What is the difference between a corporate strategy and a competitive strategy?

PRINTED BY: 9676f539bb559f5@placeholder.9722.edu. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted. management policies and practices that promote organizational effectiveness. Human resource metrics (quantitative measures of some human resource management activities, such as employee turnover) are critical in creating high-performance human resource policies and practices. This is because they enable managers to benchmark their own practices against those of successful organizations.

3-3. Give an example of hierarchical planning in an organization.

3-4. What is the difference between a corporate strategy and a competitive strategy? Give one example of each. 3-5. Explain why strategic planning is important to all managers. 3-6. Explain with examples each of the eight steps in the strategic management process.

3-7. Explain with examples how human resources management can be instrumental in helping a company create a competitive advantage.


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3-8. With three or four other students, form a strategic management group for your college or university. Your assignment is to develop the outline of a strategic plan for the college or university. This should include such things as strategic goals; and corporate, competitive, and functional strategies. In preparing your plan, make sure to show the main strengths, weaknesses, opportunities, and threats the college faces, and which prompted you to develop your particular strategic plans. 3-9. Using the Internet or library resources, review the annual reports of five companies. Bring to class examples of how those companies say they are using their HR processes to help the company achieve its strategic goals. 3-10. Interview an HR manager and write a short report on “The Strategic Roles of the HR Manager at XYZ Company.” 3-11. Using the Internet or library resources, bring to class and discuss at least two examples of how companies are using an HR scorecard to help create HR systems that support the company’s strategic aims. Do all managers seem to mean the same thing when they refer to HR scorecards? If not, how do they differ? 3-12. In teams of four or five students, choose a company for which you will develop an outline of a strategic HR plan. What seem to be this company’s main strategic aims? What is the firm’s competitive strategy? What would the strategic map for this company look like? How would you summarize your recommended strategic HR policies for this company?

3-13. Appendix A , PHR and SPHR Knowledge Base, at the


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end of this book (pages 580–588) lists the knowledge someone studying for the HRCI certification exam needs to have in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of four to five students, do four things: (1) review Appendix A ; (2) identify the material in this chapter that relates to the required knowledge Appendix A lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and (4) if time permits, have someone from your team post your team’s questions in front of the class, so that students in all teams can answer the exam questions created by the other teams.


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A few years ago, Starbucks was facing serious challenges. Sales per store were stagnant or declining, and its growth rate and profitability were down. Many believed that its introduction of breakfast foods had diverted its “baristas” from their traditional jobs as coffee-preparation experts. McDonald’s and Dunkin’ Donuts were introducing lower-priced but still high-grade coffees. Starbucks’ former CEO stepped back into the company’s top job. You need to help him formulate a new direction for his company.

The purpose of this exercise is to give you experience in developing an HR strategy, in this case, by developing one for Starbucks.

You should be thoroughly familiar with the material in this chapter.


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Set up groups of three or four students for this exercise. You are probably already quite familiar with what it’s like to have a cup of coffee or tea in a Starbucks coffee shop, but if not, spend some time in one prior to this exercise. Meet in groups and develop an outline for an HR strategy for Starbucks Corp. Assume that for a corporate strategy Starbucks will remain primarily an international chain of coffee shops. Your outline should include four basic elements: a business/competitive strategy for Starbucks, the workforce requirements (in terms of employee competencies and behaviors) this strategy requires, specific HR policies and the activities necessary to produce these workforce requirements, and suggestions for metrics to measure the success of the HR strategy.


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Chip Conley is the founder of Joie de Vivre Hospitality (JDV), a collection of boutique hotels, restaurants, and spas in California. The kitschy atmosphere of the boutiques allows JDV to differentiate itself from both the luxury and the chain hotels. Customer loyalty is so great that JDV relies primarily on word-of-mouth advertising and spends little on traditional advertising methods.

3-14. How does Joie de Vivre Hospitality differentiate its boutique hotels from other hotel offerings in the area? 3-15. How did Chip Conley and Joie de Vivre Hospitality demonstrate great strategic flexibility during the dot-com crash and post-9/11 industry recession? 3-16. What is Joie de Vivre’s philosophy on advertising for its hotels? How does this support the firm’s strategic aims? 3-17. Similarly, list five specific human resource management practices that you would suggest JDV use in order to produce the employee behaviors required to achieve JDV’s strategic aims.


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Siemens is a 150-year-old German company, but it’s not the company it was even a few years ago. Until recently, Siemens focused on producing electrical products. Today the firm has diversified into software, engineering, and services. It is also global, with more than 400,000 employees working in 190 countries. In other words, Siemens became a world leader by pursuing a corporate strategy that emphasized diversifying into high-tech products and services, and doing so on a global basis.

With a corporate strategy like that, human resource management plays a big role at Siemens. Sophisticated engineering and services require more focus on employee selection, training, and compensation than in the average firm, and globalization requires delivering these services globally. Siemens sums up the basic themes of its HR strategy in several points. These include:

A living company is a learning company. The high-tech nature of Siemens’ business means that employees must be able to learn on a continuing basis. Siemens uses its system of combined classroom and hands-on apprenticeship training around the world to help facilitate this. It also offers employees extensive continuing education and management development.


Global teamwork is the key to developing and using all the potential of the firm’s human resources. Because it is so important for employees throughout Siemens to feel free to work together and interact, employees have to understand the whole process, not just bits and pieces. To support this, Siemens provides extensive training and development. It also ensures that all employees feel they’re part of a strong, unifying corporate identity. For example, HR uses cross-border, cross-cultural experiences as prerequisites for career advances.


A climate of mutual respect is the basis of all relationships —within the company and with society. Siemens contends that the wealth of nationalities, cultures, languages, and outlooks



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represented by its employees is one of its most valuable assets. It therefore engages in numerous HR activities aimed at building openness, transparency, and fairness, and supporting diversity.

3-18. Based on the information in this case, provide examples for Siemens of at least four strategically required organizational outcomes, and four required workforce competencies and behaviors. 3-19. Identify at least four strategically relevant HR policies and activities that Siemens has instituted in order to help human resource management contribute to achieving Siemens’ strategic goals. 3-20. Provide a brief illustrative outline of a strategy map for Siemens.


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As a recent graduate and as a person who keeps up with the business press, Jennifer Carter is familiar with the benefits of programs such as total quality management and high-performance work systems.

Jack, her father, actually installed a total quality program of sorts at Carter, and it has been in place for about 5 years. This program takes the form of employee meetings. Jack holds employee meetings periodically, but particularly when there is a serious problem in a store—such as poor-quality work or machine breakdowns. When problems like these arise, instead of trying to diagnose them himself or with Jennifer, he contacts all the employees in that store and meets with them when the store closes. Hourly employees get extra pay for these meetings. The meetings have been useful in helping Jack to identify and rectify several problems. For example, in one store all the fine white blouses were coming out looking dingy. It turned out that the cleaner/spotter had been ignoring the company rule that required cleaning (“boiling down”) the perchloroethylene cleaning fluid before washing items like these. As a result, these fine white blouses were being washed in cleaning fluid that had residue from other, earlier washes.

Jennifer now wonders whether these employee meetings should be expanded to give the employees an even bigger role in managing the Carter stores’ quality. “We can’t be everywhere watching everything all the time,” she said to her father. “Yes, but these people only earn about $8 to $15 per hour. Will they really want to act like mini-managers?” he replied.


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3-21. Would you recommend that the Carters expand their quality program? If so, specifically what form should it take? 3-22. Assume the Carters want to institute a high-performance work system as a test program in one of their stores. Write a one-page outline summarizing important HR practices you think they should focus on.


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*The accompanying strategy map for this chapter is in the MyManagementLab, and the overall map on the inside back cover of this text outlines the relationships involved.


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* Written by and copyright Gary Dessler, PhD. Starting as a single hotel in a Paris suburb in 1990, the Hotel Paris now comprises a chain of nine hotels, with two in France, one each in London and Rome, and others in New York, Miami, Washington, Chicago, and Los Angeles. As a corporate strategy, the Hotel Paris’s management and owners want to continue to expand geographically. They believe doing so will let them capitalize on their reputation for good service, by providing multicity alternatives for their satisfied guests. The problem is, their reputation for good service has been deteriorating. If they cannot improve service, it would be unwise for them to expand, since their guests might prefer other hotels after trying the Hotel Paris.

Several things are complicating their problem. Elected in 2012, French president Francois Hollande has been unable to halt or even slow the country’s economic decline. His attempts to impose incremental tax rates of 75% on wealthy citizens are prompting many to contemplate leaving France. Furthermore, many tourists—faced with similar economic challenges elsewhere—are increasingly staying at short-term rental apartments in Paris, found on the Web, for a fraction of what a fine hotel stay might cost.

Top management, with input from the HR and other managers, and with the board of directors’ approval, chooses a new competitive strategy and formulates new strategic goals. They decide: “The Hotel Paris International will use superior guest services to differentiate the Hotel Paris properties, and to thereby increase the length of stays and the return rate of guests, and thus boost revenues and profitability.” All Hotel Paris managers—including the director of HR services—must now formulate strategies that support this competitive strategy.


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The Hotel Paris’s basic strategy is to use superior guest services to expand geographically. For HR director Lisa Cruz, reviewing the hotel’s activities makes it clear that achieving the hotel’s strategic aims means achieving a number of required organizational outcomes. For example, Lisa and her management colleagues must take steps that produce fewer customer complaints and more written compliments, more frequent guest returns and longer stays, and higher guest expenditures per visit.

The question facing Lisa, then, is this: What competencies and behaviors must our hotel’s employees exhibit, if we are to produce required organizational outcomes such as fewer customer complaints, more compliments, and more frequent guest returns? Thinking through this question helps Lisa come up with an answer. For example, the hotel’s required employee competencies and behaviors would include, “high- quality front-desk customer service,” “taking calls for reservations in a friendly manner,” “greeting guests at the front door,” and “processing guests’ room service meals efficiently.” All require motivated, high-morale employees.


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The HR manager’s task now is to identify and specify the HR policies and activities that will enable the hotel to produce these crucial workforce competencies and behaviors. For example, “high-quality front-desk customer service” is one such required behavior. From this, the HR director identifies HR activities to produce such front-desk customer service efforts. For example, she decides to institute practices to improve the disciplinary fairness and justice in the company, with the aim of improving employee morale. Her assumption is that enhanced


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