Strategic HRM practice exam with verified solutions

strategic management a process, an approach that addresses the competitive challenges an organisation faces Components of the strategic management process Strategy formulation and Strategy implementation Brainpower Read More Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:01 / 0:15 Full screen Strategy formulation The process of deciding on a strategic direction by defining a company's mission and goals, its external opportunities and threats, and its internal strengths and weaknesses Strategy implementation The process of planning structures and allocating resources to pass the strategy chosen by a company Strategic HRM Strategic HRM is the pattern of planned HR uses and activities intended to enable an organisation to achieve its goals Strategic HRM It involves assessing the employee skills to run systems such as total quality management and just-in-time and engaging in HR practices such as selection and training that develop needed skills Administrative linkage - lowest level of integration - HRM function's attention is focused on day-to-day activities - HRM dept is separated from any component of the strategic management process in both strategy formulation and strategy implementation - dept engages in administrative work unrelated to the company's core business needs One-way linkage - firm's strategic business planning function develops the strategic plan and then informs the HRM function of the plan - recognizes the importance of human resources in implementing the strategic plan - precludes the company from considering human resource issues while formulating the strategic plan - this level of integration often leads to strategic plans that the company cannot successfully implement • Two-way linkage - allows for consideration of human resource issues during the strategy formulation process - 3 steps 1. strategic planning team informs HRM function of various potential strategies 2. HRM executives analyze human resource implications of strategies 3. HRM executive develops programs to implement the selected strategic decision - strategic planning function and HRM function are interdependent Integrative linkage - Dynamic and complex, based on continuing rather than consecutive interaction - HRM functions are built right into the strategy formulation and implementation process Porters generic strategies Cost Ways of attaining cost advantage 1. Maintain benefit parity but produce at a lower cost 2. Maintain benefit proximity (offer a benefit not much less than competitors) 3. Offer a product that is qualitatively different from competitors but still acceptable to customers (e.g. Ryanair)