Video Transcript: The Manager's Role in Strategic Human Resource Management

hello, welcome. This is the manager's role in strategic human resource  management. So as a manager, we need to be strategic in how we goal set and  how we plan out the process. A plan shows the course of action for getting from  where you are to where you want to go. So we want to be instrumental in  helping them get from point A to point B, the most effectively, the most efficiently. So the planning involves setting objectives, marking out the objectives they  need to be able to accomplish objective 1, 2, 3, etc, and build off their success  making basic planning forecasts. You need to be able to project out what type of output are you going to need from your inputs, from your labor, from your raw  materials, right from all of your assets, reviewing alternate courses of action  again, staying flexible. Need to make sure that we're staying flexible in our  approach, to make sure that we can make the appropriate changes during a  changing market. Evaluating which options are best. We need to know what our  options are, compare them and figure out what's best for our organization, then  implement the course of action to get those defined objectives, choosing and  implementing your plan. So after we've seen our choices, we know our options,  choose the best plan and then implement it. So in different organizations, you're  going to have a hierarchy of goals. It is the traditional view that goals come from  the top down to frontline employees, from senior management as a chain or  hierarchy of goals at the top, the President, CEO, board of directors, they set the long term strategic strategic goals, then it flows downward, so from the CEO to  the president of the company, then to the vice presidents, then down to their  subordinates. It flows that way, right? So each so the CEO or the president sets  the broad vision, and it continues down until it gets to the operational level, and  then those ideas are put into process, and then growth occurs. So this is kind of  a hierarchy of goals diagram. So we want to look at the president, then the vice  presidents, right? Then we're subdivided down into segments, right? The sales  manager for each region, recruiting manager, Training Manager. So you have  the president, the vice president, and then you've got different middle managers, right? So want to consider this is the upper management, the upper crust, right?  Then, here's middle management that is delegated out from there. So in  strategic planning, the company's plan for how much it will match internal  strengths and weaknesses with external opportunities and threats in order to  maintain a competitive advantage. So we want to maintain a competitive  advantage against our competitors inside the market, right? So we need to know what our strengths and weaknesses are, right? So we need to have a plan that  will help grow our strengths and improve our weaknesses. So the strategy is a  course of action A company can pursue to achieve, to achieve its strategic aims, we've got to be strategic and how we go through the process of developing our  plan, implementing it, and then making sure we improve upon it once it's in  place. So strategic management is the process of identifying and executing the  organization's strategic plan by matching the company's capabilities with the 

demands of its environment. So you have to know your environment. You have  to know where you can take your shots, where you can try to drive for extra  profit, try to get marginal revenue. We've got to understand where we can be  strategic to take advantage of opportunities. Now, leveraging is capitalizing on a  firm's unique competitive strength while underplaying its weaknesses. We need  to leverage our strengths to increase our weaknesses, right? So what I mean by that is where we're strong, right? We need to compensate. We need to work  harder, push. Through that output, right? And in turn, while we're pushing  through our strengths, we need to bring up our weaknesses and improve those  and find out where we are in the market and why we're weaken these areas in  the market and improve upon them. So the strategic planning process one,  define the current business. What do we want to do? What market do we want  to participate in? Two, perform external and internal audits. We have got to have those control mechanisms in place so that we can know where we have to be  strategic and take advantage and exploit opportunities. Step three, formulate a  new direction. This goes back to the point of being flexible. We need to be  flexible in business, because things change, environments change, right? So  let's formulate a new direction if need be right. Number four, translate the  mission into strategic goals. When we're formulating a new direction, we're  going to come up with a new mission. Once we have the mission, we're going to turn that into strategic goals and implement those to achieve business  objectives. Number five, formulate strategies to achieve the strategic goals.  Right? We're continuing to develop the plan, organizing it right. Number six,  implement those strategies. Now, once we have our plan organized and  developed, we have to go to the ground floor and implement those new ideas.  Step seven, evaluate this is the controlling function, right? We need to evaluate  the metrics from previous performance, so we can know how to get better,  moving forward into the future. So this is a traditional swot matrix, strengths,  weaknesses, opportunities and threats. So potential strengths could be market  leadership, right? We need if we're a market leader in our industry. That's  obviously a strength, strong research and development. We can research and  develop new products, be innovative, high quality products, right? Those are  strengths, cost advantages. We play low cost due to economies of scale and  patents we own the right to make this and nobody else does, potential  opportunities, new overseas markets, growing globalization, failing trade  barriers, right? So if you have barriers to entry in a market, and those are  deteriorating, we can take advantage and expose new opportunities and new  markets competitive. Competitors are failing. Competitors are failing, right? So if our competition is not performing well, we need to go and take advantage of that and take their market share from customers that aren't happy with their  products. Diversification. Don't put all your eggs in one basket, right? Have  multiple products that you can sell or services that you can provide. And 

economic recovery, or economy is a rebound, right? When there is a you come  out of a recession in the economy is recovering right? Take advantage of that,  you can have a lot of opportunities in a rebounding economy. Potential  weaknesses, too large of inventory. If you have too large of inventory, most of  the time, you're going to have to sell your product for cheaper prices, because  you need to dwindle down your inventory. That's a weakness. You can't  maximize your revenues or your profits. Excess capacity for the market, too  many players, too many players in the market now, because there's too many  players, whatever the product is, there's too much of it out there, and we're not  going to sell as much management turnover, we the stability of any company is  its management. We don't want to see management, particularly high level  management, turning over frequently, because that shows insecurity inside the  organization, a weak market image. You don't want to be as an organization,  you don't want your image or your reputation to be tarnished by the choices of  other people. So that's why it's important to retain and hire high quality  individuals with high character, lack of management depth. Again, it goes back  to the staffing function, right? Lack of management depth. You need to train,  hire, retain and train top talent. If you don't, you're going to have lack of  management depth, potential threats, market saturation, too much, product.  Threat of takeover, right? Some, somebody, another firm, wants to buy you out.  You don't want to, you don't want to sell. They can come at you with a hostile  takeover and buy you out on the open market for a set price per share, low cost, foreign competition. We've seen this a lot recently, out of the Asian markets, low  cost goods coming to our domestic markets, and therefore making domestic  products too expensive, therefore the low cost foreign competition comes in,  and that's a threat, slow market growth. The idea for our market or for our  product, isn't taking off very well, and it needs some more research and  development. Make it more efficient, make it more innovative, whatever it is for  your product. And then another threat is the growing government regulation. It's  something that we can't predict either, right? It's going to change administration  from administration. Wherever you are in the region, changes government from  government. So regulation is a growing concern. So let's talk about the types of  strategies. Managers formulate three strategies, corporate wide strategic  planning, business unit or comprehensive strategic planning and functional  departmental strategic planning. So let's look at corporate level strategy. What  business are we in? Business One competitive strategy, how will we compete?  How will we compete? How will we compete? So we want to make sure that we  are implementing a strategy that will deliver us from our competition by creating  opportunities to expose them in the market to be better than them. So let's  discuss the corporate strategy. A company's corporate level strategy identifies  the portfolio of businesses that in total comprise the company, and how these  businesses relate to each other. So there could be numerous businesses under 

one parent company, and they all are interrelated based upon the decisions of  the upper level management of that parent company. So concentration or single  business corporate strategy. So now we're defining ourselves into one market,  putting ourselves into one competition, one competitive strategy that we aren't  going to offer product differentiation. We're just going to streamline one product,  and then that is our strategy, and we're going to make that product the best that  it can be and make it the market leader. Concentration growth strategies include market penetration, product development and horizontal integration. So with  market penetration, we're becoming a new player into a market and taking  market share from existing organizations, right? And then we're going to try to  continue to take market share through innovation, research and development  and growth, marketing, all of the above right. Product Development, we're going  to continue to develop our product products, making them better, understanding  what the market wants, what consumers desires are, and capitalizing on that  horizontal integration continue to have more and more fixed costs spread out  across your business lines, and therefore driving costs down and raising  revenues and profitability. Diversification corporate strategy implies that the firm  will expand adding new product lines. So would diversify our product lines. We  want to make sure that our risk is spread out above among multiple product  lines. So doing that allows us to take advantage of if one of our products is  doing very well in sales and is meeting is beating expectations, but one of our  other products, it's not meeting expectations, and it's not performing as well, our  over overall return on investment will be where we want it, because the one  that's performing well will make up for the one that's not performing well. So  then the average on our portfolio will come out to a better average, instead of us just being invested into one product, now we're spread out among several. So a  conglomerate is an unrelated or diversification strategy that means diversifying  into products or markets that are not related to a. Firm's current business. So  now we're just kind of reaching out seeing a high performing market or a high  performing industry, and we want to take advantage of that market growth. So  we want to, even though we don't have any experience in this market, but we  want to take advantage of the market momentum, so we're going to develop a  product line that can compete in that market, a vertical integration strategy  means the firm expands by perhaps producing its own raw materials or selling  its product. So instead of going to a middleman and buying marked up raw  materials, now they can vertically integrate and create their own raw materials  for fractions of the cost, therefore cutting their costs dramatically and increasing  profitability and shareholder value. With consolidation strategy, the company  reduces its size. So sometimes you'll see, before companies file bankruptcy or  something like that, they're going to try their best to consolidate down their  businesses. You can see that happening a lot in retail right now, as bricks and  mortar retail aren't performing very well because of online shopping, you're 

starting to see a lot of bricks and mortar retail close their doors because it's  unnecessary cost. They're providing the labor, the lease, whatever it is, right?  They're having to pay for that. So if they're in tough times, they want to  consolidate their operations and reduce their size, therefore saving on cost. With geographic expansion, the company grows by entering new territorial markets.  So with growing globalization, you're able to see greater firms go outside of their domestic borders and compete in international markets. So it's very geographic  expansion centric. So we want to be able to go into new territory, capture market share from new territory. So again, you'll see the corporate strategy possibilities, concentration, diversification, consolidation, vertical integration and geographic  expansion. So strategic human resource management is the linking of human  resource management with strategic goals and objectives in order to improve  business performance and develop organizational cultures that foster innovation and flexibility. So we want to make sure that we are staying innovative, staying  flexible, understanding market demands, being able to provide what the  consumers need, and continuing to absorb market share as we grow. Involves  Strategic Human Resources. Management, involves formulating and executing  HR systems, HR policies and activities that produce the employee  competencies and behaviors that the company needs to achieve its strategic  aims. Strategic HR tools, as you can see, strategy map, HR scorecard, digital  dashboard. So we'll talk about the strategy map. The strategy map provides an  overview of how each department's performance contributes to achieving the  company's overall strategic goals. So the strategic the strategy map will kind of  just lay it out like a road map, right? It's going to help you navigate as an  employee, as a supervisor, what's expected of you? How long do we have to  meet these expectations and these obligations, and therefore meeting the  company's strategic goals. It also helps the manager understand the role his or  her department plays in executing the company's strategic plan. So we want to  know our role as we are going through this organization, planning, developing,  implementing process, we need to know what we play, what role we play in this  strategy. So the HR scorecard, it refers to a process for assigning financial and  non financial goals or metrics to the human resources management related  chain of activities required for achieving the company's strategic aims, right? So  it's just kind of a scorecard that tells us, hey, look, this is how we're doing from a  financial and non financial perspective, right? As as the intangible, right? The  intangible results of how we are managing our employees, right? Not always a  financial benefit to the company, right? We don't always just want to see that.  We want to know how our employees, you know, how is their well being, right?  The idea is to take the strategy map and quantify it. Managers use special  scorecard software to facilitate this. Often, the computerized scorecard process  helps the manager quantify the relationships between HR, right, testing, training  and so forth, resulting in employee behaviors. How well is their customer 

service? The resulting firm why strategic outcomes and performance? Such as  customer satisfaction and profitability. So you know, taking all of these segments and combining them down into one scorecard helps you to understand your  employees on a more well rounded, quantifiable basis, strategic human  resource management tools, a digital dashboard presents the manager with  desktop graphs and charts showing a computerized picture of how the company is doing on all metrics from the HR scorecard process.