This is Human Resource Management Training organized by G.O.L and hosted by US Embassy in Cairo

1. © 2014 American University in Cairo. All rights reserved. 2–1
SHRM

2. 2–2
Part I
Strategic Management

3. 2–3
a) Introduction
b) Three Big Strategic Questions
c) Models of Strategic Management
d) Hierarchy of Strategy
e) Five Steps of Strategic Management
f) Who performs the task of strategy?
g) Benefits of thinking and managing strategically.
Contents

4. 2–4
a) Introduction

5. 2–5
A firm without strategy is
like a ship without rudder.

6. 2–6
A firm wants to know where
it is going & why it going.

7. 2–7
What is Strategy?
A company's strategy is a set of
competitive moves and business
approaches that management is
employing to run the company in order
to do the following:

8. 2–8
What is Strategy? (Cont’d)
Attract & please customers
Stake out a market position
Conduct operations
Compete successfully
Achieve organizational objectives

9. 2–9
Why Strategy is needed?
To proactively shape how’s a company’s business will be
conducted & direct the managers & employees decisions into one
direction.

10. 2–10
b) Three Big Questions

11. 2–11
Three big strategic questions
1- Where are we now?

12. 2–12
Three big strategic questions
2- Where do we want to go?
-Kind of Business(es) to be in.
-Market position to stake out.
-Buyers need & group to serve.
-Outcomes to achieve.

13. 2–13
Three big strategic questions
3- How do we get there?

14. 2–14
c) Models of Strategic
Management

15. Strategic Management (Models of Strategic Management)
Strategic formulation
Involves senior managers evaluating the interaction
between strategic factors and making strategic
choices that guide managers to meet the
organization’s goals.

16. Strategic Management (Models of Strategic Management)
Strategy Implementation
Focuses on the techniques used by managers to
implement their strategies (e.g. leadership style,
organizational structure, control systems,
management of human resources).

17. Strategic Management (Models of Strategic Management)
Strategy Evaluation
Determines to what extent the actual change and
performance match the desired change and
performance.

18. 2–18
d) Hierarchy of Strategy

20. Hierarchy of Strategy (Corporate Strategy)
A- Corporate - Level Strategy
Describes a corporation’s overall direction in terms
of its general philosophy towards growth and the
management of its various business units.
WHAT BUSINESS ARE WE IN?

21. Hierarchy of Strategy (Corporate Strategy)
• Establishing investment priorities and steering
resources into the most attractive business units
• Initiating actions to improve combined performance
of business units
• Improving synergy between related business units to
increase performance

22. Hierarchy of Strategy (Business-Level Strategy)
Business-Level Strategy
Deals with decisions and actions pertaining to each
business unit in order to make each unit more
competitive in its market-place.

23. Hierarchy of Strategy (Functional-Level Strategy)
Functional-Level Strategy
Pertains to the major functional operations within
the business unit (including research and
development, marketing, manufacturing, finance and
HR) to maximize resource productivity.

24. 2–24
e) Five steps of strategic
Management

26. 2–26
There are five tasks / steps the firm
must undergo or involved in
strategic management

27. 2–27
Five tasks of Strategic Management
1- Developing a strategic vision & mission & Values
2- Setting Objectives
3- Creating a strategy (Types)
4- Implementing & executing the strategy (BSC)
5- Evaluating performance & applying corrective adjustments

28. 2–28
1- Developing a strategic vision & mission
& Values
Vision: outlines what the organization wants to be, or
how it wants the world in which it operates to be (an
"idealized" view of the world).
It is a long-term view and concentrates on the future. It
can be emotive and is a source of inspiration.
For example, a charity working with the poor might
have a vision statement which reads "A World without
Poverty."

29. 2–29
1- Developing a strategic vision & mission
& Values (Cont’d)
Mission: Defines the fundamental purpose of an
organization or an enterprise, describing why it exists
and what it does to achieve its vision.
For example, the charity above might have a mission
statement as "providing jobs for the homeless and
unemployed".

30. 2–30
1- Developing a strategic vision & mission
& Values (Cont’d)
Values: Beliefs that are shared among the
stakeholders of an organization. Values drive
an organizations culture and priorities and provide a
framework in which decisions are made.
For example, "Knowledge and skills are the keys to
success" or "give a man bread and feed him for a day,
but teach him to farm and feed him for life".

31. 2–31
2- Setting Objectives
Setting the strategic objectives of a company
or organization should be done after the
SWOT analysis has been performed.
This would allow achievable goals or
objectives to be set for the organization.

32. 2–32
SWOT Analysis (Environmental Analysis)
SWOT analysis (alternately SWOT Matrix) is a strategic
planning method used to evaluate
the Strengths, Weaknesses/Limitations, Opportunities,
and Threats involved in a project or in a
business venture.
It involves specifying the objective of the business
venture or project and identifying the internal and
external factors that are favorable and unfavorable to
achieve that objective.

33. © 2014 American University in Cairo. All rights reserved. 2–33

34. 2–34
SWOT Analysis
Strengths: characteristics of the business, or project team
that give it an advantage over others
Weaknesses (or Limitations): are characteristics that place
the team at a disadvantage relative to others
Opportunities: external chances to improve performance
(e.g. make greater profits) in the environment
Threats: external elements in the environment that could
cause trouble for the business or project

35. 2–35
SWOT Analysis
•Identification of SWOTs is essential because subsequent
steps in the process of planning for achievement of the
selected objective may be derived from the SWOTs.
•First, the decision makers have to determine whether
the objective is attainable, given the SWOTs.
•If the objective is NOT attainable a different objective
must be selected and the process repeated.

36. 2–36
SWOT Analysis
•Users of SWOT analysis need to ask and answer
questions that generate meaningful information for
each category (strengths, weaknesses, opportunities,
and threats) in order to maximize the benefits of this
evaluation and find their competitive advantage.

37. 2–37
SWOT Analysis
•Next is an example SWOT analysis of a market position
of a small management consultancy with specialism in
HRM.

38. 2–38
SWOT Analysis
Strengths Weaknesses Opportunities Threats
Reputation in
marketplace
(Capitalize)
Shortage of
consultants at
operating level
(strength)
Well established
position with a well
defined market share
(Invest)
Large consultancies
operating at a
minor level
(Identify)
Expertise at
partner level
in HRM
consultancy
Unable to deal
with multi-
disciplinary
assignments
because of size
or lack of ability
Identified market for
consultancy in areas
other than HRM
Other small
consultancies
looking to invade
the marketplace

39. 2–39
SWOT Analysis
•From the previous example it shows that main goal of
this consultancy company is to:
A- Capitalize on it’s strengths.
B- Strengthen it’s weaknesses.
C- Invest on it’s opportunities.
D- Identify it’s Threats.

40. 2–40
Part II
Creating a Strategy

41. 2–41
3- Creating a Strategy
Involves senior managers evaluating the
interaction of strategic factors and making strategic
choices that guide the organization
to meet its goal(s).
Some strategies are formulated at the corporate, business,
and specific functional level such as marketing and HRM.

42. The Balanced Scorecard Approach

43. What is a Balanced
Scorecard?
The Balanced Scorecard is a strategic planning and
management system used to align business activities to
the vision and strategy of the organization by
monitoring performance against strategic goals.

44. Balanced Scorecard
Concept
Was first published in 1992 by Kaplan and Norton,
a book followed in 1996.
Traditional performance measurement that only
focus on external accounting data are obsolete.
The approach is to provide 'balance' to the financial
perspective.

45. Why Use a Balanced Scorecard?
Improve organizational performance by measuring what
matters
Increase focus on strategy and results
Align organization strategy with workers on a day-to-day
basis
Focus on the drivers key to future performance
Improve communication of the organization’s Vision and
Strategy
Prioritize Projects / Initiatives

46. 4 Original Business Perspectives
Adapted from The Balanced Scorecard by Kaplan & Norton
 The Balanced
Scorecard model
suggests that we
view the
organization from 4
perspectives.
 Then Develop
metrics, collect data
and analyze it
relative to each of
these perspectives

47. 4 Business Perspectives Questions
Financial
◦ What must we do to create sustainable economic value?
Internal Business Process
◦ To satisfy our stakeholders, what must be our levels of productivity,
efficiency, and quality?
Learning and Growth
◦ How does our employee performance management system, including
feedback to employees, support high performance?
Customer
◦ What do our customers require from us and how are we doing
according to those requirements?

48. Balanced Scorecard Measurements

49. Key Implementation Success
Factors
Obtaining executive sponsorship and commitment
Involving a broad base of leaders, managers and
employees in scorecard development
Choose the right Scorecard Champion
Beginning interactive (two-way) communication first
Viewing the scorecard as a long-term journey rather
than a short-term project
Getting outside help if needed

50. 2–50
Part III
Business Level Strategy

51. 2–51
Business-level strategy deals with decisions and
actions pertaining to each business unit, the main
objective of a business-level strategy being to make
the unit more competitive in its marketplace.
This level of strategy addresses the question, ‘How
do we compete?’

52. 2–52
Business Level Competitive
strategy models

53. 2–53
In the 1980s, Porter (1980, 1985) made a
significant contribution to our understanding of
business strategy by formulating a framework
that described three competitive strategies:
A- Low cost leadership strategy
B-Differentiation strategy
C- Focus strategy.

54. 2–54
A- Low cost leadership strategy

55. 2–55
The low-cost leadership strategy
attempts to increase the organization’s
market share by having the lowest unit
cost and price compared with
competitors.

56. 2–56
B- Differentiation competitive Strategy

57. 2–57
Differentiation Strategy assumes that
managers 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.

58. 2–58
C- Focus Business Strategy

59. 2–59
With the focus strategy, managers
focus on a specific buyer group or
regional market.
A market strategy can be narrow or
broad, as in the notion of niche
markets being very narrow or focused.

60. 2–60

61. 2–61
Part IV
Function Level Strategy

62. 2–62
4- Implementing a Strategy
Activities that focuses on the techniques used
by managers to implement their strategies.
In particular, it refers to activities which
deal with leadership style that is compatible to the
strategies, the structure of the
organization, the information and control systems,
and the management of human
resources.

63. Types of Organisation
From Leadership perspective hit can be divided into
three types:
Autocratic
Democratic
Laissez-Faire

64. Leadership Styles:
Autocratic (Authoritarian): the leader
makes the decisions and closely supervises
employees.

65. Leadership Styles:
Democratic (Participative): the leader allows
participation in decisions and does not closely
supervise employees.

66. Leadership Styles:
Laissez-Faire (Delegate)/ Free : the leader
takes a leave-the-employees-alone approach.

67. Types of Organisation
From Number of Employees perspective it can be divided into three
types:
Small Organisations (Uk 50-, US100-)
Medium Organisations (UK 250-, US500-)
Large Organisations (UK 250+, US500+)

68. Types of Organisation
From Structure perspective it can be divided into three types:
Functional Structure
Divisional Structure
Matrix Structure

69. 1- Functional / Pyramid Organization
Structure

70. This kind of organizational structure
classifies people according to the function
they perform in their professional life

72. 2- Divisional / Product Organization
Structure

73. This is the kind of structure that is
based on the different divisions in the
organization

75. 3- Matrix Organization Structure

76. This is a structure, which is a
combination of function, and product
structures.

78. Types of Organisation
From the Authority perspective it can be divided into three
types:
Line Authority Structure
Line & Staff Authority Structure

79. a- Line Organization Structure

80. The approvals and orders in this kind of
structure come from top to bottom in a
line. Hence the name line structure

82. b- Line & Staff Organization
Structure

83. Managers of line and staff have authority
over their subordinates, but staff managers
have no authority over line managers and
their subordinates

85. Types of Organisation
From the Form perspective it can be divided into two types:
Tall (Vertical) organisation
Flat (Horizontal) Organisation

87. Large corporations use the tall organizational structure
The decision-making powers all rest with the top
management.
The decision making and authority are all centralized and all
the strategic functions are executed through departments with
narrower span of control.

88. Span of control
A span of control is the number of people
who report to one manager in a hierarchy.
The more people under the control of one
manager - the wider the span of control.
Less means a narrower span of control.

90. The advantages of a narrow
span of control are:
A narrow span of control allows a manager to communicate
quickly with the employees under them and control them more
easily
Feedback of ideas from the workers will be more effective

91. Flat organization structure is generally
adopted by small firms.
Here the management trusts and
respects the judgment and decision-
making capabilities of its employees.

92. Considerations:
Every organization must choose its structure
after a careful evaluation of several factors.
These are factors such as the scale and
magnitude of the company's operations, its
products, customers and employees.

94. The advantages of wide span of control
are:
There are less layers of management to
pass a message through, so the message
reaches more employees faster.
It costs less money to run a wider span of
control because a business does not need
to employ as many managers in different
levels.

95. Types of Organisation
The main types of business organization in the
private are:
sole traders
partnerships
companies
franchises.

97. 2–97
5- Strategy Evaluation
Is an activity in the strategic management process
that determines to what extent actual change and
performance matches desired change and
performance.