Corporate Strategies

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
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”
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
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 of difference
 Organization offers employees incentives &
compensation for creativity
 HR strategy focuses on external hiring of
unique individuals & on retaining creative
employees
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
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
Human Resources & Resource
Based View
 People management systems

Not all competitive advantage begins with

people management systems
◦ These systems create value to extent
that they impact stock, flow, & change of
intellectual capital/knowledge
◦ Basis of core competencies
Human Resources & Resource
Based View
 “Skill” concept expanded to consider
stock of intellectual capital in firm
 “Behavior” concept reconceptualized as
flow of knowledge within firm through its
creation, transfer, & integration
 Core competence arises from
combination of firm’s stock of knowledge
& flow of knowledge through creation,
transfer, & integration in a way that is
valuable, rare, inimitable, & organized
Human Resources & Resource
Based View
 Dynamic capability construct illustrates
interdependent interplay between
workforce & core competence as it
changes over time
The Five P’s Model
 Philosophy
◦ Statements of how organization values & treats
employees; essentially culture of the organization
 Policies
◦ Expressions of shared values & guidelines for
action on employee-related business issues
 Programs
◦ Coordinated & strategized approaches to initiate,
disseminate, & sustain strategic organizational
change efforts necessitated by strategic business
needs
The Five P’s Model of SHRM
 Practices
◦ HR practices motivate behaviors that
allow individuals to assume roles
consistent with organization’s strategic
objectives
◦ Three categories of roles:
 Leadership
 Managerial
 Operational
The Five P’s Model of SHRM
 Processes
◦ Continuum of participation by all
employees in specific activities to
facilitate formulation & implementation
of other activities
The Five P’s Model of SHRM
 Successful SHRM efforts begin with
identification of strategic needs
 Employee participation is critical to linking
strategy & HR practices
 Strategic HR depends on systematic &
analytical mindset
 Corporate HR departments can have
impact on organization’s efforts to launch
strategic initiatives