The Strategic Human Resource Environment

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The Strategic Human Resource Environment
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Organizational Purpose and Mission

• An organizations purpose is its reason for
  existence.
• A businesss purpose is to earn profit for its
  owners.
• A universitys purpose is to educate and pursue
  knowledge.

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Organizational Purpose and Mission

• An organizations mission statement specifies how
  its managers have decided to fulfill its purpose.
  It
• identifies the unique set of characteristics and
  strengths of the organization that are its
  competitive advantage and
• defines the scope of business operations in the
  provision of products and services offered and
  the markets in which it intends to compete.

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Mission Statement

• STARBUCKS MISSION STATEMENT
• To establish Starbucks as the premier purveyor of
  the finest coffee in the world while maintaining
  our uncompromising principles as we grow.
• The following five guiding principles will help
  us measure the appropriateness of our decisions
• Provide a great work environment and treat each
  other with respect and dignity.
• Apply the highest standards of excellence to the
  purchasing, roasting and fresh delivery of our
  coffee.
• Develop enthusiastically satisfied customers all
  of the time.
• Contribute positively to our communities and our
  environment.
• Recognize that profitability is essential to our
  future success.

CourtesyStarbucks Coffee Company.
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SWOT Analysis
Strengths Internal Analysis Weaknesses
Opportunities External Analysis Threats
Accomplish the strategy by exploiting
opportunities with strengths, correcting
weaknesses, and building defenses against threats.
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Strategy Formulation

• Organizations formulate strategy at three basic
  levels
• Corporate strategy
• The set of strategic alternatives that an
  organization chooses when managing operations
  across several industries and diverse markets.
• Business strategy
• The set of strategic alternatives that an
  organization selects from in deciding how to
  compete in a particular industry.
• Functional strategy
• How a firm has decided to manage each of its
  major internal functions such as marketing,
  finance, distribution, and human resources.

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Corporate Strategy and HRM

• A grand strategy is a single overall framework
  for action the top management team develops to
  compete in one market or a few closely related
  markets.

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Corporate Strategy and HRM

• Growth strategies
• Niche
• Identifying a unique niche in a market and then
  succeeding in aggressively expanding within the
  chosen niche.
• External
• Growth through acquisition, mergers, and joint
  ventures.
• Strategic HRM challenges under growth strategies
• To successfully recruit and train sufficient
  numbers of qualified employees to operate
  expanding niche operations.
• In external growth, HRM focuses on melding
  disparate workforces into a single cohesive and
  integrated unit.

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Corporate Strategy and HRM

• A retrenchment or turnaround strategy is a grand
  strategy utilized when major changes in current
  operations are required to make an organization
  competitive again.
• Downsizing or rightsizing
• Actions taken to reduce costs and scale back
  operations, thus freeing up resources for
  investment in more promising products and
  markets.
• Strategic HRM challenges during this period
• To manage the process so that surviving employees
  feel attached to and remain committed to the
  organization.
• To optimize the transition process for displaced
  workers through severance packages and
  outplacement counseling.

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Corporate Strategy and HRM

• A stability strategy focuses on maintaining the
  status quo after a period of change in an
  organization.
• The strategys goals are to stay in current
  markets (where no growth is anticipated) and to
  protect the organization from external threats.
• Strategic HRM challenge of the stability
  strategy
• To retain the firms existing employees when
  there are few chances for advancement, no
  likelihood of compensation or salary increases,
  and other HR negative factors.

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Corporate Strategy and HRM

• Diversification is a widely used strategic
  approach to managing a portfolio of businesses
  competing in several different markets at once.
• Related diversification
• The relatedness of the businesses (e.g., internal
  operations, suppliers, customers, locations) is
  used to achieve cost savings or profit synergies
  and competitive advantage.
• HR practices focus on cross-organizational
  training and experiences to develop overall
  organizational perspective.
• Unrelated diversification
• The diversity of the businesses (no overlapping
  as in a related diversification) is assumed to
  offer protection from business cycle downturns.
• HR functions under unrelated diversification are
  customized and decentralized to the particular
  business units.

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Business Strategy and HRM

• Competitive Strategies
• Differentiation
• A firm develops an image or reputation for its
  product or service that sets it apart or causes
  it to be perceived as being different from its
  competitors.
• HRM activities focus on developing high quality
  work and customer service satisfaction
  capabilities in the workforce.
• Cost Leadership
• By minimizing costs, a firm can offer the lowest
  prices and gain higher revenues. Cost leadership
  comes from internal operational efficiencies and
  external cost controls.
• HR activities focus on developing a highly
  efficient workforce and reengineering operations
  for higher productivity and lowered labor costs.

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Business Strategy and HRM

• Competitive Strategies (continued)
• Focus
• Targeting a differentiated product or service
  with low cost or unique features for a specific
  market segment by geographic locations, by
  consumer preference, or by other distinct
  customer characteristics.
• HR activities are focused on creating a workforce
  that understands the competitive nature of the
  focal market.

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Functional Strategy and HRM

• The third level of strategy concerns how a
  company will decide to conduct its basic
  functional activities, such as marketing,
  finance, operations, research and development,
  and human resources.
• HR strategy formulation should be integrated with
  corporate, business, and other functional
  strategies.

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Human Resource Strategies
Human resourcestrategy formulation
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Labor Trends and Workplace Issues

• Workforce diversity
• Age
• Gender
• Ethnicity
• Disabilities
• Lifestyles

• Unionization and collective bargaining
• Union membership
• Organizing drives
• Strikes