Week 1 Discussion 1 HRM634

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Chapter 2 Business and Staffing

Strategies

Why Does One Company Succeed and Another Fail?

· Differences in their strategic, financial, and technological capabilities.

· Differences in organizational capabilities generated by attracting,

· retaining, motivating, and developing talented employees.

Staffing therefore plays a central role in creating and enhancing any

organization’s competitive advantage.

Resource-Based View of the Firm

A resource-based view of the firm proposes that a company’s resources

and competencies (including its talent) can produce a sustained

competitive advantage by creating value for customers by:

· Lowering costs of products or services

· Providing something of unique value

· Or some combination of the two

It also focuses attention on the quality of the skills of a company’s

workforce at various levels, and on the quality of the motivational climate

created by management.

· Human resource management is valued not only for its role in

· implementing a given competitive scenario but also for its role in

· generating strategic capability.

· Staffing has the potential to create organizations that are more

· intelligent and flexible than their competitors, and that exhibit superior

· levels of cooperation and operation.

Five Requirements of a Competitive Advantage

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.

To have a competitive advantage a company must be able to give

customers superior value for their money (a combination of quality,

service, and acceptable price).

Sources of Competitive Advantage

Components of Business Strategy

Business strategy involves the issue of how to compete, but also

encompasses:

· The strategies of different functional areas in the firm.

· How changing industry conditions such as deregulation, product market

· maturity, and changing customer demographics will be addressed.

· How the firm as a whole will address the range of strategic issues and

· choices it faces.

Three Types of Business Strategy

1. Cost leadership strategy: strive to be the lowest cost producer for a

2. particular level of product quality (Wal-Mart, Dell, FedEx).

1. Competitive advantage based on operational excellence: maximizing

2. the efficiency of the manufacturing or product development process

3. to minimize costs.

3. Differentiation strategy: developing a product or service that has unique

4. characteristics valued by customers (Johnson & Johnson, Nike, 3M).

1. Competitive advantage based on product innovation.

5. Specialization strategy: focus on a narrow market segment or niche and

6. pursue either a differentiation or cost leadership strategy within that

7. market segment (Starbucks, Red Lobster, Seiko).

1. Competitive advantage based on customer intimacy: deliver unique

2. and customizable products or services to meet their customers’

3. needs and increase customer loyalty.

Growth Strategy

· Definition: company expansion organically (happening as the

· organization expands from within by opening new locations) or through

· mergers and acquisitions.

Success depends on the firm’s ability to find and retain the right number

and types of employees to sustain its intended growth. 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.

Deriving Staffing Strategy

An organization’s staffing strategy should be derived from, and be clearly

supportive of, its overall human resource strategy. The strategies

developed for each HR functional area should support the overall human

resource strategy. The strategy of each functional area of human resources

should complement the strategies of the other areas, as well as the

organization’s higher-level human resource strategy.

Organizational Life Cycle and Strategy Choice

Growth-Maturity-Decline life cycle

· Strategy during growth phase:

· New and growing firms often pursue innovation or differentiation

· strategies to distinguish themselves from their competition.

· Because they are less established and thus higher-risk employers,

· they often need to invest more money and resources in staffing to

· attract the talent they need to grow.

· Because they lack a strong internal talent pool and need to add new

· employees as they grow, they frequently need to hire from outside

· the organization and tend to have an external talent focus.

· Strategy during maturity phase when products and services have fully

· evolved, and the product’s market share has become established:

· The focus shifts to maintaining or obtaining further market share

· through cost leadership, often by streamlining operations and

· focusing on efficiency.

· Because mature companies have a larger pool of internal talent from

· which to draw, the talent focus becomes more internal.

· Strategy choice during decline phase when markets are shrinking and

· business performance is weakening:

· Can pursue a cost-leadership strategy and allow the decline to

· continue until the business is no longer profitable.

· Focus on reducing labor and other costs.

· Can try to make changes to revive the product or service.

· If it chooses to try to change its product or service, the firm typically

· adopts a specialization or differentiation strategy.

· This can change the talent mix needed.

Talent Philosophy

A talent philosophyy is a system of beliefs about how employees should

be treated

Sources of Ethical Guidelines

· The American Psychological Association (APA)

· Published a document that describes test takers’ rights and

· responsibilities.

· Published the Standards for Educational and Psychological Testing

· (1999).

· Publishes reports to address emerging staffing issues such as the

· APA’s position on good and ethical Internet testing practice and test

· user qualifications.

· Published ethical guidelines to help staffing experts The Society for

· Industrial and Organizational Psychology (Division 14 of the APA)

· Principles for the Validation and Use of Personnel Selection

· Procedures (2003).

· The Uniform Guidelines on Employee Selection Procedures (1978)

· Defines discrimination and good conduct for validity studies, and

· suggests ways for identifying adverse impact and ensuring the

· appropriateness of a staffing process.

· The Society for Human Resource Management (SHRM)

· Represents over 200,000 human resource practitioners and provides a

· code of ethics for its members.

· Academy of Management

HR and Staffing Strategies

· Human resource strategy: the linkage of the entire human resource

· function with the firm’s business strategy in order to improve business

· strategy execution.

· Staffing strategy: the constellation of priorities, policies, and behaviors

· used to manage the flow of talent into, through, and out of an

· organization over time.

Nine Elements of Staffing Strategy

Competitive Talent Advantage

· Human capital advantage: acquiring a stock of quality talent that creates

· a competitive advantage.

· Hiring and retaining outstanding people produces a stock of

· exceptional talent.

· Human process advantage: superior work processes that create a

· competitive advantage.

Ethics

· A moral judgment occurs when we identify what is the “right” and

· “wrong” course of action

· Moral intent is our commitment to this identified action.

Ethical Guidelines

· Remember that you represent your employer

· Understand the organization’s ethical climate

· Know relevant laws and ethical standards

· Understand the reward system

· Be aware of conflicts of interest

· Leverage research to shape practice

· Seek qualified advice when necessary

Analytics

· Staffing metrics are operational measures about how efficient, effective,

· or impactful a firm’s staffing practices are.

· Analytics should be linked to important business processes and

· outcomes.

· Effective analytics asks the right questions, then uses the right accurate

· metrics to answer them

Technology

· Applicant tracking systems (ATS) electronically management

· recruitment data and processes

· Human resource information systems (HRIS) are software or cloud-

· based tools used to to track and analyze human resource data

Strategic Staffing 4th edition © 2020 Chicago Business Press. All Rights

Reserved. May not be scanned, copied or duplicated, or posted to a

publicly accessible website, in whole or in part

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