Strategy and Strategic Organizational Behavior

MHR 3200 Dr. Larry Inks Department of Management and Human Resources Fisher College of Business The Ohio State University

Overview
Organizational Behaviors RootsHuman Relations Strategic Management Strategic Human Resource Management Case in Point: Cirque du Soleil Current Strategic Issues Involving HRM Human Resource Strategic Issues/Questions

Human Relations Movement

Increasing numbers of studies/writings from behavioral scientists focusing on the human factor - Mary Parker Follett (1920s) - Elton Mayo The Human Problems of an Industrial Civilization (1933) - Hawthorne Studies (1927-1932) Collective bargaining legalized in 1935 Management looking for other ways to manage the workforce McGregors The Human Side of the Enterprise and his Theory Y (1960)

McGregors Theory Y (vs. Theory X)

Theory X Assumptions - People dislike work and avoid it whenever possible - People need to be coerced to work - People require close supervision at all times - Most people prefer to be directed, have little ambition and avoid responsibility Theory Y Assumptions - Work is seen as a natural activity, like play or rest - Given objectives, people can be very self-directed - People become committed to objectives with some reward - Most people are ambitious and can accept (and seek out) responsibility

Human Capital As a Key Strategic Asset

Organizations can use their resources and competencies (e.g., human capital) to create value for customers by lowering costs, providing something of unique value, or some combination of the two. This is a strong source of competitive advantage. What Makes Human Capital a Source of Competitive Advantage? Value Rareness Not easily imitated Not easily substituted or replaced Organization able to successfully utilize the resource

This is part of the Resource-Based View of the Firm

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Individual Human Capital and Social Capital

Individual Human Capital Visions and aspirations Intellect, knowledge, etc. Technical and social skills Confidence/self-esteem Enthusiasm Motivation and commitment Honesty and integrity Persistence Initiative/entrepreneurship Emotional maturity etc. Social Capital Shared visions/goals Shared values and culture Trust, mutual respect, etc. Friendship and supportiveness Engagement Cooperation/collaboration Team effectiveness Mentoring/role modeling Functional vs. dysfunctional conflict - Organizational citizenship - etc.

But the human capital/social capital link is not a given

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Strategic Management
Critical to an organizations success

Addresses the competitive challenges faced by the organization

A plan for integrating goals, tactics, policies and actions into a meaningful whole Has two primary elements - Strategy Formulation - Strategy Implementation Corporate Social Responsibility and ethics continue to play an ever-increasing role in strategic planning

Elements in Strategy Formulation

External Analysis - Opportunities - Threats

Vision

Mission

Goals

Strategic Plan

Internal Analysis - Strengths - Weaknesses

SWOT Analysis is a commonly-used tool here

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One Approach to Strategy Implementation

Galbraiths Star Model Focuses on 5 critical elements of organization functioning:
Strategy
Dont design an organization based on people. Design it how it should be and then fill roles.

People

Structure

Metrics & Rewards

Systems & Processes

All elements need to be aligned for organization to succeed

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Ideal Linkage Between HCM and Strategic Plan

Everything needs to be linked back to the strategic objectives
Human Capital Needs
Skills Behavior Culture

HC Practices
Recruiting, Training, Performance management, Labor relations, Employee relations, Job analysis Job design, Selection, Development, Pay structure, Incentives, Benefits

Strategic Plan

Firm Performance Productivity, Quality, Profitability

Human Capital Capability

Skills, Abilities, Knowledge

Human Capital Actions

Behaviors, Results

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Corporate Social Responsibility

Corporate Social Responsibility is something that can be integrated into an organizations strategic plan(s), namely by: 1) Making a profit consistent with expectations for international business to fulfill economic responsibility 2) Obeying both host country and international law 3) Acting ethically by considering both host country and global standards 4) Being good corporate citizens and fulfilling the host countrys expectations for philanthropic responsibility

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Improving the Ethical Climate

Actions that improve an organizations ethical climate include:

1) Demonstration of ethical behavior from leaders

2) Careful recruitment and selection of new employees 3) Developing a meaningful and real code of ethics 4) Training employees to better deal with ethical issues 5) Use operant conditioning to drive ethical behavior 6) Incorporate structural mechanisms to deal with ethics issues

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Case in Point: Cirque du Soleil

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Cirque du Soleil Mission Statement Invoke, provoke and evoke the imagination, the senses and the emotions of people around the world.

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Cirque du Soleil Facts

Founded: June 1984

Number of employees: 5,000

Number of artists: Over 1,300 Average age of employees: 32 Number of nationalities: Over 50 Languages spoken: Over 25 Number of cities visited since 1984: Over 130 Number of spectators since 1984: More than 100 million

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Current Cirque du Soleil Shows (21)*

Touring Shows
- Alegra (Germany, Austria, Serbia, France, Israel,
Greece, Turkey, The Netherlands, Spain)

Resident Shows in Las Vegas

- Criss Angel Believe - K - The Beatles LOVE - Mystre -O - Viva ELVIS - Zumanity Other Resident Shows - La Nouba (Walt Disney World, FL) - Iris (Los Angeles, CA)

- Amaluna (Canada, USA) - Corteo (Belgium, Switzerland, Germany) - Dralion (USA) - Kooza (USA, UK) - Michael Jackson Tour (North America, UK,
Denmark, Sweden, Finland, Russia, Germany, Austria, Spain, Czech Republic)

- Ovo (Australia) - Quidam (Canada, USA) - Saltimbanco (Italy, Jordan, Qatar, China,
Singapore, Phillippines)

- Totem (USA) - Varekai (Brazil, Argentina) - Zarkana (USA)

* As of July 2012

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Class Discussion
Circular structure, see eye to eye Hire people only if someone from that nationality already there

If they forget the mission, go to a show

Ideas for new shows come from performers

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Current Strategic Issues Involving HRM

Mergers and Acquisitions - Cultural fit - Leadership team Offshoring (done in different country) vs outsourcing (paying someone else to do it); can be both Downsizing/rightsizing (pol correct way to say it)

Business Process Outsourcing (BPO)

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HR Content Areas and Strategic Issues/Questions - not tested on

Elements of Recruitment
Levels of candidates (junior, middle, senior level) Sources of candidates (internal, universities, other companies, professional associations, websites, etc.) Who does recruiting (internal function, external recruiters, etc.) Compensation issues (compensation, bonus, buyout of options, etc.)

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Elements of Selection/Staffing
Determining the tools, systems to use (interviewing, testing, etc.) Criteria for assessment/selection (e.g., skills)

Identifying/managing the assessment team

Onboarding and orienting the new employee

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Elements of Performance Management

Good understanding of whats required on the job (job description, success profile, etc.) Ongoing, regular feedback (both positive and constructive)

Comprehensive development discussion with suggestions for improvement in the future

Annual (typically) performance review and discussion

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Elements of Training and Development

Awareness and acceptance of individual strengths and weaknesses

Understanding of competencies, skills, etc. needed for success

Variety of developmental actions/methods - Formal programs (e.g., training) - Working with others (e.g., mentoring, coaching) - On the job/experiential development

Formal action planning and follow-up

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Elements of Compensation and Benefits

Identification of different pay elements (e.g., base compensation, variable compensation, etc.)

Identification of other elements (e.g., stock-related)

Appropriate balance of these across levels and/or groups within the organization Benefits plans that are consistent with strategy Decisions on consistency in these areas across the organization (e.g., paid time off/vacation)
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Review
Organizational Behaviors RootsHuman Relations Strategic Management Strategic Human Resource Management Current Strategic Issues Involving HRM Human Resource Strategic Issues/Questions

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What Questions Do You Have?