Chapter 2 – Strategy and Human Resources Planning

Strategic Planning
Strategic planning – procedures for making decisions about the organization’s long-term goals and strategies Human resources planning (HRP) – the process of anticipating and providing for the movement of people into, within, and out of an organization Strategic human resources management (SHRM) – the pattern of human resources deployments and activities that enable an organization to achieve its strategic goals Dramatic shifts in the composition of the labour force require that managers become more involved in planning, since such changes affect the full range of HR practices (recruitment, selection, training, compensation and motivation) Increased emphasis on HR issues becomes especially critical when organizations consider global strategies, mergers, relocation of plants, innovation, downsizing, outsourcing, offshoring, or the closing of operating facilities

Strategic Planning and HR Planning: Linking the Processes
HR managers are concerned with meshing HRP and strategic planning for the organization Through strategic planning, organizations set major objectives and develop plans to achieve those objectives There are two ways human resources planning relates to strategic planning Strategy formulation  what’s possible? Whether the types and numbers of people are available to pursue a given strategy? Strategy implementation  Once strategy is devised, executives must make primary resource allocation decisions

Step One: Mission, Vision and Values
Mission – the basic purpose of the organization as well as its scope of operations Strategic vision – a statement about where the company is going and what it can become in the future; clarifies the long-term direction of the company and its strategic intent Core values – the strong and enduring beliefs and principles that the company uses as a foundation for its decisions Underlying parameters for how the company will act toward customers, employees, and general public

Step Two: Environmental Analysis
Analysis of external opportunities and threats
Changes in the external environment have an impact on the way organizations are run and how people are managed Successful strategic management depends on an accurate and thorough evaluation of the environment because some changes are good opportunities and some are threats Environmental scanning – systematic monitoring of the major external forces influencing the organization The following six forces monitored most frequently:

1. Economic factors, including general, regional, global conditions 2. industry and competitive trends, including new processes, services and innovations 3. Technology changes, including information technology, innovations, and automation 4. Government and legislative issues, including laws and administrative rulings 5. Social concerns, including child care, elder care, the environment and educational priorities 6. Demographic and labour market trends, including age, composition and literacy

Competitive Environment
Analysis of the firm’s competitive environment is central to strategic planning In strategic planning, firms analyze the competitive environment in order to adapt to or influence the nature of competition The more power the force has, the less profitable the industry will be

Customers
Most important assessments a firm can make is identifying the needs of its customers Organizations need to know how they’re going to provide value to customers – foundation for strategy and influences the kinds of skills/behaviours that will be needed from employees

Rival Firms
Need to know who is your competition, need to think outside the box Example: Toys R Us  Walmart wasn’t a toy store but moved into toys successfully

New Entrants
To protect their position, companies try to establish entry barriers tot keep new firms out of the industries

Substitutes
Sometimes the biggest opportunity or threat comes from substitution not from direct competition Firms need to adjust their skill base in order to support different technologies or may need to think about how they could compete in different ways Example: landline phones, cell phones, internet calling

Suppliers
Suppliers provide organizations with key inputs
Inputs include: raw materials for production, money, information and people External Supply of Labour
Many factors influence the labour supply (demographic changes in the population, national and regional economics, education level of the workforce, demand for specific employee skills, population mobility and gov...

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