Strategic Human Resource Management An Overview

Chapter 1

STRATEGIC HR MANAGEMENT DEFINED

Strategic HRM refers to the overall direction the organization wishes to pursue in achieving its objectives through people. It is argued that because intellectual

capital is a major source of competitive advantage and in the last analysis, it is people who implement the strategic plan, top management must take these key

considerations fully into account in developing its

corporate strategies

(Michael Armstrong, 2001)

Jeffrey Mello Defined

Strategic Human Resource Management as the development of a consistent, aligned collection of practices Programs and Polices to facilitate the achievement of organization's Strategic Objectives.

Goodstein, Nolan and Pfeiffer

the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future

3 Traditional Poles of Strategic Plan

1. Senior Management 2. Resources 3. Environment

3 Traditional Poles
Senior Management

Environment

Resources

People as strategic Assets

To attain the Strategic goals of the organization, employees must first understand and share the values and objectives of the organization. The challenges faced are
Integrating People with the Strategic Goals of the organization Managing employees Effectively.

Fundament task of Strategic Management

1. Environmental Analysis
2. Developing a Corporate Vision

3. Strategy Formulation
4. Strategy Implementation 5. Strategic Control

Potential Benefits of Strategic Management

1. Proactive and respond to changes 2. Optimize performance and results 3. Institutionalize process of Decisionmaking 4. Identify different levels and types of strategic options

5. Identify and prioritize opportunities and threats. 6. Improved co-ordination and control of activities 7. Reduction in bureaucracy and duplication of work. 8. Clarification of individual responsibilities. 9. Encouragement of forward thinking 10.Empowerment of employees.

The process of Strategic Management

STRATEGY GOALS AND OBJECTIVES ORGANIZATION SELF ASSESSMENT ENVIROMENTAL ANALYSIS
Resources Financial Physical Human Technology Capital Management Systems Culture Structure work systems

MISSION STATEMENT

Competition analysis Regulations Technology Markets Trends Economic trends

STRATEGY

Formulating 1. Organizational structure 2. Task design 3. Employee training 4. Reward system 5. Information system

Implementation 1. Mobilize Resources 2. Utilize Management system 3. Evaluate result 4. Renew the process (if)

Formulating Strategy
There are five important variables that determine the success of strategy.
Organizational structure Task design Employee training Reward system Information system

Formulating Strategy
Strategy formulation usually takes place with the involvement of the top management Hr and strategic management process can be linked in four ways
Administrative linkage One way linkage Two way linkage Integrative linkage.

Implementing Strategy
It is an area of activity that focuses on the techniques used by the managers to implement their strategies. It refers to activities that deal with leadership style, the structure of the organization, the information and control systems and the management of human resources.

CORPORATE-LEVEL
Focus of strategic management shifted from planning
process to quest for profit. The fundamental goal of business is to earn a return on its capital that exceed the cost of capital. there are two ways to attain this. the firm may locate in an industry where favourable conditions result in the industry earning a rate of return above the competitive level. Second , the firm may attain a position of advantage vis-a vis its competitors with in an industry, allowing it to earn a return in excess of the industry average.

 Corporate strategy defines the scope of the firm in terms of the industries and markets in which it competes. corporate strategy decisions include, Investment in diversification Vertical integration Acquisition New ventures Allocation of resources between the different business of the firm. Divestment.

BUSINESS CORPORATE LEVEL

TATA

TATA MOTORS

TCS

TATA HOTELS

FMCG

MKTNG

FINANCE

HR

PRODUCTION

OPERATIONAL LEVEL

Value Chain Analysis

Challenges For HRM

Global Business Enviroment Profitability through growth Technology Intellectual capital Adaptability

End to Chapter