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©2005PrenticeHallInc.Allrightsreserved.PowerPointPresentationbyCharlieCookTheUniversityofWestAlabamatentheditionGaryDesslerPart1IntroductionChapter3StrategicHumanResourceManagementandtheHRScorecardAfterstudyingthischapter,youshouldbeableto:1.Outlinethestepsinthestrategicmanagementprocess.2.Explainandgiveexamplesofeachtypeofcompanywideandcompetitivestrategy.3.Explainwhatahighperformanceworksystemisandwhyitisimportant.4.IllustrateandexplaineachofthesevenstepsintheHRScorecardapproachtocreatingHRsystems.©2005PrenticeHallInc.Allrightsreserved.3–2©2005PrenticeHallInc.Allrightsreserved.3–3HR’sStrategicChallengesStrategicplan–Acompany’splanforhowitwillmatchitsinternalstrengthsandweaknesseswithexternalopportunitiesandthreatsinordertomaintainacompetitiveadvantage.Threebasicchallenges–Theneedtosupportcorporateproductivityandperformanceimprovementefforts.–Thatemployeesplayanexpandedroleinemployers’performanceimprovementefforts.–HRmustbemoreinvolvedindesigning—notjustexecuting—thecompany’sstrategicplan.©2005PrenticeHallInc.Allrightsreserved.3–4TheStrategicManagementProcessStrategicmanagement–Theprocessofidentifyingandexecutingtheorganization’smissionbymatchingitscapabilitieswiththedemandsofitsenvironment.Strategy–Astrategyisacourseofaction.–Thecompany’slong-templanforhowitwillbalanceitsinternalstrengthsandweaknesseswithitsexternalopportunitiesandthreatstomaintainacompetitiveadvantage.©2005PrenticeHallInc.Allrightsreserved.3–5BusinessMissionandItsVisionVision–Ageneralstatementofitsintendeddirectionthatevokesemotionalfeelingsinorganizationmembers.Mission–Spellsoutwhothecompanyis,whatitdoes,andwhereit’sheaded.©2005PrenticeHallInc.Allrightsreserved.3–6StrategicManagementProcess(cont’d)Strategicmanagementtasks–Step1:DefinetheBusinessandItsMission–Step2:PerformExternalandInternalAudits–Step3:TranslatetheMissionintoStrategicGoals–Step4:FormulateaStrategytoAchievetheStrategicGoals–Step5:ImplementtheStrategy–Step6:EvaluatePerformance©2005PrenticeHallInc.Allrightsreserved.3–7OverviewofStrategicManagementFigure3–1©2005PrenticeHallInc.Allrightsreserved.3–8ASWOTChartFigure3–2SWOTAnalysisTheuseofaSWOTcharttocompileandorganizetheprocessofidentifyingcompanyStrengths,Weaknesses,Opportunities,andThreats.©2005PrenticeHallInc.Allrightsreserved.3–9StrategiesinBriefFigure3–3CompanyStrategicPrincipleDellBedirecteBayFocusontradingcommunitiesGeneralElectricBenumberoneornumbertwoineveryindustryinwhichwecompete,orgetoutSouthwestAirlinesMeetcustomers’short-haultravelneedsatfarescompetitivewiththecostofautomobiletravelVanguardUnmatchablevaluefortheinvestor-ownerWal-MartLowprices,everydaySource:AritGadieshandJamesGilbert,“FrontlineAction,”HarvardBusinessReview,May2001,p.74.©2005PrenticeHallInc.Allrightsreserved.3–10TypesofStrategicPlanningCorporate-levelstrategy–Identifiestheportfolioofbusinessesthat,intotal,comprisethecompanyandthewaysinwhichthesebusinessesrelatetoeachother.•Diversificationstrategyimpliesthatthefirmwillexpandbyaddingnewproductlines.•Verticalintegrationstrategymeansthefirmexpandsby,perhaps,producingitsownrawmaterials,orsellingitsproductsdirect.•Consolidationstrategyreducesthecompany’ssize•Geographicexpansionstrategytakesthecompanyabroad.©2005PrenticeHallInc.Allrightsreserved.3–11TypesofStrategicPlanning(cont’d)Business-level/competitivestrategy–Identifieshowtobuildandstrengthenthebusiness’slong-termcompetitivepositioninthemarketplace.•Costleadership:theenterpriseaimstobecomethelow-costleaderinanindustry.•Differentiation:afirmseekstobeuniqueinitsindustryalongdimensionsthatarewidelyvaluedbybuyers.•Focus:afirmseekstocarveoutamarketniche,andcompetebyprovidingaproductorservicecustomerscangetinnootherway.©2005PrenticeHallInc.Allrightsreserved.3–12TypesofStrategicPlanning(cont’d)Functionalstrategies–Identifythebasiccoursesofactionthateachdepartmentwillpursueinordertohelpthebusinessattainitscompetitivegoals.©2005PrenticeHallInc.Allrightsreserved.3–13RelationshipsAmongStrategiesinMultiple-BusinessFirmsFigure3–4©2005PrenticeHallInc.Allrightsreserved.3–14AchievingStrategicFitMichaelPorter–Emphasizesthe“fit”pointofviewthatallofthefirm’sactivitiesmustbetailoredtoorfititsstrategy,byensuringthatthefirm’sfunctionalstrategiessupportitscorporateandcompetitivestrategies.GaryHamelandC.K.Prahalad–Arguefor“stretch”inleveragingresources—supplementingwhatyouhaveanddoingmorewithwhatyouhave—canbemoreimportantthanjustfittingthestrategicplantocurrentresources.©2005PrenticeHallInc.Allrightsreserved.3–15TheSouthwestAirlines’ActivitySystemFigure3–5Source:ReprintedbypermissionofHarvardBusinessReview.From“WhatisStrategy?”byMichaelE.Porter,November–December1996.Copyright©1996bythePresidentandFellowsofHarvardCollege,allrightsreserved.©2005PrenticeHallInc.Allrightsreserved.3–16HRandCompetitiveAdvantageCompetitiveadvantage–Anyfactorsthatallowanorganizationtodifferentiateitsproductorservicefromthoseofitscompetitorstoincreasemarketshare.–Superiorhumanresourcesareanimportantsourceofcompetitiveadvantage©2005PrenticeHallInc.Allrightsreserved.3–17StrategicHumanR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