HR Strategy

HR Strategy

HR Strategy

Introduction

Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

In other words, strategy is about:

Where is the business trying to get to in the long-term (direction)

Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope)

How can the business perform better than the competition in those markets? (advantage)?

What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?

What external, environmental factors affect the businesses' ability to compete? (environment)?

What are the values and expectations of those who have power in and around the business?

Types of strategy

Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".

Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

Company Background: Benchill & Sons

Benchill make a narrow range of basic office furniture: desks, chairs, cabinets and the like. Their approach is to manufacture and sell their products as cheaply as possible and to keep profits high by selling in high volume. Benchill don't pretend that their furniture is better than their rivals (it most certainty isn't, though it — usually — meets a certain basic standard). However, by keeping the price down they can undercut the competition, and as such are a favored supplier for bulk buyers for whom cost and not quality is the primary concern However, other companies also adopt this strategy and this means that there is a constant pressure to keep costs down in order to remain competitive. Furniture designs are kept simple, so that there is no greet sophistication in the manufacturing process, and the cheapest raw materials are used. Very little effort is expended on designing new product ranges or improving on existing products.

Competitive business strategy

In this modern hypercompetitive marketplace, a company must be a powerful competitor to survive. A company must possess a powerful strategy in order to become a powerful competitor. But what makes a good strategy for the company?

A good business strategy would be that to attain a competitive advantage over other ...