BUS 420/FBA 411 – STRATEGIC MANAGEMENT & BUSINESS POLICY 2020/2021

STRATEGIC POLICIES IN FUNCTIONAL AREAS OF FIRM

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HUMAN RESOURCE MANAGEMENT (HRM) STRATEGY
Strategic human resource management (strategic HRM) provides a framework linking
people management and development practices to long-term business goals and
outcomes. It focuses on longer-term resourcing issues within the context of an
organisation's goals and the evolving nature of work.
What is HRM strategy and analysis?
A process of assigning financial and nonfinancial goals or metrics to the human resource
management-related chain of activities required for achieving the company's strategic
aims. It is the relationship between HR activities, employee behaviours and firm- wide
strategic outcomes and performance
What makes human resource management strategic?
Strategic human resource management involves a future-oriented process of
developing and implementing HR programs that address and solve business
problems and directly contribute to major long-term business objectives.

What Are HRM Strategies?

HRM stands for Human Resource Management. Human resource management strategies
are the plans that lead to implementing different functions in the human resources
department of an organization. Typically, these strategies are guided by the overall
strategies of the business and serve to help the business attain its long-term goals via its
staff. These strategies can be divided into four key areas:
 Talent
 Leadership
 Planning
 Performance Culture
Talent and Human Capital
Talent represents the human capital of an organization and is crucial to the success of
that business. It is an important asset that the business should strive to maintain. How
does the human resources management system help with these? It is by having a
comprehensive staffing blueprint. The human resources department should forecast the
staffing needs of the business in the future while also recruiting, hiring, and keeping the
best talents in the organization. The most successful businesses in the world pride
themselves in hiring the best talents in the world.
In order to do this effectively, the HRM department needs to identify the various
competencies required for each job, such as the skills, abilities, and knowledge required to
perform various tasks effectively. This will allow them to draw detailed job descriptions that
will ultimately guide them in finding the best people for the job.

Leadership of an Organization
The leadership of the organization is likened to what the head is to a body. It is through
leadership that a business succeeds or fails in its endeavours. The HRM department plays
a key role in the leadership of the organization because it is tasked with finding the best
executives to steer the business in the right direction.
An HRM department that can boast of past success in choosing the right executives will
generally find it easier to convince the board of its recruits the next time an executive is
required. In order to do this job effectively, HR managers need to be active in an advisory
capacity when engaging with other organizational leaders so as to give their input on what
is best for the company’s future.

Human Resources Planning

The HRM department plays an important role in helping the business to plan for the future.
Take employees for example; by conducting regular surveys of the employees to
determine employee satisfaction, the HRM department can give important insights to
business leaders on what needs to be done in the future, to contribute to a happier
workplace.

Performance Metrics and Corporate Culture

An organization with well-defined performance metrics is an organization with high
potential for success. The HRM department plays a role in this, as well. Through
developing well-defined performance metrics, regular performance evaluations, and
schemes to reward employees for high performance and creativity in accomplishing their
tasks, the HRM department will create a high-performance culture where the interests of
the employees are aligned with those of the business, and they are genuinely motivated to
do their best. Employees who feel appreciated by their companies and receive recognition
for their achievements in the workplace are likely to want to do more.

WHY IS STRATEGIC HUMAN RESOURCE MANAGEMENT IMPORTANT?

Strategic human resource management (strategic HRM) provides a framework linking
people management and development practices to long-term business goals and
outcomes. It focuses on longer-term resourcing issues within the context of an
organisation's goals and the evolving nature of work
What are the types of HRM strategies?
There are essentially two types of HR strategies – those that are overarching and those
that are specific. Overarching strategies apply to the management of an organization's
people as a whole, while specific strategies address subsets of HR, like talent
management or recruitment.
What is Overarching Strategy?
Overarching strategy is the highest guide to your activity. It should be a simple and
clear sentence that anyone can understand. This step helps you recognize the value of
an overarching strategy for communicating your overall plan.
What is Specific Strategy?
Specific strategies, such as identifying product strengths, adjusting pricing, or
acquiring another business, have historically been used to get a small enterprise off
the ground. Understanding these strategies, and skillfully implementing them, can help
entrepreneurs achieve success.
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INFORMATION TECHNOLOGY (IT) STRATEGY
IT strategy (information technology strategy) is a comprehensive plan that outlines
how technology should be used to meet IT and business goals. An IT strategy is a
written document that details the multiple factors that affect the organization's
investment in and use of technology What is an Information Technology (IT)
Strategy?
An IT strategy is an integral part of your business strategy that aims to align technology
and operations with business goals. It clearly sets goals and objectives for how those
technologies will be implemented and used, as well as articulates how the technology
strategy supports key business objectives. By having this strategy in place, everyone
within an organization knows and understands that as business needs change, technology
must evolve as well. An IT strategy enables business outcomes, competitive
differentiation, and customer value.
If you do not have an IT strategy, you risk being unable to provide the level of service to
the business, required to fulfill business objectives. This creates a gap between business
demands and Information Technology (IT) which may, in turn, lead to an adversarial
relationship between lines of business and IT. Think of it this way: most of today’s IT
organizations are reactive. They solve IT problems as they happen, such as calls into the
help desk, new equipment set up, access issues, etc. So many human and technological
resources are required to handle these everyday problems, that there’s not much time left
to look ahead.
An IT strategy can help alleviate this: it gives IT the opportunity to have a seat at the table
to discuss business plans up front and eliminates the fire drill that would happen without
this foresight. It gets IT recognized as an overall contributor to business development and
aligns IT staff with the company mission.
Of course, having a strategy is one thing; making sure it is efficiently implemented and
able to evolve is equally essential. Here are some important ways we have seen
businesses benefit from a fully formalized and evolution-ready IT strategy:

1. An IT Strategy Assures you are Leveraging Technology to its Fullest

Nearly every business operation (from retail to health care to manufacturing) has a heavy
component of technology that assures their operation flows and gets things done. Yet,
that’s not enough.
Historically technology was used by organizations to improve employee efficiency. For
example, a point of sale system that calculates change for a transaction enables
associates to service greater numbers of shoppers in a shorter period of time while at the
same time reducing errors. Technology choices were limited, and businesses were easily
able to revert to manual processes should supporting technology become unavailable.
Today’s landscape is significantly more complex – consumers are interfacing directly with
corporate systems and data analytics. The resulting information often has more value than
the products you sell, and loss of IT systems can directly reduce your revenue. In addition,
IT systems now operate in real time with performance being a key differentiator between
two competitors.
Organizations spend a large amount of time analyzing how a new or emerging technology
might help achieve a goal. The objective is to make IT proactive vs. reactive. With an IT
strategy in place, IT establishes itself as a contributor to the business plan vs. reacting to
it.
This is not always easy. It is hard for IT organizations to allocate the time needed for
technology research and discovery because they are too busy or consumed with day-to-
day operations. It is impossible to look out because you are so busy looking in. This is
where outside resources can help assess the big picture: what is happening both outside
and inside.

2. An IT Strategy Gives You a Differentiator over Competitors

A critical element of an IT strategy is that it must be valuable both to the core technology
team and the business in general. The strategy must be clearly aligned with how not only
your organization operates, but also how your users consume. This gives businesses an
advantage to grow and be more profitable, since their technology is often more
streamlined, nimble (responsive) and efficient. It can give companies a competitive
advantage.
Think about this in relation to your own business or the businesses around you. For
example, it is possible that just three to five years ago, you determined how much
computing resources you needed and bought them. If you needed more – even if for a
short window of time for a busy season – you had to buy those too. Today, companies can
take advantage of consumption-based capacity on demand. You only pay for what you are
using: dial it up during peaks or dial down during lows. Taking advantage of on-demand
services like this, if executed properly, can not only improve cost efficiency but decrease
time-to-market and improve performance during peak times, providing a better experience
for clients consuming the on-demand services.
Controlling a consumption-based model may be what you need: But extracting value from
such an approach can be complex and it needs to be part of your strategy. This
demonstrates to senior executives and other stakeholders that you are planning for the
future while being mindful of the business bottom-line benefits.
3. An IT Strategy assures you are meeting and driving Business needs
By going through the process of developing an IT strategy, organizations will have a clear
understanding of the current state of IT from a financial management perspective. They
will understand their current technology capabilities. They will have a roadmap of where
that technology may be going. This can create an awareness of possible gaps and areas
of consideration.

WHY IS INFORMATION TECHNOLOGY (IT) STRATEGY IMPORTANT?

An IT strategy enables business outcomes, competitive differentiation, and
customer value. In fact, if you do not have an IT strategy, you risk being unable to
provide the level of service to the business required to fulfill business objectives.
Today, IT is seen as a capital investment by most business leaders. They align budget
numbers with those tangible items they can see. What is Information Technology’s
resolution time? Are they on or off budget? With an IT strategy, this point-of-view can
change. To shift this thinking, you also want to shift how you are communicating the
strategy. The best IT strategies look at IT from a non-technologist’s perspective to provide
insight into how well IT is performing for the business. The business is not interested in
speed and feed – they do not care about whether you are in the cloud or not – they care
that you are meeting needs and creating value.
It is important to present information in meaningful and manageable chunks. When you
can explain to or convince non-IT leadership that IT is a key part of enabling critical value
streams as opposed to a necessary cost, and then you can start to project out.

5 COMPONENTS THAT MAKE A GREAT IT STRATEGY

A great IT strategy is not just about the technology. It is also about how it can help your
business grow and succeed. With a good understanding of what an IT strategy entails,
you will be able to build one that will work for your business. You will want to start by
making sure that the strategy is understandable and easy-to-use for all of your staff,
aligned with your company’s goals, and focused on present and future needs within the
field of IT. To ensure that you are adapting to changes in IT and your business with ease,
it is important to have a flexible plan too! Finally, the last key element that makes a great
IT strategy is to focus on cost efficiency. This helps you get the best value for your money
while getting everything you need from your IT strategy. If you want to learn more about
how to build an IT strategy, what is involved in it, or the benefit of having one, read as
follows -

1. Understandable for all staff

Building a great IT strategy is all about making sure that your technology is up to standard
and your team is able to complete their work successfully. However, if an IT strategy is too
technical and overcomplicated, it can be difficult for people who do not have technological
know-how or lack computer knowledge. Which is why having an easy to understand IT
strategy is so important. This way everyone knows exactly how IT can help them achieve
their goals and generally understand it better. Not only will this make them feel supported
but it’ll also cut down time spent asking questions and waiting on answers from the
experts.

2. Aligned with business goals

For an IT strategy to be successful, it must also align with the goals and objectives of your
business. This means understanding what is important for your business right now and
what direction you want your business to go in the future. Once you understand the
present and future needs of your business, it is much easier to align your IT strategy with
company goals. An effective way of doing this is by involving key stakeholders like
managers and chief executive officers with the building of any strategies. They will be able
to give you valuable insight into the organisations’ current challenges or pain points,
making it easier for your IT strategy to offer valuable technical support that will assist with
achieving current business objectives and later on, down the line.

3. Focus on IT presently and in the future

The next thing your IT strategy should consider in order to be successful is to focus on the
present and future needs of the business. The reason this should be considered when
building any effective IT strategy is because, both business objectives and technology
advancements can change rapidly. The needs of a business right now are going to be
different from the needs in the future. Your IT strategy therefore must consider the
technology requirements right now and further down the line, so it remains relevant to the
business. Technology also changes quickly. Chances are you will need to upgrade your
equipment as time goes on to stay relevant. While it might seem like overkill now, if your
strategy recognises the need to invest in modern technologies (for example, virtual reality
software), it will ensure your business stays ahead of competitors who ignore emerging
trends.

4. Adaptable to change with your business

A key factor to building a great IT strategy is to always take into account how well the
strategy can adapt with the business. Depending on changing circumstances, it is very
common for a business to change its direction or focus on other goals. This means that
when building your IT strategy, make sure it is open to possible changes and can adapt
with the business. If the strategy cannot be adapted, it will no longer be relevant to your
technology and cannot provide support for your team and the organisation.

5. Cost-effective
Finally, a great IT strategy should be cost effective for your business. It is impossible to
plan strategically without considering the financial side of things. It is crucial to identify
what technology is worth investing in. You do not want to spend more money than
necessary on something that may not even benefit you in future years or invest in
something that needs an upgrade every time there is a new technology breakthrough.

Tips on building a great IT strategy

Once you have got a clear idea about why having an IT system is beneficial , how do you
go about putting one together? It can be quite difficult to build, but here are some tips that
should help:
 Keep it simple – do not try to take on too much at once as this will only overwhelm
your team and makes success less likely.
 Get an expert in – if you are struggling, ask someone who knows what they are
doing for help. There is no shame in not knowing everything about IT management
so make use of those around you with relevant skills and knowledge.
 Collaborate – the whole point is that technology should be working together, rather
than against each other. The best thing to do here is try a pilot project where certain
aspects of different technologies can work alongside each other before deciding on
how/if to implement them more widely throughout your company.

Putting Your IT Strategy in Place

The first step in the strategic planning process is to understand your current state and
immediate needs. What do your financials and approach to service management look
like? What are your immediate technology needs? It is also good to take a closer look at
your technology triggers - both the external and internal factors that affect IT. External
factors can be items such as industry changes or market fluctuations. Internal factors
can be things like acquisitions, specific growth targets or other planned events. Then
consider your organizational structure and how IT runs with the business – is it a cost
center or a contributor? Finally, look at all of the different technologies used within your
organization – both inside IT and outside “rogue” technologies that are used by other
business units.
Sometimes it is hard to assess your own work in a transparent and honest fashion: But it
is critical to ask yourself, ‘Why did we do X? Why did we do Y?’ This gives you a baseline
of the current state, so you can plan for what is ahead. The ultimate goal is to create a
target for where IT is headed, a target that aligns directly with where the other business
units are headed.