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Strategic Importance of Strategic Importance of Organizational EnvironmentOrganizational Environment
Organizational environment includes:Organizational environment includes: Company leadershipCompany leadership Corporate and business strategiesCorporate and business strategies Organizational structureOrganizational structure Organizational cultureOrganizational culture
HR practices should be aligned with other HR practices should be aligned with other aspects of environment.aspects of environment.
VisionVision Top management’s view of the kind of Top management’s view of the kind of
company it is trying to create.company it is trying to create. MissionMission
Defines a company’s business and provides Defines a company’s business and provides a clear view of what the company is trying to a clear view of what the company is trying to accomplishaccomplish
Provides guidance to fulfill the vision.Provides guidance to fulfill the vision.
The vision, mission, and values convey to The vision, mission, and values convey to employees answers to questions such as:employees answers to questions such as: Where are we going?Where are we going? Why are we going?Why are we going? How will we get there?How will we get there?
HR professionals participate in the creation, HR professionals participate in the creation, maintenance and revision of vision, mission, maintenance and revision of vision, mission, and values statements and develop practices and values statements and develop practices to support them.to support them.
State Farm Insurance Mission State Farm Insurance Mission StatementStatement
At State Farm Insurance, the mission is to: At State Farm Insurance, the mission is to: Provide quality insurance productsProvide quality insurance products Offer friendly policyholder serviceOffer friendly policyholder service Settle claims fairly and quicklySettle claims fairly and quickly Charge reasonable rates for our insurance productsCharge reasonable rates for our insurance products Maintain financial stability to fulfill our commitment to Maintain financial stability to fulfill our commitment to
our policyholdersour policyholders Uphold the State Farm marketing partnershipUphold the State Farm marketing partnership
State Farm Values StatementState Farm Values Statement Providing customers with the best possible Providing customers with the best possible
service and valueservice and value Building lasting relationships among Building lasting relationships among
customers, agents, employees and customers, agents, employees and communities through respect, understanding, communities through respect, understanding, and mutual trustand mutual trust
Being financially strongBeing financially strong Keeping promises by always dealing fairly and Keeping promises by always dealing fairly and
A set of integrated and coordinated A set of integrated and coordinated commitments and actions intended to achieve commitments and actions intended to achieve a stated goal.a stated goal.
A guide for action that is closely linked to the A guide for action that is closely linked to the nature of the business.nature of the business.
Developing a Competitive StrategyDeveloping a Competitive Strategy
Firms vary on how they approach strategy:Firms vary on how they approach strategy: Some strategies reflect the founder’s Some strategies reflect the founder’s
intuitions and passions.intuitions and passions. Others are based on systematic analysis.Others are based on systematic analysis.
Systematic use of competitive analysis for Systematic use of competitive analysis for understanding the competition for labor isn’t understanding the competition for labor isn’t widely used.widely used.
Benchmarking Benchmarking Identify “industry leaders”Identify “industry leaders” Analyze “best practices”Analyze “best practices” Transfer best practices to own organizationTransfer best practices to own organization Usually a collaborative effort focusing on Usually a collaborative effort focusing on
The allocation of tasks and responsibilities The allocation of tasks and responsibilities among individuals and departments to support among individuals and departments to support the firm’s strategy.the firm’s strategy. Departmental structureDepartmental structure Divisional structureDivisional structure MatrixMatrix Process-based horizontalProcess-based horizontal NetworkNetwork
Characteristics:Characteristics: Based on functions: marketing, production, Based on functions: marketing, production,
and other activitiesand other activities Focused on specialized knowledgeFocused on specialized knowledge Maintaining coordination may be difficult as Maintaining coordination may be difficult as
firm grows.firm grows. Provides clear paths for Provides clear paths for
Characteristics:Characteristics: Based on product lines, customer markets or Based on product lines, customer markets or
geographical locationsgeographical locations Encourages cross-functional workEncourages cross-functional work Creates duplication of support functionsCreates duplication of support functions
Dual reporting to functional and divisional Dual reporting to functional and divisional heads; lines of authority may be ambiguousheads; lines of authority may be ambiguous
Employees are shared across organizational Employees are shared across organizational unitsunits
Characteristics:Characteristics: Flat hierarchical structureFlat hierarchical structure Use of teamsUse of teams Quick and continuous improvementQuick and continuous improvement Broad skill developmentBroad skill development Fits Total Quality Management (TQM) and Fits Total Quality Management (TQM) and
process reengineering approachesprocess reengineering approaches
Organizational Processes:Organizational Processes: Total Quality ManagementTotal Quality Management Baldrige AwardBaldrige Award ISO 9000 StandardsISO 9000 Standards Employee EmpowermentEmployee Empowerment
Process Reengineering:Process Reengineering: New ways to get work doneNew ways to get work done Examine breadth and depth of changeExamine breadth and depth of change
Characteristics:Characteristics: Many outsourced activitiesMany outsourced activities Uses information technology for coordinationUses information technology for coordination Facilitates constant change and adaptation Facilitates constant change and adaptation Challenge to manage and controlChallenge to manage and control
Coordinating with Global TeamsCoordinating with Global Teams
Facilitate coordination among product/regional Facilitate coordination among product/regional unitsunits
Members may be from same or different Members may be from same or different departments.departments. Formal, informal, same or multi-level groupsFormal, informal, same or multi-level groups May include people from other companiesMay include people from other companies
HR information management systems improve HR information management systems improve coordination and consistencycoordination and consistency
The unique pattern of sharedThe unique pattern of shared assumptions, assumptions, values values norms norms
that shape the that shape the socialization activitiessocialization activities language, symbolslanguage, symbols rites and ceremonies rites and ceremonies
of people in the organization.of people in the organization.
May arise from differences among:May arise from differences among: Firms that mergeFirms that merge Demographic groupsDemographic groups Occupational groupsOccupational groups National and regional groupsNational and regional groups IndustriesIndustries
Hofstede’s Dimensions of Hofstede’s Dimensions of Industry CultureIndustry Culture
Employee-oriented versus results-orientedEmployee-oriented versus results-oriented Parochial versus professionalParochial versus professional Open versus closedOpen versus closed Loose control versus tight controlLoose control versus tight control
Strategic Importance of CultureStrategic Importance of Culture
Strong CulturesStrong Cultures Provide clear guidelines for behaviorProvide clear guidelines for behavior Can enhance performance when they match Can enhance performance when they match
strategic objectivesstrategic objectives Must be in sync with Must be in sync with