CHAPTER 4

Formulating Strategy: Aligning HR Strategy to the Organisational Strategy

CHAPTER OUTLINE

• Business partner
• Strategy formulation
• Alignment
• Competitive advantage
• Matching model

LEARNING OUTCOMES

• Meaning of (SHRM)
• Recognizing human resource (HR) as important factor for strategy
• Linking HR strategy with the organisational strategy
• HR contribution to strategy
• Role of HR manager in strategy formulation

INTRODUCTION

As human resource management (HRM) manages people within the employer–employee relationship, it involves the productive use of people in achieving the organisation’s strategic business objectives and the satisfaction of individual employee needs. Hence, it is much more than a set of activities relating to the coordination of an organisation’s HRs and can be a major contributor to the success of the organisation as it is in a key position to affect customers, business results, and ultimately shareholder value. Likewise, ineffective HRM can be a major barrier to employee satisfaction and organisational success.

 

Stakeholder satisfaction: HRs alignment with business strategy would lead to stakeholder satisfaction and ultimately would affect organisational performance.

ALIGNING SHRM AND BUSINESS STRATEGY

The new business context, which is characterized by increasing globalization, greater organisational complexity, market competitiveness, and cutting-edge information communication technology, is prompting organisation executives to take more interest in the deployment and utilization of their HRs. The HR function therefore has instrumental and strategic role in the strategic planning process in the organisation. SHRM is based on HRM principles, which integrate the concept of business strategy. It has been emphasized widely and as discussed in Chapter 1, there is need for HRM to take a role of a strategic business partner which implies that SHRM has to be integrated with business strategy. To become a strategic business partner, the HR managers need to participate in strategic decision making. This, according to Ulrich (1997), would provide greater opportunity to align HR goals, strategies, philosophies, and practices with corporate objectives and the implementation of business strategies. Participation of HRM in decision making, offers opportunity for SHRM to represent its concerns and influence the direction of business strategy from the onset of the decision making process. This involvement from the crafting stage of strategy decision making enhances commitment on the part of the HR managers during implementation stage of such business strategy. The HR manager should be part of business policy formulation as a business partner, to help drive policy implementation to success and attain competitive advantage.

 

Strategic business partner: HRs role from line or staff requires an acceleration toward the strategic business partner role and contribute toward the strategic decision making.

Impact of SHRM on Organisational Performance

Many organisations face a volatile market situation. In order to create and sustain competitive advantage in this type of environment, organisations must continually improve their business performance. Increasingly, organisations are recognizing the potential of their HRs as a source of sustained competitive advantage. Linked to this, more and more organisations are relying on measurement approaches, such as HR scorecards, in order to gain insight into how the HRs in their organisation add value.

Strategic Planning and Strategic Trends

Today, the HRs role is changing and it demands increased involvement in developing and implementing the company’s strategy. Strategy is the company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage. Earlier this used to be the responsibility of the top management but now HR has a central role.

Managers engage in three levels of strategic planning for their firms. Many firms, like Tata Industries, consist of several businesses: consumer goods, retail, engineering, food products, automobiles, and so on. So, they need to have corporate level strategy, business level strategy, and functional level strategy.

 

Three levels of strategic planning: corporate, business, and   functional.

 

KNOW YOUR BUSINESS.

 

Corporate-Level Strategy

Corporate-level strategy defines the holistic approach of the corporate. It is a road map of the growth strategy of the corporation which also provides direction for the management of the business units. Tata Industries formulates a strategy and decides about the different businesses that the group plans to invest in. To achieve the strategy of growth, should Tata motors acquire Jaguar? At this level, the point of discussion and decision is about the business of the group.

Business-Level Strategy

The business units need to develop an action plan to facilitate the achievement of corporate level strategy. For example, the growth strategy of Tata Industries (corporate level) is attained by the Tata motors (Business Unit) through the acquisition of Jaguar and increasing its competitiveness. At this level, the business unit has to find the way to be competitive.

Michael Porter (1980, 1985) formulated a framework that describe three competitive strategies: cost leadership, differentiation, and focus.

The cost leadership strategy attempts to increase the organisation’s market share by having the lowest unit cost and price compared to the competitors. The other strategy is differentiation which recommends managers to distinguish their services and products from those of their competitors in the same industry by providing distinctive levels of service, product or high quality such that the customer is prepared to pay a premium price. With the focus strategy, managers focus on a specific consumer group or a market.

Functional-Level Strategy

To achieve the objectives of business unit, the functional units, like HR, finance, marketing, need to plan the optimal utilization of the respective resources in the scope of their function.

 

KNOW YOUR PLAN

A company’s corporate-level strategy identifies the portfolio of businesses that comprise the organisation, and the ways in which these businesses relate to one another. Firms like Tata are more widely diversified, with a portfolio that spans from salt to information technology.

At the next level down, each of these businesses, for example, Tata Motors needs a business-level strategy. This strategy identifies how its managers will build and strengthen that business’s long-term competitive position in the marketplace. It identifies, for instance, how Tata Motors will compete with Maruti-Suzuki.

Finally, each business comprises of departments, such as sales, manufacturing, and HRM. Functional strategies identify the basic courses of action that each of the departments will pursue in order to help the business attain its competitive goals.

 

KNOW YOUR ACTION

Typology of Business Strategies and HRM

Miles and Snow’s (1978, 1984) organisational classification reflects the philosophy of the organisation like “prospectors” are good performers yet have a constant endeavour to explore more opportunities and leverage them and so have proactive approach where as “defenders” are satiated with the few but stable business propositions, so in the defensive mode. Those who are somewhat stable but are exploring the new opportunities are “analyzers” and “reactors” are those with reactive approach and hence respond to the environmental demands rather than planning for it. These generic strategies dictate organisations’ HRM policies and practices. For example, defenders are less concerned about recruiting new employees externally and are more concerned about developing current employees. In contrast, prospectors are growing, so they are concerned about recruiting and using performance appraisal results for evaluation rather than for longer term development.

 

Prospectors, analyzers, reactors, and defenders

Generic HR Strategies

Identifying the need to highlight the prevalence of generic HR  strategies pursued by organisations in different contexts, Broadly, the generic functions of HR are recruitment, selection, planning, training, performance evaluation, career planning, and compensation. These functions can be classified as talent acquisition (recruitment and selection), talent planning (workforce planning, compensation), and talent development (training, performance appraisal, and career planning). Besides these three functions, the HR has to also devise a strategy to reduce cost and hence, the fourth strategy is the strategy of “cost containment.”

 

Generic HR strategy: Talent acquisition, talent planning and talent development and cost containment

HR as a Competitive Advantage

The theory of competitive advantage as propounded by Michael Porter focuses on the organisation’s value creation for its customers and thereby attaining competitive edge over others. Porter emphasized the importance of differentiation, which consists of offering a product or service “that is perceived industry-wise as being unique,” and focus—seeing a particular buyer group or product market “more effectively or efficiently than competitors who compete more broadly.” The generic strategies include cost leadership, differentiation, and focus which could lead to competitive advantage. Although Porter posits that the business environment determines the organisational performancebut the resource-based view, proclaims that the organisation can attain competitive advantage by the proper allocation and utilization of available resource. Here, the HR systems can contribute to sustained competitive advantage through facilitating the development of competencies that are organisation specific. The sustained superior performance of many companies has been attributed to unique capabilities for managing HRs to gain competitive advantage.

 

Porter’s generic strategy: cost leadership, differentiation, focus.

Today, organisations have capital and technology but it is the HR and its competencies that becomes a source of competitive advantage. To attain competitive advantage, organisational resources must be value additive, unique, not imitable, rare, and nonsubstitutable.

The twenty-first century has accepted that people and not products, markets, cash, buildings, or equipment, are the critical differentiators of a business enterprise and hence should be considered and developed as competitive advantage. The key to sustaining a profitable company or a healthy economy is the productivity of the workforce.

HRM needs to achieve the following strategic goals in order for the company to gain and sustain competitive advantage:

• To invest in people through the introduction and encouragement of learning processes designed to increase capability and align skills to organisational needs.
• To ensure that the organisation identifies the knowledge required.
• To meet its goals and satisfy its customers and takes steps to acquire and develop its intellectual capital.
• To define the behaviours required for organisational success and ensure that these behaviours are encouraged, valued, and rewarded.
• To encourage people to engage wholeheartedly in the work they do for the organisation.
• To gain the commitment of people to the organisation’s mission and values.
• To achieve these goals it is necessary to understand the linkage between HRM and business strategy.

Schuler and Jackson (1987) have derived from Porter’s discussion of competitive advantage three competitive advantage strategies that organisations can use to gain competitive advantage: innovation, quality enhancement, and cost reduction.

 

Competitive advantage: innovation, quality, and cost.

Innovation strategy focuses on creating differential products or services and be novel. This requires the HR to broaden their competencies, so that they can facilitate the achievement of organisational strategy.

Quality enhancement strategy emphasizes on enhancing the quality of the product and/or services. This requires the commitment and involvement of the workforce.

Cost reduction strategy requires organisation to reduce the cost of the product or service. The optimal utilization of resources is a key to this.

Any of these strategies can be executed to achieve the expected results, only with the support of the efficient and effective workforce.

The process of linking HR strategies with business strategies serves investors, customers, and employees of the organisation who want the business to deliver results. Thus, main focus of HR strategy is to have operational linkages to fit HRM with the strategic thrust of the organisation. Interaction between business strategy and HR strategy of organisations also need to particularly take care of uncontrollable factors which exist in external environment.

 

Linking HR and competitive strategy would facilitate the achievement of business strategy.

A framework for aligning business strategies and HR strategies could be provided by competitive strategy approach that relates the different HR strategies to the organisations competitive strategies (Table 4.1).

Model of Strategic Management (e.g., of SHRM)

Strategic management is a regular activity of striking the balance between the top management’s values, the business environment, and the resources. The business environment, that is, changing needs and critical resources have to be examined to achieve the strategic aims and attain competitive advantage. Business strategy answers the following questions:

• What—vision, mission, and goals.
• How—organisation design, functional strategies, resource and cost allocation, budget requirements, planning.
• Who—workforce planning, performance management, and development.

Strategy is What, How and who to achieve the organisational goals.

HR strategies seek to manage the HR in order to achieve the organisational goals. It focuses on what the organization intends to do in relation to its HR  policies and practices. Hence, the way HR is deployed, motivated, managed, and retained will impact upon the business strategy implementation.

 

STEPS OF STRATEGIC MANAGEMENT PROCESS

1. Vision, Mission, and Goals

At the corporate level, the strategic management process includes activities that range from appraising the organisation’s current mission and goals to strategic evaluation. Vision is a dream of what would the organisation want to be in future and mission is the direction in which the organisation gears toward for the achievement of its business objectives. First of all, the top level management map their position vis-a-vis the current mission and goals of the organisation. Goals are the desired ends sought through the actual operating procedures of the organisation and typically describe short-term measurable outcomes. At this stage, the short- and long-term goals are identified and the process to achieve these goals is planned. To accomplish the objectives, the individual employee is assigned the task of his or her competence. For example the vision of ICICI bank is “To be the leading provider of financial services in India and a major global bank.” Mission is “to leverage people, technology, speed and financial capital to:

• be the banker of first choice for our customers by delivering high quality, world-class products and services,
• expand the frontiers of our business globally,
• play a proactive role in the full realisation of India’s potential,
• maintain a healthy financial profile and diversify our earnings across businesses and geographies,
• maintain high standards of governance and ethics,
• contribute positively to the various countries and markets in which we operate, and
• create value for our stakeholders.”

Vision and mission of ICICI

2. Environmental Analysis

This is a crucial stage, which helps in the strategy formulation and implementation. All the information and data, both external as well as internal, required to develop a sustainable business should be gathered at this stage.

Environmental analysis looks at the internal organisational strengths and weaknesses and the external environment for opportunities and threats. The factors that are most important to the organisation’s future are referred to as strategic factors and can be summarized by the acronym SWOT—Strengths, Weaknesses, Opportunities, and Threats.

3. Strategy Formulation

The first step in formulation of a strategy is from the appraisal of the environmental analysis information. The internal resources are audited and the need for external resources is determined. At this stage, top management assess the interaction between strategic factors and make the strategic choices that act as a road map for managers to meet the organisation’s goals. The term “strategic choice” raises the question of who makes decisions and why they are made. For example, Kotak Mahindra bank acquired ING Vysya. The strategy formulated is “acquisition and growth.”

4. Strategy Implementation

At this stage, the management 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 organisation, the information and control systems, and the management of HRs. This is the action stage of the strategic management process. If the overall strategy does not work with the business’ current structure, the organisational redesign has to be considered to implement the strategy of “acquisition.”

 

Strategic management process

5. Strategy Evaluation

Strategy evaluation is an activity that determines to what extent the actual change and performance match the desired change and performance. Strategy evaluation and control actions include performance measurements, consistent review of internal and external issues, and making corrective actions when necessary. Any successful evaluation of the strategy begins with defining the parameters to be measured. These parameters should mirror the goals set in Stage 1.

The Matching Model

Devanna et al. (1984, p. 37) expect the congruence of the HR strategy, systems and structures with the corporate strategy supporting Chandler’s (1962 maxim that “structure follows strategy.” In the Devanna et al. model, HRM– strategy–structure follow and feed upon one another and are influenced by environmental forces.

 

The matching model: Congruence of the HR strategy, systems, and the structures with the corporate strategy.

There must be a “fit between competitive strategy and internal HRM strategy and a fit among the elements of the HRM strategy” (Beer et al., 1984, p. 13). The relationship between business strategy and HR strategy is said to be “reactive” in the sense that HR strategy is subservient to “product market logic” and the corporate strategy. The latter is assumed to be the independent variable (Purcell & Ahlstrand, 1994).

HRM cannot function in isolation rather should emanante from the corporate strategy. There is some theorization of the link between product markets and organisational design, and approaches to people management. Thus, for example, each competitive strategy involves a unique set of responses from workers, or “needed role behaviors,” and a particular HR strategy that might generate and reinforce a unique pattern of behavior (Cappelli & Singh, 1992; Schuler & Jackson, 1987). HRM is therefore seen to be “strategic by virtue of its alignment with business strategy and its internal consistency” (Boxall, 1992).

The Issue of Strategic Integration

The purpose of SHRM is to ensure that HRM is fully integrated with the strategy and strategic needs of the firm; HR policies are coherent both across policy areas and across hierarchies; and HR practices are adjusted, accepted, and used by line managers and employees as part of their everyday work (Schuler, 1992, p. 18). SHRM therefore has many different components, including HR policies, culture, values, and practices. Schuler (1992) developed a “5-P model” of SHRM that melds five HR activities (philosophies, policies, programs, practices, and processes) with strategic business needs, and reflects management’s overall plan for survival, growth, adaptability, and profitability.

 

5P Model: Philosophies, policies, programs, practices, and processes.

This is helpful in understanding the complex interaction between organisational strategy and SHRM activities.

This model further shows the influence of internal characteristics (which mainly consists of factors such as organisational culture and the nature of the business) and external characteristics (which consist of the nature and state of economy in which the organisation is existing and critical success factors, i.e., the opportunities and threats provided by the industry) on the strategic business needs of an organisation.

Business Life Cycles and HRM

The “life cycle stage” of an organisation affects the HRM. It consists of introduction (start-up), growth (development), maturity, decline, and turnaround. The researchers have discussed a clear association between a given life cycle stage and specific HRM policies and practices. For example, it is logical for firms in their introductory and growth life cycle stages to emphasize a rationalized approach to recruitment in order to acquire best-fit HRs, compensate employees at the going market rate, and actively pursue employee development strategies. Similarly, organisations in the maturity stage are known to recruit enough people to allow for labour turnover/lay-offs and to create new opportunities in order to remain creative to maintain their market position. Such organisations emphasise flexibility via their training and development programmes and pay employees as per the market leaders in a controlled way. Accordingly, firms in the decline stage will be likely to minimize costs by reducing overheads and aspire to maintain harmonious employee relations.

 

Business life cycle: Start up, growth, maturity, decline and turnaround.

Role of HRM in Strategy Formulation

The organisations can improve their environment for success by making choices about HR planning, staffing, appraisal, compensation, training and development, and labour relations that are consistent with and support the corporate strategy. This means that HR objectives, policies, and plans must be integrated with the organisation’s strategic business objectives. When this happens, HRM becomes a true business partner in boosting the organisation’s competitive advantage by helping achieve strategic objectives and employee growth. HR objectives, policies, and plans must be judged by how well they help achieve the organisation’s strategic business objectives.

SWOT (company’s external opportunities and threats, and its internal strengths and weaknesses) needs to be done to formulate strategic plan. HR professionals can help with in environmental scanning, identifying, and analyzing external opportunities and threats that may be crucial to the company’s success. For example, when companies plan for alliances, the role of HR becomes crucial. The HR professionals need to identify the possible match between the prospective allies, for example, compensation package, culture, and so on. Formulating plans requires competitive intelligence, and HR management can supply useful information. HR also supplies information regarding the company’s internal strengths and weaknesses.

As SHRM objectives must be in harmony with the organisation’s overall aims, HRM must support the achievement of those SHRM objectives. An organisation which has set profit improvement as a strategic business objective, for example, may need strategic HRM objectives producing reduced labour costs (improved employee performance, reduced headcount). These objectives, in turn, necessitate action plans for specific HR activities such as developing performance linked reward systems to promote employee motivation and productivity, appropriate training progammes to maintain and enhance employee competence and an appraisal and exit programme to accurately identify and remove poor performers.

Strategic HRM objectives can be linked to strategic organisational objectives like Cost containment. HR objectives and activities will focus on cost reduction via reduced headcount, improved expense control, improved productivity, reduced absenteeism, and labour turnover. Many factors affect HRM. Whether from the organisation’s external or internal environment, the impact of a particular influence must be identified and considered by the HR manager. HRM does not operate in a vacuum. It is influenced by and in turn influences factors such as changes in technology, laws, social values, and economic conditions which exist outside the organisation, as well as internal factors such as the organisation’s objectives, strategy, culture, and structure. All of these have a significant influence on the organisation’s HRM objectives, strategies, and action plans. An integral strategic HRM therefore involves analyzing environmental influences to identify those factors which inhibit the organisation and those which help achieve its objectives. An analysis of the strengths and weaknesses of the HRM function can also identify those positive and negative characteristics of HRM which help or hinder the achievement of strategic objectives. Such analysis includes the quality of HRs available to the organisation. If an organisation is to grow and remain competitive, its HR objectives and strategies must achieve the best alignment or fit between external opportunities and threats and the internal strengths and weaknesses of the organisation. The strategic approach generates more informed and purposeful HR management. Articulating the organisation’s mission or purpose, its objectives and its strategies help direct the setting of HRM objectives and strategies. In turn, when applied to specific HRM activities such as recruitment and selection, the HR manager can better appreciate which specific action plans are required to support HRM and organisational strategic objectives. Organisations that adopt HRM strategies and practices consistent with the demands of their internal and external environments should out-perform organisations that adopt less well-matched strategies and practices.

CONCLUSION

Strategic planning facilitates the achievement of the organisation’s vision by delivering the desired outcomes to all its stakeholders through the strategic alignment of the deliverables at every stage.

Summary

• The strategy is formulated at three levels: corporate, business unit, and functional.
• The strategic alignment at all three levels is crucial and critical for the attainment of organisational objectives.
• The strategy can be formulated on basis of cost, differentiation, and focus.
• Strategic management process have different stages: vision and mission, environmental analysis, strategy formulation, strategy implementation and evaluation.
• HRs role needs to be transformed to the “strategic business partner.”
• The HR strategy differs according to the stage of the business life cycle.
• Organisational strategy can be achieved by aligning the strategy at all levels.

References

Beer, M., Spector, B., Lawrence, P.R., Quinn Mills, D. and Walton, R.E. (1984) Human Resource Management. New York: Free Press.

Boxall, P.F. (1992) Strategic Human Resource Management: Beginning of a new theoretical sophistication? Human Resource Management Journal, 2(3): 60–79.

Budhwar, P. and Khatri, P. (2001) HRM in Context: The applicability of HRM models in India. International Journal of Cross Cultural Management, 1(3): 333–356.

Budhwar, P. and Sparrow, P. (2002) An Integrative Framework for Determining Cross-national Human Resource Management Practices. Human Resource Management Review, 12: 377–403.

Cappelli, Peter and Harbir Singh (1992). “Integrating Strategic Human Resources and Strategic Management” in Research Frontiers in Industrial Relations and Human Resources, eds. David

Chandler, A. (1962) Strategy and Structure. Cambridge, MA: MIT Press.

Devanna, M.A., Fombrun, C. & Tichy, N. 1984. Human Resource Management: A Strategic Perspective. Organisational Dynamics, 9 (3): 51–68.

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Amy Barrett in Blue Bell, Pa. Unisys aims for the top of the tree. Nov, 1998, Business Week.

Review Questions

1. Explain SHRM model.
2. What is the role of HR professionals in strategy formulation.
3. Discuss the linkage between organisational strategy and the HR strategy.

Time to Apply Theory to Practice: Assignment

Prepare a report on “Start up’s and Role of HR”

• Visit a start-up organisation and observe the role of HR.
• Pick strategy of this organisation and try to build HR strategy and discuss with the promoter of the start-up.

Critical and Analytical Thinking: Unisys Aims for the Top of the Tree

Will Weinbach’s new push erase its second-tier status?

The faces around him said it all. When Lawrence A. Weinbach took the top job at ailing Unisys Corp. in the fall of 1997, he quickly noticed that no one in the halls of the Blue Bell (Pa.) computer company smiled. In fact, many employees didn’t even look him in the eye. And when Weinbach went out to visit big customers, most asked the same uneasy question: “Is Unisys viable?” Says Weinbach: “Nobody thought this company had a future.”

These days, there’s little worry about Unisys’ survival. One year after his arrival, Weinbach, 58, has slashed the company’s staggering debt load by nearly $1 billion, to a more manageable $1.3 billion. That has helped the company turn in strong earnings all year long. On October 15, Unisys announced that profits nearly doubled in the third quarter, to $96 million on $1.8 billion in sales. And the stock has more than doubled, to 25 7/8 since Weinbach’s arrival.

Not bad for the first year on the job. But Weinbach’s next year will be an even bigger test. He wants to build the company’s services business—expected to hit $5 billion this year—into a high-octane profit engine, focusing on areas where Unisys has proven expertise—such as financial services and telecommunications. The trouble is, Weinbach faces a delicate balancing act: he has to rev up the services side as he copes with the expected decline of the company’s traditional mainframe business, which still generates about 60 percent of the company’s earnings. “The challenge is to do this and be perceived as a top-tier (services) player,” says Merrill Lynch & Co. analyst Steven M. Milunovich. “They are still viewed as a second-tier computer company.” Concedes Weinbach: “Are we there yet? No. But we are on our way.” REVENUE RAISER. Certainly, Weinbach is not used to playing in the second tier. An accountant by training, he previously had a 36-year career at accounting and consulting giant Andersen Worldwide. Chief executive for his last 8 years there, he upped revenues from $3.4 billion to $11.3 billion. But with Andersen’s mandatory retirement age of 62 was 5 years away, Weinbach decided to start a second career. “The challenge of coming into a turnaround and seeing if we could get (Unisys) to come alive was very enticing,” he says.

At Unisys, Weinbach quickly moved to impose financial discipline on the company’s erratic information services business. That unit focuses on a variety of services including the design and installation of sophisticated document imaging, voice-messaging, or customer-information systems for companies like Norwest Financial, the consumer-finance business of Norwest Corp. Those businesses, together with the company’s networking and maintenance-service group, are expected to generate 67 percent of Unisys’ $7.2 billion in annual revenues this year. But the service unit contributes just 39 percent of the company’s operating income. One reason: Unisys bid so aggressively to win some contracts that a number of them, including one to manage the health insurance system for Florida state employees, were money losers.

Indeed, the information service group racked up losses of $400 million in 1995 and 1996 alone. Now, before a bid is made, the proposal gets a stringent internal review by executives who don’t receive commissions on the deal. And Weinbach says Unisys won’t be chasing huge outsourcing deals, in part because profits on such projects are slim.

Where Weinbach is scrambling after new business is in midsize service deals that can help the company build up its Internet expertise. A Unisys package called Cool ICE, for example, is the software glue that helps customers create electronic commerce applications that link their databases to Web sites. Although coming off a small customer base, sales are up 300 percent this year. Unisys also is hawking another program, FBA Navigator, a system for managing customer information at retail banks that allows banks to send personally tailored marketing pitches to customers over the web.

Products like Navigator are part of another scheme to drive service revenue. Weinbach calls it repeatable solutions. These are predesigned systems that are developed to meet the needs of industries such as publishing, telecommunications, and transportation, which can then be tailored—using Unisys experts—to fit the specific requirements of individual customers and any number of hardware platforms.

Unisys, for instance, offers daily newspapers a system called Hermes. Developed in Europe in the 1970s, Hermes manages the flow of everything from archived stories and photos to the newspaper’s daily content and layout. It has caught fire in the last 3 years, with a total of 100 newspapers now using the system—33 signed up in 1998 alone—including Rupert Murdoch’s News International PLC, publisher of London’s The Sun. “Their key was they were successful in Europe with customers that were happy with them,” says Bill Hack, publishing systems director at Philadelphia Newspapers, which is rolling out Hermes at its Philadelphia Inquirer and Philadelphia Daily News operations. So far, the midsize-service effort is paying off. In the first 9 months of this year, total service revenue rose 17 percent, to $3.5 billion, generating operating income of $221 million, compared with just $86 million in the year-earlier period. And more than 25 percent of orders in services this year are from new clients.

While Weinbach says services are the future of Unisys, he isn’t turning his back on hardware. Instead, he’s zeroing in on high-end servers and mainframes. Earlier this year, he outsourced the production of low-end servers and personal computers to Hewlett-Packard. That’s allowing the company to target much of its $300 million research and development budget on a new generation of high-end servers. The new machines—the first line will be ready by mid-1999—will run Microsoft Corp’s Windows NT operating system as well as other operating systems and use new-generation Intel Corp chips.MICRO-BET. That bet isn’t without risks. Rightnow, NT is the hot ticket among corporate users, but it isn’t viewed as reliable enough to handle the high volume, mission-critical functions typically run on mainframes. Unisys is betting that, by partnering with Microsoft, the two companies can boost NT to handle those tasks for industries such as financial services. If the new hardware delivers, Unisys will be set to exploit the hot market for NT software and services. “The risk is that making NT industrial-strength takes longer and is more difficult than they currently project,” says analyst Charles C. Burns of technology researcher Giga Information Group.

None of Weinbach’s ambitious plans will flourish, however, if he isn’t able to overhaul the company’s stodgy old mainframe image. That holds Unisys back in everything from recruiting to being considered a serious candidate for top- flight contracts. A new ad campaign—costing $20 million in the fourth quarter alone—is aimed at blowing away that image. With its showcasing of hip young professionals who are so obsessed with their jobs that their heads are actually computer screens, the ads are a break from Unisys’ traditional pitch.

Weinbach also is raising the bar on training. He is planning to roll out “Unisys University,” a technical and management training program, in January of 1999 to keep employees up on technical issues and build a pool of experts. He reinstated a matching contribution from the company in employee 401(k) programs—cut during lean years—and started a program in which employees can buy Unisys stock at a discount. Now, employee turnover is down from 14 percent in 1996 to about 9 percent in the first quarter of this year. “We were concerned about morale and support at the company,” says George F. Thomas, director of information systems at New York Clearing House Assn., a big Unisys mainframe customer. “Now you can see a turnaround in attitude.”

There’s still a lot of room for improvement, though. One senior executive at the company says some infighting continues between the hardware and services teams on issues like financial resources and manpower. Weinbach knows those units need to coordinate sales and service efforts better, so earlier this year he created one sales group to handle the company’s 200 largest accounts. “We are trying to change the culture of this company,” Weinbach says. If he can do that, Unisys may be able to focus on prospering instead of survival.

Questions

1. Describe the change in strategy and/or the major strategic thrusts taking place under Lawrence Weinbach at Unisys.
2. What are the implications of these strategic business issues for people issues (culture, competencies, critical behaviors, etc.)? Develop a SHRM model.
3. How can HR play a role in executing this strategy?

Suggested Readings

• Best Fit And Best Practice Perspectives For HR Management Essay

  https://www.ukessays.com

• Best Practice VS Best Fit – Human Resources management

  https://hrm024209.wordpress.com

• Strategic human resource management an … - Human Dynamics

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• Best Practice Vs. Best Fit Approach to Strategic Human Resource …

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• Approaches to SHRM - research-methodology.net

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• Human Resources Management (Best Practice VS Best Fit) | Poet …

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• An Introduction to Strategic Human Resource Management - Cipd

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• The Best Fit Approach | HR at Work

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• human resource management - Kogan Page

  https://www.koganpage.com

• Best Practice Strategic Human Resource Management …

  https://www.employeeconnect.com

• strategic human resource management an … - Human Dynamics

  www.humdyn.co.uk

• Best-practice SHRM: high-commitment models - Wisdom Jobs

  https://www.wisdomjobs.com

• Best practice model - SlideShare

  https://www.slideshare.net

• BEST PRACTICE v. BEST FIT Best Practice Model Empirical Evidence …

  www.mbatools.co.uk

• Strategic human resource management approaches and practices and …

  https://abhinavjournal.com

• Understanding the Role of HR as a Strategic Business Partner: Q&A …

  www.hrinasia.com

• When Employees Don’t Read Benefits Materials - SHRM

  https://www.shrm.org

• Talent Acquisition: A Guide to Understanding and Managing … - SHRM

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• What Do Personality Tests Really Reveal? - SHRM

  https://www.shrm.org

• Understanding and Developing Organisational Culture - SHRM

  https://www.shrm.org

• Understanding Foreign Culture Can Boost Productivity - SHRM

  https://www.shrm.org

• Acting Out - SHRM

  https://www.shrm.org

• Top Choice—A Case Study in Succession Management - SHRM

  https://www.shrm.org

• Understanding Workplace Cultures Globally - SHRM

  https://www.shrm.org

Tools

• 360 Degree Refined.
• SHRM-CP/SHRM-SCP Certification Preparation.
• Multi-Rater (360 Degree) Edition.
• SHRM eLearning Library.
• HRM Diagnostic™ - 180 Tool.
• SHRM Employee Handbook Builder.
• SHRM Essentials of Human Resources.
• Mastering Your HR Generalist Role.

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• Toolkits - SHRM

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• Competency Diagnostic Tools - SHRM

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• Resources & Tools - SHRM

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• SHRM Diagnostic™ - 360 Tool - SHRM HR Competency Diagnostic …

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• Strategic Human Resource Management - SlideShare

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• SHRM HR Competency Tools | Mississippi State Council of SHRM

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• HRCI e-Learning Package: 60+ Credits plus SHRM … - tools to succeed

  www.tools2succeed.com

• SHRM India Launches Study On Talent Assessment Tools - BW …

  businessworld.in

Suggested Case Studies—SHRM

• Case Studies - SHRM

  https://www.shrm.org

• human resource management - Kogan Page

  https://www.koganpage.com

• Case study of strategic human resource management in Walmart stores

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• Strategic human resource management – a case study - SlideShare

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• SHRM - Walmart case study | Walmart | Strategic Management - Scribd

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• Case Study 1 Strategic Human Resource Management - Scribd

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  Walmart Strategic Human Resource Management Case Study Solution

  https://bohatala.com › Case Studies Solutions

• Strategic human resource management: case study - The Uni Tutor

  https://www.theunitutor.com

• Strategic Human Resource Management in U.S. Luxury Resorts—A …

  www.tandfonline.com

• Case Study – SHRM - Marketing General Incorporated

  www.marketinggeneral.com › Works

• SHRM Case Study - GLOBALSTRAT - International Growth Strategies

  www.globalstrat.org

• [PDF]Putting strategic human resource management (SHRM) - UTas ePrints

  eprints.utas.edu.au

Movies and Videos on SHRM

• SHRMOFFICIAL - YOUTUBE

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• SHRM- Working for Us! - YouTube

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• Who is Eligible for the New SHRM Certification? - 2017 - YouTube

  https://www.youtube.com

• How can Strategic Human Resource Management (SHRM) help in …

  https://www.youtube.com

• 4 Helpful HR Video Resources You Never Knew Existed | Business.org

  www.business.org

• Popular TV and Films Love to Hate HR - SHRM

  https://www.shrm.org

• Webcasts - SHRM

  https://www.shrm.org

• Strategic Human Resource Management Video Lecture

  https://www.michiganstateuniversityonline.com

• Society for Human Resource Management (SHRM) - Videos | Facebook

  https://www.facebook.com

• Strategic Human Resource Management: An International Perspective …

  https://www.amazon.com