Class 3 - Sept 20.pptx

Strategic Human Resource Management atif acikgoz PreviousWeek on SHRM •The concept of strategy •Three models of strategy •HR roles in strategy •Case: High Growth Industries ThisWeek on SHRM Three levels of strategy Corporate Level Business Level Functional Level Top-down vs Bottom-up Approach ...

Strategic Human Resource Management atif acikgoz PreviousWeek on SHRM •The concept of strategy •Three models of strategy •HR roles in strategy •Case: High Growth Industries ThisWeek on SHRM Three levels of strategy Corporate Level Business Level Functional Level Top-down vs Bottom-up Approach Three levels of strategy Corporate Strategies  Growth can allow an organization to reap the benefits of economies of scale, to enhance its position in the industry relative to its competitors, and to provide more opportunities for professional development and advancement to its employees.  CHO issues associated with a growth strategy involve adequate planning to ensure that new employees are hired and trained in a timely manner to handle market demand, alerting current employees about promotion and development opportunities, and ensuring that quality and performance standards are maintained during periods of rapid growth. CLICK CLICK What is the difference? REF SampleQ Businesses that use their resources to add something new to their industry rather than competing with what already exists create new value that people are often willing to pay for. This is related to which growth strategy? a. b. c. d. Market development Market penetration Diversification Product development • An organization pursuing stability (maintaining the status quo) may see very limited opportunities in its environment and decide to continue operations as is. • The critical SHR issue for this type of organization is that an organization that is not growing will also be limited in the opportunities it is able to offer to its employees. There may be fewer opportunities for upward mobility, and employees may decide to leave and pursue opportunities with other employers. CLICK • By using a retrenchment (turnaround) strategy, the organization decides to downsize or streamline its operations in an attempt to fortify its basic competency. CLICK In early 2012, Best Buy found itself at a critical juncture with its stock price having declined by 50 percent over the previous five years. With the 2009 failure of its one-time rival Circuit City in the big-box consumer retail market and the 2012 failure of Borders Books, senior executives at Best Buy realized that a change was needed in how it conducted its business. Best Buy’s traditional strategy, large megastores, at up to 58,000 square feet, stocked with deep and wide selections of discounted movies and music discs lured customers into stores who then shopped for (and purchased) higher-priced, higher-margin items such as flat-screen televisions and stereo equipment. Four significant threats faced Best Buy as it attempted to stay in business. The first was showrooming, whereby customers browse and see merchandise in Best Buy stores then purchase the merchandise elsewhere, online. The second was deep discounting being done by online retailers who didn’t have to assume the costs of running physical locations and were able to sell to customers without having to collect sales tax. The third was the retail operations of consumer electronics titan Apple, which contrasted to Best Buy by offering an experience that provided a highly trained, technologically savvy sales force in an environment that encourages customers to browse and use Apple products. Finally, there was little incentive to build relationships with customers, encouraging loyalty and repeat business. Best Buy’s turnaround strategy involved a response to each of these four challenges. In response to showrooming, Best Buy plans to increase the training and customer service skills of its sales force and offer incentives to close sales while customers browse. In response to deep discounting, Best Buy plans to close 50 stores, lay off 400 corporate staff and reduce costs by $800 million. In response to Apple, Best Buy plans to remodel its existing stores and offer a broader array of the most in-demand products, such as tablet computer and smartphones. In response to its customers, Best Buy plans to expand its existing loyalty program with free shipping and a 60-day price match guarantee. Discuss •What were the HR roles in this process? Why? SampleQ Based on the BestBuy short case, answer the following question: What factors affected BestBuy’s success? i. Training workforce ii. Laying off unproductive workforce iii. Redesigning of organizational processes iv. Understanding changing customers expectation v. Satisfying employees’ new demands a. i b. i and ii c. iii and iv d. v e. i, ii, iii, and iv f. All options g. None of the options Business-level Strategies • An organization pursuing cost-leadership strategy attempts to increase its efficiency, cut costs, and pass the savings on to the consumer. It assumes that the price elasticity of demand for its products is high—or, in other words, that a small change in price will significantly affect customer demand. • This type of organization would center its HR strategy around short-term, rather than longterm, performance measures that focused on results. Because efficiency is the norm, job assignments would be more specialized, but employees might be cross-trained during slack or downtime periods. Cost-cutting measures might also result in developing incentives for employees to leave the organization, particularly higher salaried managerial employees. SampleQ The restaurant industry is known for low elastic margins that make difficult for a company to compete with low-cost leadership strategy. McDonald’s has been successful with this strategy by offering a variety of fast-food products at a very low price. McDonald's keeps prices low through a division of labor that allows the company to hire and train young employees rather than to trained cooks of the enterprise. The company also relies on some of the managers who earn higher wages because of their experience. These managers allow the staff to offer or sell the products in bargaining prices. What HR factors will have a strategic impact on a restaurant’s market success? i. Training workforce for efficiency improvements ii. Training workforce for effectiveness improvements iii. Specialized workforce and standardized processes iv. Cross-communication among organizational departments v. Cross-training of workforce a. i b. i and ii c. iii and iv d. v e. i and iii f. All options g. None of the options • An organization pursuing differentiation strategy distinguishes its product or service from those of competitors. This allows the organization to demand a premium price over the price charged by competitors and attempts to gain the loyalty of consumers toward a particular brand. With this type of strategy, creativity and innovation in product design or service delivery are important in developing such a distinction. • HR strategy should offer incentives and compensation for creativity. Staffing may focus more on external hiring and recruiting individuals who bring a fresh, unique, outside perspective to the organization rather than being bound by existing ways of doing things. HOW Alphabet, the parent company of Google, is renowned for its innovative practice known as "20-percent time.” This principle advocates that individuals, teams, or even entire organizations allocate a minimum of 20 percent of their work hours towards exploring projects that may not yield immediate returns but harbor the potential for significant future opportunities. In a 2004 pre-IPO statement, cofounders Larry Page and Sergey Brin articulated, "In addition to their regular responsibilities, we encourage our employees to invest 20 percent of their time in endeavors they believe will profoundly benefit Google. This empowerment fosters creativity and innovation and has been instrumental in numerous major advancements.” This forwardthinking approach has borne fruits such as Google News (2002), AdSense (2003), and Gmail (2004). • An organization pursuing focus strategy realizes that different segments of the market have different needs and attempts to satisfy one particular group. • The key strategic HR issue here is ensuring that employees are very aware of what makes the particular market unique. Training and ensuring customer satisfaction are critical factors in this strategy. An organization often attempts to hire employees who are part of the target market and therefore are able to empathize with customers. Rolls-Royce is widely regarded as a prominent car manufacturer on a global scale. In addition to automobiles, the British company has established a notable presence in industries such as gas turbines, jet engines, and ship propellers. Its reputation for innovation and HR practices contribute significantly to its leadership position in the market. The company's commitment to apprenticeships and rigorous training is a longstanding hallmark. Notably, over 30% of Rolls-Royce's senior management team began their careers in entrylevel positions within the company. This underscores the company's adaptability and strategic evolution through its value chain and business model. Rolls-Royce places a considerable emphasis on its apprentice program, recognizing the pivotal role of training in maintaining its success. Each year, the company brings on board over 180 agedone sixteen eighteen across its Whatapprentices is Rolls-Royce’s of thetosuccess secrets? 12 UK sites. The majority of these apprentices choose to stay with the company for the duration of their careers. $400,00 0 $465,00 0 $355,00 0 2023 •Stars – YouTube: YouTube is also a flagship product. Did you know that over 500 hours of content is uploaded to YouTube every minute? Growth and expansion is touching the sky for this one. •Cash cows – Google Search & Ads: And as far as the Google search engine is concerned, about 70% of the world’s population uses it. Thus, making it dominant in the relative market share. Available on both desktop computers and mobile devices, it is the browser of choice for many people: on all platforms. • Small opportunities to get market share •Question marks – Drive & Docs: Google Drive and Docs are one example. The demand for data storage and protection has increased the market for cloud storage. Google Drive and Docs have potential and high market growth but face less money back due to high market share of their competitor. • Market growth is high, but they can convince people to invest and eventually grow to become a cash cash cos=w •Dogs – Google Play: This product was not a total failure, in terms of ideas. Google Video was launched in late January 2005 and 22 months later Google bought YouTube for $1.65 billion. And now you find all theREF Functional Strategies DydadicWork •Search for Apple org structure and figure out its strategy making process. Share your understanding first with your partner and then the class. CLIC K Top-down vs Bottom-up Approaches ClassWor k •What does Nokia’s café process say about its senior leaders? •How will Nokia’s values help execute the change in business strategy? •Define the behaviors that were stimulated through the café approach at Nokia. What information channels got opened? •What’s your evaluation of the social process for engaging thousands of employees across the globe in defining the values? •Is there a negative side to mass participation, or connecting the many to the many? Do you think employees want to weigh in on all issues?