How strategic planning is linked to

Human Resources Management?

By Aleksandra Jagoda Duszynska
z
and Armine Yesayan
 Agenda

1. Introduction
2. Strategic planning and its goals
3. Strategy, structure and HR
4. Trends influencing HRM
5. Strategic planning process
6. Cascading of strategies
7. Generic strategies and HRM
8. Critical reflection
9. List of references

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 Strategic Planning and HR

Strategic planning and human resources have symbiotic relationship.

• Strategic planning involves all the procedures of making

decisions and long-term goals of an organisation.

• Human resource planning is a process of adjusting the flow of

people in, into and out of the organisation.

Source: Drucker, 2002

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 Strategic Human Resource Management

The theory was developed in 1980s to improve corporate

competitiveness.
Labor ≠ part of production cost (Hendry and Pettigrew, 1986)

Source: https://corehr.files.wordpress.com/2012/07/precision-engineering-challenges.jpg

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 Goals of Strategic Human Resource
Management

Market-based view Resource-based view

• Provide the organization with • Provide the organisation with

capabilities to achieve the the source of competitive
strategic objectives advantage.
efficiently and effectively.

Source: Hendry and Pettigrew, 1986

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Alignment of Strategy, Structure and HR

Source: Fombrun, Tichy and Devanna, 1984

6
 New Trends and Consequences
• Globalization
• Decrease in product life
cycle, pressure for
innovation
• Increase in diverse
customer needs, need
for market
responsiveness
• Increase in technology
advances
• Change in employee
attitudes and values
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• Worker and technological
efficiency is not sufficient
to remain competitive
• Employee contribution to
value creation is crucial
for reaching strategic
objective
• Labor is resource for
value derivation
• Human resource
advantage
Source: Boxhall and Purcell, 2003
Strategic Planning Process

Source: Mondy and Martocchio, 2016

•
Cascading of Strategies

Source: https://www.slideshare.net/TejasAtyam/strategic-management-42991530

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Generic Strategies of Michael Porter

Source: Tanwar, 2013

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 Linking Differentiation Strategy to HR

• selecting highly skilled individuals

• giving employees more discretion

• using minimal controls

• providing more resources for experimentation/creativity

• allowing and even rewarding occasional failure

• appraising performance

Source: Schuler and Jackson, 1987

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 Linking Differentiation Strategy to HR

Differentiation strategy requires people in the organization to work

differently/creatively.

Source: http://worldofskunkworks.blogspot.de/2013/04/apples-skunk-works-what-is-wrong-there.html
Source: http://www.harley-davidson.com/de_DE/Motorcycles/v-rod.html

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 Linking Cost Leadership Strategy to HR

• tight control

• overhead minimization

• pursuit of economies of scale of standardized products

• increase in productivity

• outsourcing

Source: Schuler and Jackson, 1987

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 Linking Cost Leadership Strategy to HR

Cost-reduction strategy requires people in the company to work

harder.

Source: http://www.ebay.com/gds/Top-6-Dell-Inspiron-Laptops-/10000000177747726/g.html
Source:http://cfts.org.ua/news/2017/04/26/v_mininfrastruktury_zayavili_ob_uspeshnykh_peregovorakh_ryanair_s_
aeroportami_lvov_i_borispol_40287

14
 Summary

Company HR
Employees
Strategy Strategy
• Strategic • Competences • Key functions
challenges • Motivation • Recruiting
• Strategic priorities • Commitment • Development
• Business objective • Values • Communication
• Competitive • Availability • Layoffs
advantage

• Company vision

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 Critical Reflection

• There is a direct link between business strategy planning and HRM

aspects.

• Whenever there is a change in company strategy because of changes in

customer demand, competition or technology, there should be also a

change in HRM planning.

• HRM strategies should be in line with business competitive strategies to

increase organizational performance, help to retain and motivate

employees.

• External factors should be considered as well (economic and technology

trends, future market forecast, political changes and cultural factors).

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 List of References
• Hendry, C. and Pittgrew, A. (1986). The practice of strategic human resource management.
Personnel Review, 15 (5), pp. 3-8.
• Fombrun, J.C., Tichy, M.N. and Devanna A. M. (1984). Strategic human resource management.
New York: Wiley & Sons.
• Boxhall, P. and Purcell, J. (2003). Strategy and human resource management. New York: Polgrave
Macmillan.
• Tanwar, R. (2013). Porter’s generic competitive strategies. Journal of business and management,
15 (1), pp. 11-17.
• Schuler S. R. and E. Jackson E. S. (1987). Linking competitive strategies with human resource
management practices. The academy of management, 1 (3), pp. 207-219.
• Porter, M. E. (1979). How Competitive Forces Shape Strategy. Harvard Business Review, 57 (2),
pp. 1-10.
• Allen, R. S. and Helms, M. M. (2006). Linking strategic practices and organizational performance to
Porter's Generic Strategies. Business Process Management, 12(4), pp. 433-454.
• Datta, Y. (2010). A Critique of Porter's Cost Leadership and Differentiation Strategies. Chinese
business review, 9 (4), pp. 1-51.
• Ma, H. (2000). Competitive Advantage and Firm Performance. Emerald Backfiles, 10 (2), pp. 15-32.
• Drucker, P. (2002). They’re Not Employees, They’re People. Harvard Business Review, 80, pp. 70–7
• Mondy, R. W. and Martocchio, J. J. (2016). Human Resource Management. 14. ed., Pearson
Education Limited, Harlow.

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 List of References for Visuals

• https://corehr.files.wordpress.com/2012/07/precision-engineering-challenges.jpg

• https://www.slideshare.net/TejasAtyam/strategic-management-42991530

• http://worldofskunkworks.blogspot.de/2013/04/apples-skunk-works-what-is-wrong-there.html

• http://www.harley-davidson.com/de_DE/Motorcycles/v-rod.html

• http://www.ebay.com/gds/Top-6-Dell-Inspiron-Laptops-/10000000177747726/g.html

• http://cfts.org.ua/news/2017/04/26/v_mininfrastruktury_zayavili_ob_uspeshnykh_peregovorak

h_ryanair_s_aeroportami_lvov_i_borispol_40287

18
Thank you for your attention!