Strategic Management: An Integrated Approach, Essay Example

Introduction

In strategic management, formulation of organizational goal and policies is done by the management in respective departments (Hill & Jones, 2008). Among them is the Human Resource Department, which deals with the affairs of the members of staff, development of rules and procedures of doing business, as well as the allocation of duties. The competitive advantage of an organization is determined by the diverse factors and the mechanisms that are used to push for the corporate vision (Hill & Jones, 2008). In this analysis, we seek to understand the relationship between the Resource Based View and the overall competitive advantage of a firm. We will also discuss major corporate strategies and the challenges they pose to the Human Resource department. Finally, we analyze primary business unit strategies and their relationship with the management of human resources. All this is meant to help in boosting the understanding of strategic management effects on a business entity.

Resource-Based View (RBV)

RBV of an entity is a business management item that is used to evaluate the strategic resources that are readily available to the firm at any given time. The importance of RBV solely depends on the approaches adopted by strategic managers in their respective dockets. RBV highly depends on the mechanism used in the evaluation of resources and their allocation (Mello, 2014).  The effective assessment and evaluation of resources will lead to the implementation of the effective strategic business plan (Hill & Jones, 2008).  The relationship between RBV and the comprehensive competitive advantage lies in the utilization of the available resources and the procedures that will determine their usage. It depends on how resources are bundled together for a common purpose. It is the combination of tangible and intangible business resources in driving the shared corporate vision (Mello, 2014).  In the transformation of short-run firm’s competitive advantage, it is required that efforts are graduated to sustainable competitive advantages, and the resources are heterogeneous in nature and relatively immobile. If these two conditions hold true, then the bundle of resources combined can sustain the organization above average returns (Hill & Jones, 2008).  The success of a firm through RBV depends on the ability to make resource bundles that are unique and not easy to be copied by competitors. It is the primary driver of competitive advantage (Mello, 2014).

3 Major Corporate Strategies and HR Challenges

Growth

This is where an organization seeks to expand the market served, and products offered, through expanding the current business or introducing a new wing. With the implementation of the growth strategy, an entity may increase the size of the workforce, increase investment, at the same time, introducing new business procedures (Hill & Jones, 2008). Organizations grow and expand their market share through the use of concentration, vertical integration, diversification or horizontal integration. The main challenges facing HR during the implementation of this strategy include the need for recruitment, training, performance appraisals and need for more competent managers to oversee the implementation of the same (Mello, 2014).

Stability

This strategy seeks to maintain the scale of operations at its current state. This happens where a firm discovers that it is at its optimum production point, and the business is growing at the expected rate (Mello, 2014). Management embarks on stabilizing the business by maintaining procedures and other strategies, so as to keep the firm running at the desired pace. For instance, the company may decide to stop expanding its market and avoid product diversification for a period. At this moment, it will continue to serve the same customers with the same goods or services (Hill & Jones,2008).  The challenge that the firm’s HR may face is the need for extensive training for the existing members of staff to make sure that they all understand what limits the business is running on. Constant and close management of activities is required so as to make sure that every action is being undertaken according to the set limits, not to go beyond the necessary quantity or quality.

Renewal

This strategy is opted for, when a firm is in a crisis. Most of the times, it is used to revive business performance when the management realizes that things are going down, and there is a dire need for changing tactics and bring business back to life. The two primary classes of renewal strategies consist of retrenchment and turnaround strategies (Mello, 2014). This is where a corporate organization gives some members of staff a compulsory and early retirement, by relieving them of their duties. It also involves doing an overall turnaround of the workforce by shifting and swapping roles (Hill & Jones, 2008). The main challenge is the determination of who among the employees should go home or be moved from their previous positions. This involves the determination of the problematic areas where the depression seems to be more concentrated and pointing out the individuals responsible for the downfall. It is a real challenge to the management in the HR department.

3 Major Business Unit Strategies and HR Challenges

Cost leadership

This is where a firm operates at the lowest cost of production among the competitors. It is a business strategy that is aimed at driving competitive advantage for a company through cutting down costs to a level that profits are at the maximum (Mello, 2014). It mostly happens in large corporations that enjoy economies of scale by dividing their total costs by the diversified production units. The challenge that HR faces during the implementation of this strategy is how to ensure all employees are adhering to the procedures laid down for cutting costs. The HR department is the arm of an organization that is responsible for the management and training of workers, as well as developing methods that are meant to drive the businessvision. This may include training, motivation, and punishment, just to make sure that every member of staff becomes responsible (Hill & Jones, 2008).

Differentiation

This unit strategy calls for firms to begin producing goods and offering services differently from the usual. This mayinclude the incorporation of new methods of production or introduction of new products and services to be offered to the same market. This is a competitive strategy for firms during the wake of stiff competition (Mello, 2014). The challenge that HR faces during this business phase in how to train the existing staff on the new methods of production and to ensure there is no time lapse during the transition. The efforts of HR in fast-tracking the process means a lot for the success of the procedures.

Mixed strategies

This is where a firm chooses to implement more than one strategy, through combining ideas, and allocating resources in portions and bundles to build a foundation of a great business entity. It happens at the beginning of a business season, or when a firm introduces new products or services, which employees are not familiar. This is done to trap effects from different methodologies and help departments in boosting each other (Hill & Jones, 2008). The main challenge here is for HR to determine how much everything will be used, how and when. It also becomes challenging during the determination of employee targets as far as performance is concerned, considering that spill-over effects of mixed strategies are imminent.

Summary

In the above discussions, it can be concluded that Human Resource Department plays the most significant role in the implementation of business strategies. The success of a business entity highly depends on the steps that will be taken by HR and the responses that the workforce will exhibit. The competitive advantage of a firm is dependent on the moves that human resource takes whenever there is a transition in the organization and the willingness of the entire workforce. It is prudent that every firm ensures that there is a robust collaboration between human resources and the production strategies. Since employees are the best and most significant resources, a firm can have.

References

Hill, C., & Jones, G. (2008). Strategic management: An integrated approach. (10^th Edn.) Boston MA: Cengage Learning

Mello, J. A. (2014). Strategic human resource management. (4^th Edn.). Boston MA: Thomson Learning.