STRATEGIC HUMAN

RESOURCE MANAGEMENT
CHAPTER 1
Instructed by: Dina Shafiey

Ground Rules

Process in Brief
Contacts
Lateness and break times
Absenteeism
Assignments
Text Book
Assessments
Final Exam and Team
presentation

Agenda

Chapter 1 Learning objectives

Introduction
Strategy and Strategy Making
Strategic Management and its links to
HRM
The resource-based view of organization
and its links to HRM

1 Strategy and human resource

management
Learning Outcomes
By the end of this chapter you should be
able to:

Define the term strategy.

Describe and evaluate a range of approaches to
strategy making.
Analyze links between different approaches to
strategy and human resource management (HRM).
Understand the significance of strategic integration
to explore links between strategy and HRM and its
multi-dimensional nature.
Analyze the resource-based view of the organization
and describe key concepts related to this approach.
Describe and evaluate links between resource-based

Agenda

Chapter 1 Learning objectives

Introduction
Strategy and Strategy Making
Strategic Management and its links to
HRM
The resource-based view of organization
and its links to HRM

Introduction

SHRM is concerned with the relationship

between the organization's strategic
management and the management
of its human resources

Strategic management focuses on the

scope and direction of an organization

Introduction (Contd)
What is Strategy?
How is Strategy
formed?

Figure 1.1 Mapping the strategy and human resource management territory: a
summary diagram of the chapter content

Agenda

Chapter 1 Learning objectives

Introduction
Strategy and Strategy Making
Strategic Management and its links to
HRM
The resource-based view of organization
and its links to HRM

Strategy and Strategy

Making

4 Approaches to strategy and strategy

making ( by Mintzberg, 1998)

Classical Approach
Evolutionary Approach
Processual Approach
Systemic Approach

Classical Approach

Developed as a theoretical discipline in

the 1960s
Emphasis strategy as being:

Rational
Deliberate
Linear
Top-down process

Classical Approach (Contd)

This process involves a number of

strategic planning steps including:
Analyzing organization's
environment and its internal
resources
Identifying and evaluating
strategic options
Implementing chosen strategy

Classical Approach (Contd)

A range of techniques and tools used
SWOT analysis has been used widely
These techniques leads senior
managers to identify a range of
strategic options to choose the
future organization strategy
The goal is to achieve competitive
advantage over competitors or to
produce organizational effectiveness

Evolutionary Perspectives

Advocates see organization and its

managers as being subordinates to the
external environment, with
managements role as one of reacting to
environmental forces.

Managements role is to match strategy

to these external forces.

Processual Approach

Identifies strategy as an adaptive and

emergent process, driven by learning in
an organization.

The formulation and implementation of

strategy become more integrated.

Strategies are formed through action.

Processual Approach
(Contd)

Evaluating the processual approach:

Emergent strategy making emphasizes

Learning,
Deliberate strategy emphasizes control
(Classical approach seeks to emphasize
management control over strategy)
The role of organizational leaders to
develop an approach to strategic
management that exercises control while
facilitating learning.

Systemic Perspectives

Based on the belief that strategy and

strategy making will be affected by the
Social and Cultural system within
which this occurs

Systemic Perspectives
(Contd)

Evaluating the systemic approach:

Just as it is important to recognize that

there will be variations to strategy
formation within a particular country, the
systemic approach recognizes that there
will be differences related to cultural
grounds between societies, thereby
invalidating the idea of any universalistic
model of strategy formulation.

Agenda

Chapter 1 Learning objectives

Introduction
Strategy and Strategy Making
Strategic Management and its links to
HRM
The resource-based view of organization
and its links to HRM

Strategic Management and its links to

HRM

Different approaches to strategic

management impact the formation of HR
strategy

To be strategic HRM needs to

demonstrate a two-way link to strategy.
HRM will be informed by organizational
strategy as well as helping to shape the
nature of this strategy.

Classical approach to strategy making

and HRM

This model follows assumptions of classical

approach in separating strategy formulation from
its implementation.
Strategy formulation composed of 3 linear
elements:
1.

2.

3.

Establishing organization's vision, mission, values and

general strategy, then identifying HRM implications.
Identifying a range of strategic business issues and
establishing strategic business objectives
Crafting specific plans to achieve vision, mission,
values and objectives..etc, which also leads to
identifying HR implications of such business
strategies.

Classical approach to strategy making

and HRM

Strategy implementation includes

developing and implementing HR plans
using the four-task model of HRM:
1.
2.
3.
4.

Engage in HR planning
Develop required employee competencies
Ensure required role behaviors
Promote employee motivation

Evolutionary perspectives to strategy and

HRM

Managers strategic choice would be minimized

in circumstances where environmental factors
controlled the fate of an organization and HR
strategy would need to be closely matched to
the organizational strategy determined by these
factors in order to achieve success.
Success depends on the capability of managers
to identify and interpret key environmental
variables, so that organizational and HR
strategies as adapted as well to environmental
circumstances.

Processual approach to strategy making

and HRM

The existence of an emergent strategy will need

to be recognized and appropriate HR strategies
introduced to encourage the behaviors required
to promote and support this approach.
The development of emergent strategies in
organizations is based on learning.
This needs to be recognized and supported
through HR strategies related to, recruitment
and selection, training and development, reward
and strategies related to organizational
development and structure.

Systemic perspectives to strategy and

HRM

Institutional differences between

countries will affect strategic choice
about organizational and HR strategies.
The way HR strategy is integrated into
organizational strategy will vary based
on societal and cultural values

The multi-dimensional nature of strategic

integration

Integration is used to explore possible links

between different approaches to strategy
and HRM.
Integration may be a two-way process (HRM
informs the nature of organizational strategy
as well as being informed by it FULL
INTEGRATION), one-way process
(organizational strategy informs HRM without
being informed by it in any intended or
planned way - PARTIAL INTEGRATION)

The multi-dimensional nature of strategic

integration (Contd)

Strategy may be made at a number of

levels in an organization
Strategy made at one level (specially
higher levels) of an organization will
affect decision-making at other levels
3 Levels or orders of strategy

The multi-dimensional nature of strategic

integration (Contd)

The Highest level (First Level)

Overall or corporate strategy of an organization Upstream

First-order decisions to indicate their status in relation to lowerorder ones and the likely way in which other levels of strategy
will flow from these higher-order strategies
Concerned with long-term direction and scope of the
organization
Multi-product and multi-divisional firms have to make a
distinction between corporate and business strategies
Corporate strategies: taken at center, covering entire enterprise
(ex; stability, growth, Retrenchment/withdrawal, combination..),
affect 2nd and 3rd level strategies including HR strategy
Business strategies: taken lower down at division or businessunit level and related to the products made and the markets
served.

The multi-dimensional nature of strategic

integration (Contd)

Second and Third levels of strategy are seen

as down-stream of corporate strategy
The Second level of strategy

Concerns the organizational structures and

operating procedures put in place to support
first-order decisions

The Third level of strategy

Concerns functional strategies including HRM

Developed in the context of the first two levels

The multi-dimensional nature of strategic

integration (Contd)

Ex. A decision to merge with or take over another

organization (first-order / first level)
Followed by a set of decisions governing structures
and relationships of the new organization (might
include delayering, increasing accountability to
business units, decentralization..etc.; which impact
HR areas as roles performed by employees, reporting
relationships, and management style)
Functional areas define their strategies (third level) in
accordance to the first two levels and the external
environmental factors operating on the organization

Figure 1.3 Strands of strategic integration

Figure 1.4 Strands of strategic integration shown in a hierarchical relationship and

related to external variables

Agenda

Chapter 1 Learning objectives

Introduction
Strategy and Strategy Making
Strategic Management and its links to
HRM
The resource-based view of organization
and its links to HRM

The resource-based view of organization

and its links to HRM

Resource-based theory was analyzed

because of its recognition of an
organization's internal resources as a
potential source of competitive
advantage.
Forms of organizational capability were
analyzed and their relationship to human
resource management were evaluated.

The resource-based view of organization

and its links to HRM

Organizational Capability

Capacity of the organization to act and

change in pursuit of sustainable
competitive advantage.

Coordination flexibility
The

ability to rapidly reallocate resources to

new or changing needs.

Resource flexibility
Having

human resources who can do many

different things in different ways.

Figure 1.5 Resource-based approach to strategy

Source: Developed from Grant (1991)

Strategic HRM (Concepts and

Models)

Integration of business strategy and HR

strategy:

Linking of HR policies and practices with

the strategic management process of the
organization

Internationalization of the importance of

HR on the part of line managers

Integration of the workforce into the

organization to foster commitment

More Practice
Assignment 1
Solving Self-check and
Reflect Questions (P.13,
18, 23, 35)
Read Part 1 Case Study
(Book p.108)
Strategic Human
Resource Management
at Halcrow Group

Q & As

Thank You