Introduction

Learning outcome - SHRM

 Identify general principals of Strategic Management

 Develop strategic options for organizations, assess those options,

select those deemed most appropriate, and justify and
communicate those decisions to others

 Understand and describe the linkages between strategic

management, HR planning, and HRM practices

 Identify ways that HR management operates (or could operate)

as a strategic business partner in today’s business organizations

 Develop means of evaluating human resources and the

effectiveness of HR practices
 Module 1

Introduction to SHRM
HR and linkage with Business goals
Learning Objective - Module 1

 Principles and Process of Strategic Management

 Understanding of the effective management of the

strategic functions within organizations

 Understanding Strategic Human Resource Management

 Strategic Management

“Strategic management is the continuous planning,

monitoring, analysis and assessment of all that is
necessary for an organization to meet its goals and
objectives”
Process flow of Strategic Management
BSC-Balanced Score Card

MBO-
Management
by Objectives

Strengths,
Weakness,
Opportunities
Threats
Few Marketplace Strategy -

Famous Billboard Wars

Airline companies
Jet Airways v/s Kingfisher
Jet Airways /Kingfisher v/s Go Air
Pepsi v/s Coca Cola
Burger King v/s McDonalds
FedEx v/s DHL
Brand Wars
Video Url:

Apple vs Blackberry Commercial War.

https://www.youtube.com/watch?v=zMFuPbUQBPQ
SAMSUNG MAKES FUN OF APPLE! IN NEW COMMERCIAL
https://www.youtube.com/watch?v=fKunpnL4g0w
MERCEDES VS JAGUAR | Very FuNNy COMMERCIAL BATTLE
https://www.youtube.com/watch?v=WLka5owmuU8
 2-18

Business Strategy
 Definition:
how a company will compete in its
marketplace

 Competitive advantage: anything that gives a

firm an edge over rivals in attracting customers
and defending itself against competition
Sources of Competitive Advantage

 To have a competitive advantage a company

must be able to give customers superior value
for their money which may come as:
 Innovation
 Cost
 Service
 Quality
 Branding
 Distribution
 Speed
 Convenience
 First to market
Types of Business Strategy
Types of Business Strategy
Cost leadership strategy: be the lowest cost producer for
a particular level of product quality (Wal-Mart, Dell, Big
Bazar,Indigo,spicejet)

How do you achieve it?

 Through operational excellence:
 This can only be achieved with trainable and
flexible employees who avoid waste and lower
production costs
 Video Url
 Big Bazaar - Har Din Lowest Price
 https://www.youtube.com/watch?v=mehLmm7ag0s
Contd.
Differentiation strategy: developing a product or
service that has unique characteristics valued by
customers and for which the firm may be able to
charge a premium price (Bentley Continental,
Mercedes-Benz ,Rolex, Apple)
 Competitive advantage based on product
innovation
 Southwest Airlines is both a cost leader and a
differentiator.
Video Url:
 https://www.youtube.com/watch?v=7sWPHKU1
XZU
 Porsche 911 commercial ad.
Contd.
Specialization strategy: focus on a narrow market
segment or niche and pursue either a differentiation
or cost leadership strategy within that market
segment (Starbucks, Apple)
Competitive advantage based on customer intimacy:
deliver unique and customizable products or services
to meet their customers’ needs and increase
customer loyalty.
Consulting, retail and banking strive for customer
intimacy.
Video Url:
https://www.youtube.com/watch?v=ZFb01yTR9bA
British Airways: Fueled by Love
Growth Strategy

 Definition: company expansion organically

(happening as the organization expands from within
by opening new locations) or through mergers and
acquisitions .

 Organic growth requires an investment in recruiting,

selecting, and training the right people to expand
the company’s operations.

 Mergers and acquisitions expand an organization’s

business and can also be a way to acquire the
quality and amount of talent a firm needs to execute
its business strategy
Strategic Human Resource Management(SHRM)
Jeffrey A Mello –‘The Development of a consistent, aligned
collection of practices, programs and policies to facilitate the
achievement of the organization’s strategic objectives’

 SHRM Is the Process of aligning HR strategies with

the business strategy to accomplish goals through
the employees’ competency and commitment

 Requires abandoning the mindset and practices of

“personnel management” and focusing on
strategic issues than operational issues
 Difference between HRM and SHRM

BASIS FOR COMPARISON HRM SHRM

Nature Reactive Proactive

Responsibility Staff specialist Line manager

Approach Fragmented Integrated

Concerned with internal and

Scope Concerned with employee relations
external relations

Time horizon Short term Long term

Basic factor Capital and products People and knowledge

Change Follows change Initiates change

Accountability Cost center Investment center

Components of SHRM
 Components of SHRM
 1.HR: Primary source of competitive advantage
 2.Activities:HR programs and practices to get that
competitive advantage
 3.Pattern and Plan: fitment of HR strategy with
Business Strategy
 4.Purposeful :People, activities and plans are
directed to achievement of organization’s goals.
Benefits of Strategic Human Resource
Management
 Improve Organizational efficiency
 Contribute to revenue growth
 Better understanding of responsibilities and
how they relate to Mission, Strategy and
Business goals by employees
 Improve employee engagement, effort and
performance
 Increase organizational ability to manage
change
Competitive intangibles are the source from which
competitive advantage flows.

https://www.youtube.com/watch?v=4Q2W4GvrZTk
Narayana Murthy explains why he'll take Rs 1 as salary at Infosys
Human capital is the primary source of every
competitive intangible

https://www.youtube.com/watch?v=7loEuIEjLzo
HR will be dead by 2020 (Full Video) - Vineet Nayar & Richard Rekhy at
14th National HRM Summit.
https://www.youtube.com/watch?v=sP3ZhcXOkSM
A leader must be a "people person" | Richard Branson | WOBI
Overview – VRIO Framework
VRIO Framework
 Thisis a business analysis tool proposed by
Barney in 1991

 This utility of this tool is determined by

applying the resource based view(RBV)
of the Organization
VRIO Model
Illustration – Walmart VRIO
 Walmart VRIO

T-Temporary Advantage. SCA-Strategic Competitive Advantage

Everyday low prices:
 Walmart has forever had the strong recognition
from their slogan, ‘everyday low prices’. This has
been a valuable resource and has allowed
Walmart to achieve the largest market share in
the discount retail industry. This slogan is also
a rarity within the industry. But we find that this
strategy is easily replicated. Walmart is currently
having temporary strategic advantage.
Grocery Retail
 Grocery Retail: Walmart currently offers grocery
retail within their stores; this is a valuable resource
that allows them to retain large profits. This is not
a rare attribute because there is other
competition that has the same offering. This
could be easily imitated but Walmart is fully
capable of exploiting this resource.
 Greeters
 Walmart is the only discount retail store that offers
greeters when customers enter the store. This is
a valuable resource because it gives the consumer
a welcoming feel when they enter. This is also
a rare attribute within the industry. Any company
that tried to imitate this would face significant costs
(increased employees = increase expense).
Walmart is fully capable to organize this attribute
and exploit it to its fullest advantage.
 MIS System
 MISSystem: Walmart is known for having the state
of the art MIS system that allows them to keep
inventory costs low. No other retailer within the
industry has been able to organize and exploit this
resource. This is a rare, valuable resource and
could not be easily imitated. This is a fully strategic
advantage.
VRIO ASSIGNMENT - Role Play
(Problem Team Vs Solution Team)

 Toyota vs Honda
 Star bucks vs Cafe coffee day
 Burger king vs MC Donald
 Mercedes vs Jaguar
 Indigo airlines vs Airasia
 Apple vs Samsung
 Coke vs Pepsi