STRATEGIC HUMANRESOURCE

MANAGEMENT

PRESENTED BY
ASWATHI-A
2ND
ND SEM MBA
 WHAT IS A STRATEGY?
WHAT IS A STRATEGY?

Strategy in simple terms ,is a unified course of action to the goal .

Strategy comes from the Greek word “strategos” , which has its
roots in military language

GLUECK defines the strategy as the :

“unified ,comprehensive and integrated plan designed to ensure
that the basic objective of the enterprise are achieved”

Shortly we can say that strategy is an integrated course of/plan of

action…
 what is strategic management?

Definition>>>
JOHN and RICHARD define strategic mgt as
“the set of decisions and subsequent actions used to formulate and
implement strategies that will optimize the fit between the organization and
its environment in an effort to achieve organizational objectives”
SAMUEL and PETER define strategic mgt as
“a continuous, iterative, cross-functional process aimed at keeping an
organization as a whole appropriately matched to its environment”
Analysis of these two definition
 Cross functional process to view the organization as a single system
 Match the organization to its environment that is matching strengths with
the opportunities
 Set of decisions and actions to achieve organizational objectives……
 STRATEGIC HUMAN RESOURCE
MANAGEMENT

A pattern of planned human resource deployments and activities

intended to enable an organization to achieve its goals.
NATURE AND ROLE OF SHRM>:
The process of developing practices , programmes and policies that help
achieve organizational objective. Its not that the HR mgr
himself/herself formulate strategies . He/she will be the member of a
core team which formulate company strategies and ensures their
implementation.
Four roles of HR executives are relevant in this context>
First ,HR should define and organization’s architecture , in other words
, its should identify the underlined model of the companies way of
doing business
Second HR needs to be accountable for
conducting an organizational audit . it help to
identify the components of architecture.
Third role of HR as a strategic partner, is to
identify methods for renovating the parts of
the organizational architecture that need it.
Fourth and finally , HR must take stock of its
own work and set clear priorities.
 Barriers to strategic HR
Short term mentality/focus on current performance
Inability of HR to think strategically
Lack of appreciation of what HR can contribute
Failure to understand general managers role as an hr
manager
Difficulty in quantifying many HR outcomes
Perception of human assets as higher risk investments
Incentives for change that might arise
 Model of strategic HRM
FIRM INSTITUTIONAL/POLITICALFO
STRATEGY RCES
RESOURCE BASED VIEW
OF FIRM RESOURCE DEPENDENCE
DEPENDANCE
INSTITUTIONAL
HRM
PRACTICE
BEHAVIORAL
APPROACH

CYBERNETIC AGENCY

FIRM-LEVEL OUTCOMES
HR CAPITAL POOL
HR BEHAVIORS (PERFORMANCE,SATISFACTION,AB
(SKILLS ,ABILITIES)
SENTEEISM,ETC)
 SIX VARIABLES OF THE MODEL

RESOURCE BASED PROSPECTIVE-it explains practices , that

provide competitive advantage such as unique allocation of the
firms resources , organizational culture , and core competencies
BEHAVIORAL VIEW-it explains practices designed to control and
influences attitudes and behaviors
CYBERNETICS SYSTEMS-it explains the adoptions of practices
resulting from feedback on contributions to strategy
AGENCY/TRANSACTION COST-why firms use control system
such as performance evaluation and reward system
 Continuation…………………………..

THE INSTITUTONAL/POLITICAL FORCES :It explain

the practices such as in appropriate performance
evaluation systems may exist because of
organizational inertia than rational decision making
RESOURCE DEPENDENCE-it explains practices caused
by power and political influences such as legislation ,
unionization control of resources, and expectations
of social responsibility
 STAGES IN HRM
There are four imp stages :
1. Environmental scanning
2. Strategy formulation
3. Strategy implementation
4. Evaluation and control
 STRATEGIC MANAGEMENT PROCESS
ENVIRONMENTAL STRATEGY FORMULATION STRATEGY EVALUATION
SCANNING IMPLEMENTATION CONTROLL

CORPRATE STRATEGY PROGRAM STRATEGIC

EXTERNAL BUSINESS UNIT CONTROL
MES
STRATEGY BUDGET PROCESS
INTERNAL FUNCTIONAL AND
PROCEDUR
STRATEGY ES PERFORMA
NCE
 1) ENVIRONMENTAL SCANNING
Environment of an organization comprises external
and internal factors . Environment need to be
scanned in order to determine trends and
projections of factors that will affect fortunes of the
organization .Scanning helps to identify threats and
opportunities prevailing in the environment .
 2)STRATEGY FORMULATION
Strategies are formulated at three levels :
1)Corporate level,
2)Business unit level and
3)Functional level
 CORPORATE - LEVEL STRATEGY
This is formulated by top management of the
organization made up of more than one line of
business .In formulating corporate – level
strategies , the company should decide where it
want to be- in ten or fifteen years hence , in at
least eight areas- market standing , innovation ,
productivity , physical and financial resources ,
profitability , managerial performance and
developments , worker performance and attitude
and social responsibility .
 Corporate level strategies table
1)GROWTH STRATEGIES
E. Vertical integration of
A. Internal growth related businesses
B. Horizontal integration F. Vertical integration of
C. Horizontal related unrelated businesses
diversification G. Mergers
D. Conglomerate diversification H. Strategic alliances
2)STABILITY STRATEGY
3)RETRENCHMENT STRATEGIES
E. Turnaround
F. Divestment
G. liquidation
 Business level strategies
A business unit is an organizational subsystem that
has a market , a set of competitors , and a goal
distinct from those of other subsystem in the
group . A single company that operates within one
industry is also considered a business unit . The
major question at the corporate-level is “In what
industries or businesses should we be
operating?,””how should we compete in the chosen
industry or business?” . In business level strategy all
this should be identified.
 3)FUNCTIONAL -LEVEL STRATEGY
It identify the basic courses of action that each of the
departments must pursue in order to help the
business unit to attain its goals .in formulating
functional level strategies , managers must be
aware that the different functions are interrelated .
Each functional area , in pursuing its purpose , must
mesh its activities with the activities of other
departments.
 Integration among functions
FINANCE

PPRODUCTION /
OPERATION HUMAN RESOURCE MGT
MGT

MARKETING
MATERIALS MGT

RISERISEARCH AND
MANAMGT INFORMATION
DEVELOPMENT
SYSTEM
ANOTHER STRATEGIC ISSUES INCLUDE:

1. DEVELOPMENT
2. PERFORMANCE APPRAISAL
3. COMPENSATION
4. INDUSTRIAL RELATIONS
5. WORK SYSTEMS
6. ORGANISATIONAL CULTURE
 STRATEGY
STRATEGYIMPLEMENTATION
IMPLEMENTATION
Strategies formulated need to be implemented. Implementation
of strategies is , often more difficult than their formulation.
Implementing strategies require such actions as altering sales
territories , adding new departments closing facilities , hiring
new employees , changing an org pricing strategies ,
developing financial budgets , formulating new employee
benefits establishing cost- control procedures , changing
advertising strategies , building new facilities transferring
managers among divisions and building a better computer
information system .
 Additionally,hrhrfunction
Additionally, functioncan
cancontribute
contributetotostrategic
strategic
plansand
plans andactions
actionsofofthe
thefirm
firmininthe
thefollowing
followingway
way

A. Encouragement of pro-active rather than reactive

behavior : Being pro-active means that the firm
has a vision of where it wants to go ten years hence
, and has human resource who helps to reach there
. Being reactive means confronting problems as
they surface .
B. Explicit communication of goals : Every firm
generally have a goal and therefore this must be
communicated to all employees . Every one should
work towards reaching the goal .
 Continue…

C) Stimulation of critical thinking : To strategise means to

think critically . The strategic HRM can help a firm
critically examine its assumptions and determine
whether the decisions that follow from those
assumptions need modification or need to be held back.
D) Productivity as an HR base strategy : The more
productive an organization , the better is the
competitive advantage. Many of the HR functions such
as pay , appraisal systems , training , selection etc….
Contribute to productivity
 Continue..

E ) Quality and service are HR- based strategies :

Quality comes from people and the firms are
spending vast sum of money on quality training .
Delivering excellent customer service is another
approach to build competitive advantage.
 Physical
facility and
equipment

Confidence
in employee Care and
knowledge Service concern
excellence

DDependable
Timely
and accurate
assistance
performance

CUSTOMER SERVICE DIMENSIONS

 contiunue

F)Proficient strategic management: Building a

capable organization is obviously always a top
priority in strategy execution .
 4) STRATEGY EVALUATION
Strategy evaluation helps to determine the extend to which the
companies strategies are successful in attaining its objective .
Basic activities involved in strategy evaluation are :
1. Establishing performance targets , standards and tolerance
limits for the objectives , strategies and implementation
plans.
2. Measuring the performance in related to targets at a given
time. If outcomes are outside the limits , then inform the
manager to take action.
3. Analyse deviations from acceptable tolerance limits.
4. Execute modifications where necessary and are feasible.
 IN SHORT………
Identifying vision , mission , and objectives of the
company .
External environmental analysis
Internal environment analysis
Revised organizational direction if necessary
Formulation of alternative strategies
Selecting the best strategy
Strategy implementation
Strategic evaluation and control
 CONCLUSION
The advent of HRM has brought the linkage
between employer – employee
relationship and strategic mgt to sharp
focus. The role of HRM is significant in
strategic management process. HRM
makes strategic mgt highly effective by
supplying human resources who are
competent and committed…….
 Tha
n
you k
…
……
queries