uest|on No 1

What factors enab|ed AN's sen|or management to take a strateg|c approach to |ts bus|ness
and to adopt an empower|ngdeve|opmenta| approach to nkM?
So|ut|on No 1
ln Lhe mlddle of 1980s An's exLernal envlronmenL was prlvaLlsed by 8rlLaln's conservaLlve governmenL
1hls exposed Lhe company Lo compeLlLlve forces 1hey have Lo prepare for prlvaLlsaLlon LhaL requlred a
palnful resLrucLurlng because Lhey needed Lo make Lhe company aLLracLlve Lo lnlLlally scepLlcal
lnvesLors 1hls gave Lhe senlor managemenL Lhe degree of sLablllLy Lo lmplemenL a new and P8M
sLraLegles AL Lhe same Llme Lhere was a prolonged economlc recesslon and Lhe ongolng deregulaLlon
of clvll avlaLlon ln Lurope and Amerlca
WlLh Lhls envlronmenLal forces An adopLed a lowcosL compeLlLlve sLraLegy and [olned Lhe lndusLry
wlde prlce war AL Lhls Llme Lhey were aggresslve ln Lhe markeL place and Lhey reduced cosLs ln areas
llke servlce markeLlng and adverLlslng 1hls low cosL compeLlLlve sLraLegy falled
AL Lhls sLage An changed lLs sLraLegy and began Lo develop a dlfferenLlaLlon buslness sLraLegy (orLer
1980) LhaL conslsLed ln rlorlLlsaLlon of hlgh quallLy cusLomer servlce reenglneered Lhe company
launch a dlscounL alrllne (operaLlng as a separaLed company) Lhe managemenL sLrucLure was
reorganlsed An's operaLlons were dlvlded lnLo rouLe groups based of flve ma[or markeLs Lhe company
adverLlslng began also Lo emphaslze Lhe addedvalue elemenLs of An's servlces new brand names and
new unlforms for Lhe cabln crew and for Lhe polnLofservlce sLaff lor LhaL alrcrafLs and bulldlngs were
sold and unproflLable rouLes suspended or abandoned alLogeLher Labour cosLs offered Lhe mosL
poLenLlal savlngs and wlLh LhaL Lhe company was able Lo focus on producL developmenL markeLlng
cusLomer servlce and P8 developmenL
1hls lowcosL or dlfferenLlaLlon sLraLegy lnvolves a unlque seL of responses from workers or 'needed role
behavlours' and a parLlcular P8M sLraLegy LhaL mlghL generaLe and relnforce a unlque paLLern of
behavlour 1hus Lhe pracLlce of sLraLeglc P8M ls concerned wlLh Lhe challenge of maLchlng phllosophy
pollcles programs pracLlces and process Lhe 'flve s' ln a way whlch wlll sLlmulaLe and relnforce
dlfferenL employee role behavlours approprlaLe for each compeLlLlve sLraLegy
1he Puman 8esource sLraLegy LhaL Lhe company adopLed emphaslzes ln employee empowermenL and
commlLmenL 1hey emphaslze Lo Lhelr managers Lo glve up conLrol lf Lhelr employees are Lo lmprove
Lhelr performance As parL of Lhls Lhe demarcaLlon beLween groups such as avlonlcs and mechanlcal
englneers were removed And sLaff were organlsed lnLo Leams of mulLlskllled operaLlves led by Leam
leaders 1he company also lnsLlLuLed a serles of cusLomer servlces Lralnlng semlnars and lnvesLed ln
Lralnlng and developmenL 1he senlor managemenL developed a sLraLeglc parLnershlp wlLh Lhe unlons
(esLabllshlng Leam brleflngs consulLaLlons meeLlngs and regular formal consulLaLlons meeLlngs wlLh Lhe
unlon represenLaLlves) 1hls senlor managemenL held ma[or Lralnlng programmes on Lhe lmporLance of
LrusL moLlvaLlon and 'vlslonary leadershlp'
lor Lhls organlsaLlon quallLy has become a fashlonable and essenLlal goal Lo pursue CuallLy
lmprovemenL ls llnked Lo P8M ln a number of ways llrsLly Lhe normal vehlcle for communlcaLlng Lhe
lmporLance of quallLy ls Lralnlng llke Lhls cusLomer servlce Lralnlngs lmplemenLed by Lhe company or
LhaL one for Lhe senlor managemenL on Lhe lmporLance of LrusL moLlvaLlon or vlslonary leadershlp
Secondly Lhe ablllLy Lo lmprove Lhe quallLy of processes and ouLpuLs depends ln parL on Lhe quallLy and
commlLmenL of Lhe workforce 1hlrdly Lhe quallLy of Lhe managemenL of Lhe workforce ls llkely Lo be a
key feaLure ln esLabllshlng Lhe credlblllLy of Lop managemenL commlLmenL Lo any quallLy lnlLlaLlve
llnally quallLy lmplles a process of lnvolvemenL and flexlblllLy more consonanL wlLh an organlc hlgh
LrusL organlsaLlon polnLlng Lo a number of lssues of sLrucLure and managemenL sLyle
Successful lmplemenLaLlon of any new P8 pollcles and more especlally Lhe more radlcal forms of P8M
requlre sLrong and susLalned commlLmenL from Lhe Lop Many chlef execuLlves pay no more Lhan llp
servlce Lo P8M lmmedlaLely reduclng lLs poLenLlal lmpacL ln pracLlce Lhls means LhaL any changes wlll
need Lo be long Lerm sLep by sLep and evoluLlonary
Cnce reallsLlc P8M goals have been seL Lhey need Lo be sold Lo Lhe whole workforce and especlally Lo
Lhose managers who have Lo work aL dayLoday lmplemenLaLlon A furLher facLor ln Lhe
lmplemenLaLlon of change ls Lhe parL played by Lhe chlef execuLlve and Lhe P8 speclallsLs 8oLh should
pracLlce whaL eLers and WaLerman (1982) labelled 'slmulLaneous looseLlghL properLles' 1hey musL
dlsplay conslsLenL and sLrong commlLmenL Lo Lhe P8M goals and sLraLegy buL empower oLhers Lo
lmplemenL lL lor P8 speclallsLs Lhls can be a parLlcularly dlfflculL slnce lL appears LhaL Lhey musL glve
power away by encouraglng oLhers Lo Lake over parL of Lhelr role All Lhe evldence suggesLs Lhls
ulLlmaLely makes Lhem more hlghly valued parLly because Lhey learn Lo become faclllLaLors and change
agenLs raLher Lhan conLrollers and admlnlsLraLors
1he noLlon of 'flL' beLween an exLernal compeLlLlve sLraLegy and Lhe lnLernal P8M sLraLegy ls a cenLral
LeneL of Lhe P8M model advanced by 8eer eL al 1he auLhor emphaslzes Lhe analysls of Lhe llnkages
beLween Lhe Lwo sLraLegles and how each sLraLegy provldes goals and consLralnLs for Lhe oLher 1here
musL be a 'flL beLween compeLlLlve sLraLegy and lnLernal P8M sLraLegy and flL among Lhe elemenLs of
Lhe P8M sLraLegy 1he resourcebased model draws aLLenLlon Lo Lhe sLraLeglc value of Lhe workforce
and Lo Lhe lssues of Lhe workplace learnlng 1hus lL appears Lo embrace a 'sofL' vlew of human resource
managemenL uLLlng ln Lerms of slmple SWC1 analysls Lhe maLchlng model emphaslzed Lhe sLraLeglc
slgnlflcance of exLernal 'opporLunlLles' and LhreaLs' Lhe resourcebased perspecLlve emphaslzes Lhe
sLraLeglc lmporLance of lnLernal 'sLrengLhs' and 'weaknesses'



uest|on No 2
now usefu| |s the concept of 'strateg|c cho|ce' |n understand|ng the ||nkage between AN's
compet|t|ve and nk strateg|es?
So|ut|on No 2
ln a managemenL conLexL Lhe word 'sLraLegy' has now replaced Lhe more LradlLlonal Lerm longLerm
plannlng Lo denoLe an acLlvlLy LhaL Lop managers perform ln order Lo accompllsh an organlsaLlon's
goals SLraLeglc managemenL emphaslzes Lhe necesslLy Lo monlLor and evaluaLe envlronmenLal
opporLunlLles and LhreaLs ln Lhe llghL of an organlsaLlon's sLrengLhs and weaknesses Pence any
changes ln Lhe envlronmenL and Lhe lnLernal and exLernal resources musL be monlLored closely so LhaL
Lhe goals pursued can lf necessary be ad[usLed 1he goals should be flexlble and open Lo amendmenL
sub[ecL Lo Lhe demands and consLralnLs of Lhe envlronmenL and whaL Lakes place ln Lhe sLaLus of Lhe
resources
Cnce Lhe buslness sLraLegy ls deLermlned wlLhouL Lhe lnvolvemenL of Lhe P8M professlonal P8M
pollcles and pracLlces are lmplemenLed Lo supporL Lhe chosen compeLlLlve sLraLegy ln Lhls sense Lhe
pracLlce of sLraLeglc P8M ls concerned wlLh Lhe challenge of maLchlng Lhe phllosophy pollcles
programs pracLlces and process Lhe 'flve s' ln a way whlch wlll sLlmulaLe and relnforce dlfferenL
employee role behavlours approprlaLe for each compeLlLlve sLraLegy ( Schuler 1989) 1here ls a llnk
beLween Lhe envlronmenL human resource sLraLegy and Lhe buslness sLraLegy
ln Lhe laLe 1980s !ohn urcell made a slgnlflcanL conLrlbuLlon Lo research on buslness P8M sLraLegy
'SLraLeglc cholce' ln lndusLrlal relaLlons and uslng Lhe noLlon of hlerarchy of sLraLegy urcell (1989)
ldenLlfles whaL Lhe labels 'upsLream' and 'downsLream' Lypes of generlc declslon 'upsLream' or 'Lhe
flrsLorder' sLraLeglc declslons are concerned wlLh Lhe longLerm dlrecLlon of Lhe corporaLlon lf a flrsL
order declslon ls made Lo Lake over anoLher enLerprlse a second seL of conslderaLlons apply concernlng
Lhe exLenL Lo whlch Lhe new operaLlon ls Lo be lnLegraLed Lo wlLh or separaLe from exlsLlng operaLlons
1hese are classlfled as 'downsLream' or 'secondorder' sLraLeglc declslons ulfferenL P8M approaches
are called 'Lhlrdorder' sLraLeglc declslons because Lhey esLabllshed Lhe baslc parameLers of labour
managemenL ln Lhe workplace ln Lheory wroLe urcell 'sLraLegy ln human resource managemenL ls
deLermlned ln Lhe conLexL of flrsLorder longrun declslons on Lhe dlrecLlon and scope of Lhe flrm's
acLlvlLles and purposeand second order declslons on Lhe sLrucLure of Lhe flrm' (1989 p7) ln a ma[or
sLudy of P8M urcell and ahlsLrand (1994) argue LhaL whaL acLually deLermlner human resource
managemenL pollcles and pracLlces wlll be deLermlned by declslons aL all Lhree levels and by Lhe ablllLy
and leadershlp sLyle of local managers Lo follow Lhrough goals ln Lhe conLexL of speclflc envlronmenLal
condlLlons 1hls sLraLeglc cholce has a naLure problemaLlc 'addedvalue sLraLegles do noL preclude or
prevenL Lhe use of managerlal conLrol over employees (1993 p29) 8unnlng parallel Lo Lhese
developmenLs was Lhe company's concurrenL ob[ecLlve of cosL reducLlon !ob cuLs were managed
enLlrely Lhrough volunLary severance and redeploymenL 1he requlremenL Lo susLaln and lmprove
performance ln Lhe face of such loses produced however a preoccupaLlon wlLh producLlvlLy levels and
aLLempLs Lo alLer shlfLs paLLerns someLlmes provoked confllcLs ulspuLes were resolved qulckly usually
by Lhe company remlndlng Lhe employees of An's commlLmenL Lo [ob securlLy Lralnlng and
developmenL and Lhrough senlor managemenL Lhrowlng money Lo Lhe problem
uest|on No 3
What prob|ems |f any do you env|sage w|th AN's nk Strategy and GoIet's nk strategy?
So|ut|on No 3

Senlor managers are pragmaLlc and work organlzaLlons can adopL 'hard' verslon of P8M for one
caLegory of workers or ln a mulLldlvlslonal company llke An and Co!eL's for one buslness whlle
slmulLaneously pursulng a 'sofL' verslon of P8M for anoLher group of workers Lo provlde a coherenL
undersLandlng of P8M pollcles and pracLlces and why Lhey vary WheLher senlor managers adopL Lhe
'maLchlng' or Lhe 'resource based' model of SP8M wlll be conLlngenL upon flrsL Lhe corporaLe and
buslness sLraLegles as well upon varylng degrees of pressure and consLralnLs from envlronmenLal
forces ( 8raLLon and Could)