Business Strategy

& HRM

Corporate strategyThe direction and scope of an organisation over the long term, which achieves competitive advantage for the organisation through its configuration of resources within a changing environment and to fulfil stake holder expectations Johnsons and Scholes

The three levelsCorporate: relates to the over all scope of the organisation

Competitive: how the organisation is to compete in the given market

Operational: how the various sub units contribute to the higher level strategies

Whittingtons topology of strategy ProcessesOutcomesClassical EvolutionarySystemicProcessualProfit MaximisingPluralistic DeliberateEmergent

ClassicalStrategy portrayed as a rational process of deliberate calculation and analysis, undertaken by senior managers

EvolutionaryStrategy seen as a product of market forces in which the most efficient and productive organisations win through

ProcessualStrategies tend to evolve through the process of discussion and disagreements that involves managers at different levels in an organisation

SystemicStrategy is shaped by the social system in which it is embedded factors such as class, gender and legal environment and choices are influenced by interests of a broader society

Linking

Strategy & HRM

Life cycle modelsSTART UP GROWTHMATURITY DECLINE

Life cycle modelsSTART UP Flexibility necessary For growth and development and commitment to entrepreneurialismEmphasis on flexible working pattern

Recruit and retain staff with the motivation to work long hours

Employees encouraged to look forward to potential benefits

Life cycle modelsFormal policies emerge to manage size and build on earlier success

Retain expertise and ensure earlier levels of commitment are maintained Need for specialist becomes apparent

HR policies formalised to avoid the danger of inability to address grievance and discipline

A balance of informal and formal approach soughtGROWTH

Life cycle modelsMATURITY Surpluses level outProcedures formalisedControl labour costs

Reduced t&d activities

Positive psychological contract challenging

Focus on productivity and staff made to move around and out

Life cycle modelsDECLINEBusiness struggling to surviveEmphasis shift to rationalisation and redundancy

Policies and procedures reconsidered

Specialist HR function disbanded

Focus on re-skilling & outplacement

Increasing tendency to contract out services

Competitive advantage modelPRACTICESCost reductionQuality enhancementInnovationSTRATEGY ResourcesLearning & developmentReward managementHR function

HRM & the resource based view It is the range of resources including human, that gives each organisation it unique character and may lead to differences in competitive performance Organisations obtain sustained competitive advantage by implementing strategies that exploit their internal strength and neutralise external threats

HRM& RBVPotential for sustained competitive advantage requires four specific attributesValue resources adding value in some wayRarity shortage of these particular resourcesImperfect imitability unable to imitate or copy lack of substitutes not easily substitutable

FinallyCompetitively advantageous equipment can be designed and continuously improved only if the workforce is highly skilled. Continuous education is attractive only if employees are willing to learn. Sending workers throughout the world to garner ideas is cost effective only if they are empowered to apply what they have learned to organisational problems.