HR Strategy - Formulation

Question 1

Strategy Formulation

Answer 1

Gather and analyze internal and external information to determine the organization’s current position and capabilities, opportunities, and constraints.

• Concept of systems thinking (related parts, input-process-output) and components of an organizational system (e.g. interdependence, the necessity of feedback, differentiation of units)
• Mission, vision, and values and relation to strategic management
• Strategic planning analysis frameworks (PESTLE analysis, SWOT analysis, Industry analysis, Scenario planning, Growth-share matrix)
• Systems theory and input-process-output model

Question 2

Systems Theory

Answer 2

Because the system of an organization is dynamic, changes in one part can affect the other parts. (Internally or externally)

Question 3

Systems Thinking

Answer 3

Organizations are composed of interacting and sometimes interdependent parts that together create a dynamic internal environment.

Internal environments are created by the varying ways that all of these interdependent units (areas of the business) interplay.

Question 4

Systems Theory

What are the parts of an organization as a system?

Answer 4

• External environment
  
  • (e.g. Government, society, culture, economics)
• Internal environment
  
  • Leadership
  • Operations
  • Finance and administration
  • Facilities and information systems
  • Sales and customer relations
  • Human Resources

Question 5

IPO

Input-Process-Output

Answer 5

Those who plan and implement strategies use this.

Question 6

Environmental Analysis Tools

Answer 6

• PESTLE
• SWOT
• Growth-Share Matrix
• Scenario Analysis

Question 7

Environmental Scanning

Answer 7

Process of systematically surveying and gathering data, from both internal and external sources*, that can be *analyzed to identify opportunities and threats and to strengthen strategic plans and goals.

Question 8

Acronym: PESTLE Analysis

Answer 8

A strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future.

​Goes well with SWOT because it identifies opportunities and threats

These are all macro-economic factors that cannot be controlled by a business

• Political
• Economic
• Social
• Technological
• Legal
• Environmental

Question 9

PESTLE

(Examples of Political)

Answer 9

Influences of government policies, laws, and regulations

• Regulatory environment and actions
• Taxation policies
• Treaties and tariff structures
• Immigration policies
• Governance legislation
• Government stability
• Levels of corruption

Question 10

PESTLE

Examples of Economic Influences

Answer 10

• Business forecasts
• Labor availability and cost
• Price for services and materials
  
  • Inflation/deflation rates
• Household income
• Consumer confidence
• Availability and cost of capital
• Income disparities

Question 11

PESTLE Analysis

Examples of Social Influences

Answer 11

• Demographic shifts in age, ethnic background
• Education and skills profiles
• Housing patterns
• Patterns of discrimination
• Family structure
• Values
• Lifestyles and purchasing habits
• Media use
• Effect of globalization on local culture

Question 12

PESTLE Analysis

Examples of Technology Influences

Answer 12

• New centers of technological training and expertise
• Innovative technology and applications of technology
• Unequal access to technology
• New or changing technical standards
• Technological vulnerability

Question 13

PESTLE Analysis

Examples of Legal Influences

Answer 13

• Trends in patent law and intellectual property protection
• Increased civil litigation in workplaces
• Increased shareholder legal actions
• Unequal access to legal representation
• Trends in evidence requirements and penalties
• Increased cost for defense
• Trends in findings for corporate negligence

Question 14

PESTLE Analysis

Examples of Environmental Influences

Answer 14

Essentially corporate social responsibility

• Decreasing carbon consumption limits
• Increased use of alternative-fuel vehicles
• Need for innovative technology and practices to decrease use of resources or environmental impact
• Unequal effect of environmental damage or policies
• Vulnerability of reliable and potable water supplies
• Increased interest in environmental impact

Question 15

Demographics

Answer 15

Shifts in age, ethnic background

Question 16

SWOT analysis

What are external?

Answer 16

Opportunities and Threats

Question 17

SWOT Analysis

What are internal?

Answer 17

Strengths and Weaknesses

Question 18

Growth Share Matrix

Question Mark

Answer 18

High growth, low market share

May be a winner or a loser with an unclear future. As this business line is showing growth in a new market, it would be a question mark. There is an uncertain future in the new market.

Question 19

SWOT Analysis

What can be leveraged?

Answer 19

Strengths and Opportunities can be leveraged

Question 20

SWOT Analysis

Which are the problems?

Answer 20

Weaknesses and threats are problems

Question 21

Growth-Share Matrix

AKA - BCG Matrix

Answer 21

Used by larger organizations to find where the greatest value in their organization lies.

Question 22

Growth-Share Matrix

What does a growth trend indicate?

Answer 22

Greater value

Question 23

Growth-Share Matrix

What does a larger market share indicate?

Answer 23

A stronger competitive position

Question 24

Growth-Share Matrix

Dogs

Answer 24

Growth: Small

Market Share: Small

Consuming resources without offering strong value or future growth.

Question 25

Growth-Share Matrix Cash Cow

Answer 25

Growth: Static or low Market Share: Large Creates value reliably but shows little opportunity for growth

Question 26

Growth-Share Matrix Star

Answer 26

Growth: Large Market Share: Large Ex: Business line that is growing and has a dominate share of the market

Question 27

Growth-Share Matrix Question Marks

Answer 27

Growth: High Market Share: Small Could be winners or losers, their future is unclear

Question 28

Scenario Analysis

Answer 28

Process of analyzing possible future events by considering alternative possible outcomes **For example,** a large law firm might *_analyze the effect of changes in the pool of newly graduated lawyers_* on the *_firm’s operations._* What would be the effects if the firm received 25% to 50% fewer applications? How would this affect recruitment costs, salaries, or unfilled positions?

Question 29

Mission

Answer 29

How the organization defines its purpose

Question 30

Vision

Answer 30

Future we hope to see

Question 31

Values

Answer 31

Principles that guide behavior What we believe

Question 32

Value driver

Answer 32

A value driver is an *_activity or capability that adds worth_* to a product, service or brand. More specifically, a value driver refers to those activities or capabilities that *_add profitability, reduce risk, and promote growth in accordance with strategic goals_*.

Question 33

Key Performance Indicators (KPI)

Answer 33

Quantifiable measures used to evaluate the success of an organization, employee, etc. _Example: Financial KPI's_ Growth in revenue Net profit EBITDA

Question 34

Balanced Scorecard

Answer 34

*_Used to identify Key Performance Indicators_* and make sure *_objectives used to measure performance_* are *_strategically aligned_* to the various *_sources of value to the organization_* and are balanced. Helps companies set strategic *_goals_*, define *_action plans_* to deliver strategic goals, and develop *_KPI (and metrics)_* to monitor the delivery of their strategic goals. Finance Customers Internal business processes Learning and growth

Question 35

Leading Indicator

Answer 35

Predictive in that *_action in this area_* can *_change future performance_* and *_help achieve success_* Activity and results Short-term and long-term Strategic and tactical

Question 36

Lagging Indicator

Answer 36

Effects that have already occurred and cannot be changed Turnover rate Financial results

Question 37

Balanced Score Card Achieve balance in three key areas

Answer 37

* Between financial and nonfinancial indicators of success * Between internal and external components in the organization * Between lagging and leading indicators of performance

Question 38

Balanced Score Card The most effective strategy focuses on....

Answer 38

Leading indicators If the organization continues to improve its leading indicators, however, it will eventually turn its lagging indicators around.

Question 39

SMARTER Goals

Answer 39

* Specific * Measurable * Attainable * Relevant * Time-Bound * Evaluated * Revised

Question 40

Benchmark

Answer 40

A standard or point of reference against which things may be compared or assessed.

Question 41

Benchmarking

Answer 41

The practice of *_comparing business processes*_ and _*performance metrics_* (i.e. KPI) to *_industry bests_* and *_best practices from other companies_*.