Meaning of Strategy:
Strategy is a course of action or
a long term plan. Organizational Strategy means organization’s long term plan
about how it will deploy its resources and how it will outperform competitors
by serving customer better than the competitors.
Strategy Levels:
Scholarly literature on Strategic management identifies
three main levels of strategies.
Corporate level strategy sets the direction for whole
organization
Business Unit or Divisional level strategy is about planning
at specific division or strategic business unit level
Functional Strategy is about the planning of specific
functions such as HRM, Marketing, Finance and Research and Development.
Corporate level strategy guides the divisional level
strategy and the divisional level strategy guides each functional level
strategy however in some cases it become reverse means functional strategies
are set first and then they guide divisional strategies and corporate strategy.
Source: Strategy Levels by Tahir 2012
Strategic HRM Process:
The process of Strategic HRM begins with the strategy
formulation for the whole organization. Once strategy is being formulated it
guides HRM practices and policies. Strategic Human Resource Management means
designing such HR practices and policies which result in specific behavior and
skills. Such behavior and skills are important for organization to achieve its
strategic objectives. In simple words
Strategic HRM means achieving competitive advantage through your people. For
example if organization is competing on Cost basis then HR practices should be
designed in such a way that it result in a more cost conscious employees.
Similarly if Organization is competing on Differentiation then HR practices
should aim to increase employee’s creativity, innovation and risk taking.
Source: Strategic HRM Process by Tahir 2012
Some Strategic HRM model suggest that HR
Practices should be matched with organization’s or Industry’s life cycle. Summing
up the debate it simply means that HR Practices and policies are guided by the
overall strategy and are aimed to achieve required competencies and behavior
and once these competencies and behavior are achieved, they become source of
competitive advantage because it is difficult for competitor to copy.
HR Manager’s
Strategic Role:
If organization want to achieve its strategic objectives, it
is important that HR manager should be involved in strategy formulation
process. Many organizations fail to achieve their strategic objectives because
of the low involvement of HR managers in strategy formulation process. The
failure mainly occurs because employees are not ready to implement strategic
changes or there is mismatch between their competencies and organization’s
strategy. This gap can only be filled by involving HR Manager in Strategy
formulation process. The strategic role of HRM requires HR Managers to play an
active role in strategy formulation, continuous lobbying, designing HR
practices which support business strategies and being proactive to any changes in the environment internally as well as
externally.
