2

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
 A Strategic
Perspective
What is meant when we refer to strategy
and a strategic perspective:
All firms exist in a competitive environment,
with competitors trying to attract the same
customers.
Therefore, a firm implements a strategy that
its competitors are unable to implement.

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 42
 Human Resources
and Competitive
Advantage
If a firm can
1. hire the right people
2. train them to be effective
3. place them in the right jobs
4. motivate them to work hard, and
5. retain them
then it can gain a sustained competitive
advantage.

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 43
 The Influence of Organizational
Purpose and Mission
What is an organizations purpose?
It is the organizations basic reason for
existence.
What is an organizations mission?
It is the organizations statement of how it
intends to fulfill its purpose.
Both purpose and mission affect an
organizations HR practices.

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 44
Beyond the Book:
Organizational Culture and HRM Success

Understanding
Understanding
the
the Cultural
Cultural Environment
Environment

Plays
Playsaamajor
major Have
Haveaavision
vision
Sets
Setsthe
thetone
tone Have
Haveaavision
vision
role
rolein
inshaping
shaping of
ofhow
howfirm
firm
for
forthe
the of
ofwhere
wherefirm
firm should
shouldget
get
organization
organization isisgoing
going
its
itsculture
culture there
there

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 45
Corporate Strategy and HRM
Corporate Strategy
Deals with determining what businesses the
corporation will operate.
Business strategy
Deals with how the firm will compete in each
market where it conducts business.
Functional strategy
Deals with how the firm will manage each of
its major functions (such as marketing,
finance, and human resources).
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 46
 Corporate
Strategy

Competitive Competitive Competitive

Strategy Strategy Strategy

Functional Functional Functional

Strategies Strategies Strategies

Fig 2.3 Linkage of Corporate Strategy, Competitive Strategy and Functional Strategy
Corporate Strategy and HRM
(contd)
Growth Strategy
Focuses on growing and expanding the
business, which can be pursued through
joint ventures or acquisitions.
Retrenchment Strategy
Occurs when an organizations operations
are not effective and changes are required.
Stability Strategy
Maintains the status quo.

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 48
 Diversification Strategies

Diversification Strategy
Occurs when an organization adds new
products and services.
Related Diversification
Occurs when a firm achieves synergy among
the various businesses it owns.
Unrelated Diversification
Is used when a firm operated several unique
businesses in different unrelated markets.

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 Business Strategies (contd)

The Adaptation Model

Is an approach to business strategy where a
firm seeks ways to adapt to its environment.
Basic Strategy Alternatives:
Defender strategy
Prospector strategy
Analyzer strategy
Reactor strategy

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 Business Strategy Alternatives

Defender Strategy Prospector Strategy

Works best in an environment Works best in dynamic and
with little uncertainty and risk growing environments with much
and a high degree of stability uncertainly and risk

Analyzer Strategy Reactor Strategy

Works best in stable conditions Represents the strategic failure
with a moderate degree of of a firm to respond properly to
uncertainly and risk its competitive environment

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 Comparison between Defender and
Prospector Strategy and related HRM
Business Strategy& Defender Prospector
Strategy
HRM Strategy

Product-market Limited, stable product line Broad, changing product line

strategy Predictable markets Changing markets

Growth through market Growth through product

penetration development and market

development

Basic Strategy Building human resources Acquiring human resources

Recruitment & Emphasis: "making of human Emphasis: buying of human

Selection resources resources

Little recruiting above entry Sophisticated recruitment at all

level levels
 Comparison between Defender and
Prospector Strategy and related HRM
Strategy
Business Defender Prospector

Strategy& HRM

Strategy

Training & Formal, extensive skill building Informal, limited

Development Extensive training programs Skill identification and acquisition

Limited training programs

Performance Process-oriented procedure Results-oriented procedure

Management Time-series comparisons (for example, Evaluations based on cross-sectional

previous years' performance will be comparisons (for example, what

taken into account while judging the others have done during the same

current years performance) period)

 Comparison between Defender and
Prospector Strategy and related HRM
Strategy
Business Defender Prospector

Strategy& HRM

Strategy

Compensation Oriented towards position in Oriented towards performance

Management organization hierarchy [Seniority will be Focused on External competitiveness

valued while deciding compensation] Total compensation heavily oriented

Focused on Internal consistency towards incentives and driven by

Total compensation heavily oriented recruitment needs

towards cash and driven by superior-

subordinate differentials
 Fig 2.4 Human Resource Strategies

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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 415