Unit 1 - Strategy
HR Role in Strategy
• Strategy - The formulation of organizational missions, goals, objectives, and action plans for achievement that explicitly
recognizes the competition and the impact of outside environmental forces.
• Defines the organization’s intentions.
• Strategic Planning - Procedures for making decisions about the organization’s long-term goals and strategies
• Human Resources Planning - The process of anticipating and providing for the movement of people into, within and out
of an organization.
• Strategic Human Resources Management - The pattern of human resources deployments and activities that enable an
organization to achieve its strategic goals.
• Descriptions of Strategy
• Strategy Formulation - The process of conceptualizing the organization’s mission, identifying its strategy, and
developing long-range organizational performance goals
• Benefits
• Clarity of purpose - helps create employment brand
• Coordination across organization - shape organizational structure
• Efficiency - developing metrics
• Incentives - achievement of strategy is rewarded
• Change - helps identify the need to change
• Career Development - easier for employees to contribute
• Strategy Implementation - The act and acts of putting long, mid, and short-range plans into place. These are activities
that employees and managers undertake to enact the strategic plan and achieve performance goals
• Aligning HR Strategy with Business Strategy
• Create an HR strategy based on the existing business strategy
• Supports business
• Create the business strategy based on the required HR strategy
• Decided based on employment workforce availability (ie. engineering)
• Use an iterative approach to develop the HR and business strategies simultaneously, recognizing a “reciprocal
interdependency” between the two
• Interdependency, reciprocal
Environmental Factors and Corporate Strategies
Environmental Factors
• Economic Climate - track unemployment, trade
• Globalization - growth across border
• GLocal - think global, but act local
• Political and Legislative Factors - arena in which compete for resources with body of laws
• Influence employment standards, health & safety
• Demographic Factors - biggest challenge for HR, Labour Market
• Social/Cultural Factors
, Corporate Strategies
• Corporate Strategy - Considers how we structure the overall business, so all of its parts create more value together
than they would individually. Organizational-level decisions that focus on long-term survival.
• Helps to find where to focus energy
• Differs from business strategy (which can be Line of Business specific)
• Types
• Restructuring - Reorganizing structures to be more profitable
• Turnaround Strategy - An attempt to increase the viability of an organization
• Divestiture - The sale of a division or part of an organization
• Typically done to maximize profit
• Some areas can become redundant
• Liquidation - The termination of a business and the sale of its assets
• Not altogether bankrupt
• May allow resources to find other areas of business
• Bankruptcy - A formal procedure in which an appointed trustee in bankruptcy takes possession of a business’
assets and despises them in an orderly fashion.
• Can no longer pay depts
• HR oversees downsizing, severance and pay
• Growth
• Incremental Growth - Is attained by expanding the client base, increasing products/services, changing the
distribution networks or using technology
• International Growth - Is attained by seeking new customers or markets by expanding internationally
• Acquisition - The purchase of one company by another
• Faster, easier way to grow
• Merger - When two organizations combine resources and become one
• Questions: how to deal with overlap, which culture should be adopted
• Stability
• Maintenance strategies where companies do not wish to see their companies grow and so their strategic HRM
practices remain constant
• Status quo, neutral or do-nothing strategies. Wait and see approach
• Eventually lead to a retrenchment (similar to restructuring) strategy
International Human Resources Management
• Definition - Examination, creation and management of HR management issues, functions, policies and practices that
result from the strategic activities of a multinational enterprise and that affect the international concerns and goals of
that enterprises.
Differing Corporation Types
• International Corporation - A domestic firm that uses its existing capabilities to move into overseas markets
• Honda, General Electric, Proctor & Gamble
• Multinational Corporation (MNC) - A firm with independent business units operating in multiple counties
• Shell, Philips
• Global Corporation - A firm that has integrated worldwide operations through a centralized home office
• Matsushita, NEC
• Transnational Corporation - A firm that attempts to balance local responsiveness and global scale via a network of
specialized operating units
HR Role in Strategy
• Strategy - The formulation of organizational missions, goals, objectives, and action plans for achievement that explicitly
recognizes the competition and the impact of outside environmental forces.
• Defines the organization’s intentions.
• Strategic Planning - Procedures for making decisions about the organization’s long-term goals and strategies
• Human Resources Planning - The process of anticipating and providing for the movement of people into, within and out
of an organization.
• Strategic Human Resources Management - The pattern of human resources deployments and activities that enable an
organization to achieve its strategic goals.
• Descriptions of Strategy
• Strategy Formulation - The process of conceptualizing the organization’s mission, identifying its strategy, and
developing long-range organizational performance goals
• Benefits
• Clarity of purpose - helps create employment brand
• Coordination across organization - shape organizational structure
• Efficiency - developing metrics
• Incentives - achievement of strategy is rewarded
• Change - helps identify the need to change
• Career Development - easier for employees to contribute
• Strategy Implementation - The act and acts of putting long, mid, and short-range plans into place. These are activities
that employees and managers undertake to enact the strategic plan and achieve performance goals
• Aligning HR Strategy with Business Strategy
• Create an HR strategy based on the existing business strategy
• Supports business
• Create the business strategy based on the required HR strategy
• Decided based on employment workforce availability (ie. engineering)
• Use an iterative approach to develop the HR and business strategies simultaneously, recognizing a “reciprocal
interdependency” between the two
• Interdependency, reciprocal
Environmental Factors and Corporate Strategies
Environmental Factors
• Economic Climate - track unemployment, trade
• Globalization - growth across border
• GLocal - think global, but act local
• Political and Legislative Factors - arena in which compete for resources with body of laws
• Influence employment standards, health & safety
• Demographic Factors - biggest challenge for HR, Labour Market
• Social/Cultural Factors
, Corporate Strategies
• Corporate Strategy - Considers how we structure the overall business, so all of its parts create more value together
than they would individually. Organizational-level decisions that focus on long-term survival.
• Helps to find where to focus energy
• Differs from business strategy (which can be Line of Business specific)
• Types
• Restructuring - Reorganizing structures to be more profitable
• Turnaround Strategy - An attempt to increase the viability of an organization
• Divestiture - The sale of a division or part of an organization
• Typically done to maximize profit
• Some areas can become redundant
• Liquidation - The termination of a business and the sale of its assets
• Not altogether bankrupt
• May allow resources to find other areas of business
• Bankruptcy - A formal procedure in which an appointed trustee in bankruptcy takes possession of a business’
assets and despises them in an orderly fashion.
• Can no longer pay depts
• HR oversees downsizing, severance and pay
• Growth
• Incremental Growth - Is attained by expanding the client base, increasing products/services, changing the
distribution networks or using technology
• International Growth - Is attained by seeking new customers or markets by expanding internationally
• Acquisition - The purchase of one company by another
• Faster, easier way to grow
• Merger - When two organizations combine resources and become one
• Questions: how to deal with overlap, which culture should be adopted
• Stability
• Maintenance strategies where companies do not wish to see their companies grow and so their strategic HRM
practices remain constant
• Status quo, neutral or do-nothing strategies. Wait and see approach
• Eventually lead to a retrenchment (similar to restructuring) strategy
International Human Resources Management
• Definition - Examination, creation and management of HR management issues, functions, policies and practices that
result from the strategic activities of a multinational enterprise and that affect the international concerns and goals of
that enterprises.
Differing Corporation Types
• International Corporation - A domestic firm that uses its existing capabilities to move into overseas markets
• Honda, General Electric, Proctor & Gamble
• Multinational Corporation (MNC) - A firm with independent business units operating in multiple counties
• Shell, Philips
• Global Corporation - A firm that has integrated worldwide operations through a centralized home office
• Matsushita, NEC
• Transnational Corporation - A firm that attempts to balance local responsiveness and global scale via a network of
specialized operating units
