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SMART goals set by managers are ________.
A) specific, measurable, aggressive, required, and tested
B) short-term, motivational, attainable, relevant, and total
C) standardized, manageable, accurate, restrictive, and tested
D) short-term, measurable, aggressive, risky, and timely
E) specific, measurable, attainable, relevant, and
timely
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The Strategic Management Process
the process of identifying and executing the organization's strategic plan by matching the company's capabilities with the demands of the environment.
The Management Planning Process
The
Hierarchy of Goals
Policies and Procedures
The Management Process
The basic management planning process consists of five steps: setting objectives, making basic planning forecasts, reviewing alternative courses of action, evaluating which options are best, and then choosing and implementing your plan.
The Hierarchy of Goals
In companies, it is traditional to view the goals from the top of the firm down to front-line employees as a chain or hierarchy of goals. Figure 3-1 illustrates this.
Figure 3-1 (picture).
At the top, the president sets long-term or "strategic" goals (such as "double sales revenue to $16 million in fiscal year 2017"). His or her vice presidents then set goals for their units that flow from, and make sense in terms of accomplishing, the president's goal. Then their own subordinates set goals, and so on down the chain.
Policies and Procedures - Policies
provide day-to-day guidance employees need to do their jobs in a manner that is consistent with the company's plans and goals. Policies set broad guidelines delineating how employees should proceed.
Policies set broad guidelines delineating how employees should proceed. For example
"It is the policy of this company to comply with all laws, regulations, and principles of ethical conduct."
Procedures
spell out what to do if a specific situation arises.
strategic plan
the company's overall plan for how it will match its internal strengths and weaknesses with its external opportunities and threats in order to maintain a competitive position.
The strategic planner asks,
"Where are we now as a business, and where do we want to be?" He or she then formulates a strategic plan to help guide the company to the desired destination.
Figure 3-2 summarizes the strategic
management process.
Its seven steps include:
Asking, "Where are we now as a business?"
Evaluating the firm's internal and external strengths, weaknesses, opportunities, and threats,
Formulating a new business direction,
(4) Deciding on strategic goals,
(5) Choosing specific strategies or courses of action,
(6) Implementing the strategic plan, and
(7) Evaluating the strategic plan.
In practice, managers engage in three types of strategies, including:
Corporate Strategy
Competitive Strategy
Functional Strategy
Corporate Strategy
Identifies the portfolio of businesses that, in total, comprise the company and how these businesses relate to each other
For any business, the corporate strategy answers the question
"What businesses will we be in?"
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.
Corporate-level Strategies
Concentration
Diversification
Vertical
Integration
Consolidation
Geographic expansion
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.
Concentration (single-business)
Corporate strategy; where the company offers one product or product line, usually in
one market.
The WD-40 Company is one example. With one spray lubricant, its product scope is narrow.
Concentration (single-business) example
The WD-40 Company is one example. With one spray lubricant, its product scope is narrow
Diversification
Corporate strategy means the firm will expand by adding new product lines.
Diversification example
PepsiCo is diversified. Thus, PepsiCo added Frito-Lay chips and Quaker Oats to its business portfolio. Here, the product scope is wider
Vertical integration
Corporate strategy means the firm expands by, perhaps, producing its own raw materials, or selling its products directly.
Vertical integration - example
Apple opened its own Apple stores
Consolidation strategy
Corporate strategy in which the company reduces its size.
Geographic expansion
Corporate strategy in which the company grows by entering new territorial markets
Geographic expansion - example
Corporate strategy in which the company grows by entering new territorial markets, for instance, by taking the business abroad.
Competitive Strategy
A strategy that identifies how to build and strengthen the business's long-term competitive position in the marketplace, which is also known as business-level competitive strategy.
examines the basis on which each business competes.
Competitive Strategy. For example, within a company like PepsiCo, each business unit (such as Pepsi and Frito-Lay) needs a business-level competitive strategy.
Managers typically adopt one or more of three standard competitive strategies
cost leadership, differentiation, or focus—to achieve competitive advantage.
The Three Standard Competitive Strategies
Cost Leadership
Differentiation
Focus
Cost leadership
This competitive strategy means becoming the low-cost leader in an industry.
Differentiation
the firm seeks to be unique in its industry along the dimensions that are widely valued by buyers.
Cost leadership example
Walmart
Differentiation - example
Volvo and Papa John's are examples. Volvo stresses the safety of its cars, and Papa John's stresses fresh ingredients.
Focusers
the company carves out a market niche.
Focuses - example
Bugatti cars is an example. They offer a product or service that their customers cannot get from generalist competitors, such as Toyota.
Functional strategy.
identifies the broad activities that each department will pursue in order to help the business accomplish its competitive goals.
Manager's Role in Strategic Planning
Devising the company's overall strategic plan is top management's responsibility. However, few top executives formulate strategic plans without lower-level managers' input.
In practice, devising the firm's overall strategic plan involves frequent discussions among and between top and lower-level managers. The top managers then use this information to hammer out their strategic plan.
Strategic Human Resource Management
The company's top managers choose overall corporate strategies, and then choose competitive strategies for each of the company's businesses. Departmental managers within each of these businesses formulate functional strategies for their departments.
Their aim should be to have functional strategies that will support the competitive strategy and the company-wide strategic aims. For example, the marketing department would have marketing strategies, the production department would have production strategies, and the human resource management department would have human resource management strategies.
Strategic human resource management
formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims.
Sustainability goals - example
PepsiCo wants to deliver "Performance with Purpose." This means achieving financial performance while also achieving human sustainability, environmental sustainability, and talent sustainability.
Strategic Human Resource Management Tools
Strategy map
The Human Resource Scorecard
Digiital Dashboard
Strategy map
Shows the "big picture" of how each department's performance contributes to achieving the company's overall strategic goals. It also summarizes how each department's performance contributes to achieving the company's overall strategic goals. It helps the manager and each employee visualize and understand the role his or her department plays in achieving the company's strategic plan.
The Human Resource Scorecard -
scorecard refers to a process for assigning financial and nonfinancial goals or metrics to important human resource management-related chain of activities. That chain is required in order to achieve the company's strategic aims and for monitoring results. Many employers quantify and computerize the strategy map's activities by utilizing the Human Resource Scorecard.
Digital Dashboard
Presents the manager with desktop graphics and charts, showing a computerized picture of how the company is doing on all the metrics from the Human Resource Scorecard process.
Human Resource Metrics
The quantitative gauge of a human resource management activity, such as employee turnover, hours of training per employee, or qualified applicants per position.
Benchmarking
Comparing the practices of high-performing companies results to your own, in order to understand what they do that makes them better.
Data Analytics
Using statistical and mathematical analysis and algorithms to find relationships and make predictions
Benchmarking
Comparing the practices of high-performing companies results to your own, in order to understand what they do that makes them better.
Just measuring how one is doing (for instance, in terms of employee productivity) is rarely enough for deciding what (if anything) to change. Instead, most managers want to know,
How are we doing?" in relation to something.
For example, a manager may ask staff, "Are our accident rates rising or falling?"
To understand the relationship between the accident rates of the company and accident rates of other companies, the manager may want to benchmark the results.
Organizational Data
Revenue
Revenue per full-time employee
Net Income Before Taxes
Net Income Before Taxes per full-time employee
Positions Included Within the Organization's Succession Plan
Employment Data
Number of Positions Filled
Time-to-Fill
Cost-Per-Hire
Employee Tenure
Annual Overall Turnover Rate
Annual Voluntary Turnover Rate
Annual Involuntary Turnover
Rate
Human Resource Department Data
Total Human Resource Staff
Human Resource-to-Employee Ratio
Percentage of Human Resource Staff in Supervisory Roles
Percentage of Human Resource Staff in Professional/Technical Roles
Percentage of Human Resource Staff in Administrative Support Roles
Reporting Structure for the Head of Human Resource
Types of Human Resource Positions Organizations Expect to
Hire
Expectations for Revenue and Organizational Hiring
Percentage of Organizations Expecting Changes in Revenue in current year compared to prior year
Percentage of Organizations Expecting Changes in Hiring
Strategy-based metrics
Specifically focus on measuring the activities that contribute to achieving a company's strategic aims
Benchmarking provides one perspective on how your company's human resource management system is performing. It shows how your human resource management system's performance compares to the competition. However, it may not reveal the extent to which your firm's human resource practices are supporting its strategic goals. Managers use strategy-based metrics to answer such questions.
...
The human resource audit
generally involves using a checklist to review the company's human resource functions (recruiting, testing, training, and so on), as well as ensuring that the firm is adhering to regulations, laws, and company policies.
The human resource auditor may first review payroll data, focusing on what and when each employee was paid. He or she will then turn to whether the human resource records are in order (for instance, are medical records kept separate from resumes). He or she will also review the employer's handbooks and policies, for instance, checking for disability accommodation policies, social media policies, and family and medical leave policies. He or she may also want to benchmark the results to comparable companies'. HR audits vary in scope.
...
Data analytics
using statistical and mathematical analysis and algorithms to find relationships and make predictions
Talent Analytics
is a data analytics tool that enables employers (including Walmart) to analyze in new ways employee data both on obvious things (like employee demographics, training, and performance ratings), but also data from new sources (like company internal social media sites, GPS tracking, and e-mail activity). Employers then use talent analytics (data analytics applied to HR issues) to answer questions that in the past they couldn't answer, or couldn't answer as well.
evidence-based human resource management
which involves using data, facts, analytics, scientific rigor, critical evaluation, and critically evaluated research/case studies to support human resource management proposals, decisions, practices, and conclusions.
In gathering evidence, scientists (or managers) first need to be
objective
experiment
a test set up in such a way as to ensure that he or she understands the reasons for the results obtained
High-Performance Work Systems
is a set of human resource management policies and practices that promote organizational effectiveness.
Employee engagement
Refers to being psychologically involved in, connected to, and committed to getting one's jobs done. Engaged employees "experience a high level of connectivity with their work tasks," and work hard to accomplish their task-related goals.
Employee engagement is important because
it drives performance and productivity.
What Can Managers Do to Improve Employee Engagement?
Provide supportive supervision
Ensure employees understand how their departments contribute.
See how their efforts contribute to achieving the company's goal.
Ensure employees get
a sense of accomplishment from working at the firm.
Ensure employees are highly involved.
Employers should hold managers responsible for employee engagement.
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