netrashetty
Netra Shetty
International Business Machines (IBM) (NYSE: IBM) is a United States multinational technology and consulting firm headquartered in Armonk, New York. Founded in 1911, IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
International Business Machines (IBM) (NYSE: IBM) is a United States multinational technology and consulting firm headquartered in Armonk, New York. Founded in 1911, IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
Model of strategic management
In the descriptive and prescriptive management texts, strategic management appears
as a cycle in which several activities follow and feed upon one another. The strategic
management process is typically broken down into five steps:
undertaken by the upper echelon of the organization in order to accomplish performance
goals. Wheelen and Hunger (1995, p. 3) define strategic management as ‘that set
of managerial decisions and actions that determines the long-run performance of a
corporation’. Hill and Jones (2001, p. 4) take a similar view when they define strategy
as ‘an action a company takes to attain superior performance’. Strategic management
is considered to be a continuous activity that requires a constant adjustment of three
major interdependent poles: the values of senior management, the environment, and
the resources available (Figure 2.1).
Strategic Human Resource Management 39
Figure 2.1 The three traditional poles of a strategic plan
Source: Adapted from Aktouf (1996)
Environment Resources
Senior management
H R M I N P R A C T I C E 2 . 1
STRATEGY PLANNING HAS SUDDENLY GOT SEXY
GORDON PITT. THE INS AND OUTS OF MANAGEMENT TOOLS. GLOBE AND MAIL, 1998, JANUARY 8
In the past decade, the North
American workplace, as those
in Europe, has seen a constant
parade of management fads
and fashions. In 1993, the top
three most popular management
techniques were mission
statements, customer satisfaction
measurement, and total
quality management. In 1996,
strategic planning, mission
statements and benchmarking
were the top three management
techniques. Of the 409 North
American companies surveyed,
89 per cent reported using strategic
planning in 1996. As one
business observer (Pitt, 1998)
commented: ‘Strategic planning
has always been around [but] it
suddenly got sexy.’
1. mission and goals
2. environmental analysis
3. strategic formulation
4. strategy implementation
5. strategy evaluation.
Figure 2.2 illustrates how the five steps interact. At the corporate level, the strategic
management process includes activities that range from appraising the organization’s
current mission and goals to strategic evaluation.
The first step in the strategic management model begins with senior managers evaluating
their position in relation to the organization’s current mission and goals. The
mission describes the organization’s values and aspirations; it is the organization’s
raison d’être and indicates the direction in which senior management is going. Goals
are the desired ends sought through the actual operating procedures of the organization
and typically describe short-term measurable outcomes (Daft, 2001).
Environmental analysis looks at the internal organizational strengths and weak-
40 Human Resource Management
Figure 2.2 The strategic management model
Mission and goals
Management philosophy
Values
STEP 1
Environmental analysis
Internal scan
External scan
STEP 2
Strategic formulation
Strategic choice
Corporate
Business
Functional
STEP 3
Strategy implementation
Leadership
Structure
Control systems
Human resources
STEP 4
Strategy evaluation
Operating performance
Financial performance
STEP 5
nesses and the external environment for opportunities and threats. The factors that
are most important to the organization’s future are referred to as strategic factors and
can be summarized by the acronym SWOT – Strengths, Weaknesses, Opportunities
and Threats.
Strategic formulation involves senior managers evaluating the interaction between
strategic factors and making strategic choices that guide managers to meet the organization’s
goals. Some strategies are formulated at the corporate, business and specific
functional levels. The term ‘strategic choice’ raises the question of who makes decisions
and why they are made (McLoughlin & Clark, 1988). The notion of strategic
choice also draws attention to strategic management as a ‘political process’ whereby
decisions and actions on issues are taken by a ‘power-dominant’ group of managers
within the organization. Child (1972, quoted in McLoughlin & Clark, 1988, p. 41)
affirms this interpretation of the decision-making process when he writes:
[W]hen incorporating strategic choice in a theory of organizations, one is recognizing the
operation of an essentially political process, in which constraints and opportunities are
functions of the power exercised by decision-makers in the light of ideological values.
In a political model of strategic management, it is necessary to consider the distribution
of power within the organization. According to Purcell and Ahlstrand (1994,
p. 45), we must consider ‘where power lies, how it comes to be there, and how the
outcome of competing power plays and coalitions within senior management
are linked to employee relations’. The strategic choice perspective on organizational
decision-making makes the discourse on strategy ‘more concrete’ and provides important
insights into how the employment relationship is managed.
Strategy implementation is an area of activity that focuses on the techniques used by
managers to implement their strategies. In particular, it refers to activities that deal
with leadership style, the structure of the organization, the information and control
systems, and the management of human resources (see Figure 1.2 above). Influential
management consultants and academics (for example Champy, 1996; Kotter, 1996)
emphasize that leadership is the most important and difficult part of the strategic
implementation process.
Strategy evaluation is an activity that determines to what extent the actual change
and performance match the desired change and performance.
The strategic management model depicts the five major activities as forming a
rational and linear process. It is, however, important to note that it is a normative
model, that is, it shows how strategic management should be done rather than
describing what is actually done by senior managers (Wheelen & Hunger, 1995). As we
have already noted, the notion that strategic decision-making is a political process
implies a potential gap between the theoretical model and reality.
International Business Machines (IBM) (NYSE: IBM) is a United States multinational technology and consulting firm headquartered in Armonk, New York. Founded in 1911, IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology.
Model of strategic management
In the descriptive and prescriptive management texts, strategic management appears
as a cycle in which several activities follow and feed upon one another. The strategic
management process is typically broken down into five steps:
undertaken by the upper echelon of the organization in order to accomplish performance
goals. Wheelen and Hunger (1995, p. 3) define strategic management as ‘that set
of managerial decisions and actions that determines the long-run performance of a
corporation’. Hill and Jones (2001, p. 4) take a similar view when they define strategy
as ‘an action a company takes to attain superior performance’. Strategic management
is considered to be a continuous activity that requires a constant adjustment of three
major interdependent poles: the values of senior management, the environment, and
the resources available (Figure 2.1).
Strategic Human Resource Management 39
Figure 2.1 The three traditional poles of a strategic plan
Source: Adapted from Aktouf (1996)
Environment Resources
Senior management
H R M I N P R A C T I C E 2 . 1
STRATEGY PLANNING HAS SUDDENLY GOT SEXY
GORDON PITT. THE INS AND OUTS OF MANAGEMENT TOOLS. GLOBE AND MAIL, 1998, JANUARY 8
In the past decade, the North
American workplace, as those
in Europe, has seen a constant
parade of management fads
and fashions. In 1993, the top
three most popular management
techniques were mission
statements, customer satisfaction
measurement, and total
quality management. In 1996,
strategic planning, mission
statements and benchmarking
were the top three management
techniques. Of the 409 North
American companies surveyed,
89 per cent reported using strategic
planning in 1996. As one
business observer (Pitt, 1998)
commented: ‘Strategic planning
has always been around [but] it
suddenly got sexy.’
1. mission and goals
2. environmental analysis
3. strategic formulation
4. strategy implementation
5. strategy evaluation.
Figure 2.2 illustrates how the five steps interact. At the corporate level, the strategic
management process includes activities that range from appraising the organization’s
current mission and goals to strategic evaluation.
The first step in the strategic management model begins with senior managers evaluating
their position in relation to the organization’s current mission and goals. The
mission describes the organization’s values and aspirations; it is the organization’s
raison d’être and indicates the direction in which senior management is going. Goals
are the desired ends sought through the actual operating procedures of the organization
and typically describe short-term measurable outcomes (Daft, 2001).
Environmental analysis looks at the internal organizational strengths and weak-
40 Human Resource Management
Figure 2.2 The strategic management model
Mission and goals
Management philosophy
Values
STEP 1
Environmental analysis
Internal scan
External scan
STEP 2
Strategic formulation
Strategic choice
Corporate
Business
Functional
STEP 3
Strategy implementation
Leadership
Structure
Control systems
Human resources
STEP 4
Strategy evaluation
Operating performance
Financial performance
STEP 5
nesses and the external environment for opportunities and threats. The factors that
are most important to the organization’s future are referred to as strategic factors and
can be summarized by the acronym SWOT – Strengths, Weaknesses, Opportunities
and Threats.
Strategic formulation involves senior managers evaluating the interaction between
strategic factors and making strategic choices that guide managers to meet the organization’s
goals. Some strategies are formulated at the corporate, business and specific
functional levels. The term ‘strategic choice’ raises the question of who makes decisions
and why they are made (McLoughlin & Clark, 1988). The notion of strategic
choice also draws attention to strategic management as a ‘political process’ whereby
decisions and actions on issues are taken by a ‘power-dominant’ group of managers
within the organization. Child (1972, quoted in McLoughlin & Clark, 1988, p. 41)
affirms this interpretation of the decision-making process when he writes:
[W]hen incorporating strategic choice in a theory of organizations, one is recognizing the
operation of an essentially political process, in which constraints and opportunities are
functions of the power exercised by decision-makers in the light of ideological values.
In a political model of strategic management, it is necessary to consider the distribution
of power within the organization. According to Purcell and Ahlstrand (1994,
p. 45), we must consider ‘where power lies, how it comes to be there, and how the
outcome of competing power plays and coalitions within senior management
are linked to employee relations’. The strategic choice perspective on organizational
decision-making makes the discourse on strategy ‘more concrete’ and provides important
insights into how the employment relationship is managed.
Strategy implementation is an area of activity that focuses on the techniques used by
managers to implement their strategies. In particular, it refers to activities that deal
with leadership style, the structure of the organization, the information and control
systems, and the management of human resources (see Figure 1.2 above). Influential
management consultants and academics (for example Champy, 1996; Kotter, 1996)
emphasize that leadership is the most important and difficult part of the strategic
implementation process.
Strategy evaluation is an activity that determines to what extent the actual change
and performance match the desired change and performance.
The strategic management model depicts the five major activities as forming a
rational and linear process. It is, however, important to note that it is a normative
model, that is, it shows how strategic management should be done rather than
describing what is actually done by senior managers (Wheelen & Hunger, 1995). As we
have already noted, the notion that strategic decision-making is a political process
implies a potential gap between the theoretical model and reality.