Strategic Management

1. Strategic Management

2. Overall Goal of Strategic Management for an Organization • Deploy & allocate resources ==> competitive advantage

3. Exhibit 3-1Process of Strategic Management

4. What is Strategic Management? • analyze competitive situation • develop strategic goals • devise plan of action • allocate resources • implement plan • evaluate results

5. Two Contrasting Approaches • Industrial Organization Model vs. Resource-Based View • Research provides support for both positions • What drives strategy? • I/O: External considerations • RBV: Internal considerations • I/O: Strategy drives resource acquisition • RBV: Strategy determined by resources

6. Corporate Strategies

7. Corporate Strategies: Growth

8. Corporate Strategies: Growth • Benefits • Gaining economies of scale in operations & functions • Enhancing competitive position vis-à-vis industry competitors • Providing opportunities for employee professional development & advancement

9. Corporate Strategies: Growth - Internal

10. Corporate Strategies: Growth - Internal • Internal Methods • Penetration of existing markets • Developing new markets • Developing new products or services for existing or new markets

11. Corporate Strategies: Growth - Internal • Internal Methods • Penetration of existing markets • Developing new markets • Developing new products or services for existing or new markets • HR Issues • Planning for new hiring • Alerting current employees • Ensuring quality & performance standards are maintained

12. Corporate Strategies: Growth - External

13. Corporate Strategies: Growth - External • External Methods • Acquiring other organizations • Vertical integration

14. Corporate Strategies: Growth - External • External Methods • Acquiring other organizations • Vertical integration • HR Issues • Merging organizations • Dismissing redundant employees

15. Corporate Strategies: Stability

16. Corporate Strategies: Stability • Maintaining status quo due to limited environmental opportunities for gaining competitive advantage

17. 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

18. Corporate Strategies:Turnaround or Retrenchment

19. Corporate Strategies:Turnaround or Retrenchment • Downsizing or streamlining organization in cost-cutting attempt to adjust to competitive environment • Few opportunities & many environmental threats

20. 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”

21. Business Unit Strategies

22. Business Unit Strategies: Cost Leadership

23. Business Unit Strategies: Cost Leadership • Increases in efficiency & cutting of costs, then passing savings to consumer • Assumes price elasticity in demand for products or services is high • Assumes that customers are more price sensitive than brand loyal

24. Business Unit Strategies: Cost Leadership • Increases in efficiency & cutting of costs, then passing savings to consumer • Assumes price elasticity in demand for products or services is high • Assumes that customers are more price sensitive than brand loyal • HR strategy focuses on short-term performance measures of results & promoting efficiency through job specialization & cross-training

25. Business Unit Strategies: Differentiation

26. Business Unit Strategies: Differentiation • In order to demand a premium price from consumers • Attempting to distinguish organizational products or services from other competitors or • Creating perception of difference • Organization offers employees incentives & compensation for creativity

27. Business Unit Strategies: Differentiation • In order to demand a premium price from consumers • Attempting to distinguish organizational products or services from other competitors or • Creating perception of difference • Organization offers employees incentives & compensation for creativity • HR strategy focuses on external hiring of unique individuals & on retaining creative employees

28. Business Unit Strategies: Focus

29. Business Unit Strategies: Focus • Business attempts to satisfy needs of only a particular group or narrow market segment • Strategic intent is to gain consumer loyalty of neglected groups of consumers

30. Business Unit Strategies: Focus • Business attempts to satisfy needs of only a particular group or narrow market segment • Strategic intent is to gain consumer loyalty of neglected groups of consumers • Strategic HR issue is ensuring employee awareness of uniqueness of market segment • Thorough employee training & focus on customer satisfaction are critical factors • Hiring members of target segment who are empathetic to customer in target segment

31. Reading 3.3 Randall Schuler Text pages 144-155 Strategic Human Resource Management: Linking the People with the Strategic Needs of the Business

32. Schuler’s 5-P Model

33. Strategy Implementation Strategy Formulation HR Practices Recruiting Training Performance Management Job Analysis Job Design Selection Development Pay Structure Incentives Benefits Labor Relations Employee Relations Mission Goals SWOT Strategic Choice Firm Performance Productivity Quality Productivity Human Resource Capability Skills Abilities Knowledge Human Resource Actions Behaviors Results (Productivity, Absenteeism, Turnover) Human Resource Needs Skills Behaviors Culture Strategy Evaluation Emergent Strategies