Shrm Riti Hr Diploma 2014

8/11/2019 Shrm Riti Hr Diploma 2014

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Strategic Human Resources Management

Linda M. Balboul

Ph.D. Sociology

MBA Human Resources

PMP


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Art & science of formulating,

implementing, and evaluating, cross-functional decisions that enable an

organization to achieve its objectives

Strategic ManagementDefined


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In essence, the strategic plan is a

companys game plan

Strategic Management


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The term strategic management is used

synonymously withstrategic planning.


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3Stages of the Strategic Management Process

Strategy formulation

Strategy implementation

Strategy evaluation


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Vision&Mission

Strategy Formulation

ExternalOpportunities&Threats

InternalStrengths&Weaknesses

Long-TermObjectives

AlternativeStrategies

StrategySelection


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Issues in Strategy

Formulation

Businesses to enter

Businesses to abandon

Allocation of resources

Expansion or

diversification

International markets

Mergers or joint ventures

Avoidance of hostile

takeover


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Strategy Implementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation


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Strategy Implementation Steps

Developing a strategy-supportive culture

Creating an effective organizational structure

Redirecting marketing efforts Preparing budgets

Developing and utilizing information systems

Linking employee compensation to organizationalperformance


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Strategy Evaluation

Internal Audit

External Audit

Performance Measurement

Corrective Action


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Peter Drucker: Think through the overall

mission of a business.Ask the key question:

What is our Business?

Prime Task of



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Anything that a firm does

especially well compared to rival

firms

Strategic Management is Gaining and

Maintaining Competitive Advantage



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Strategy

Strategies are the means bywhich long-term objectives

will be achieved.


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What Is A Strategy?


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Strategic Management Process


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What Is A Strategy?


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Strategic Management Process


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Comparing Business And Military

Strategy

A Strong Military Heritage Underlies the Study of StrategicManagement

Terms such as objectives, mission, strengths, and weaknesseswere firstformulated to address problems on the battlefield.

A fundamental difference between military and business strategy is thatbusiness strategy is formulated, implemented, and evaluated with theassumption of competition, while military strategy is based on an

assumption of conflict.

The similarities between military and business strategy can be seen inSun TzusThe Art of War.


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Strategic Management Model


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Benefits of Strategic Management

Nonfinancial Benefits

Enhanced awareness of threats Improved understanding of competitorsstrategies

Increased employee productivity

Reduced resistance to change

Clearer understanding of performance-rewardrelationship

Enhanced problem-prevention capabilities


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Why Some Firms Do No Strategic Planning

Lack of knowledge of strategic planning

Poor reward structures

Fire fighting

Waste of time

Too expensive

Laziness

Content with success

Fear of failure

Overconfidence Prior bad experience

Self-interest

Fear of the unknown


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Strategic Management (Buzz Word)


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Strategy Is Modern-day War


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Defining Our Strategy


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IKEA: Well-defined Strategy


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What Do We Want To Become/Where Do We

Want To Go?

Importance of a Vision Statement

A vision statement should answer the basic question, Whatdo

we want to become/where do we want to go?

A clear vision provides the foundation for developing acomprehensive mission statement.

Many organizations have both a vision and a mission

statement, but the vision statement should be established

first and foremost.

The vision statement should be short, preferably one

sentence

As many managers as possible should have input into

developing the statement.


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What Is Our Business?

Drucker says asking the question, Whatis our business?is

synonymous with asking the question, What is our mission?

An enduring statement of purpose that distinguishes one

organization from other similar enterprises, the missionstatement is a declaration of an organizations reason for

being (raison dtre).

Sometimes called a creed statement, a statement of purpose, a

statement of philosophy, a statement of beliefs, a statement ofbusiness principles, or a statement definingour business,amission statement reveals what an organization wants to be and

whom it wants to serve.


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Vision Statement

What do we want to become?

Mission Statement

What is our business?

Formulate a New Business Mission and

Its Vision


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Mission Statement Components

Components and Questions That a Mission Statement Should Answer

1. Customers: Who are the firmscustomers?

2. Products or services: What are the firmsmajor products?

3. Markets:Geographically, where does the firm compete?

4. Technology: Is the firm technologically current?

5. Concern for survival, growth, and profitability: Is the firm committed to growth and

financial soundness?

6. Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the

firm?

7. Self-concept: What is the firms distinctive competence or major competitive

advantage?

8. Concern for public image: Is the firm responsive to social, community, and

environmental concerns?

9. Concern for employees: Are employees a valuable asset of the firm?


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Jerry McGuires Mission Statement
http://localhost/var/www/apps/conversion/tmp/scratch_8/SHRM/Jerry%20McGuire%20Mission%20Statement.mp4http://localhost/var/www/apps/conversion/tmp/scratch_8/SHRM/Jerry%20McGuire%20Mission%20Statement.mp4


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Define The Current Business

Decisions on:

Products and services to provide

Where to sell them Product/Services differences from competitors

Example: Rolex sells high-priced quality watches vs.

Seiko sells inexpensive but innovative watches


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Clearly Define Your Industry


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BMW Case


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Perform Internal And External Audits

Analyze external and internal situations

Usage of SWOT (Strengths, Weaknesses,Opportunities and Threats) analysis through the

usage of a SWOT chart


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SWOT Analysis


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Analysis of Trends

Economic

Social

Cultural

Demographic/Environmental

Political, Legal, Governmental

Technological

Competitors

External Opportunities and Threats


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Basic Rule Of Strategic Management

External Opportunities and Threats

Strategy Formulation

Take advantage of

External Opportunities

Avoid/minimize impactof External Threats


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It is not the strongest of the species that survive,nor the most intelligent, but the one most responsiveto change.

Charles Darwin

External Assessment

Nothing focuses the mind better than the constantsight of a competitor who wants to wipe you off

the map.

Wayne Calloway, Former CEO, PepsiCo


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Ch 3 -41

Industrial Organization (I/O) View

-- Industry factors more important than

internal factors

Performance determined by industry forces


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Economies of Scale

Industry Analysis

Barriers to market entry

Product differentiation

Level of competitiveness

I/O Perspective Firm Performance


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Industry Analysis (EFE)

External Factor Evaluation Matrix

Summarize & evaluate:

CompetitivePoliticalCultural

TechnologicalEnvironmentalSocial

GovernmentalDemographicEconomic


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Five-Step process

List key external factors (10-20) Opportunities & threats

Assign weight to each (0 to 1.0)

Sum of all weights = 1.0 Assign 1-4 rating to each factor

Firms current strategies response to the factor

Multiply each factors weight by its rating

Produces a weighted score Sum the weighted scores for each

Determines the total weighted score for the organization.

Highest possible weighted score for the organization is 4.0; thelowest, 1.0. Average = 2.5


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.201.20Political unrest/change of governments

.202.10Bad media exposure

.102.05Smokeless market/places

.153.05Production limits on tobacco

.202.10Legislation against the tobacco industry

Threats

.303.10More social pressure to quit smoking

2.101.00TOTAL

.604.15Leader in discount market

.051.05Astronomical Internet growth

.153.05Increased demand

.151.15Markets untapped

Weighted

scoreRatingWeight

Key External Factors

Opportunities

Sharkeya Case


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Sharkeya (in the previous example), has a

total weighted score of 2.10indicatingthat the firm is below average in its

effort to pursue strategies that

capitalize on external opportunities andavoid threats.


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Controllable activities performedespecially well or poorly

Determined relative to competitors

Internal Strengths and Weaknesses


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Assessing the Internal Environment

Internal Strengths and Weaknesses

Internal Factors

Performance Measures

Ratios

Industry Averages

Survey Data


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Internal Versus External Factors


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What are internal factors?


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STARBUCKS Case

3


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Internal resources come from 3categories

A. Physical resources: plant, equipment, location,

technology, raw materials, machines, etc.

B.

Human resources: employees, training,experience, intelligence, knowledge, skills, abilities,

etc.

C. Organizational resources: firm structure, planning

processes, information systems, patents,trademarks, copyrights, databases, etc.


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Key Internal Forces

Generally in the Arab world, the internal capacity to

assess external environments and explore their

trends, is lacking.

Arab management, therefore, should give prioritytointernal capacity-building processes and encourage

creative rethinking of strategic initiatives and externaltrends.

The Process of Performing an Internal


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The Process of Performing an Internal

Assessment

1. Representative managers and employees from throughout the firm need

to be involved in determining a firmsstrengths and weaknesses.

2. The internal assessment requires gathering and assimilating information

about the firms management, marketing, finance/accounting,

production/operations, research and development (R&D), and

management information systems operations.

3. Performing an internal assessment requires gathering, assimilating, and

evaluating information about the firmsoperations too.

4. Compared to the external assessment, the process of performing aninternal assessment provides more opportunity for participants to

understand how their jobs, departments, and divisions fit into the

whole organization.
http://www.state.wy.us/state/strategy/insurance.html


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( )


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The Resource-Based View (RBV)

Th R B d Vi (RBV)


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The Resource-Based View (RBV)


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Specific results that an organization seeks

to achieve in pursuing its basic mission

Long-term means more than one year

Long-Term Objectives


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Essential for ensuring the firms success

Provide direction

Aid in evaluationCreate synergy

Reveal priorities

Focus coordination

Provide basis for planning, organizing, leading

and controlling

Long-Term Objectives


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Levels of Organizational Strategy


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Corporate Strategies

Diversification strategy implies that the firm will

expand by adding new product lines.

Vertical integration strategymeans the firm expands

by, perhaps, producing its own raw materials, or sellingits products direct.

Consolidation strategyreduces the companyssize

Geographic expansion strategy takes the companyabroad.


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Corporate Strategy: Amazon.com Case


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Vertical Integration Strategy


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B i C i i S


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Business or Competitive Strategy

A strategy focused on how anorganization should compete in

each of its SBUs (strategic

business units)


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Business Level Strategic Planning


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373

Business Level Strategic Planning

Achieving Sustained Competitive


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1. Continually adapting to changes in externaltrends and events and internal capabilities,competencies and resources

Achieving Sustained Competitive

Advantage

2. Effectively formulating, implementing, andevaluating strategies that capitalize on thosefactors

T f C i i S i


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Types of Competitive Strategies

Cost Leadership Strategy

Seeking to attain the lowest total overall costs relative toother industry competitors.

Differentiation Strategy

Attempting to create a unique and distinctive product orservice for which customers will pay a premium.

Focus Strategy Using a cost or differentiation advantage to exploit a

particular market segment rather a larger market.


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Fi F O i


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Five Forces Overview


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Corporate Portfolio Analysis


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Corporate Portfolio Analysis

Managers manage portfolio (or collection) of businesses usinga corporate portfolio matrix such as the BCG Matrix.

BCG Matrix

Developed by the Boston Consulting Group Considers market share and industry growth rate

Classifies firms as:

Cash cows:low growth rate, high market share

Stars:high growth rate, high market share

Question marks:high growth rate, low market share

Dogs:low growth rate, low market share

The Boston Consulting Groups Growth-Share


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g p

Matrix (BCG)

Marke

tGrowthRate

Relative Market Share

Dogs 8

7

3

?

Question marks

?21

Cash cows

6

Stars

5

4


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Implement the Strategies


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Implement the Strategies

Implementation = putting into action Hiring people

Building plants adding new product lines

Involves management functions:

Plan

Organize Lead

Control

A l Obj ti


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Short-term milestones that firmsmust achieve to reach long-termobjectives

Annual Objectives

P li i


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Means by which annualobjectives will be achieved

Policies



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Mike Duke

Sam Walton

Evaluate Performance


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Evaluate Performance

Success of strategies dependent on changes inexternal factors

E.g. New trends may reduce demand in one product

and increase the demand for another

Strategic Control necessary

Process of accessing progress towards strategic

goals and taking corrective actions

Managers study new situations and make

adjustments


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Assignment Research and analyze

Azza Fahmy case study

and provide the

following:

Proposed vision

Proposed Mission

SWOT

External FactorEvaluation (EFE) Matrix

Your recommendation if

any


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Questions?

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Shrm Riti Hr Diploma 2014

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