Strategic Management PDF

STRATEGIC MANAGEMENT  Strategic Management Strategic Human Resource Management – Involves aligning initiatives involving how people are managed with organizational mission & objectives Strategic Management Process – Determining what needs to be done to achieve corporate...

STRATEGIC MANAGEMENT  Strategic Management Strategic Human Resource Management – Involves aligning initiatives involving how people are managed with organizational mission & objectives Strategic Management Process – Determining what needs to be done to achieve corporate objectives over 3 - 5 years – Examining organization & competitive environment – Establishing optimal fit between organization & its environment – Reviewing & revising strategic plan  The Process of Strategic Management Mission statement Environmental analysis Organizational self-assessment Establishing goals & objectives Setting Strategy Identify Assumptions  Mission Statement Explains purpose & reason for existence Usually very broad No more than a couple of sentences Serves as foundation for everything organization does  Solectron Mission Statement (contrast to Microsoft mission statement)  Analysis of Environment Critical components of external environment – Competition – Industry structure – Government regulations – Technology – Market trends – Economic tends  Organization Self-Assessment Identify primary strengths & weaknesses Find ways to capitalize on strengths Find ways to improve or minimize weaknesses Examine resources – Physical – Human – Technological – Capital  Organization Self-Assessment Examine internal management systems – Culture – Organization structure – Power dynamics & policy – Decision-making processes – Past strategy & performance – Work systems  Establishing Goals & Objectives Goals should be: – Specific – Measurable – Flexible  Corporate Strategies: Growth Benefits Internal Methods – Gaining economies of scale in – Penetration of existing markets operations & functions – Developing new markets – Enhancing competitive position – Developing new products or vis-à-vis industry competitors services for existing or new – Providing opportunities for markets employee professional External Methods development & advancement – Acquiring other organizations HR Issues – Vertical integration – Planning for new hiring HR Issues in M&A – Alerting current employees – Merging organizations – Ensuring quality & performance – Dismissing redundant employees standards are maintained  Corporate Strategies: Stability Maintaining status quo due to limited environmental opportunities for gaining competitive advantage Few employees will have opportunities for advancement Critical that management identify key employees & develop specific HR retention strategies to keep them  Corporate Strategies: Turnaround or Retrenchment Downsizing or streamlining organization in cost-cutting attempt to adjust to competitive environment Few opportunities & many environmental threats Important to develop HR practices to manage “survivors” Business Unit Strategies: Cost Leadership Increases in efficiency & cutting of costs, then passing savings to consumer Assumes price elasticity in demand for products or services is high Assumes that customers are more price sensitive than brand loyal HR strategy focuses on short-term performance measures of results & promoting efficiency through job specialization & cross-training  Business Unit Strategies: Differentiation In order to demand a premium price from consumers – Attempting to distinguish organizational products or services from other competitors or – Creating perception of difference Organization offers employees incentives & compensation for creativity HR strategy focuses on external hiring of unique individuals & on retaining creative employees  Business Unit Strategies: Focus Business attempts to satisfy needs of only a particular group or narrow market segment Strategic intent is to gain consumer loyalty of neglected groups of consumers Strategic HR issue is ensuring employee awareness of uniqueness of market segment – Thorough employee training & focus on customer satisfaction are critical factors – Hiring members of target segment who are empathetic to customer in target segment  Benefits of a Strategic Approach to HR Facilitates development of high-quality workforce through focus on types of people & skills needed Facilitates cost-effective utilization of labor, particularly in service industries where labor is generally greatest cost Facilitates planning & assessment of environmental uncertainty & adaptation of organization to external forces