STRATEGIC HUMAN RESOURCES MANAGEMENT Alexandra Ion

1. STRATEGIC HUMAN RESOURCES MANAGEMENT Alexandra Ion

2. Work in progress!

3. About… HR roles M.V.V. Integrating HR strategy Analysis methods HR strategy tools What is strategy? Challenges

4. What is Strategy? Overall definition: "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations". Johnson and Scholes (Exploring Corporate Strategy)

5. What is Strategy? HR Definition: A "big picture" approach to HR, which means planning and operating HR programmes to make a direct contribution toward meeting major corporate long-term objectives; solving "business" problems through the effective use of people management programmes.

6. Analysis methods • Porter’s five forces • S.W.O.T. • B.C.G. • Ansoff • Action priority matrix • Value chain

7. Porter’s five forces(competitive analysis) The big idea Five fundamental competitive forces that determine the relative attractiveness of an industry: New entrants Bargaining power of buyers Bargaining power of suppliers Substitute products and services Rivalry among existing competitors When to use it For each of the five forces, consider how well your company can compete

8. Porter’s five forcesmodel

9. Porter’s five forcesmodel • + • Most widely used and recognized model for strategic analysis • - • The organization’s intrinsic strengths and ability to develop its competencies INDIPENDANTLY of the external forces is a largely untouched aspect (the model is rather REACTIVE than PRO-ACTIVE) • The model is best used in combination with an inside-out approach.

10. S.W.O.T. Any company undertaking strategic planning will, at some point assess its strengths and weaknesses When combined with an inventory of opportunities and threats in (or even beyond) the company’s external environment, the company is effectively making what is called a SWOT analysis. • SWOT establishes its current position in the light of its strengths, weaknesses, opportunities and threats.

11. S.W.O.T; factors to consider

12. S.W.O.T. analysis

13. S.W.O.T. • + • The value of SWOT analysis: it constitutes a self assessment for management • - • Far more complex than at first sight • It offers no assistance to translate the elements into strategic alternatives • Inherent risk of making incorrect assumptions

14. B.C.G. Boston Consulting Group matrix Based on Product Life Cycle theory and can be used to determine what priorities should be given in the product portofolio of a business unit. • 2 dimentions: market share and market growth

15. B.C.G.

16. B.C.G. • + • Help understand a frequently made strategy mistake: having a one size fits all approach • - • High market share is not the only success factor • Market growth is not the only market attractiveness indicator • Sometimes Dogs can earn even more cash than Cash cows

18. Ansoff’s grid • 2 dimensions determine the scope of options (growth of vectors), namely PRODUCTS and MARKETS • 4generic growth strategies: • Market penetration • Market development • Product development • Diversification • 5 components of corporate business strategy • Product/market scope • Growth vector • Competitive advantage • Synergy • Make or buy

19. Ansoff’s grid

20. Ansoff’s grid • + • Model still valid, used by marketing strategists • Serves as a means to describe product-marketing opportunities and strategic options • Excellent framework for exploration, description and strategic dialogue • - • Used in isolation, the model can do little to determine the best strategy

21. Core competencies A core competency is a specific factor that a business sees as being central to the way it, or its employees, works. • It fulfills two key criteria: • It is not easy for competitors to imitate • It can be leveraged widely to many products and markets It may also include product development or culture, such as employee dedication!!!

22. Competences analysis

23. Do you picture it?

24. Value chain A value chain is a chain of activities for a firm operating in a specific industry. Products pass through all activities of the chain in order, and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. • It is important not to mix the concept of the value chain with the costs occurring throughout the activities!!!

25. Value chain

26. Value chain • + • The concept of value added, in the form of the value chain, can be utilised to develop an organisation’s sustainable competitive advantage • - • It describes an industrial organization which essentially buys raw materials and transforms these into physical products • The ‘value’ for the final customer is the value only in its theoretical context and not practical terms

27. WARNING! Models and theories offer not solutions to organizational problems, but rather ways to reduce the complexities and uncertainties involved – nothing more, but definitely nothing less.

28. WARNING! In the world of management and organization, it is fortunately still ideas that really matter, and not models.

29. Q & A

30. Q & A

31. M.V.V.

32. Mission What do we do? While your mission should refer more specifically to the type of business you do or products you sell, it can also encompass what you feel your organization's contribution will be to your industry, community, or to the world. Your mission statement may change if your company outlives the industry it started in, but it should still tie back to your core values and vision.

33. Dell Computers - "With the power of direct and Dell's team of talented people, we are able to provide customers with superb value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use".

34. Values Who are we? Core values identify 3-5 terms that describe the forces that drove you to form and grow your organization. They encompass your ethics, principles, and beliefs about your organization and its relationship to the world. Core values are immutable, values that remain the same for the life of your organization.

35. "integrity, honesty, openness, personal excellence, constructive self-criticism, continual self-improvement, and mutual respect" - Microsoft

36. Vision Why are we here? Vision is the reason your company exists. The world changes, technology changes, so your vision statement need not refer to your product. It conveys why you are in this business (and not another). It ties directly back to your core values. If the market changed dramatically, your vision should remain intact because it speaks to what your company represents, not just what it does.

37. NASA: "Man on the moon by the end of the decade “ SIEMENS: “Where technology touches lives” HYUNDAI: “Building a better world through innovative technology” NOKIA: “Connecting people” XEROX: “The document company” DU PONT: “Better things for better living through Chemistry”

38. M.V.V. and HR

39. Integrating HR strategy with corporate and functional strategy

40. HR Roles (as defined by ASTD-American Society for Training and Development) • Recruitment/selection/staffing • Planning, organization and job design • Career development • Organization development • Training and development • Research and information • Labor relations • Employee assistance and support • Compensation and benefits administration

41. HR Cycle Margin Budgeting Y M.V.V. Strategy & Objectives Marketing HR Policies & Procedures / Action Plans HR Results HR Productivity Innovation N Set priorities Financial Resources Physical Resources Objectives Accomplished CSR Continuous Learning Improvement Competencies Development (long term) Y Compensation & Reward Performance evaluation Organizational Results …revise Objectives (SMART) …see other Internal Factors …see other External Factors …manage Change …? N Recruitment External Competencies N Y HR Results Right Competencies Develop internal Competencies Training

42. HR Strategy • Explicitly recognizes the impact of the outside environment • Explicitly recognizes the impact of competition and the dynamics of the labor market • Has a long-range focus (3-5 years) • Focuses on the issue of choice and decision making • Considers all personnel, not just hourly or operational employees • Is integrated with overall corporate strategy and functional strategies

43. The Challenges • The Environment • Rapid change • Work force diversity • Globalization • Legislation • Work/Life • Skill shortages

44. The Challenges • The Organization • Competitive position: Cost, Quality, Distinctive capabilities • Decentralization • Downsizing • Organizational restructuring • Self-Managed work teams • Organizational culture • Technology • Outsourcing

45. The Challenges • The Individual • Matching People and Organization • Productivity • Empowerment • Brain Drain • Job Insecurity • Ethical Issues and Social responsibility

46. WARNING! All managers are HR Managers! Shared responsibilities between HRM-Line Managers

47. WARNING! Staff people: service representatives (advising, helping, providing expert guidance and support for decisions); must understand the business (ideally coming from business) Line managers: internal clients (must become knowledgeable about HR issues)

49. Tools • G.A.P.S. map • Helicopter thinking • Influence diagram • Financial business case

50. G.A.P.S. map Go for SHOULD Analyze the IS Pin the CAUSES Select the right SOLUTION