SHRM-CP Functional Area 1: HR Strategy

What is the BASK Definition for HR Strategy?

“HR Strategy involves the activities necessary for developing, implementing, managing, and evaluating the strategic direction required to achieve organizational success and to create value for stakeholders.”

What is the role of strategy?

• Aligns all functions in an organizatio nto “row together” towards defining the organization’s goals and direction

What is required to create strategic goals?

• A vision of growth that is associated with the organization’s missio

• A vision that includes the result of value for stakeholders

What is strategy?

• The planning of long-range goals and actions to attain those goals

What does strategy look at?

• The strengths, weaknesses, and vulnerabilities within the organization

• The competition, opportunities, and external issues and influences outside the organization

What strategy theory does Henry Mintzberg believe in?

• Strategy emerges in response to environmental threats and opportunities and cannot be planned rationally because no one person can foresee everything about the future

What strategy theory does Michael Porter believe in?

• The gathering of data is strategy’s core source for setting and choosing direction.

What are the two theories or thoughts on strategy?

• Strategy emerges in response to environmentla threats and opportunities and cannot be planned rationally because no one person can foresee everything about the future

• The gathering of data is streategy’s core source for setting and choosing direction

What are the main concepts on creating strategy and managing it?

• Aligning Effort

• Controlling Drift

• Focusing on Core Competencies

• Systems Thinking

• Using Structure as a Strategic Level

• Using Culture as a Strategic Level

What is the idea behind “aligning effort” as a concept about creating strategy and maintaining it?

• You need to ensure that all functions are aligned with the organization’s mission and goals

• Ensure policies and practices are aligned with the strategy and intention

What is the idea behind “controlling drift” as a concept about creating strategy and maintaining it?

• You need to be sure an organization is not coasting along and doing what it has always done

• Make sure the organization does not get blindsided because of disruption in its marketplace or industry

What is the idea behind “focusing on core competencies” as a concept about creating strategy and maintaining it?

• You need to know what the organization is good at for its customer base and be sure to focus efforts using those competencies

What is the idea behind “systems thinking” as a concept about creating strategy and maintaining it?

• You need to keep in mind the inter-relations of both internal and external factors, such as stakeholders, industry forces, and the other influences on an organization

• You need to look at both opportunities and the corresponding risks or conflicts and know what degree of risk is acceptable to the organization

What is the idea behind “using structure as a strategic level” as a concept about creating strategy and maintaining it?

• Ask: “Does the structure of the organization support the strategy, or does it hamper it because of current policies and expectations within the organization?”

What is the idea behind “using culture as a strategic level” as a concept about creating strategy and maintaining it?

• Ask: “Does the culture align itself with the intended strategy?”

What are the benefits of strategy?

• Helping everyone in the organization focus on the future with a written plan that contains goals to further the organization’s existence

• Provides a map that gives direction and intention on where the organization plans to spend its resources

• Helps keep decision-making and activities aligned

• Provides a spotlight to prioritize how to deploy resources

How can organizations fail to obtain the benefits of strategy through their process and/or the management of strategy?

• Failing to remember not to take shortcuts with the process of strategy

• Being too comfortable with the status quo and not challenging or assessing the potential risks

• Lacking follow-through and alignment of the plan throughout the organization

• Insufficient involvement or commitment from management

• Lack of communication throughout the organization

What are the three levels of strategy?

• Organizational Level

• Business Unit Level

• Operational Level

What is the “Organizational Level” as a level of strategy?

• Involves a general vision of the future as an umbrella over the entire organization

What is the “Business Unit Level” as a level of strategy?

• Focuses on how and where the organization will focus to create value for its shareholders

• Focus is on the business units such as sectors, divisions, regions, and product units

What is the “Operational Level” as a level of strategy?

• Focuses on the activities and actions the functions within the organizations will take to progress it toward its vision

What is the Role of HR in Strategy?

• The operational level will be the main focus to support the entire organization

• HR’s policies, programs, and processes need to correlate, collaborate, and align with the organization’s business units

• Build bridges with both internal and external stakeholders

• View issues from differing perspectives and seek resolutions to help bridge the differing functions in a collaborative effort

What is the basic premise of strategy and management?

• Lead activities that yield a great value

What is value?

• Not cultural values

• Value that is brought to stakeholders

What is the Value Chain Model?

• Describes the process by which a business receives materials and then adds value to the materials through processes that create their finished products or services, which are then sold to customers

Who created the Value Chain Model?

• Michael Porter

How do organizations conduct value-chain analysis?

• Look at the steps in their production process that are utilized to create their products or services and then identifying a way to increase the efficiency of the production chain

What is the end goal of value-chain analysis?

• To create a maximum value for the least possible cost, creating the organization’s competitive advantage

What are primary activities in the Value Chain Model?

• Varies according to the type of the organization’s activities

• Contributes directly to the value that is created for the customer

How is value determined for primary activities in the Value Chain Model?

• Depends on the secondary activities that provide services to the primary functions

What are secondary activities in the Value Chain Model?

• Activities that provide services to primary functions

What is one disadvantage to the Value Chain Model?

• Not all business find this model realistic because their business does not control the entire chain of production and distribution

Describe and/or draw the Porter Value Chain Concept

How created the stakeholder concept?

• R. Edward Freeman

What is the Stakeholder Concept?

• Recognizes the different types of value an organization creates

• There are various perceptions from the view of each stakeholder, especially in a global organiation

• Encompasses all the relationships that impact the organization, plus all the people, groups, and entities that the organization impacts

• These are two-way relationships!

Describe and/or draw the Stakeholder Concept

What are the categories in the stakeholder concept and what is in the middle?

• Categories:

  • Owners

  • Customers

  • Local Community

  • Special Interest Groups

  • Competitors

  • Media

  • Consumer Advocates

  • Environmentalists

  • Employees

  • Suppliers

  • Government

• In the middle:

  • Organizations

What is the biggest role HR has in defining and creating value for its organization?

• Knowing the workforce

What does it mean to “know the workforce”?

• Know core competencies of talent

• Know where to find the talent that is needed

• Know the legal environment in which the organization employes its workforce

What is the strategic planning process about?

• Designing the organization for the future

What are the four basic stages of the strategy process?

• Formulation of the Strategy

• Development of the Strategy

• Implementation Stage

• Evaluation Stage

What is the stage “Formulation of the Strategy” in the strategy process?

• Gathering the critical and necessary data to analyze and assess the current situation

What is the stage “Development of the Strategy” in the strategy process?

• Creating your plan to gain a competitive advantage in the markets in which you compete

What is the stage “Implementation Stage” in the strategy process?

• The enactment of specific objectives and initiatives that produce outcomes associated with the goals

What is the stage “Evaluation Stage” in the strategy process?

• The final stage

• Where metrics and achievements are accessed and reported upon to stakeholders

What is strategy formulation?

• The process by which an organization chooses the most appropriate courses of action to achieve its defined goals

When should data be gathered in the strategy formulation process?

• Prior to and during the creation of the strategic plan

• Continue through implementation and the monitoring process of the strategic plan

What is the key to business success?

• Information

What does it mean when something is “on the radar”?

• It is being tracked

• Someone believes the information is important to the organization’s success

How can conduct Environmental Scanning?

• PESTLE Analysis

• SWOT Analysis

• Industry Analysis

What is PESTLE Analysis?

• An environmental scanning technique that helps businesses assess particular factors that may have an impact on their operations

What are the six factors of PESTLE (or what does PESTLE stand for)?

• Political

• Economic

• Social

• Technological

• Legal

• Environmental

What are political factors in a PESTLE Analysis?

• All about how and to what degree a government intervenes in the economy

• Includes:

  • Government policy

  • Political stability or instability in overseas markets

  • Foreign trade policy

  • Tax policy

  • Labor law

  • Environmental law

  • Trade restrictions

  • etc.

What are economic factors in a PESTLE Analysis?

• Includes:

  • Economic growth

  • Unemployment rates

  • Interest rates

  • Exchange rates

  • Inflation

  • Disposable income of consumers and businesses

  • Etc.

• These factors can be broken into macroeconomic and microeconomic factors

What are macroeconomic factors?

• Deals with the management of demand in any given economy

What are microeconomic factors?

• All about the way people spend their incomes

What are social factors in a PESTLE Analysis?

• Areas that involve the shared belief and attitudes of the population as well as demographic information

• Includes:

  • Population growth

  • Age distribution

  • Health consciousness

  • Career attitudes

  • Etc.

• These factors have a direct effect on how marketers understand customers and what drives them

What are the three ways technological factors in PESTLE Analysis affect marketing of products and HR services?

• New ways of producing goods and services

• New ways of distributing goods and services

• New ways of communicating with target markets

What are environmental factors in a PESTLE Analysis?

• Factors that have become increasingly important due to the increasing scarcity of raw materials, pollution reduction targets, doing business as an ethical and sustainable company, and carbon footprint targets set by governments

• Consumers are demanding that the products they buy are sourced ethically and from a sustainable force

What are legal factors in a PESTLE Analysis?

• Include, but are not limited to:

  • Patent law

  • Intellectual property protection

  • Health and safety

  • Equal opportunity

  • Advertising standards

  • Consumer rights and laws

  • Product labeling

  • Product safety

• HR professionals need to know what is and what is not legal in order to avoid fines, embarassment, or serious reputational damage

What is SWOT Analysis?

• An analysis that looks at both the internal and external environment and identifies pros and cons in each

What does SWOT stand for?

• Strengths

• Weaknesses

• Opportunities

• Threats

What are “strengths” in SWOT Analysis?

• Areas in the organization you are strong in or performing well at

What are “weaknesses” in SWOT Analysis?

• Areas in the organization you need improvement

What are “opportunities” in SWOT Analysis?

• Positives in the environment

What are “threats” in SWOT Analysis?

• Negative challenges the organization faces in the environment