CHAPTER 2: STRATEGIC HUMAN RESOURCE MANAGEMENT
Business Model - how a firm will create value for customers and be profitable.
Strategic Human Resource Management (SHRM) - A pattern of planned human resource deployments
and activities intended to enable an organization to achieve its goals.
Strategy Formation - 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 devising structures and allocating resources to enact the
A Model of the Strategic Management Process
- A firms strategic management decision making process usually takes place at its top levels, with a
strategic planning group.
Role of HRM in Strategy Formulation
Administrative Linkage - focused on day to day activities, engages in administrative work unrelated to
the company's core business needs. [lowest level of integration]
One-Way Linkage - HRM function is to design systems that implement the strategic plan
Two - Way Linkage - the strategic planning team informs the HRM function of the various strategies the
company is considering -->HRM analyze the HR implications--> HRM develops programs to implement.
Integrative Linkage - HRM is involved in both formulation and implementation. STRATEGY FORMULATION
5 Major components of the strategic management process:
1. Mission - A statement of the organizations reason for being.
2. Goals - What an organization hopes to achieve in the medium to long-term future.
3. External Analysis - Examining the organizations operating environments to identify strategic
opportunities and threats
4. Internal Analysis - The process of examining an organizations strengths and weaknesses.
5. Strategic Choice - The organizations strategy; the ways an organization will attempt to fulfill its
mission and achieve its long-term goals.
- An organization has a variety of structural forms and organizational processes to choose from when
implementing a given strategy.
- HRM ensures the company has the proper number of employees with the skill required by the strategic
- HRM develops control systems that ensure employees act to promote the achievement of goals.
Vertical Alignment - HR practices and processes are aimed at addressing the strategic needs of the
How does HRM function implement strategy?
- Through administering HRM practices: job analysis/design, recruitment and selection, training and
development programs, performance management systems, reward systems, employee/labour
Role Behaviours - Behaviours that are required of an individual in his/her role as a jobholder in a social
Strategic Typologies - useful for classifying the ways different organizations eek to compete within an
External Growth Strategy - acquiring vendors and suppliers/ buying business for expansion.
- For those attempting to integrate vertically or horizontally or to diversify
- Strategy focusing on increasing market share, reducing co