Jeffrey a mello 4e chapter 3 strategic management

Corporate Strategies: GrowthCorporate Strategies: Growth – Gaining economies of scale in operations & functions – Enhancing competitive position vis-à-vis industry competitors – Provid

STRATEGIC MANAGEMENT

Strategic Management

Strategic Management

– Involves aligning initiatives involving how people are

managed with organizational mission & objectives

objectives over 3 - 5 years

– Examining organization & competitive environment

– Establishing optimal fit between organization & its

environment

– Reviewing & revising strategic plan

– Involves aligning initiatives involving how people are

managed with organizational mission & objectives

objectives over 3 - 5 years

– Examining organization & competitive environment

– Establishing optimal fit between organization & its

environment

– Reviewing & revising strategic plan

Models of Strategy

Models of Strategy

organizational strategy rather than internal decisions of

managers

– Environment presents threats & opportunities

resources

• Offering goods & services at lower costs than competitors

• Differentiating products to bring premium prices

organizational strategy rather than internal decisions of

managers

– Environment presents threats & opportunities

resources

• Offering goods & services at lower costs than competitors

• Differentiating products to bring premium prices

Models of Strategy

Models of Strategy

–An organization’s resources & capabilities, not external

environmental conditions, should be basis for strategic

–An organization’s resources & capabilities, not external

environmental conditions, should be basis for strategic

–Resources are not highly mobile across organizations & once

acquired are retained

–Valuable resources are costly to imitate & non-substitutable

Contrasting the Two Approaches

Contrasting the Two Approaches

• Research provides support for both

positions

• What drives strategy?

• I/O: Strategy drives resource acquisition

• RBV: Strategy determined by resources

• Research provides support for both

positions

• What drives strategy?

• I/O: Strategy drives resource acquisition

• RBV: Strategy determined by resources

The Process of Strategic

Mission StatementMission Statement

• Explains purpose & reason for existence

• Usually very broad

• No more than a couple of sentences

• Serves as foundation for everything

organization does

• Explains purpose & reason for existence

• Usually very broad

• No more than a couple of sentences

• Serves as foundation for everything

organization does

Solectron Mission Statement

Solectron Mission Statement

(contrast to Microsoft mission statement) (contrast to Microsoft mission statement)

Microsoft Mission Statement

Microsoft Mission Statement

Organization Self-Assessment

Organization Self-Assessment

• Identify primary strengths & weaknesses

• Find ways to capitalize on strengths

• Find ways to improve or minimize

• Identify primary strengths & weaknesses

• Find ways to capitalize on strengths

• Find ways to improve or minimize

Establishing Goals & Objectives

Establishing Goals & Objectives

Corporate Strategies: Growth

Corporate Strategies: Growth

– Gaining economies of scale in

operations & functions

– Enhancing competitive position

vis-à-vis industry competitors

– Providing opportunities for

employee professional

development & advancement

– Planning for new hiring

– Alerting current employees

– Ensuring quality & performance

standards are maintained

– Gaining economies of scale in

operations & functions

– Enhancing competitive position

vis-à-vis industry competitors

– Providing opportunities for

employee professional

development & advancement

– Planning for new hiring

– Alerting current employees

– Ensuring quality & performance

standards are maintained

– Penetration of existing markets– Developing new markets

– Developing new products or

services for existing or new markets

employees

– Penetration of existing markets– Developing new markets

– Developing new products or

services for existing or new markets

employees

Corporate Strategies: Stability

Corporate Strategies: Stability

• Maintaining status quo due to limited

environmental opportunities for gaining

competitive advantage

• Few employees will have opportunities for

advancement

• Critical that management identify key

employees & develop specific HR retention strategies to keep them

• Maintaining status quo due to limited

environmental opportunities for gaining

competitive advantage

• Few employees will have opportunities for

advancement

• Critical that management identify key

employees & develop specific HR retention strategies to keep them

Corporate Strategies:

Turnaround or Retrenchment

Corporate Strategies:

Turnaround or Retrenchment

• Downsizing or streamlining organization in

cost-cutting attempt to adjust to competitive environment

• Few opportunities & many environmental

threats

• Important to develop HR practices to

manage “survivors”

• Downsizing or streamlining organization in

cost-cutting attempt to adjust to competitive environment

• Few opportunities & many environmental

threats

• Important to develop HR practices to

manage “survivors”

Business Unit Strategies: Cost

Leadership

Business Unit Strategies: Cost

Leadership

passing savings to consumer

or services is high

than brand loyal

measures of results & promoting efficiency

through job specialization & cross-training

passing savings to consumer

or services is high

than brand loyal

measures of results & promoting efficiency

through job specialization & cross-training

Business Unit Strategies:

from other competitors or

– Creating perception of difference

compensation for creativity

individuals & on retaining creative employees

consumers

from other competitors or

– Creating perception of difference

compensation for creativity

individuals & on retaining creative employees

Business Unit Strategies: Focus

Business Unit Strategies: Focus

particular group or narrow market segment

neglected groups of consumers

awareness of uniqueness of market segment

satisfaction are critical factors

customer in target segment

particular group or narrow market segment

neglected groups of consumers

awareness of uniqueness of market segment

satisfaction are critical factors

customer in target segment

Benefits of a Strategic Approach to

HR

Benefits of a Strategic Approach to

HR

• Facilitates development of high-quality

workforce through focus on types of people

& skills needed

• Facilitates cost-effective utilization of labor,

particularly in service industries where

labor is generally greatest cost

• Facilitates planning & assessment of

environmental uncertainty & adaptation of organization to external forces

• Facilitates development of high-quality

workforce through focus on types of people

& skills needed

• Facilitates cost-effective utilization of labor,

particularly in service industries where

labor is generally greatest cost

• Facilitates planning & assessment of

environmental uncertainty & adaptation of organization to external forces

Reading 3.1

Are You Sure You Have a Strategy?

Reading 3.1

Are You Sure You Have a Strategy?

Strategy has five components, which provide

answers to five specific questions:

1)where will we be active? (arenas)

2)how will we get there? (vehicles)

3) how will we win in the marketplace?

(differentiators)

4) what will be our speed and sequence of moves? (staging)

5) how will be obtain our returns? (economic logic)

Strategy has five components, which provide

answers to five specific questions:

1)where will we be active? (arenas)

2)how will we get there? (vehicles)

3) how will we win in the marketplace?

Reading 3.2 Bringing Human Resources Back into Strategic

Planning

Reading 3.2

Bringing Human Resources Back into Strategic

Planning

HR can play critical role during each stage of the planning process

Stage 1 - Understand the Planning Legacy- the planning process needs to be informed by what’s been

done before; What was the result of any previous work?; Where were the successes and failures?; How have employees been affected?; and What is the organizational attitude, at all levels, toward the strategic planning process and the resulting plans?

HR can conduct this type of research at all levels of the organization Without this knowledge, strategic planning teams will often repeat the same mistakes of their predecessors

Step 2 - Create a Diverse Planning Team - the formation of an intelligent strategic-planning team

which includes both diversity of thought and diversity of skills.

HR is the repository of all employee data related to knowledge, functional expertise, skills and

experiences and is in the best position to compile an optimal team.

Step 3 - Align Planning with Leadership Goals – ensuring that planning efforts are being conducted in

tandem with the organization’s mission and vision of senior executives 

HR should communicate this knowledge as well as provide access to senior leaders and help facilitate effective and well-structured interviewing sessions that will aid communication.

HR can play critical role during each stage of the planning process

Stage 1 - Understand the Planning Legacy- the planning process needs to be informed by what’s been

done before; What was the result of any previous work?; Where were the successes and failures?; How have employees been affected?; and What is the organizational attitude, at all levels, toward the strategic planning process and the resulting plans?

HR can conduct this type of research at all levels of the organization Without this knowledge, strategic planning teams will often repeat the same mistakes of their predecessors

Step 2 - Create a Diverse Planning Team - the formation of an intelligent strategic-planning team

which includes both diversity of thought and diversity of skills.

HR is the repository of all employee data related to knowledge, functional expertise, skills and

experiences and is in the best position to compile an optimal team.

Step 3 - Align Planning with Leadership Goals – ensuring that planning efforts are being conducted in

tandem with the organization’s mission and vision of senior executives 

HR should communicate this knowledge as well as provide access to senior leaders and help facilitate effective and well-structured interviewing sessions that will aid communication.

Reading 3.2 Bringing Human Resources Back into Strategic

Planning

Reading 3.2

Bringing Human Resources Back into Strategic

Planning

Step 4 - Analyze Current Realities – examine the organization’s history with its current

position and identify both the factors that can be leveraged to move the organization

forward as well as those may serve as obstacles and challenges to moving forward.

HR can facilitate the selection of subject matter experts as well as provide technical

expertise regarding laws and regulations which affect existing and potential employees

Step 5 - Develop Alternative Performance Options – ensuring that the strategic plan has

some flexibility in the form of alternative scenarios and courses of action

 HR can determine, with a great degree of accuracy, what resources (people, time, tools, and money) realistically exist in the current organization, which ones can be acquired from

outside the organization, and which ones can be redistributed around the organization to achieve any alternative options.

Step 6 -Measure Progress – ensuring that actual performance is in line with that expected

 HR ensures that all associated performance measures are clearly understood throughout the organization and ensures that the performance management system rewards appropriate performance

Step 4 - Analyze Current Realities – examine the organization’s history with its current

position and identify both the factors that can be leveraged to move the organization

forward as well as those may serve as obstacles and challenges to moving forward.

HR can facilitate the selection of subject matter experts as well as provide technical

expertise regarding laws and regulations which affect existing and potential employees

Step 5 - Develop Alternative Performance Options – ensuring that the strategic plan has

some flexibility in the form of alternative scenarios and courses of action

 HR can determine, with a great degree of accuracy, what resources (people, time, tools, and money) realistically exist in the current organization, which ones can be acquired from

outside the organization, and which ones can be redistributed around the organization to achieve any alternative options.

Step 6 -Measure Progress – ensuring that actual performance is in line with that expected

 HR ensures that all associated performance measures are clearly understood throughout the organization and ensures that the performance management system rewards appropriate

performance

Reading 3.2 Bringing Human Resources Back into Strategic

Planning

Reading 3.2

Bringing Human Resources Back into Strategic

Planning

Step 7 - Deploy the Strategic Plan – developing appropriate and effective communication

to create enthusiasm and commitment to the components of the plan.

 HR develops plans and programs to ensure and monitor employee engagement and

commitment.

Step 8 - Develop Contingency Plans – given the fact that assumptions made during the

planning process about the future may not materialize as anticipated, plans need to be

flexible to address the realities which develop for the organization.

 HR assists the organization with any kind of change initiatives which must be implemented

as part of this process

Step 7 - Deploy the Strategic Plan – developing appropriate and effective communication

to create enthusiasm and commitment to the components of the plan.

 HR develops plans and programs to ensure and monitor employee engagement and

commitment.

Step 8 - Develop Contingency Plans – given the fact that assumptions made during the

planning process about the future may not materialize as anticipated, plans need to be

flexible to address the realities which develop for the organization.

 HR assists the organization with any kind of change initiatives which must be implemented

as part of this process