How to determine business stategy and align it with HRM issues

    Author: Iloka Benneth Chiemelie

    Published: 11th of March 2014

     

     What are the necessary conditions for determining a business strategy in an organization?

In any given business, one of the major issues that managers face is determining the best strategy to adopt, as wrong decision can have negative effects on the business while right decisions are expected to yield positive impact. Thus, the necessary conditions that must be considered in the course of deciding on a specific strategy are ad adapted from John Bratton (n.d) and they include:

1.1 Mission and goals – the company should have a clear message of what they are, and what they intend to achieve as communicated in their mission and goals. The mission states what they want to be, while the goals communicate how the mission will be achieved. It is more of a building block that sets the height on other features. A good mission will ensure good strategy, but poor one will have negative effect in terms of strategic decision making.

1.2 Environmental analysis – the company must understand its environment in term of the market (needs), competitors (products and prices), and general stakeholders (wants). This will be used to identify factors that can enhance or mitigate success, thus leading to more effective strategy design.

1.3 Strategic formulation – the senior managers will need to establish a link between the environmental factors and set goals as this is what strategic formulation is all about. The implication should be that the goal should be about meeting the needs of customers much better than competitors can.

1.4 Strategy implementation – there should be a sound implementation approach or process that the company must follow. This will involve a way of ensuring that all formulated strategies are put to work effectively.

1.5 Strategy evaluation – finally, the company need to monitor the implemented strategy in order to ensure that they are meeting set goals, or the strategy be adjusted in cases where they fall short of the set goals.

2. How can organizations work to include HR issues within a business strategy?

The issue of how organizations can incorporate HR into its business strategy has been much debated with Purcell (2001) making a significant contribution on that research in the late 1980s, as he made reference to literatures on strategic decision within the context of industrial relations (such as Kochan et al., 1986; Thurley & Wood, 1983) to identify what he called ‘upstream’ and ‘downstream’ types of strategic decision. The upstream type of SHRM deals with long-term directions of the company such as a French company purchasing an England company; while the downstream type of SHRM deals with how the new operations will take place such as the decision to either integrate the end business in the existing operations or outside of the existing operations. In any case, organizations can work to include HR issues within their business strategy by:

1.      By link the strategic management process of their organization with their HR policies and practices;

2.      By internationalizing the importance of HR to the part of line managers; and

3.      By adopting ‘identity of interest’ as its main strategic goals and using to integrate the workforce in order to enhance commitment.

This approach is referred to as the ‘matching model.’

References

John, B (n.d), “Strategic human resource management.” Available at: http://www.palgrave.com/business/brattonandgold/docs/bgcha02.pdf [Accessed on: 3/8/2014].

Purcell, J. (2001). The meaning of strategy in human resource management. In J. Storey (ed.), Human resource management: A critical text (pp. 59–77). London: Thompson Learning.