Strategic Human Resource Management

External Analysis

consists of examining the organization's operating environment to identify the strategic opportunities and threats

One-way

firms strategic business planning function develops the strategic plan and then informs the HRM function of the plan.

HRM

has a profound impact on the strategic plan implementation by developing and aligning HRM practices that ensure the company has motivated employees with necessary skills

Enhancing Competitiveness

is achieved in a variety of ways such as adapting to a changing and learning environment, developing a human capital pool, assimilating information, making decisions, and flexibly restructuring to compete.

HR Professionals

must develop business, professional-technical, change management and integration competencies

Emergent Strategies

strategies that evolve from the grass roots of the organization and can be thought of as what organizations actually do, as opposed to what they intend to do.

Development

the acquisition of knowledge, skills, and behaviors that improve an employee's ability to meet the challenges of future jobs

Administrative Linkage

the lowest level of interaction. HRM functions attention is focused day-to-day activities

Job Analysis

the process of getting detailed information about jobs

Recruitment

the process through which the organization seeks applicants for potential employment

Mission

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

Concentration Strategy

A strategy focusing on increasing market share, reducing costs, or creating and maintaining a market niche for products and services.

Role Behaviors

Behaviors that are required of an individual in his or her role as a job holder.

Variable Costs

Costs that vary directly with the units produced

A Business Model

How the firm will create value for customers profitability

Strategic Management

Process of analyzing a company's competitive situation, developing the company's strategic goals, and devising a plan of action and allocation of resources that will help a company achieve its goals

Three Implementation Variables

Task People Reward systems

Human Resources

The most important asset and the single largest most controllable cost within business model

Strategic HRM

The pattern of planned HR deployments and activities intended to enable an organization to achieve its goals

Downsizing

The planned elimination of large numbers of personnel, designed to enhance organizational effectiveness

Strategic Choice

The way the organization will fulfill its mission and achieve its long-term goals; it is of utmost importance that all people-related business issues identified in the HRM function be considered during strategy formulation

Porter's Strategies

Value can be created in one of two ways, either reducing costs or differentiating product or service in such a way that it allows the company to charge a premium price relative to its competitors

Goals

What it hopes to achieve in the medium to long-term future; they reflect how the mission will be operationalized

Integrative linkage

their HRM functions built right into the strategy formulation and implementation processes

Internal Growth Strategy

A focus on new market and product development, innovation, and joint ventures.

Four Strategic Planning and HRM Linkages

Administrative linkage One-way Integrative linkage Two-way linkage

External Growth Strategy

An emphasis on acquiring vendors and suppliers or buying businesses that allow a company to expand into new markets.

Strategy

Comes from the Greek word "Strategos," which has its roots in military language Webster's New American Dictionary defines it as the "skillful employment and coordination of tactics" and as "artful planning and management."

Five Categories of Directional Strategies

Concentration Strategy Internal Growth Strategy External Growth Strategy Downsizing Mergers and Acquisitions

A strategic competitive advantage in two additional ways

Emergent Strategies Enhancing Competitiveness

Fixed Costs

Generally considered the costs that are incurred regardless of the number of units produced

Mergers and Acquisitions

HR needs to be involved in mergers and acquisitions

Selection

Identifying the applicants with the appropriate knowledge, skills, and ability

Strategic Management Process

Include mission, goals, external and internal analysis, and strategic choice

HRM Practices

Job analysis, recruitment, job design, selection, development, performance management

Job Design

Making decisions about what tasks should be grouped into a particular job

HRM Function

Must be integrally involved in the company's strategic management process

Strategy Implementation Variables

Organizational structure Task design Selection Training and development of people Reward system Types of information Information systems

Strategy Formulation

Strategic planning groups decide on a strategic direction by defining the company's mission and goals, its external opportunities and threats, and its internal strengths and weaknesses.

2 phases of Strategic Management

Strategy formulation and strategy implementation

Margins or Contribution Margin

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

Performance Management

The means through which managers ensure that employees' activities and outputs are congruent with the organization's goals.

Strategy Implementation

The organization follows through on the strategy that has been chosen. This includes structuring the organization, allocating resources, ensuring that the firm has skilled employees in place, and developing reward systems that align employee behavior with the strategic goals. This process entails a constant cycling of information and decision making.

Strategic Management Process Model

The success of the strategic management process depends largely on the extent to which the HRM function is involved

Gross Margin

The total amount of margin you made and is calculated as the number of units sold times the contribution margin

Goal of Strategic Management

To deploy and allocate resources in a way that gives it a competitive advantage

Strategy Decisions About Competition

Where to compete? How to compete? With what will we compete?

Two-way linkage

allows for consideration of HR issues during the strategy formulation process

Internal Analysis

attempts to identify the organization's strengths and weaknesses; it focuses on the quantity and quality of resources available to the organization—financial, capital, technological, and human resources