Key Considerations In Strategic Business Planning And The
Strategic Contribution Made By The Human Resources Function In Ensuring The Organisation Achieves Its Overall Aims And Objectives
Strategic business planning is a crucial tool for charting organisational purpose. Normally, strategic business planning or simply stated, strategic planning determines and shapes the direction an organisation is going to take in a specified period, say, one, two, three or even five years (Hamel and Prahalad, 1994). This comprises at least four elements, the company’s vision, mission, values and strategy which together form the broad organisational purpose, or simply stated organisational roadmap. Basically, these four elements seek to answer the questions, what we want to achieve? For whose benefit is the achievement aimed at? And how best can we realise this achievement? To answer these questions, managers at the top end of the management ladder must therefore enumerate the necessary resources, appraise their dynamic capabilities and strengthen their core competencies (Drejer, 2002). This position is strengthened by Allen (2006) who posits that this purposeful appraisal and capacity-strengthening process entails hiring, training, developing, rewarding, and talent retention.
Arguably, human resources play a critical role in the pursuit of long-term competitive advantage. This involves setting SMART objectives, minimising workplace losses emanating from injuries, imparting the much needed change, creating a responsive culture, and implementing the set corporate profitability and corporate social responsibility (CSR) goals. This paper is a culmination of efforts to critically enumerate the key considerations in strategic business planning and the strategic contribution made by human resources in ensuring an organisation achieves its overall aims and objectives. To fulfil these two core aims, the paper will use contemporary examples from leading corporations such as Apple, Google and Microsoft.
Key Considerations in Strategic Business Planning
The first procedure in strategic planning is analysing the immediate and future business situation. According to Lorenzen (2006), strategic managers should carry out a comprehensive situational analysis of their businesses to ensure that all internal and external factors as they apply to the business both in the short and long-terms are properly enumerated and their perceived influence noted. Such enumeration should move above mere restatement of the factors but should capture the effects such factors have on an organisation’s long-term strategic goals (Hamel and Prahalad, 1994). When doing an external situation analysis both start-up and existing organisations should consider some or all of the following key factors: the nature and scope of the market (customers), the level of industry competition, the level of technology available or at the hands of competitors, the power and dynamics of suppliers, the prevailing labour dynamics, the prevailing economic dynamics, and the prevailing regulatory regime. According to Allen (2006), external environment analysis is focused on customers’ experiences, values and needs and therefore businesses should not be tied by a certain framework of factors but should be guided by the unique industry features in which they operate. Of importance too is the need to focus on environmental shifts in both short and long-term dimensions and how these shifts may impact customer purchasing behaviours. For instance, when rolling out the first Smartphone, Apple conducted a market feasibility study to determine what mobile users wanted to be incorporated in their phones particularly new features such as internet, Bluetooth, and camera services.
After conducting a thorough industry analysis, strategic managers shift their focus to formulating vision, mission, values, and strategy. The vision of an organisation is futuristic and captures where the organisation plans to reach in terms of profitability and sustainability in a given time frame, say, ten years or twenty years (Allen, 2006). This statement must elicit substantial emotional reaction among employees for it to inspire them into fulfilling their individual, group, and organisational goals. Such vision must factor in the stakeholders needs, interests and experiences (Haines, 2004). For example, Apple says in its vision that it “… is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offering” (Apple, 2012). On the other hand, mission statement encompasses the organisational purpose, an explanation why the organisation exists, what it does to its stakeholders, and how it achieves its stated vision (Lorenzen, 2006). For example, Google mission is “to organise the world’s information and make it universally accessible and useful” (Google, 2012). Organisational values on the other hand capture a set of shared organisational beliefs which together comprise the organisation’s culture – determining how major activities are carried out. For example, part of Microsoft’s values includes avowed “integrity, honesty, openness, personal excellence, constructive self-criticism, continual self-improvement, and mutual respect” (Microsoft, 2012). Lastly, business strategy captures a set of goals that an organisation seeks to achieve. A business strategy is sometimes referred to as the organisational roadmap as it charts the way forward towards the achievement of the end vision (Haines, 2004). For example, Apple’s strategy partly reads, “We will continue to work with a vast ecosystem of partners to deliver a broad spectrum of Windows PCs, tablets and phones” (Apple, 2012). Overall, these four organisational purpose pillars should be structured in a manner that is translatable to the day-to-day activities of the organisation.
Developing an organisation’s vision, mission, values and strategy normally involves strategic planning tools such as SWOT, PESTEL and Porters Five Forces model. These tools seek to scan the internal and external environments with view of identifying an organisation’s strengths and opportunities as well as its weaknesses and threats. The SWOT model for instance, seeks to enumerate the internal factors which include strengths such as and weaknesses facing the company as well as the external factors which in this case include the opportunities such as unexploited market and threats such as a stringent regulatory regime (Drejer, 2002). Managers should then seek to build on the identified strengths, resolve the identified weaknesses, capitalise on the highlighted opportunities and work on avoiding the identified threats (Hamel and Prahalad, 1994). Other models have almost a similar impact but sometimes analysts prefer employing more than one model so as to capture the bigger environmental picture surrounding a business entity. No matter the utilised model(s), a strategic manager should ensure that the gist of situation analysis is fully accomplished.
However, successful business planning cannot be realised if managers cannot manage change effectively and efficiently. To this effect, Kotter (2011) advices that the management of change should capture what the organisation want to achieve in a given time-frame. This, according to Kotter begins by building a compelling and receptive vision to assist in realising the envisaged change. Moreover, Johnson (1992) posits that management of change at the strategic management level requires the incorporation of stakeholders’ needs, experiences and values and regular communication with the stakeholders to identify any changes in these values and experiences. In reaction to this, Kotter (2011) advices that managers of change should develop the skills of handling resistance through mutually satisfying methods such as holding educational sessions to clarify contentious issues. From the Five Forces standpoint, it is arguable that mangers must purposefully monitor their environment for changes in supplier and buyer power, for changes in the level of competition, for changes in substitute products and for changes in barrier for entry (Porter, 1998). Arguably, Porter’s Five Forces framework seems reasonable for the contemporary organisations since they are forced to make strategic changes very often due to the rapid changes in technology, social media, business competition, and deliverability of products. Overall, managers should create a mutually satisfying change environment especially when drastic strategic changes such as laying-off redundant employees or switching from a manual production system to a more automated production system are being made.
Strategic Contribution of Human Resources
The strategic contribution of human resources in the achievement of organisational goals is conceptualised in the idea of strategic human resource management (SHRM). According to Myers and Kirk (2005), SHRM entails the purposeful deployment of human resources to specific tasks and activities that comprise the broad organisational processes. Normally, the HR manager may recruit, train, develop, motivate, reward, promote, and even fire employees as per the set organisational processes. For example, in a high-tech firm like Apple, Microsoft or even Google, SHRM functions entail utilising physical and human resources to build competitive advantage. Specifically, Google’s human resources who include highly qualified and motivated IT experts are responsible for the day to day achievement of the company’s mission which is “to organise the world’s information and make it universally accessible and useful” (Google, 2012). Overall, the secret to success strategic management is the seamless coordination of an organisation’s human resources especially at the top end of the management ladder where the core and supporting activities of the value chain (inbound logistics, operations, outbound logistics, services, marketing and sales, firm infrastructure, HRM, procurement, and technology) are coordinated, communicated and executed. This is true since Myers and Kirk (2005: 359) argue that the realm of SHRM entails a “range of culturally sensitive interventions linked vertically to business goals and strategy, and horizontally to other HR business activities, to actively encourage and support employee learning, commitment and involvement throughout the organization.” Arguably, Myers and Kirk are of the opinion that human resources spearhead important organisational tasks such as strategy building and execution. However, this can only be achieved through continued organisational skill and knowledge acquisition and application.
Moreover, from a Resource-Based View (RBV) approach, the value of human resources in strategy building and execution is more pronounced when an organisation engages highly qualified, motivated, inimitable and non-substitutable employees. According to McCracken and Wallace (2000), an inimitable and non-substitutable workforce requires organisations to engage in need-based recruitment, need-based training and development and need-based strategic leadership. For example, Apple has continued to hold the leading position in the Smartphone and computer manufacturing industry simply because of it commands a highly valuable, inimitable and non-substitutable workforce led by the late CEO, Steve Jobs and now Tim Cook. Though he is no longer alive, Jobs was instrumental in laying down a strong organisational culture of innovation and creativity through his strong strategic leadership prowess (Heracleous and Papachroni, 2010). He convinced the company’s management to change the existing working conditions (remuneration, welfare, benefits, and career development) for its IT experts, created a flexible and friendly work environment that encouraged employees to think outside the box, and most importantly, he scrapped the existing product line and helped replace them with more superior and appealing range of products that sold at competitive prices in the international market. Arguably, the most competitive organisations are those that invest more in their human resources. This argument is underpinned by the notion that the role of human resources in an organisation is to coordinate material and financial capital towards the achievement of the set organisational goals (McCracken and Wallace, 2000). To this effect, a good organisational/learning culture should be at the centre of SHRM, where the HRM constantly reviews the existing workforce and comes up with the best way of enhancing its utility.
Strategic business planning is critical for modern businesses that operate in unpredictable business environments. However, for this process to bear fruits, mangers should contact thorough situational analysis in order to identify the needs, experiences and interests of key stakeholders such as customers, employees, the communities they serve as well as regulatory authorities. Such situational analysis should involve strategic analysis tools such as SWOT, PESTEL, and Porters Five Forces model. Here, these tools should scan and enumerate all the external and internal environment factors that are deemed to have a substantial influence on the strategic direction an organisation takes. It is only after scanning the environment that an organisation is able to create an organisational purpose. This purpose comprises of vision, mission, values and strategy. Together, these four elements create a roadmap or a culture that guides organisational activities. Within this backdrop of time-bound roadmap, is SHRM, a set of cultural interventions aimed at integrating business goals with strategy by way of creating a receptive organisational learning culture. These cultural interventions underscore the role of human resources within an organisation particularly the pursuit of the set organisational aims and objectives. Overall, SHRM can be perceived as the adhesive that ties human resources to the organisational goals and objectives. Such integration is crucial in reducing redundancy and enhancing employee job engagement.
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