STRATEGIC HUMAN RESOURCE

MANAGEMENT
 STRATEGIC HUMAN RESOURCE MANAGEMENT
SHRM means formulating HR polices and practices
that produce the employee skills and performance
required to achieve the company’s strategic goals.
 THE STRATEGIC MANAGEMENT PROCESS
Strategy
 A course of action the organization intends to pursue to achieve its strategic aims.
Strategic Plan
 How an organization intends to match its internal strengths and weaknesses with its external
opportunities and threats to maintain a competitive advantage over the long term.
Strategic Management
 The process of identifying and executing the organization’s mission by matching its
capabilities with the demands of its environment.
 BUSINESS VISION AND MISSION
Leveraging
 Capitalizing on a firm’s unique competitive strength while underplaying its weaknesses.

Vision
 A general statement of an organization’s intended direction that evokes emotional feelings in organization
members.

Mission
 Spells out who the firm is, what it does, and where it’s headed.
THE STRATEGIC MANAGEMENT PROCESS
Step 1: Define the Current Business
 Every company must choose the terrain on which it will compete –in particular, what products it will sell,
where it will sell them, and how its products and services will differ from its competitors.

 Managers sometimes use vision and mission statements.

 Whereas visions usually lay out in very broad terms what the business should be, the mission lays out in broad terms what our main
tasks are now.

Step 2: Perform External and Internal Audits

 Ideally, managers begin their strategic planning by methodologically analyzing their external and internal
situations.
 To facilitate this strategic external/internal audit, many managers use SWOT analysis.
 This involves a SWOT chart to compile and organize the process of identifying company Strengths, Weaknesses, Opportunities
and Threats.

SWOT Matrix, with Generic

Examples
Step 3: Formulate New Business and Mission Statements
 Based on the situation analysis, what should our new business be?
 What is our new mission and vision?
Step 4: Translate the Mission into Strategic Goals
 Saying the mission is “to make quality job one thing; operationalizing that mission for your managers is
another.
Step 5: Formulate Strategies to Achieve the Strategic Goals
 The strategies bridge where the company is now, with where it wants to be tomorrow.
 The best strategies are concise enough for the manager to express in an easily communicated phrase
that resonates with employees.
Step 6: Implement Strategies
 Strategy implementation means translating strategies into actions and results –by actually
hiring (or firing) people, building (or closing) plants, and adding (or eliminating) products
and product lines.
Step 7: Evaluate Performance
 Strategies do not always succeed.
 Managing strategy is an ongoing process.
 Strategic evaluation addresses several important questions:
 For example: Are all the resources of our firm contributing as planned to achieving our strategic goals?
 What is reason for any discrepancies?
 Do changes in our situation suggest that we should revise our strategic plan?
TYPE OF STRATEGY AT EACH COMPANY LEVEL
 TYPES OF CORPORATE STRATEGIES
Corporate Strategy Possibilities

Concentration Diversification Consolidation

Geographic
Vertical integration
expansion
A company’s corporate level strategy identifies the portfolio of businesses that, in total,
comprise the company and the ways in which these businesses relate to each other.
“What business will be in?”

Concentration (single business)

 The firm offers one product or product line, usually in one market.
Diversification
 The firm will expand by adding new product lines.
 Related and unrelated (conglomerate)
Vertical Integration
 The firm expands by, perhaps, producing its own raw materials, or selling its products direct.
Consolidation
 Reducing a firm’s size.
Geographic Expansion
 Taking business abroad
TYPES OF COMPETITIVE STRATEGIES

Business-Level
Competitive Strategies

Cost leadership Differentiation Focus/Niche

A competitive strategy identifies how to build and strengthen the business’s
long term competitive position in the marketplace.
“On what basis will each of our businesses compete?”
Cost leadership
 A firm is seeking to become the overall low-cost leader in an industry (Walmart and
Big Bazar)
Differentiation
 The firm seeks to be unique in their industry along competitive dimensions that are
widely valued by buyers.
 Volvo (safety), Mercedes- Benz (reliability and quality)
Focus
 The firms that attempt to compete in a narrow market segment (niche) through the
provision of a product or service that specify customers can get in no other way.
(Ferrari)
 FUNCTIONAL STRATEGY
A functional strategies identify the basic courses of action that each department will
pursue in order to help the business attain its competitive goals.

 P&G to make Oil of Olay a top-tier brand, its product development, production, marketing, sales, and
human Resource departments had to engage in activities that were consistent with this unit’s new high
quality mission.