1. Mergers, Acquisitions, and Strategic
Human Resource Management
Chapter 3
Copyright © 2009 Pearson Education, Inc. 3-1
publishing as Prentice Hall

2. What is strategic HRM?
Strategic HRM is developed through three steps:
1. Decide on the strategic goals
2. Identify employee skills and
behaviors necessary for success
3. Formulate HR management policies
and practices that will produce
these required skills
Copyright © 2009 Pearson Education, Inc. 3-2
publishing as Prentice Hall

3. The Strategic Management Process
The process begins by
developing a strategic
plan that describes how
internal strengths and
weaknesses will be
matched with external
opportunities and
threats
Copyright © 2009 Pearson Education, Inc. 3-3
publishing as Prentice Hall

4. Steps in Strategic Management
Copyright © 2009 Pearson Education, Inc. 3-4
publishing as Prentice Hall

5. Step 1: Define the current business
Begin by asking these questions:
– What products do we sell?
– Where do we sell these products?
– How do our products or services differ from
our competitors?
Copyright © 2009 Pearson Education, Inc. 3-5
publishing as Prentice Hall

6. Step 2: Perform External and Internal
Situational Audits
• The key to success is adaptation
• Situational audits require SWOT (strengths,
weaknesses, opportunities, and threats) analysis
Copyright © 2009 Pearson Education, Inc. 3-6
publishing as Prentice Hall

7. Step 3: Formulate a New Business
Direction
• What should our new business be in terms of
product, placement and competitive advantage?
• The vision statement describes the following:
What do we want to become?
• The mission statement explains the following:
Where are we now?
Copyright © 2009 Pearson Education, Inc. 3-7
publishing as Prentice Hall

8. Step 4: Translate the Mission into
Strategic Goals
• Operationalize the mission for managers
• What does the mission mean to each
department?
• What goals follow implementation?
Copyright © 2009 Pearson Education, Inc. 3-8
publishing as Prentice Hall

9. Step 5: Formulate Strategies to
Achieve the Strategic Goals
• What is the game plan?
• Decide on a course of
action
– Best strategies are
concise
– Easily communicated
Copyright © 2009 Pearson Education, Inc. 3-9
publishing as Prentice Hall

10. Step 6: Implement the Strategies
• Get the game plan going
• Do what needs to be done
– Hire or fire people
– Build or close plants
– Adding or eliminating products and product
lines
Copyright © 2009 Pearson Education, Inc. 3-10
publishing as Prentice Hall

11. Step 7: Evaluate Performance
• Evaluate, evaluate, evaluate
• Ongoing process vis-à-vis strategic control
• Addresses the following questions:
– Are resources being utilized as planned?
– Are discrepancies explained?
– Do changes in our situation suggest change?
Copyright © 2009 Pearson Education, Inc. 3-11
publishing as Prentice Hall

12. Types of Strategies
Copyright © 2009 Pearson Education, Inc. 3-12
publishing as Prentice Hall

13. Corporate Strategy
• Top-level, company-wide
• Identifies the portfolio of existing business
segments
• Strategic possibilities include the following:
– Diversification or vertical integration
– Consolidation
– Geographic expansion
Copyright © 2009 Pearson Education, Inc. 3-13
publishing as Prentice Hall

14. Competitive Strategy
• Identifies how to build upon and strengthen the
business’s
long-term
marketplace
position
• Identifies and
develops
competitive
advantage
Copyright © 2009 Pearson Education, Inc. 3-14
publishing as Prentice Hall

15. Competitive Advantage
• Cost leadership indicates that the enterprise
intends to become the low-cost leader in the
industry
• Differentiation strategies seek to be unique in its
industry along dimensions valued by buyers
• Focusers carve out niche markets and compete
by providing a product/service that customers
can get through no other means
Copyright © 2009 Pearson Education, Inc. 3-15
publishing as Prentice Hall

16. Functional Strategies
• Identifies basic courses of action that each
department will pursue to achieve strategic goals
– consider Southwest Airlines
Copyright © 2009 Pearson Education, Inc. 3-16
publishing as Prentice Hall

17. The Importance of Leverage
• Leverage means
supplementing what you
have and doing more
with what you’ve got!
• Human resources can
be a crucial competitive
advantage!
Copyright © 2009 Pearson Education, Inc. 3-17
publishing as Prentice Hall

18. HRM Creates Competitive Advantage
Copyright © 2009 Pearson Education, Inc. 3-18
publishing as Prentice Hall

19. Four Important Strategic HR Issues
1. HR must understand that employees play a
key role in employers’ performance
improvement efforts
2. HR teams should support corporate
productivity and performance improvement
efforts
Copyright © 2009 Pearson Education, Inc. 3-19
publishing as Prentice Hall

20. Four Important Strategic HR Issues, cont.
3. HR units must be more involved in designing –
not just executing – the strategic plan
4. HR managers must understand how to create
value
Copyright © 2009 Pearson Education, Inc. 3-20
publishing as Prentice Hall

21. How Involved Is HR in Strategic
Management?
Copyright © 2009 Pearson Education, Inc. 3-21
publishing as Prentice Hall

22. What Roles Does HR Play?
• Strategy
execution
• Strategy
formulation
• SWOT analysis
Copyright © 2009 Pearson Education, Inc. 3-22
publishing as Prentice Hall

23. Translating Strategy into HR Policy and
Practice
Copyright © 2009 Pearson Education, Inc. 3-23
publishing as Prentice Hall