Human Resource Management

Lecture Slides # 2

Course Introduction and Overview -

Human Resource Management
(Chapter 1 continued)

BS (Hons) Management Semester 5

Anwar Khurshid

September 25, 2023

1
Fit with Organizational Strategies
(pp 55-60)
Corporate strategy
The mix of businesses a corporation
decides to hold and the flow of
resources among those businesses.
Business unit strategy
The formulation and implementation
of strategies by a firm that is
relatively autonomous, even if it is
part of a larger corporation.
 Porter’s Business Strategies
Porter has identified three types of business
unit strategies:
1. Cost leadership strategy
2. Differentiation strategy
3. Focus strategy
 Porter’s Business Strategies
(p 56-57)

Cost leadership strategy

❑ Gaining a competitive advantage through lower costs.
❑ Efficient plant facilities,
❑ Intense supervision of labor,
❑ Vigorous pursuit of cost reductions, and
❑ Tight control of distribution costs and overhead.
The HR strategies that fit a low-cost orientation
emphasize
❑ Efficient, low-cost production;
❑ Highly structured procedures to minimize uncertainty;
❑ Discourage creativity and innovation (which may lead to
costly experimentation and mistakes).
 Porter’s Business Strategies
(p 56-57)
Differentiation strategy
❑ Attempts to achieve a competitive advantage by creating a
product or service that is perceived as being unique.
❑ Strong marketing abilities, an emphasis on product
engineering and basic research,
❑ A corporate reputation for quality products, and amenities
that are attractive to highly skilled labor
HR strategies that fit a differentiation strategy
emphasize
❑ Innovation,
❑ Flexibility,
❑ Renewal of the workforce by attracting new talent,
❑ Reinforcement (rather than discouragement) of creativity.
 Porter’s Business Strategies
(p 56-57)

Focus strategy
❑ Relies on both a low-cost position and
differentiation, with the objective of serving a
narrow target market better than other firms.
The HR strategies likely to fit the focus
strategy best would be
❑ somewhere in the middle of those described
for low-cost producers and differentiators.
Miles and Snow’s Business Strategies
Prospectors
Prospectors emphasize
❑ growth and innovation,
❑ development of new products, and
❑ an eagerness to be the first in new-product or market areas,
even if some of these efforts fail

The prospectors’ strategy is associated with

❑ flexible and decentralized organizational structures,
❑ complex products (such as computers and pharmaceuticals),
❑ unstable environments that change rapidly.
Miles and Snow’s Business Strategies
Defenders
❑ Defenders are conservative business units that prefer
to maintain a secure position in relatively stable
product or service areas instead of looking to expand
into uncharted territory.

❑ Defenders tend to be highly formalized, emphasize

cost control, and operate in a stable environment.

❑ Defenders' success comes primarily from efficiently

serving a stable market.
 Fit with the Environment
We can examine the environment in terms of four
major dimensions:
(1) Degree of uncertainty (how much accurate
information is available to make appropriate
business decisions),
1. BlackBerries have been largely replaced by iPhones,
and Nokia has seen much of its market taken over by
Apple.
(2) Volatility (how often the environment changes),
1. IBM paid dearly when demand for its mainframe
computers declined drastically.
Fit with the Environment (cont’d.)
(3) Magnitude of change (how drastic the changes
are),
1. Polaroid was forced to declare bankruptcy as quick
adoption of digital cameras.
(4) Complexity (how many different elements in the
environment affect the firm, either individually or
together).
1. The number and variety of competitors in the
computer industry, both domestically and overseas,
have grown dramatically in recent years.
 Fit with Organizational
Characteristics
Production Process
Market Posture
Overall Managerial Philosophy
Organizational Structure
Organizational Culture
Selecting HR Strategies to Increase Firm
Performance (pp 55 – 60)
The Concept of Fit