EXPLOITS UNIVERSITY

FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING
BACHELORS OF ACCOUNTANCY (Y-3/2)
HUMAN RESOURCES MANAGEMENT

By:

KELVIN NOZGEKANI GONDWE

Presented to:

MR. MADALITSO MUKIWA

DAY CLASS

ASSIGNMENT 1

Word count:
1004.
Due Date:

8th May, 2013.

INTRODUCTION

For a battle to be won on a battlefield, there is a need to have the art of planning and directing
overall military operations and movements in a war or battle. We can talk about offensive
strategies such as counter-offensive, which is a strategic offensive that takes place after an
enemy’s front line troops and reserves have been exhausted, and before the enemy has had the
opportunity to assume new defensive opportunities to defend temselves.

Watching some of the old movies, especially war movies. When there is a war between
American soldiers and Vietnam, The Vietnam soldiers, they usually go for human wave attack
which is unprotected frontal attack where they try to move as many soldiers as possible into
enganging close range combat with the defender. This is the strategy they use despite that they
can end up losing a lot of soldiers in the process.

This paper is not about war or how to use strategy to avoid it. But this paper is about how
strategy can be used in an organisation, we are going to look at levels of strategies and how it
affects the business and also how strategy will depend on the capacity levels and cultural
orientation of the organisation. When we look at organisations, we look at how they operate and
how they are managed to survive with the amount of resources they have as a firm. Management
have that action plan for running the business and operations within the firm to achieve its
desired goal, this points out an organisation in a particular direction, charts a strategic path, and
builds organisation’s identity. That is strategy.
ORGANISATION STRATEGY

Strategy has a lot of definitions, but mostly it is defined as a method or plan chosen to bring
about a desired future such as achievement of a goal or a solution to a problem. We can also look
at other definitions by different authors:

Chandler (1962) "Strategy is the determination of the basic long-term goals of an enterprise, and
the adoption of courses of actions and the allocation of resources necessary to carry out these
goals;

Schendel and Hatten's definition (1972): "Strategy is the basic goals and objectives of the
organisation, the major programs of action chosen to reach these goals and objectives, and the
major pattern of resource allocation used to relate the organisation to its environment;"

Glueck (1976) "Strategy is a unified, comprehensive, and integrative plan designed to assure that
the basic objectives of the enterprise are achieved;"

Steiner and Meiner (1977) state: "Strategy is the forging of company missions, setting objectives
for the organisation in light of external and internal forces, formulating specific policies and
strategies to achieve objectives, and ensuring their proper implementation so that the basic
purposes and objectives of the organisation will be achieved;"

Michael Porter defines strategy as: ‘The creation of unique and value position involving a
different set of activities from its rivals or performs similar activities in different ways.” A
strategy is an integrated and coordinated set of commitments and actions designed to exploit core
competencies and gain a competitive advantage.

In an organisation, when we are talking about strategies, we are looking at choices made by
managers for the gowth of the business itself. This can be, how to manatain a strong relationship
with its customers, how to survive on the market despite heavy competition, taking into
consideration on how to make the business grow and also how to achieve its goal or vision.
Strategic Management is that set of managerial decisions and actions that determine the long
term performance of a corporation (Wheeler and Hunger 1998). An organisation’s Strategy is
management’s action plan for running the business and conducting operations. It consist of the
business moves and ways that managers are employing to grow the business, attract and please
customers, compete successfully, conduct operations, and achieve the targeted levels of
organisational performance.

The tasks of strategic management includes, Strategy formulation; Strategy Implementation and
Strategy Evaluation.

Strategy formulation: This is when the organisations vision and mission is developed,
indetifying external opportunities and threats and determining internal strenghts and weaknesses.
It also refers to the process of choosing the most appropriate way of action for the realisation of
organisational goals and objectives and thereby achieving the organisational vision.

Fig 1. Strategic Incentive Plan

Source: Google
The process of strategy formulation follows six steps that are used in the successful strategies as
follows;

1. Setting Organisations’ objectives - The key component of any strategy statement is to

set the long-term objectives of the organisation. It is known that strategy is generally a
medium for the realisation of organisational objectives. Objectives stress the state of
being there whereas Strategy stresses upon the process of reaching there.

Strategy includes both the fixation of objectives as well the medium to be used to realise
those objectives. In conclusion a strategy is said to be a wider term which believes in the
manner of deployment of resources so as to achieve the objectives.

While fixing the organisational objectives, it is essential that the factors which influence
the selection of objectives must be analysed before the selection of objectives. Once the
objectives and the factors influencing strategic decisions have been determined, it is easy
to take strategic decisions.

2. Evaluating the Organisational Environment - The next step is to evaluate the general
economic and industrial environment in which the organisation operates. This includes a
review of the organisations competitive position. It is essential to conduct a qualitative
and quantitative review of an organisations existing product line. The purpose of such a
review is to make sure that the factors important for competitive success in the market
can be discovered so that the management can identify their own strengths and
weaknesses as well as their competitors’ strengths and weaknesses. After identifying its
strengths and weaknesses, an organisation must keep a track of competitors’ moves and
actions so as to discover probable opportunities of threats to its market or supply sources.

3. Setting Quantitative Targets - In this step, an organisation must practically fix the
quantitative target values for some of the organisational objectives. The idea behind this
is to compare with long term customers, so as to evaluate the contribution that might be
made by various product zones or operating departments.
 4. Aiming in context with the divisional plans - In this step, the contributions made by
each department or division or product category within the organisation is identified and
accordingly strategic planning is done for each sub-unit. This requires a careful analysis
of macroeconomic trends.

5. Performance Analysis - Performance analysis includes discovering and analyzing the

gap between the planned or desired performance. A critical evaluation of the
organisations past performance, present condition and the desired future conditions must
be done by the organisation. This critical evaluation identifies the degree of gap that
persists between the actual reality and the long-term aspirations of the organisation. An
attempt is made by the organisation to estimate its probable future condition if the current
trends persist.

6. Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of
action is actually chosen after considering organisational goals, organisational strengths,
potential and limitations as well as the external opportunities.

Strategy Implementation: Strategy implementation is the translation of chosen strategy into

organizational action so as to achieve strategic goals and objectives. Strategy implementation is
also defined as the manner in which an organization should develop, utilize, and amalgamate
organizational structure, control systems, and culture to follow strategies that lead to competitive
advantage and a better performance. Organizational structure allocates special value developing
tasks and roles to the employees and states how these tasks and roles can be correlated so as
maximize efficiency, quality, and customer satisfaction-the pillars of competitive advantage. But,
organizational structure is not sufficient in itself to motivate the employees.

An organizational control system is also required. This control system equips managers with
motivational incentives for employees as well as feedback on employees and organizational
performance. Organizational culture refers to the specialized collection of values, attitudes,
norms and beliefs shared by organizational members and groups.
Strategy Evaluation: Strategy Evaluation is as significant as strategy formulation because it
throws light on the efficiency and effectiveness of the comprehensive plans in achieving the
desired results. The managers can also assess the appropriateness of the current strategy in
todays dynamic world with socio-economic, political and technological innovations. Strategic
Evaluation is the final phase of strategic management.

The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by
managers, groups, departments etc, through control of performance. Strategic Evaluation is
significant because of various factors such as - developing inputs for new strategic planning, the
urge for feedback, appraisal and reward, development of the strategic management process,
judging the validity of strategic choice.

A strategy is devided into three different levels such as:

 Corporate Level Strategy

 Bussiness Level Strategy

 Functional or Operational Level Strategy

Corporate Level Strategy:

As defined by Andrews (1980), "Corporate strategy is the pattern of decisions in a company that
determines and reveals its objectives, purposes, or goals, produces the principal policies and
plans for achieving those goals, and defines the range of businesses the company is to pursue, the
kind of economic and human organisation it is or intends to be, and the nature of the economic
and noneconomic contribution it intends to make to its shareholders, employees, customers, and
communities." He then also stated that; "Corporate strategy defines the businesses in which a
company will compete, preferably in a way that focuses resources to convert distinctive
competence into competitive advantage."
Corporate level strategy looks at the direction of the orgaisation as a whole, at this level they are
concerned with matters that affect the overall firm such as deciding the size and composition of
its business portfolio. They are also responsible for financial performance, legal structure, and
for establishing the overall corporate image and social responsibility. So a strategic behavior is
driven by the organisation’s current corporate strategy as it is concerned with the overall scope
of an organisation and how value will be added to the different parts of the firm.

According to Rex C. Mitchell Corporate strategy involves four kinds of initiatives:

 Making the necessary moves to establish positions in different businesses and achieve an
appropriate amount and kind of diversification. A key part of corporate strategy is
making decisions on how many, what types, and which specific lines of business the
company should be in. This may involve deciding to increase or decrease the amount and
breadth of diversification. It may involve closing out some LOB's (lines of business),
adding others, and/or changing emphasis among LOB's.
 Initiating actions to boost the combined performance of the businesses the company has
diversified into: This may involve vigorously pursuing rapid-growth strategies in the
most promising LOB's, keeping the other core businesses healthy, initiating turnaround
efforts in weak-performing LOB's with promise, and dropping LOB's that are no longer
attractive or don't fit into the corporation's overall plans. It also may involve supplying
financial, managerial, and other resources, or acquiring and/or merging other companies
with an existing LOB.
 Pursuing ways to capture valuable cross-business strategic fits and turn them into
competitive advantages -- especially transferring and sharing related technology,
procurement leverage, operating facilities, distribution channels, and/or customers.
 Establishing investment priorities and moving more corporate resources into the most
attractive LOB's.

Bussiness Level Strategy:

Business level strategy is the way a business competes in a particular business sector. The
strategic decisions made in business level strategy concern matters such as pricing, marketing
and manufacturing efficiency. Business strategy is concerned primarily with gaining a
competitive advantage in the market.

Competitive strategy is about being different. It means deliberately choosing to perform

activities differently or to perform different activities than rivals to deliver a unique mix of value.
(Michael E. Porter).

At this level, strategy is acomprehensive plan providing objectives for organisations, allocation
of resources among functional areas and coordination between them for achievement of
corporate level objectives. Managers are involved in this level of strategy.

Functional or Operational Level Strategy:

Functional strategies deal with allocation of resources among different operations within these
functional areas. Functional and operational implementation basically means that all the
functions of an organisation should perform in accordance with the bussiness level and corporate
level strategies.

STRATEGY AND CULTURAL ORIENTATION OF THE ORGANISATION

Organisational culture serves as a lens that enables proactive and strategic evolution and
adaptation of an organisation in the face of competitive challenges. The boundaries of an
organisation can and should be understood and mapped in cultural terms to reduce inherent risks
and to maximize opportunities. Culture includes the organisation values, visions, norms, working
language, systems, symbols, beliefs and habits. It is also the pattern of such collective behaviors
and assumptions that are taught to new organisational members as a way of perceiving, and even
thinking and feeling. Organisational culture affects the way people and groups interact with each
other, with clients, and with stakeholders.

Ravasi and Schultz (2006) state that; ‘Organisational culture is a set of shared mental
assumptions that guide interpretation and action in organisations by defining appropriate
behavior for various situations’.
When we look at culture in broad we can look at how people behave in their respective manner
or it can be the collective behavior of humans who are part of an organisation. Every
organisation or a firm has a goal or an objective that it wants to achieve. For that to happen there
is a plan or strategy used to reach that goal. For a strategy to be successful, people need to work
together as a team to achieve certain milestones. If there are any differences within them, it can
be hard to work together when you have different agendas. Culture contributes significantly to
the failure or underperformance of most mergers and acquisitions.

Fig 2. Organisational Culture

Source: Google

So coordination among various activities occurs naturally because individuals know their part in
the wider picture or it is simply not taken seriously that activities are done in certain ways.

STRATEGIC AND CAPACITY LEVELS

Strategic capability is concerned with the resources and competences that an organisation can
use to provide value to customers or clients.
The capacity levels of strategy depend on the following:
  Core Competencies
 Resources (Organisational Capabilities)
 Capabilities (Individuals skills)

Core Competence: are the bases upon which an organisation achieves strategic advantage and is
distinguished from competitors. According to Wikipedia, a core competency can take various
forms, including technical/subject matter know-how, a reliable process and/or close relationships
with customers and suppliers.[1] It may also include product development or culture, such as
employee dedication, best Human Resource Management (HRM), good market coverage, etc.
So, Core competencies are the combination of more knowledge and technical capacities that
allow a business to be competitive in the marketplace. Theoretically, a core competency should
allow a company to grow into new end markets as well as provide a significant benefit to
customers. It should also be hard for competitors to imitate.

Inimitable strategic capabilities are those capabilities that gives the organisation to have a huge
advantage over its rivals, this shows that it has capabilities that are durable and which
competitors find difficult to imitate or obtain. This shows the particular strengths relative to other
organisations in the industry which provide the fundamental basis for the provision of added
value.

Core competencies reflect the collective learning in organisations and involve how to coordinate
diverse production skills and integrate multiple streams of technologies. So if the organisation is
able to coordinate its functions properly, there is a high possibility that it will be able to follow it
strategy accordingly and achieve the desired goals and objectives.

Resources (Organisational Capabilities)

Valuable Resources and competencies is the key to competitive advantages,

Resources can be:

  Physical i.e. the wiring into your home (ramp for the info highway)
 Human i.e. skilled and creative employees (Wal*Marts’ dedicated employees)
 Intangible i.e. brand names and technological know-how
 Organisational Capabilities embedded in the business’ routines, processes, culture

Capabilities (Individuals skills):

Organisational capability focuses on achieving goals through employee commitment and
competence.
Two criteria for competitive advantage:
1) Adding perceived value to the customer
2) Offering the best quality services or products that cannot be easily imitated by a
competitor

Organisational Capability enhances perceived customer value in three ways:

1) Responsiveness: the ability of the business to understand and meet customer needs more
quickly than competitors
2) Relationships: the ability of a business to develop enduring relationship between customer
and employee
3) Service quality: the ability of business to design, develop and deliver service that meets or
exceeds customer expectations.
Organisational Capability enhances uniqueness because it is difficult to imitate:
Imitation requires changing the way people think, act, and interact.
CONCLUSION
It is clear to the managers and entrepreneur’s that environment can change at any point of time
and their plans should follow a strategy that includes contingency planning too. The ongoing
process of formulating strategies for the organisation, will bring profit to the organisation and
create a good relationship between organisation and its environment. It will help the organisation
to know the strengths that the organisation already possess for the achievement of its objectives;
weaknesses that could negatively affect to accomplish its goals and also it gives opportunities
and markets that can be exploited in favor; and threats that are present in external and internal
environment. This means that a well-formulated strategy can bring various benefits to the
organisation in present as well as in future since strategic management takes into account the
future and anticipates for it.
References:

Cole G.A., 2003. Strategic Management, 2nd Edition.

Hill C.W.L. and Jones G.R., 2007. Strategic Management: An Integrated Approach, 8th edition.

Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2009. Strategic Management, Competitiveness
and Globalization. 9th edition

Johnson, G., Scholes, K. and Whittington, R., 2008. Exploring Corporate Strategy. 8th edition.

Johnson, G., Scholes, K. and Whittington, R., 2011. . Exploring Corporate Strategy: Texts and
Cases. 9th edition. Prentice Hall

Strategy Evaluation Process and its Significance, available at:

http://www.managementstudyguide.com/strategy-evaluation.htm [accessed on 5th May 2013]

Strategy Implementation - Meaning and Steps in Implementing a Strategy, available at:

http://www.managementstudyguide.com/strategy-implementation.htm [accessed on 4th May
2013]