Human Resources and Culture
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Transcript of Human Resources and Culture
Human Resources and Culture
Chapter 3
Learning Objectives Define and explain the importance of human
resources to an organization Explain the purpose of a human resource audit Explain what a human resource audit contains Understand HR benchmarking Understand CSF’s and how human resources can
be CSF’s Define culture and understand its sources and
types
Importance of Human Resources Human resources are an important part of
the value chain They can be unique, and thus a source of
core competence in an organization If a core competence is related to HR, then
HR can contribute to competitive advantage
Strategic Analysis of HR: Purpose People related strategies may be important to
new strategy (for example, a change in the way the organization does business)
In today’s technologically complex business world, analysis of existing human resources is important in order to determine what options are available
The network of people within an organization and their relationships with people can be an important part of strategy
HR and Sustainable Competitive Advantage In some industries, people are the most important factor in
success- advertising and creative development- leisure and tourism- management consulting- hospitals and medical professions
The adaptability of people to changing environments is an important skill
“The ability to learn faster than your competitors may be the only sustainable advantage” – Arie De Geus, former head of planning at Royal Dutch Shell
How is Human Resource Analysis Done? Human Resource Audit Purpose: (1) To identify the size, skills and
structure surrounding current employees and (2) to identify future human resource needs of the organization
Question Answered:
Are the human resources a strength or a weakness?
The Audit: Principles Obtain some basic information on the
people and policies involved in the organization
Explore in detail the role and contribution of the human resources management function in the development of strategy
The Audit: Contents People in the
Organization
Role and Contribution of HR strategy
Employee numbers and turnover
Organization structure
Structures for controlling the organization
Use of special teams, e.g. forInnovation
Level of skills and capabilitiesrequired
Morale and rewards
Employee and industrial relations
Selection, training and development
Staffing levels
Capital investment/employee
Role of quality and personal servicein delivering the products or servicesof the organization
Role of professional advice indelivering the product or service
HR Audit: People in the Organization
Relationship with strategy
Key characteristics of HR strategy
Consistency of strategy across different levels
Responsiveness of HR strategy in leading change in the organization
Role of HR strategy in leading change in the organization
Monitoring and review of HR strategy
Time horizon for operation of HR strategy
Role and Contribution of HR Strategy
What the Audit Achieves Provides information that is useful in deciding how
feasible a strategy is Identifies any human resource “gaps” (human
resources necessary for a proposed strategy minus the current state of human resources)
Allows the organization to “benchmark” their performance against other organizations (benchmark is a process of comparison)
Human Resources as a CSF Critical Success Factor (CSF) = a reason
why one organization is superior to another HR can be a CSF if employees are have
unique skills
Organizational Culture
Why is organizational culture important? Culture can influence every part of an
organization, including the strategy process Thus, culture is important in both the
strategic analysis and “doing” the strategy stages
The culture of any group of people is that set of beliefs, customs, practices and ways of thinking that they have come to share with each other through being and working together.
- Stacey
Determinants of Culture Philosophy of the founders Nature of the business and industry Management style National or regional characteristics Power distance Organizational structure Level of dependency on technology
What is Power Distance? Power distance (Hickson and Pugh) - how
far employees feel from their bosses In organizations with high power distance,
inequality is accepted In organizations with low power distance,
employees feel closer to their bosses and are often consulted to share in decision-making
Analysing organisational culture-1
Environment
Cultural factors specific to organisation
Identification of cultural style of the organisation
Analysis of the strategic implications
People, corporate cultures, labour policies, international issues.
History? Size? Products and technology?Leadership? Cultural Web?
Power? Role?Task? Personal?
Prescriptive or emergent?Competitive advantage?Core competence? Miles and Snow Culture types
Analysing organisational culture-2Organisational culture: “Beliefs, values and learned ways of
managing” Important to distinguish between organisational and
national/international culture Analyse organisational culture through these main
elements: History and ownership Size Technology Leadership and mission Cultural Web - developed by Johnson Cultural Typologies – Handy Culture types – Miles and Snow
Cultural Typologies (Handy) Handy classified organizational cultures
into 4 types:
- Power Cultures
- Role Cultures
- Task Cultures
- Person Cultures
Cultural Typologies (Handy) Power culture – dominated by one very
powerful person or small group and decisions are very centralized
Role culture – Found in established organizations in stable environments, with hierarchical structures, i.e. very bureaucratic
Cultural Typologies (Handy) Task culture – Found in organizations
involved in non-repetitive activities Person culture – Found in organizations
that exist primarily for the benefit of the members of the organization
Miles and Snow Typology
ReactorReactorLittle consideration of Little consideration of
environment; drift environment; drift with little concern for with little concern for
strategystrategy
ProspectorProspectorStress innovation Stress innovation and growth; seek and growth; seek new opportunitiesnew opportunities
AnalyzerAnalyzerStress maintenance of Stress maintenance of
status quo with status quo with moderate innovation moderate innovation
and growthand growth
DefenderDefenderStress stability, Stress stability,
conservatism, and conservatism, and maintenance of maintenance of
status quostatus quo
Dynamic, growingDynamic, growingenvironment environment characterizedcharacterized
by high uncertaintyby high uncertaintyand riskand risk
Moderately stableModerately stableenvironment withenvironment withsome uncertaintysome uncertainty
and riskand risk
Very stableVery stableenvironment withenvironment withlittle uncertaintylittle uncertainty
and riskand risk
Four strategic types and their approaches to strategy (Miles and Snow)
Defender: protect market share hold current position
Analyser: seek market opportunities but protect existing areas hold market share but with some innovation
Prospector: find new opportunities exploit and take risks
Reactor: respond only to others often late and inadequate
Miles and Snow TypologyExamples
Defender: McDonald’s
Prospector: Reebok International, Mrs. Fields
Analyzer: Procter & Gamble (Crest), Starbucks
Reactor: W.T. Grant
Analysis/Testing For Strategic Fit The analysis of culture should be more than just a
list of factors describing culture The analysis process should be done with
reference to possible areas of strategic interest I.e., the analysis should include testing for
whether the culture is a strategic fit with the current strategy
Ten Guidelines for Analyzing culture and its meaning for strategy How old is the organization? Does it exist in a stable or fast-
changing environment? Who owns it and what is the structure? How is it organized? How are results judged? How are decisions made? What qualities make a good boss? A good employee? How are people rewarded? How are groups and individuals controlled? Do people work in teams or as individuals?