) Finally, after the strategic decision has been made, the strategic plan is passed on to the HRM executive, who develops programs to implement it.
Four levels of integration seem to exist between the HRM function and the strategic management function?
1) administrative linkage 2) one-way linkage 3) two-way linkage 4) integrative linkage
two aspects that make GM uncompetitive are?
1) benefit costs (in particular, health care) 2) the cost of its legacy workforce [important]
For a company to have a good strategy foundation what things need to happen?
1) certain tasks must be accomplished in pursuit of the company's goals, 2) individuals must possess certain skills to perform those tasks 3) these individuals must be motivated to perform their skills effectively
strategic planning group consisting of what 4 people?
1) chief executive officer, 2) chief financial officer, 3) president, 4) various vice presidents
3 examples of opportunities found through an external analysis?
1) customer markets that are not being served 2)technological advances that can aid the company 3) labor pools that have not been tapped
6 functional areas of HRM?
1) job analysis and design 2) recruitment and selection 3) training and development 4) performance management; 5) pay structure, incentives, and benefits 6) labor and employee relation
4 threats found through an external analysis?
1) potential labor shortages, 2)new competitors entering the market, 3) pending legislation that might adversely affect the company, and 4) competitors' technological innovations
Value can be created in one of two ways what are the two ways?
1) value can be created by reducing costs 2) value can be created by differentiating a product or service in such a way that it allows the company to charge a premium price relative to its competitors
stratagie that attempts to create the impression that the company's product or service is different from that of others in the industry?
"differentiation" strategy
strategy that focuses on becoming the lowest cost producer in an industry. This strategy is achieved by constructing efficient large-scale facilities, by reducing costs through capitalizing on the experience curve, and by controlling overhead costs and costs in such areas as research and development, service, sales force, and advertising -provides above-average returns within an industry, and it tends to bar other firms' entry into the industry because the firm can lower its prices below competitors' costs
"overall cost leadership" stragtegy
according to the coference board what may be one of the major reasons that mergers do not always live up to expectations?
"people issues"
To be maximally effective, the HRM function must be integrally involved in the company's strategic management process in what 4 ways
(1) have input into the strategic plan, both in terms of people-related issues and in terms of the ability of the human resource pool to implement particular strategic alternatives; (2) have specific knowledge of the organization's strategic goals; (3) know what types of employee skills, behaviors, and attitudes are needed to support the strategic plan; (4) develop programs to ensure that employees have those skills, behaviors, and attitudes.
two stratagoes from Micheal Porter?
1) "overall cost leadership" strategy 2) "differentiation" strategy
One recent study of 115 strategic business units within Fortune 500 corporations found that ___ to ___% of the companies had some link between HRM and the strategic planning process?
49-69%
If a firm seeks to provide value through innovation, then that means that firm must be world class in its ________ capability
R&D
READ Page 91 Chart 2.3
READ Page 91 Chart 2.3
A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.
TQM (Total Quality Management)
programs requiring extensive training of all employees in the TQM philosophy, methods, and often other skills that ensure qualit
TQM programs
T/F when cultural values align with the customer value, the firm has a better chance of actually delivering that customer value?
True
T/F The number of organizations undergoing downsizing increased significantly from the third to the fourth quarter of 2008, and although this trend has slowed, layoffs are still significant?
True
T/F? A firm's strategic management decision-making process usually takes place at its top levels
True
T/F? organizational culture answers "how we compete"?
True
allows for consideration of human resource issues during the strategy formulation process. -The strategic planning function and the HRM function are interdependent in two-way linkage. -occurs in three sequential steps.
Two-Way Linkage
the HRM function's attention is focused on day-to-day activities -in this level of integration, the HRM department is completely divorced from any component of the strategic management process in both strategy formulation and strategy implementatio (the lowest level of integration)
administrative linkage
stems from a company's being able to create value in its production process
competitive advantage
the difference between what you charge for your product and the variable costs of that product. -they are what contributes to your ability to cover your fixed costs. Example: if you charged $15 for each widget, your____________ margin would be $5 ($15 price - $10 variable cost)
contribution margins
acquiring knowledge, skills, and behavior that improve employees' ability to meet the challenges of a variety of existing jobs or jobs that do not yet exist
development
strategy is one made up of retrenchment, divestitures, or liquidation. These strategies are observed among companies facing serious economic difficulties and seeking to pare down their operations
divestment or downsizing strategy
The planned elimination of large numbers of personnel, designed to enhance organizational effectiveness. -tends to fall short of meeting companies' financial and organizational objectives, and has negative effects on employee morale and productivity
downsizing
what two appproches can be used in statergic managment
either the generic approach to competing or the specific adjustments and actions taken to deal with a particular situation
any unplanned strategic initiative undertaken by mid-level employees of their own volition -evolve from the grassroots of the organization and can be thought of as what organizations actually do, as opposed to what they intend to do
emergent startay
analysis that consists of examining the organization's operating environment to identify the strategic opportunities and threats
external analysis
strategy attempts to expand a company's resources or to strengthen its market position through acquiring or creating new businesses -used by comanies who are attempting to integrate vertically or horizontally or to diversify are exhibiting usally by mergers or aquisistions?
external growth
the costs that are incurred regardless of the number of units produced. Example: if you are producing widgets in a factory, you have the rent you pay for the factory, depreciation of the machines, the utilities, the property taxes, and so on. In addition, you generally have a set number of employees who work a set number of hours with a specified level of benefits
fixed costs
What an organization's hopes to achieve in the medium- to long-term future; they reflect how the mission will be operationalized
goals
the total amount of margin you made -calculated as the number of units sold times the contribution margin. Example: If you sold 1,000,000 units, your _________ margin would then be $5,000,000.
gross total margin
dynamic and multifaceted, based on continuing rather than sequential interaction. -HRM executive is an integral member of the senior management team -HRM function is involved in both strategy formulation and strategy implementation -helps top managers choose the best strategy
integrative linkage
Most strategies that companies espouse are __________ strategies?
intended
strategies that are the result of the rational decision-making process used by top managers as they develop a strategic plan
intended strategies
3 Directional Strategies
interal growth, external growth & disvestment stragies
Strategies focusing on market development, product development, innovation, or joint ventures -Companies with this strategy channel their resources toward building on existing strength
internal growth stratagie
the process of getting detailed information about jobs
job analysis
addresses what tasks should be grouped into a particular job. -should have an important tie to the strategy of an organization because the strategy requires either new and different tasks or different ways of performing the same tasks. -many entail the introduction of new technologies
job design
Potential employees (the labor market) from which a firm attracts and hires its work force
labor pool
type of organization in which people continually expand their capacity to achieve the results they desire -requires the company to be in a constant state of learning through monitoring the environment, assimilating information, making decisions, and flexibly restructuring to compete in that environment.
learning organization
the former workers (i.e., those no longer working for the company) to whom the firm still owes financial obligations. GM and the United Automobile Workers (UAW) union have negotiated contracts over the years that provide substantial retirement benefits for former GM workers -retired GM workers have defined benefit plans that guarantee a certain percentage of their final (preretirement) salary as a pension payment as long as they live; in addition, the company pays for their health insurance. The contract specifies that workers are entitled to retire at full pension after 30 years of service
legacy workforce
The overarching goal of most profit-making companies in the United States is to?
maximize stockholder wealth
a statement of the organization's reason for being; it usually specifies the customers served, the needs satisfied and/or the values received by the customers, and the technology used -often accompanied by a statement of a company's vision and/or values
mission statement
the firm's strategic business planning function develops the strategic plan and then informs the HRM function of the plan -Integration level that does recognize the importance of human resources in implementing the strategic plan, it precludes the company from considering human resource issues while formulating the strategic plan. -This level of integration often leads to strategic plans that the company cannot successfully implement.
one-way linkage
a complex set of values, beliefs, assumptions, and symbols that define the way in which a firm conducts its business -helps to define its relevant stakeholders (employees, customers, suppliers, and competitors) and how it interacts with them
organizational culture
what provides the raw materials in a learning organization?
people (human capital) who make up the company
is used to ensure that employees' activities and outcomes are congruent with the organization's objectives. It entails specifying those activities and outcomes that will result in the firm successfully implementing the strategy
performance managment
what is left after you have paid your variable costs and your fixed costs. Example: f your gross margin was $5,000,000, and your fixed costs were $6,000,000, then you lost $1,000,000.
profit
3 things that an internal anysis can detect? (ie the quanity and quality of 4 resources)
quantity and quality of resources available to the organization: 1) financial, 2) capital 3) technological 4) human resources.
The process of seeking applicants for potential employment.
recruitment
Through what 3 things can companies obtain a pool of human resources capable of implementing a given strategy?
recruitment, selection, training, and development
R&D means what?
research & development
the behaviors required of an individual in his or her role as a jobholder in a social work environment
role behavior
refers to the process by which it attempts to identify applicants with the necessary knowledge, skills, abilities, and other characteristics that will help the company achieve its goals
selection
an approach to addressing the competitive challenges an organization faces. -It can be thought of as managing the "pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole
strategic managment
strategic management process's two distinct yet interdependent phases?
strategy formulation and strategy implementation
If the firm seeks to be the lowest cost, then it might need to be world class in either its ________ or ___________ capabilities?
supply chain or manufacturing
a planned effort to facilitate the learning of job-related knowledge, skills, and behavior by employees
training
refers to a planned effort to facilitate the learning of job-related knowledge, skills, and behavior by employees
training
skills are instilled in employees through _____________ and ____________?
training and development
Many companies today examine their strengths and weaknesses through _________analysis?
value chain
a model that breaks up all of the different parts of the organization into a variety of capabilities such as research and development (R&D), supply chain, manufacturing, distribution, and service (as shown in
value chain
costs that vary directly with the units produced. Example: all of the materials that go into the widget might cost a total of $10, which means that you have to charge at least $10 per widget, or you cannot even cover the costs of production.
variable cost
The first step for decision makers is to determine?
where in the value chain they seek to create the most value for customers
