SHRM-BUSINESS ACUMEN LATEST
UPDATE
v Business Acumen Competency - The Business Acumen competency allows HR professionals to apply
knowledge of an organization's business model and competitive situation when solving workforce
problems. It can be combined with other competencies, such as Critical Evaluation, Consultation, and
Communication, to deliver strategic support to HR's organization.
Value - An organization's success in meeting it's strategic goals. Before strategic planning can begin, an
organization must consider this question of value: how it creates value and what activities are critical to
the creation, retention, and increase of value. HR must understand varying perceptions of value because
they will drive strategic goals throughout the organization and affect the ways in which HR can support
the organization in its entirety. -value is not the same as organizational values. Value is derrived from
financial, people, technological and physical assets.
Value Chain - Or Business Model is the process by which an organization creates the product or service it
offers to the customer. Includes primary activities(which directly contribute to value
created...operations/sales) & secondary activities(indirectly contribute to value...management/HR/IT) By
identifying key value-producing activities, the value chain helps HR and leaders invest resources in the
right activities.
How does HR add value? - Contributing quality talent pools/managing labor supply/developing
leaders/acquiring strategically important areas of talent
Global Value Chain - Consists of multiple organizations producing parts of a good or service across
geographical regions, with each link adding value to the chain. Layers different locations onto different
functions and can be complex to manage. However, it enhances opportunities to reduce risk, share
knowledge, and achieve economies
Stakeholder Concept - Proposes that any organization operates within a complex environment in which it
affects and is affected by a variety of forces or stakeholders who all share in the value of the organization
-internal and external stakeholders are the receivers of the org's value and they perceive that value in
different ways
Industry, Business or Product Life Cycle - Includes 4 phases: Introduction, Growth, Maturity and then
either renewal, no growth, or Decline
-HR has key role in each area of the Business or product life cycle and must know where business lies in
cycle to shift HR strategy accordingly
Macroenvironment - all the factors that exist outside the organization that could influence an
organization's strategic decisions. These factors include: Industry and market conditions/events and
trends in society that might impact future talent supply, compliance requirements, and ee needs.
Michael Porter's Five Forces - This model is used to identify opportunities and threats, foresee possible
changes in the competitive landscape, and plan strategy.
, -threat of substitution, bargaining power of suppliers, bargaining power of buyers, threat of entry, rivalry
among competitors
MP 5 forces - Threat of Substitution - How easy is it for a competitor to capture customers by offering a
similar product or a product that satisfies the same need but perhaps in a different way? If the threat is
high, an organization may be forced into competing on price, and HR will need to develop a strategy that
promotes cost efficiency. If the threat is low, the organization will have more capital to invest. HR may
focus on developing an entrepreneurial culture.
MP 5 Forces - Threat of Entry - How easy is it for a new competitor to enter the industry? If the threat of
entry is high, management and the workforce must be nimble. HR professionals must examine the
organization's structure to support rapid decision making and response.
MP 5 Forces Bargaining Power of Suppliers - Are there few suppliers or many? What would happen if a
supplier went out of business or was bought by a competitor? If the bargaining power of suppliers is
high, HR must be sure that the job descriptions include skills such as negotiation and managing risk and
competencies such as Ethical Practice and Relationship Management.
MP 5 Forces Bargaining Power of Buyers - How vulnerable is the organization if buyers exert more
influence? If high, marketing competencies are key. HR may need to align compensation practices to
motivate marketing and sales toward behaviors important to the organization's strategic objectives—
e.g., developing long-term or sole-source relationships.
MP 5 Forces - Rivalry Among Competitors - All of the other forces have the potential to increase the
intensity of competition within the industry. A concentration of suppliers or buyers will trigger
competition, and the insecurity caused by easy entry into the market and substitution can lead to price-
cutting wars and product or service design aimed at locking customers in.
How to improve HR environmental awareness - Read the business press, stay current with the latest HR
research, analyze the organization's performance, monitor the performance of other organizations,
become regular users of third-party information, scan annual reports from businesses or groups with
comparable markets and workforces **also HR should advocate for their businesses when legislation
comes up that may make things more difficult for them to compete sucsessfully
Strategy - A plan of action for accomplishing an organization's long-term goals to create value
Strategic Planning - The process of setting goals and designing a path towards a competitive position
Strategic Management - The actions leaders take to move the organization toward set goals to achieve a
competitive position.
Business Intelligence - Raw data, internal and external to an organization, that is translated into
meaningful information for decision makers to use in taking strategic action.
Three basic components of a business intelligence system (data gathering/data warehousing/query and
reporting) - A business intelligence system is designed to provide leaders with more data and better
means to analyze the data. This allows leaders to make better decisions that are based on actual data
rather than on "instincts" or "best guesses." It does not necessarily improve data security, especially
UPDATE
v Business Acumen Competency - The Business Acumen competency allows HR professionals to apply
knowledge of an organization's business model and competitive situation when solving workforce
problems. It can be combined with other competencies, such as Critical Evaluation, Consultation, and
Communication, to deliver strategic support to HR's organization.
Value - An organization's success in meeting it's strategic goals. Before strategic planning can begin, an
organization must consider this question of value: how it creates value and what activities are critical to
the creation, retention, and increase of value. HR must understand varying perceptions of value because
they will drive strategic goals throughout the organization and affect the ways in which HR can support
the organization in its entirety. -value is not the same as organizational values. Value is derrived from
financial, people, technological and physical assets.
Value Chain - Or Business Model is the process by which an organization creates the product or service it
offers to the customer. Includes primary activities(which directly contribute to value
created...operations/sales) & secondary activities(indirectly contribute to value...management/HR/IT) By
identifying key value-producing activities, the value chain helps HR and leaders invest resources in the
right activities.
How does HR add value? - Contributing quality talent pools/managing labor supply/developing
leaders/acquiring strategically important areas of talent
Global Value Chain - Consists of multiple organizations producing parts of a good or service across
geographical regions, with each link adding value to the chain. Layers different locations onto different
functions and can be complex to manage. However, it enhances opportunities to reduce risk, share
knowledge, and achieve economies
Stakeholder Concept - Proposes that any organization operates within a complex environment in which it
affects and is affected by a variety of forces or stakeholders who all share in the value of the organization
-internal and external stakeholders are the receivers of the org's value and they perceive that value in
different ways
Industry, Business or Product Life Cycle - Includes 4 phases: Introduction, Growth, Maturity and then
either renewal, no growth, or Decline
-HR has key role in each area of the Business or product life cycle and must know where business lies in
cycle to shift HR strategy accordingly
Macroenvironment - all the factors that exist outside the organization that could influence an
organization's strategic decisions. These factors include: Industry and market conditions/events and
trends in society that might impact future talent supply, compliance requirements, and ee needs.
Michael Porter's Five Forces - This model is used to identify opportunities and threats, foresee possible
changes in the competitive landscape, and plan strategy.
, -threat of substitution, bargaining power of suppliers, bargaining power of buyers, threat of entry, rivalry
among competitors
MP 5 forces - Threat of Substitution - How easy is it for a competitor to capture customers by offering a
similar product or a product that satisfies the same need but perhaps in a different way? If the threat is
high, an organization may be forced into competing on price, and HR will need to develop a strategy that
promotes cost efficiency. If the threat is low, the organization will have more capital to invest. HR may
focus on developing an entrepreneurial culture.
MP 5 Forces - Threat of Entry - How easy is it for a new competitor to enter the industry? If the threat of
entry is high, management and the workforce must be nimble. HR professionals must examine the
organization's structure to support rapid decision making and response.
MP 5 Forces Bargaining Power of Suppliers - Are there few suppliers or many? What would happen if a
supplier went out of business or was bought by a competitor? If the bargaining power of suppliers is
high, HR must be sure that the job descriptions include skills such as negotiation and managing risk and
competencies such as Ethical Practice and Relationship Management.
MP 5 Forces Bargaining Power of Buyers - How vulnerable is the organization if buyers exert more
influence? If high, marketing competencies are key. HR may need to align compensation practices to
motivate marketing and sales toward behaviors important to the organization's strategic objectives—
e.g., developing long-term or sole-source relationships.
MP 5 Forces - Rivalry Among Competitors - All of the other forces have the potential to increase the
intensity of competition within the industry. A concentration of suppliers or buyers will trigger
competition, and the insecurity caused by easy entry into the market and substitution can lead to price-
cutting wars and product or service design aimed at locking customers in.
How to improve HR environmental awareness - Read the business press, stay current with the latest HR
research, analyze the organization's performance, monitor the performance of other organizations,
become regular users of third-party information, scan annual reports from businesses or groups with
comparable markets and workforces **also HR should advocate for their businesses when legislation
comes up that may make things more difficult for them to compete sucsessfully
Strategy - A plan of action for accomplishing an organization's long-term goals to create value
Strategic Planning - The process of setting goals and designing a path towards a competitive position
Strategic Management - The actions leaders take to move the organization toward set goals to achieve a
competitive position.
Business Intelligence - Raw data, internal and external to an organization, that is translated into
meaningful information for decision makers to use in taking strategic action.
Three basic components of a business intelligence system (data gathering/data warehousing/query and
reporting) - A business intelligence system is designed to provide leaders with more data and better
means to analyze the data. This allows leaders to make better decisions that are based on actual data
rather than on "instincts" or "best guesses." It does not necessarily improve data security, especially
