Strategy in simple terms refers to the plans organization formulates to meet its end objectives, Strategies are devised to ensure market success and achieve competitive advantage. Johnson and Scholes define strategy as
Introduction to Strategy
Definition
Strategy in simple terms refers to the plans organization formulates to meet its end objectives, Strategies are devised to ensure market success and achieve competitive advantage. Johnson and Scholes define strategy as
"Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations"
Formulation of Strategy
A Business Strategy is thus about finding answers to the following queries
- What are the current and future needs of customers? (End User Requirements)
- What are the distinctive capabilities that will give business competitive advantage? (Strengths)
- What in broad terms needs to be done? (Actions)
- What is the business trying to attain? (Direction)
- Which markets should a business compete? (markets; scope)
- How can the business perform better than the competition? (Advantage)?
- What resources (skills, relationships, assets, facilities and technical competence) are required? (Resources)?
- What external environmental factors affect the businesses? (Environment)?
- What are the expectations of those who have interest in the business? (stakeholders)
Providing answers to the above listed questions makes the formulation of business strategy a more organized, efficient and effective process. The purpose of business strategy is to recognize the customer needs, decide on the market, establish a direction and build on the capabilities Organization to take advantage of the market situation and perform to the expectation of the shareholders by effectively and efficiently utilizing the resources business has.
Development of HR Strategy
Once the business finds answers to the above mentioned questions, the strategy for different business function could be formulated and they should be in line and in the same direction as the business strategy. HR Strategy is no exception and is all about how the Human Resource of the business would be integrated with the business strategy and how they could help in execution of the business strategy.
Richardson and Thompson (1999) suggest that:
"A strategy, whether it is an HR strategy or any other kind of management strategy must have two key elements: there must be strategic objectives (i.e. things the strategy is supposed to achieve), and there must be a plan of action (i.e. the means by which it is proposed that the objectives will be met)".
The direction for HR strategies is about provision of Human needs of the strategy, it is important because the people follow the direction and make use of the resources and bring capabilities to the business and more than anything else they are the one who execute the strategies, as Gratton (2000) commented: There is no great strategy, only great execution.’
it is worthy to note that there is no blue print for HR strategy, they are definitely good and bad practices available, since all organizations are different with different set of rules, procedures and policies, and most importantly different people with business having a different culture, it is advisable the firms do look into the culture of the people and the organization plus their skills, attitudes and behaviors before formulation of business and HR strategies.
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