STRATEGIC MANAGEMENT

BAHBRY

 V: Setting Strategy
It is o underscores the importance of defining organizational goals as a precursor to strategy
development. Strategy is defined as the means to achieve goals, encompassing actions, operations,
and competitiveness. The involvement of HR in strategic management is highlighted for planning and
implementation success.
It emphasizes the need to incorporate strategic choices into a comprehensive HR strategy, aligning
practices and policies with corporate objectives. It's noted that there's no one-size-fits-all HR
management approach due to organizational uniqueness.
The example of First Tennessee National Corp is provided, where hiring a finance-oriented HR
executive led to a strategic partnership with finance, enhancing profitability. Data-driven studies
aligned rewards with business strategy, correlated HR activities with performance metrics, and
established career paths for retention and profitability.
 Corporate strategies
It is discussing three generic organizational strategies: growth, stability, and turnaround. Each strategy
requires a distinct approach to HR management.
Growth: This strategy involves expanding either internally or through acquisitions. Key HR issues
include timely hiring and training for market demand, promoting internal development opportunities,
and maintaining quality standards during rapid growth. In acquisitions, merging dissimilar HR
systems and managing employee retention are critical challenges.
Stability: Organizations pursuing stability face limited growth opportunities, which can affect
employee retention. Identifying and retaining key employees become essential in this scenario.
Turnaround: In this strategy, organizations downsize to improve efficiency and capitalize on
existing strengths. Cost-cutting is a key focus, and compliance with employment laws during layoffs
is crucial. Managing the morale and productivity of retained employees is also a significant HR
challenge.
Each strategy demands a tailored HR approach to align with the organization's goals and
circumstances.

 Business unit strategies

The paragraph discusses how larger organizations often divide their operations into smaller, more
responsive units, which can be based on product/service, customer group, or geographic region. These
business units develop distinct strategies, leading to three different business unit strategies that require
unique HR approaches.
Cost Leadership: This strategy focuses on efficiency and cost reduction to offer lower prices to
consumers. HR strategies emphasize short-term performance measures, specialized job assignments,
and incentives for employees to leave.
Differentiation: Organizations pursuing this strategy aim to distinguish their products or services
from competitors, allowing them to charge premium prices. HR strategies involve encouraging
creativity, innovation, and long-term performance measures, often through external hiring.
Focus: This strategy targets specific market segments with unique needs. HR focuses on training,
ensuring customer satisfaction, and hiring employees who empathize with the target market.
Additionally, the paragraph mentions three "logics of control" for business unit strategy: investment
logic (adaptability), inducement logic (cost containment), and involvement logic (both cost
containment and innovation). Each logic corresponds to different management practices and control
mechanisms.