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HR and Corporate Strategy. HR and Business Strategy. Human resource strategy framework.
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HR & Organizational Strategies
Chapter 3
Nisha Hariyani
HR &
Organizational Strategies
HR and Corporate Strategy
• “corporate Strategy is the overall plan for diversified business” – Michael Porter
• Three types of Corporate Strategy are– Growth– Stability– Retrenchment
HR & Business Strategy
• Corporate strategy is seen as the overall strategy related to business interests, while business strategy is designed to serve the interests of a particular business unit.
• Three types are:– Cost Leadership– Differentiation– Focus
Dyer & Holder Typology for Strategies
• It’s a fit between HR Strategy and Org Strategy to drive Corporate performance
Three strategy are:1. An investment strategy is adopted by org that
keeps track of changing market and encouraging innovation and creativity
2. Inducement strategy aims at retaining the employees by encouraging loyalty
3. Involvement strategy is one where the organization gives importance to both innovation and cost cutting.
HR strategy framework
• The steps in strategy frame work are:
• External environmental scan– Competitor/industry analysis– Stakeholder analysis– PEST analysis– Environmental Situational Factors
• Internal capital assessment
Competitor / industry analysis
Intensity of RivalryIntensity of Rivalry
Bargaining power of Buyers
Bargaining power of Buyers
Threat of New EntrantsBarriers to entry
Threat of New EntrantsBarriers to entry
Bargaining power of suppliers
Bargaining power of suppliers
Threat of substitutesThreat of substitutes
Competitor Analysis
Stake Holder Analysis
• A stake holder anaysis identifies and assesses the importance of key people, groups of people, or institutions for the organization’s success.
• Stake holders include– Shareholders,
– Employees
– Customers,
– Owners
– Government
– Communities
– Unions
– Suppliers
PEST Anaysis
• P – Political
• S – Social
• E- Economical
• T – Technological
Environmental Situational Factors
• The two major challenges that the human resources field has to face with the changing business environment. They are:
• Managing Diversity
• Demographic Trends
Reasons for evolution of diverse workforce
• Shift from manufacturing to service economy
• Globalization of the markets
• Changing business strategies
• Mergers and acquisitions
• Changing labor market
Managing diversity paradigms
• Managing diverse employees is a strategic issue and has an impact on an organization’s productivity and success.
• According to David Thomas and Robin J. Ely there are Three paradigms which guide the diversity initiatives in an organization they are
• Discrimination and fairness paradigm– Here diversity is measured by a company’s recruitment and how
it maintains a diverse workforce
• Access and legitimacy paradigm– Diversity is measured by how an organization matches internal
demographics with the external diverse customers.
• Learning and effectiveness paradigm. – Diversity is measured by connecting unique contribution to work
Diversity processes
• Diversity processes help in managing diverse employees. The main processes are:
• Cultural Audit Surveys– A survey is conducted to know employees attitude towards diversity,
organizational values and norms and the position of different diversity groups in organization.
• Awareness training– To make employees understand and sort the cultural differences.
• Skill building trainings– This helps employees to focus on the behavior and skills needed to
work in a heterogeneous environment.
• Diversity enlargement hiring strategies.
Diversity enlargement hiring strategies
• An organization will become more multicultural if it hires a more diverse workforce.
• For these practices should include– Creating diversity awareness– Involving the top management in diversity initiative program– Developing a plan of action for diversity programs– Identifying the changes required in the human resource
functions.
• Management of work teams
• Management of virtual teams
HR strategy framework
• The steps in strategy frame work are:
• External environmental scan– Competitor/industry analysis– Stakeholder analysis– PEST analysis– Environmental Situational Factors
• Internal capital assessment
Internal capital assessment
• ICA helps analyze a firm’s strengths and weaknesses in financial, technological and human resources.
• The rapid growth of the internet has also significantly affected how organizations are managed.
• HR assessment includes the analysis of the workforce, organizational culture, the changes to be implemented in the org culture and the technology to be used for effective performance of the employees.
Strategy Formulation
• Organization has to have a vision and mission for the successful implementation of HR strategy.
• Vision presents a core ideology and an envisioned future of the org
• Mission statement should describe the company’s business and its activities and the position it plans to achieve in its fields.
• The next step is to integrate HR plan with Org Plans.
Snapshot
• HR and Corporate Strategy
• HR and Bisness Strategy
• Human Resources Strategy Framework– External environmental scan
• Competitor/industry analysis
• Stakeholder analysis
• PEST analysis
• Environmental Situational Factors– Managing Diversity
– Internal capital assessment– Strategy Formulation
End to chapter no: 3
The End