strategy in strategic hrm part 2
Post on 17-Oct-2014
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DESCRIPTION
This is part 2 in a 2 part foundational portion for the course Strategic HRM. The course is aimed at working professionals pursuing an Executive MBA. This part is intended to provide a grounding in Strategy to enable a smooth segue to the second part of the Strategic HRM program. It does not therefore dive into the HR aspect specifically but focuses on establishing the foundation of Strategy and its linkage to HRTRANSCRIPT
STRATEGY IN STRATEGIC HRM: PART 2Anilesh SethIdeator, Co Founder & CEO, KROWwww.krow.inEx-CEO/MD: LGSI, Qatalys & Supervalu India
www.slideshare.net/anileshhttp://In.linkedin.com/in/[email protected]
Part 2: Sessions 3 & 4
• Objective of these sessions is to enable an understanding of strategy and associated terms and tools to serve as a foundation to segue into Strategic HRM
• Content of Part 2:The Strategic Planning Process – use of Analytical tools and frameworks (PESTEL, SWOT, Ansoff Grid, BCG Matrix etc) to enable an understanding of strategic issues and strategy development, linked to a company’s Vision, Mission and Values. The use of Nortan and Kaplan’s Balanced Score Card to develop organizational metrics in the backdrop of a strategy map, connected to human capital as its core
Strategy Implementation
Strategy Development
Strategic Analysis
Strategy development is done in the context of a company’s Vision, Mission and Values
Vision
Mission
Values
So what is Vision, Mission and Values?
Vision
• Long term, encouraging aspiration for the business• Must be in line with corporate values
Mission
• Purpose of the business
Values
• Attitude, behavior, character of the organization to guide actions
Examples of Vision and MissionCompany Vision Mission
Tata Motors PCBU To develop TATA into a world class Indian car brand for innovative and superior vehicles
- Be the most admired multi-national Indian car company producing vehicles that people love to buy
- Create an organization that people enjoy working for, doing business in and investing in
Google To develop the perfect search engine To organize the world’s information and make it universally accessible and useful
Joomla Project -People publishing and collaborating in their communities and around the world-Software that is free, secure, and high-quality-A community that is enjoyable and rewarding to participate in-People around the world using their preferred languages-A project that acts autonomously-A project that is socially responsible-A project dedicated to maintaining the trust of its users
Our mission is to provide a flexible platform for digital publishing and collaboration.
And some Values…Company What we believe/Values
Google 1) We want to work with great people2) Technology innovation is our lifeblood3) Working at Google is fun4) Be actively involved; you are Google5) Don't take success for granted6) Do the right thing; don't be evil7) Earn customer and user loyalty and respect every day8) Sustainable long-term growth and profitability are key to our success9) Google cares about and supports the communities where we work and live10) We aspire to improve and change the world
Joomla Project -Freedom-Equality-Trust-Community-Collaboration-Usability
For detailed commentary on Vision, Mission, Values, read Joomla’s at:http://www.joomla.org/about-joomla/the-project/mission-vision-and-values.html
Strategy Implementation
Strategy Development
Strategic Analysis
PESTEL analysis of the macro-environment
PESTEL analysis of the macro-environment
http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm
Govt policy – e.g.,priorities in supporting business like FDI in retail
Interest rates, tax rates, inflationetc.,
Say a young population
Online shopping,3G services,Wifi
The monsoon is a greatexample in India
New IT law in India,LLP introduction
PESTEL case: Ikea• Founded in 1943 – started by a 17 year old as a local catalog company• Today more than 300 stores in more than 35 countries with 130,000
co-workers• There are over 10,000 different products in the store• Just recently received clearance to set up shop in India• The focus is on:
– Offering a wide range of well designed, functional home furnishing products
– At prices so low that as many people as possible will be able to afford them• In India the press states that:
– They will not be allowed to set up their cafes– They will not be allowed to mail a catalog– There will be strict sourcing norms
PESTEL case: IkeaPolitical:- Unpredictable tenure of coalition
government- Slow economic reforms- Opened up FDI in retail to the extent
of 51%
Economical:- Reducing GDP growth – current
estimates at about 5.3 % down from 8% in 2012
- CPI Inflation rates for Sept 2012 at 9.14%
Social:- Aspirational, young population- Rapid urbanization - However still a traditional mind set- Caste system – social inequalities- Customer service orientation is low
Technological:- Great IT manpower – but fewer skilled
manpower in areas like supply-chain, procurement, assortment etc
- Poor supply chain/poor infrastructure (Roads, Water, Power)
Environmental:- Monsoons can disrupt the economies
in places like Mumbai- JV Partners in India can dictate terms
to their overseas partners- Too much red tape
Legal:- Taxation laws are not favorable to
investments (like the Vodafone case)- Labor laws- The no of clearances required to set up
a retail firm are huge and time consuming
SWOT Analysis
http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_16.htm
PESTELANALYSIS
SWOT Analysis
SWOT Analysis…WalmartStrengths- Largest retailer: huge buying
volumes and negotiating styles keeps its cost low
- Tight cost and operational control through sophisticated IT systems
Weaknesses- Image of pushing small retailers out
of business- A very large organization – potential
issues with communication etc
Opportunities- Growing markets outside the
US - eg India
Threats- Other retailers are adopting Walmart’s
practices and the pressure on prices may increase over time, to remain competitive
SWOT Analysis…Sector example: Indian Aviation
Source: http://centreforaviation.com/analysis/mei-perspective-7731
Strengths- Modern fleet- High Quality
Weaknesses- Airport infrastructure- Airways infrastructure- National carrier Accumulated debt/losses- High cost structure- Skilled resources
Opportunities- Liberal environment- Economic growth- Political stability- Market growth- Location- Lower costs potential
Threats- Mid east aviation- Terrorism
SWOT Analysis can apply to individuals too (an important HR tool)
Example taken from a personal blog
Back to the Ikea example..using PESTEL and SWOT together
Strengths Weaknesses
Opportunities- Middle class
population of 400 million
- Growth of Indian furniture market estimated at 30%
- Demand is mostly satisfied by local producers
Threats
Overlay the opportunities on the PESTEL analysis
Market Research
• MR is any organized effort to gather information about markets or customers
• It is a crucial aspect of determining market strategy – it is used to identify and analyze the market need, size and competition
• It is a key factor to gain advantage over competitors
• It involves the gathering and interpretation of information about consumers/organizations/industries, using statistical techniques to aid in decision making
Market segmentation
http://www.tutor2u.net/blog/index.php/business-studies/comments/qa-what-is-market-segmentation
• Segmentation is used by a business to target its products at the right customers
• It is about producing products that meet customers needs and wants
The Ansoff MatrixThe Product-Market Grid
http://www.ehow.com/video_4957415_business-planning-product-market-grid.html
The Product-Position map
High BHP
High Price
Low Price
Low BHP
A
B
C
D
Example: Motorcycles
The BCG Growth-share matrix
This is a portfolioplanning model developed by BCG
http://www.netmba.com/strategy/matrix/bcg/
The BCG Growth-share matrix - example
http://en.wikipedia.org/wiki/Growth-share_matrix
The Marketing Mix
Strategy Implementation
Strategy Development
Strategic Analysis
Strategy Maps
Strategy map - example
Ref: http://purestonepartners.com/tag/strategy-management/
Strategy Implementation
Strategy Development
Strategic Analysis
The Balanced Score Card
The Balanced Scorecard - Example
Ref: http://www.symphonytech.com/articles/bscard.htm
Back to the link between Strategy and HR
Financial Perspective
Customer Value Proposition
Value Creating Processes
Learning and Growth
Perspective. HUMAN CAPITAL
Vision
Vision
VisionVi
sion
StrategySt
rate
gyStrategy
Strategy
At the core is ensuring thata company’s Human Resourcesare a source of key Competitiveadvantage
Text books/reference books• Competitive Strategy: Techniques for Analyzing Industries and Competitors
– Michael Porter• Competitive Advantage: Creating and Sustaining Superior Performance
– Michael Porter• Cases in Competitive Strategy
– Michael Porter• Strategy Maps
– Kaplan & Norton• What Matters Now
– Gary Hamel• Strategic Flexibility
– Gary Hamel, C K Prahlad, Howard Thomas, Don O’Neal• Competing for the Future
– Gary Hamel, C K Prahlad• Strategic Management
– Hitt, Ireland, Hoskisson