Strategic Role of HRM

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Prepared By Komal Tanvani Ahad Popatputra 3/21/13

Strategy

A Strategy is Course of action. The essence of Strategic planning is to ask

Where we are now as a business ? Where do we want to be ?

The manger then formulates specific strategies to take the company from where it is now to he or she want to be.

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Steps in Strategic Management

Strategic management entails both strategic planning and implementation and is the process of

Identifying and executing the organizations strategic plan, By matching company capabilities with the demands of its environment.

There are 7 steps in strategic management

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Cont,
1. 2. 3.

4. 5.

6. 7.

Define the current business Perform external and internal audits Formulate new business and mission statements Translate the mission into strategic goals Formulate Strategies to achieve the strategic goals Implement the strategies Evaluate performance

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1.Define the current business

Every company must choose the terrain on which it will compete- in particular

What product it will sell ?, where it will sell ? And how its products differ from its competitor?

Most basic strategic decisions manager make involve deciding what business the firm should be in: in terms of

Particular products they will sell, etc.

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2.Perform external & internal audits

Managers begin their Strategic planning by analyzing their external and internal situations Manager use SWOT analysis
Strengths Strong research group Weaknesses Old machinery

Opportunities Expanding china markets 3/21/13

Threats Merger of 2 competitors to form 1 strong one

3. Formulate new business and mission statement

Based on the situation analysis,

What should our new business be ? What products it will be sell ? Where it will sell them ? How its products will differ from its competitors ?

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4. Translate the mission into strategic goals

Saying the mission is to make quality job one is one thing and Operational zing that mission for your manager is another The firms manager need strategic goals.

What exactly does that mission mean, for each department in terms of how we will boost quality ?

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5. Formulate strategies to
achieve the strategic goals

Strategy is a course of action. The strategies bridges where the company is now, with where it wants tomorrow The best strategies are concise enough for manager to express in an easily communicated phrase that resonates with employees Keeping the strategy clear and concise, so that employee share that strategy.

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6. Implement the Strategies

Implementation means translating the strategies into action and result by

Actually hiring people, building plants and adding products and product lines.

Strategy implementation involves drawing on and applying all the management functions:

Planning, organizing etc.

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7. Evaluate Performance

Strategies dont always succeed. Managing strategy is ongoing process. Strategic controls keep the company's strategy up to date. It is the process of assessing the progress towards strategic goals and taking corrective actions as needed.

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Types of Strategies
1.

Corporate Strategy:A company's corporate level strategy identifies the portfolio of that businesses. A diversification corporate strategy A vertical integration strategy. Consolidation Geographic expansion

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Cont.
2.

Competitive Strategy:At the next level down, each of the businesses needs competitive strategy. It identifies how to build and strengthen the business long term competitive position in the market place.

2.

Functional Strategy:Functional strategies identify the basic course of action that each department pursue.

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HRMS role in creating competitive advantage

To have an effective competitive strategy, the company have more competitive advantages,

factors that allow an org, to differentiate its products Ex:- Jet airways

The competitive advantage can take any forms.

For pharma company, it may be the quality of its research team and its patent 3/21/13

Cont.

Technology is rarely enough to set firm apart.

Ex:- Ford and Toyota Specific HRM course of action the company pursue to achieve its strategic aims. HDFC bank Dell

Strategic Human resource management

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Cont.

Strategic human resource management include:

Build two-way communication Screening out potential managers Guaranteeing employee security to all employee Giving promotion

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Company's competitive environment Economical, political

Company's strategic situation

Company's strategic plan -Should we expand geographically? -Cut costs ? -Diversify ?

Company's internal strength and weaknesses

Organizational performance 3/21/13

Company's HR strategies What are the basic course of action HR will pursue to ensure that recruiting, training and compensation system support company's strategic plan ?

Strategic Human resource challenges

HR manager face three basic strategic challenges.

1.

2.

3.

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The need to support corporate productivity and performance improvement efforts. Employees play an expanded role in employers performance improvement efforts. Employer see that their HR unit must be more involved in designing not just executing the company's strategic plan

HRMs strategic roles

56% of the HR manager says they work with senior mgt, in creating strategic plans and 68% say they do so with respect to implementing plans. HR managers can play two strategic planning roles.

In strategy execution and In strategy formulation

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Cont.

Strategy Execution role

Traditionally is the heart of HR managers strategic job. Top management formulates company's corporate strategy Then HR manager design strategies, policies that make sense in terms of corporate strategies by

Retraining employees Out placing employees

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Cont.

The Strategy formulation role

HR supports strategy formulation in many ways. Opportunities and threats Strengths and weaknesses

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Any Questions

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