UNIT NO 02

College
MANPOWER FORECASTING Logo
 UNIT 02
• Manpower Forecasting: Concept,
• Factors affecting HRP, HRP at different levels of management,
• Integration of strategic planning and HRP,
• Process of HRP
• Introduction Demand Forecasting – Techniques of demand
forecasting, Supply forecasting, Control and Review mechanism
Manpower Forecasting
• Manpower forecasting is essentially about ensuring that the
right talent is available when needed. For most organizations,
manpower planning is an annual exercise where it is looked at
as a cost without considering the skills required to meet the
business objectives.
Defination:
• Defining the term Manpower Planning, L.R. Sayles & George
Strauss have stated,
“Manpower Planning means forecasting prediction of the number of
the people whom the organisation will have to hire, train or
promote in a given period.

Broadly defined, Manpower Planning represents a systematic

approach to personnel in which the emphasis is on the inter
relationship among the various personnel policies and programmes.”
Importance of Manpower Planning –
Leo Lingham in “Managing a Business”:
• 1. Quantify job for producing product/service.
• 2. Quantify people and positions required.
• 3. Determine future staff-mix.
• 4. Assess staffing levels to avoid unnecessary costs.
• 5. Reduce delays in procuring staff.
• 6. Prevent shortage/excess of staff.
• 7. Comply with legal requirements.
Types of Manpower planning
• Types of manpower planning can be distinguished
• On the basis of the level at which it is done.
• On the basis of the period for which it is done.
• Manpower Planning

On the basis of level

On period basis
Macro-level
Micro-level
Short period
Medium period

Long period
(national level)
(Industrial
Unit level)
Factors affecting Manpower Planning
• Working Hours
• Number of shifts
• Nature of Production
• Product mix
• Performance rate
• Hours lost
 STRATEGIC PLANNING

Introduction
Corporate Strategy
The Stages of Corporate Strategy Formulation
The Stages of Corporate Strategy Implementation
Strategic Alternatives
• It sets forth the organization's mission, vision, values and
objectives, and states how the organization will achieve
them. It summarizes the environmental and resource
assumptions underlying the strategic choices and identifies the
risks associated with the choices.
 Strategic Planning
• A strategy is an overall approach, based
on an understanding of the broader
context in which you function, your own
strengths and weaknesses, and the
problem you are attempting to address.
A strategy gives you a framework within
which to work, it clarifies what you are
trying to achieve and the approach you
intend to use. It does not spell out
specific activities.

• Thus formulation of Corporate Strategy

forms the crux of the Strategic Planning
Process
 Corporate Strategy

• It is concerned with the overall purpose and scope of the business to meet
stakeholder expectations. This is a crucial level since it is heavily influenced by
investors in the business and acts to guide strategic decision-making
throughout the business. Corporate strategy is often stated explicitly in a
"mission statement".

• Corporate strategy spells out the growth objective of the firm, the direction,
extent, pace, and timing of firms growth.

• It is objective strategy of the firm.

Strategy is Partly Proactive and Partly
Reactive
 Stages of Corporate Strategy
Formulation – Implementation Process

• Formulation of strategies is a creative and analytical process. It is a process

because particular functions are performed in a sequence over the period of
time. The process involves a number of activities and their analysis to arrive
at a decision.

• The process set out above includes strategy formulation and its
implementation, what has been referred to as strategic management process.
 Stages of Corporate Strategy
Formulation – Implementation Process

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

• Developing a • Setting • Crafting a • Implementing • Monitoring

Strategic Vision Objectives Strategy to and Executing Developments,
achieve the Strategy Evaluating
Objectives and Performance,
Vision and Making
Corrective
Action, Revise
if needed
 1. Developing a Strategic Vision

• What directional path a company should take based on current market position
and its future prospects with respect to product, customer, market, and
technology constitutes strategic vision of the company.

• Strategic vision communicates management aspirations to stake holders and

steers energy of employees in one direction.

• Mission and Strategic intent overall strategic direction should be clear and precise
that is what organization is seeking to achieve. This will help organization
galvanize motivation and enthusiasm throughout the organization.

• Questions like short term profits vs. long term growth, related business vs.
diversified business, global coverage vs. regional coverage, internal innovation and
new products vs. acquisition of other business etc., needs to be addressed for
better strategic choice.
 2. Setting Objectives: Balanced Score Card
Approach

• BSC approach measures companies performance and requires the setting of both the financial and strategic
objectives besides tracking their achievement.

• A trade of between financial and strategic objectives has to be made depending on the situation.

• Mainly strategic objectives will deliver sustained future profitability every quarter and strengthen company’s
business position by its growing competitive advantage over rivals.

• Thus financial objectives will be achieved by strategic objectives that improves company’s market strength.
 2. Setting Objectives: Short and Long Term

• Financial and strategic objectives include both short term (yearly) objectives that
delivers immediate performance improvements and long term (3-5 years)
objectives that deliver Profitability, Productivity, Competitive Position, Employee
Development, Employee Relations, Technological Leadership, and Public
Responsibility.

• Long term objectives represent results expected from pursuing certain strategies.
Qualities of long term objectives are Acceptable, Flexible, Measurable, Motivating,
Suitable, Understandable, and Achievable.

• Objectives should be quantitative, measurable, realistic, understandable,

challenging, hierarchical, obtainable, and congruent among organizational units.
 2. Setting Objectives: Short and Long Term
• Objectives are commonly stated in term of:
• Growth in Assets
• Growth in Sales
• Profitability
• Market Share
• Degree and Nature of Diversification
• Degree and nature of Vertical Integration
• Earnings Per Share
• Social Responsibility

• Such objectives provide direction, allow synergy, aid in evaluation, establish

priorities, reduce uncertainty, minimize conflicts, stimulate exertion, aid in
allocation of resources and job design.

• Short term obj. differ from long term obj. when elevating organizational
performance but it cannot be done in one year time
 3. Crafting a Strategy

Organizational
Strength and
Weakness

Strategic Decisions:
Strategic Investment,
Competitor Functional Area
Strength and Strategies,
Weakness
Sustainable
Competitive
Advantage

Market Needs,
Attractiveness,
and Key
Success Factors
 4. Implementation and Executing the
Strategy
• It is operation oriented activity which is most demanding, and time consuming
part of strategy management process. It involves:
• Staffing the organization with right mix of people (supportive competencies and
competitive capabilities) by motivating them to pursue objective targets.

• Developing budgets for activities critical to strategic success.

• Installing Information system, Policies, Operating procedures, Systems should facilitate

execution of work day in and day out.

• Tying rewards and incentives to achievement of objectives and good execution strategy.

• Creating conducive work culture / climate for successful strategy implementation.

• Exert internal leadership to drive strategy implementation by creating strong fit

between strategy and organizational capability, between strategy and reward structure,
internal operating systems, and organizational work culture / climate.
5. Monitoring Developments, Evaluating Performance, and Making
Corrective Adjustments
• This stage is trigger point for deciding whether to continue or change
companies vision, objectives, strategy, and strategy execution methods.

• Whenever company encounter disruptive changes in the external environment,

then strategy needs to be reevaluated (cause related to poor strategy or poor
execution) and timely corrective action needs to be taken by modifying or
redrafting its strategic vision, direction, objectives etc.

• Proficient strategy execution is always the product of much organizational

learning. It is achieved unevenly coming quickly in some areas and problematic
in other areas.

• Periodic assessment and quick adjustments helps in making corrective actions

more meaningful and effective.
 Grand Strategies / Directional Strategies

Strategy
Alternatives

Stability Expansion Retrenchment Combination

Intensification Diversification

Market Market Product Vertically Concentric Conglomerate

Penetration Development Development Integrated Diversification Diversification

Forward Backward
 Stability Strategy
• It is strategy by a company where the company stops the expenditure on expansion, do not
venture into new markets or introduce new products.
Stability strategy is adopted by company due to following reasons:
• When the company plans to consolidate incrementally, its position in the industry in
which company is operating.

• When the economy is in recession companies want to have more cash in their balance
sheet rather than investing that cash for expansion or other such expenses.

• When company has too much debt in the balance sheet than also company stops or
postpones their expansion plans because it would not able to pay interest rate on such
debt and it may create liquidity crunch for the company.

• When the company is operating in an industry which has reached maturity phase and
there is no further scope for growth than also company adopts stability strategy. It is
safe oriented less risky strategy.

• When the gains from expansion plans are less than the costs involved for such
expansion than company follows the stability strategy.
 Expansion Strategy

• It is opposite to stability strategy where rewards and risks are high.

• It is true growth oriented strategy which redefines the business.

• The process of renewal of firms through fresh investments in new products,

markets etc.

• It is highly versatile strategy which offers various permutations an combinations

for growth.

• Expansion strategy has two major strategic routes: Intensification and

Diversification. Both of them are growth strategies and how you pursue them.

• Intensification means pursuing growth in current business.

• Diversification means expansion into new business that are outside current
business and markets.
 Divestment Strategy is Adopted When

• Compulsions of Disinvestments may be varied, such as:

• Business becoming Unprofitable,

• High Competition,

• Industry Overcapacity,

• Failure of Strategy
• Generate Resources
 Retrenchment Strategy

• Retrenchment is a corporate-level strategy that seeks to reduce the size or

diversity of an organization's operations.

• Retrenchment is also a reduction of expenditures in order to become financially

stable.

• Retrenchment occurs when an organization regroups through cost and asset

reduction to reverse declining sales and profits.

• This strategy is design to fortify an organization's basic distinctive competence.

• In some case, bankruptcy can be an effective type of retrenchment strategy.

Bankruptcy can allow a firm to avoid major debt obligations and to avoid
union contracts.
• Introduction Demand Forecasting – Techniques of demand
forecasting, Supply forecasting, Control and Review mechanism