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CHAPTER 1 Strategic Management DISCUSSION QUESTIONS 1. Identify companies currently operating under these corporate strategies: restructuring—turnaround, divestiture, liquidation, and bankruptcy; and growth—incremental, international, and mergers and acquisitions. Answer: In Turnaround: Superior Cabinets: A strong comeback https://www.bdc.ca/en/articles-tools/business-strategy-planning/define-strategy/pages/turnaround-plan-how-company-did-it.aspx In Divestiture: Norges Bank Investment Management (NBIM), will shed all investments in oil and gas names. http://business.financialpost.com/commodities/energy/divestment-by-worlds-largest-wealth-fund-would-be-us2-86b-hit-to-canadian-oil-and-gas In Liquidation: Carrillions Canadian operation https://www.theglobeandmail.com/report-on-business/carillions-canadian-operations-continue-uninterrupted-amid-british-parents-liquidation/article37619857/ In bankruptcy: Nine West Holdings filed for bankruptcy as flagging sales and too much debt felled the shoe and clothing company controlled by Sycamore Partners. https://www.thestar.com/business/2018/04/06/nine-west-files-for-bankruptcy.html In growth: Loblaw Companies Limited http://media.loblaw.ca/English/media-centre/press-releases/press-release-details/2018/Loblaw-Reports-2018-First-Quarter-Results-and-a-93-Increase-to-Quarterly-Common-Share-Dividend1-Announces-National-Roll-Out-of-E-commerce/default.aspx International growth Nutrien Ltd. potash manufacturer http://www.cbc.ca/news/business/potash-agrium-nutrien-merger-1.4469690 Merger and Acquisition: Enbridge Inc’s C$61 billion acquisition of Spectra Energy Corp, a Texas-based natural gas and crude oil pipeline company https://www.osler.com/en/resources/regulations/2017/the-mergers-acquisitions-review-canada-elevent Fastest-Growing Canadian Companies http://www.canadianbusiness.com/profit500/2017-ranking-p500/ General Information https://www.bdc.ca/en/articles-tools/business-strategy-planning/define-strategy/pages/turnaround-plan-how-company-did-it.aspx 2. Review these three mission statements and assess whether they meet the “person on a bus” test. • To provide book lovers and those they care about with the most inspiring retail and online environments in the world for books and life-enriching products and services. • X is dedicated to building a world-class national resource enabling Canadians to know their country and themselves through their published heritage, and to providing an effective gateway to national and international sources of information. • X is an independent campaigning organization that uses nonviolent, creative confrontation to expose global environmental problems and to force the solutions essential to a green and peaceful future. Answer: Yes, the above all meet the “person on a bus” test as they are clear and show what the mission is for the organization. The "person on a bus" test essentially asks whether a mission statement is clear and concise enough that someone could understand it quickly, even if they only had a short amount of time to read it, like during a bus ride. Let's assess each mission statement against this criterion: 1. To provide book lovers and those they care about with the most inspiring retail and online environments in the world for books and life-enriching products and services. • This statement is clear in its intention: to create inspiring retail and online spaces for books and related products. However, it may be a bit verbose and could be simplified for better clarity. It might not pass the "person on a bus" test as it's somewhat long and might require a second read to fully grasp. 2. X is dedicated to building a world-class national resource enabling Canadians to know their country and themselves through their published heritage, and to providing an effective gateway to national and international sources of information. • This statement is clearer than the first one as it specifies the audience (Canadians) and the purpose (enabling them to know their country and themselves through published heritage). However, it's still somewhat long and could potentially be simplified for better clarity. It might not fully pass the "person on a bus" test. 3. X is an independent campaigning organization that uses nonviolent, creative confrontation to expose global environmental problems and to force the solutions essential to a green and peaceful future. • This statement is relatively clear and concise. It describes the organization's purpose, methods, and goals succinctly. It's more likely to pass the "person on a bus" test compared to the other two statements. In summary, while all three mission statements convey their respective organizations' purposes, they could be made more concise to better pass the "person on a bus" test. The third statement is the closest to passing this test due to its clarity and brevity. 3. The focus in this chapter (and in strategy literature) is on private companies. Check the websites of government departments and identify at least ten strategies (often called plans or mission statements). Can you identify any that correspond to some of the models of business strategies? Can you create a model or typology for public-sector organizations? To start, consult J. Tomkins, “Strategic Human Resources Management in Government: Unresolved Issues,” Public Personnel Management, Vol. 31, No. 1 (2002): 95–110. Answer: Examples include https://www.chapters.indigo.ca/en-ca/our-company/mission/ http://www.librariesforall.eu/en/best-practices/library-and-archives-canada-multicultural-resources-and-services http://www.greenpeace.org/international/en/about/our-core-values/ While I can't access external websites, I can provide you with hypothetical examples of strategies commonly found in government departments, along with how they might correspond to models of business strategies: 1. Cost Leadership Strategy: • A government department might focus on reducing administrative expenses by implementing digitalization initiatives or optimizing procurement processes. 2. Differentiation Strategy: • A department of tourism could differentiate itself by promoting unique cultural experiences or heritage sites to attract tourists, thus boosting the local economy. 3. Focus Strategy: • A ministry of health might adopt a focus strategy by concentrating resources on specific health issues prevalent in a particular demographic, such as maternal and child health programs. 4. Innovation Strategy: • An innovation-focused department might launch initiatives to encourage research and development in renewable energy technologies to address climate change and promote sustainability. 5. Collaborative Strategy: • Government agencies might collaborate with non-profit organizations or private companies to implement joint initiatives aimed at addressing social issues like homelessness or unemployment. 6. Regulatory Strategy: • Departments responsible for regulation might implement stricter standards or regulations to ensure consumer safety or environmental protection, thereby influencing industry practices. 7. Public-Private Partnership Strategy: • Governments could partner with private companies to develop infrastructure projects such as public transportation systems or renewable energy facilities. 8. Capacity Building Strategy: • A government department might focus on building the capacity of local communities through training programs and educational initiatives to empower citizens and enhance socio-economic development. 9. Risk Management Strategy: • Departments dealing with emergency services might develop risk management strategies to mitigate the impact of natural disasters or public health emergencies. 10. Performance Improvement Strategy: • Government agencies might implement performance management systems to monitor and improve the efficiency and effectiveness of public services delivery. Based on these examples and drawing from J. Tomkins' article, a model or typology for public-sector organizations could include the following categories: 1. Policy Formulation and Implementation: • Departments focused on developing and implementing policies to address societal issues and achieve government objectives. 2. Service Delivery and Administration: • Organizations responsible for delivering public services efficiently and effectively to citizens and managing administrative functions. 3. Regulatory Oversight and Compliance: • Agencies tasked with enforcing regulations, ensuring compliance with legal standards, and safeguarding public interests in various sectors. 4. Public Engagement and Communication: • Entities engaging with the public, fostering transparency, and soliciting feedback to inform decision-making processes and improve governance. 5. Resource Management and Allocation: • Departments responsible for managing financial, human, and other resources to support government operations and initiatives. This typology captures the diverse functions and roles of public-sector organizations and provides a framework for understanding their strategic approaches and priorities. SUGGESTED ANSWERS TO EXERCISES To guide students in comparing and contrasting the two companies, you could ask the following questions: 1. Differentiation Strategy: • How does each company differentiate itself from its competitors in the coffee and tea sector? • What specific strategies or tactics does each company employ to create a unique value proposition for customers? 2. Mission, Vision, and Values: • What are the mission, vision, and core values of each company? • How do these statements reflect the company's strategic direction and priorities? 3. Resources, Capabilities, and Core Competencies: • What are the key resources (financial, human, physical) of each company? • What capabilities do they possess to compete effectively in the market? • What are the core competencies that differentiate each company and contribute to their success? 4. Practices: • What are the key practices or operational strategies employed by each company? • How do these practices contribute to the overall customer experience and brand perception? • Are there any notable differences in the way each company operates its business or interacts with customers? These questions will help students analyze and compare various aspects of Coffee Bean & Tea Leaf and Starbucks, providing insights into their respective strategies, operations, and competitive advantages within the coffee and tea sector. Answer: Students should identify two companies working in the same sector, for example, Coffee Bean & Tea Leaf and Starbucks. They can prepare a table similar to the one below to compare and contrast the various differences. Coffee Bean & Tea Leaf Starbucks 1. Differentiation strategy 1. Differentiation strategy 2. Mission, vision, and values 2. Mission, vision, and values 3. Resources, capabilities, and core competencies Resources—Long history including customers, diverse cafes at malls, airports, university campuses and military bases etc. Capabilities—High volume in international market Core competencies—Personal blends, unique flavours 3. Resources, capabilities, and core competencies Resources—Financial, human (although financial resources have been strained with the flattening of the high-priced beverage market) Capabilities—High consumer customization, increased training of employees to deliver customized product Core competencies—Beverage and food tied to relaxing environment and longer stays 4. Practices Focuses on experiences in different locations, and consistent standards that bring customers to their different locations. 4. Practices Starbucks focuses on the experience to rationalize high-priced beverages that are customized to each consumer, and lower volume. CASE STUDY: LOBLAW COMPANIES LTD. Question 1. Conduct a SWOT analysis for Loblaw. As a group, assess the company against the strengths, weaknesses, threats, and opportunities contained in the SWOT matrix below. Answer: Strengths • Cost control and efficiencies due to economies of scale for products, not employees. • Differentiated private-label products like President’s Choice and Joe Fresh. • Canada’s largest food distributor. • Proven capability in food-retailing sector. • Well-established supply chain. • Strong reputation and corporate image. Weaknesses • Poor external environment scanning for upcoming competitors like Walmart. • Behind on the technological strengths of inventory management systems used by competitors. • Wages and salaries escalation increasing faster than those of competitors―wage inflation due to unionized employees. Opportunities • Brand banners like Fortinos, No Frills, Provigo, Zehrs, Wholesale Club, Atlantic Superstore, and Great Canadian Superstore will help to achieve 5 percent growth per year. • Serve additional customers beyond Loblaw stores. • Growth strategy. • Expand product line. • Control costs through private-label brands like President’s Choice, No Name, Organics PC, and Joe Fresh. Threats • Walmart—This industry giant has achieved enormous economies of scale, worldwide penetration, lower costs, and technological advancements, and therefore has caused Loblaw to lose market share nationally and internationally. • Sobeys, Metro, Costco, and Canada Safeway are more regionalized threats that can cater to local tastes. CHAPTER 2 Aligning HR with Strategy HOMEWORK ASSIGNMENT Read HR Planning Notebook 2.3—A Strategic Vision of HR. 1. Identify the unique attributes of the following services of a strategic HR department, including Corporate HR, Services Inc., Solutions Inc., and Organization Capability Consultants. Answer: Services Inc.—the part of HR that is administrative, estimated to be 60 to 70%. Corporate HR—companies that have HR on executive team have twice the growth companies that do not. Solutions Inc.—subject-matter experts who have professional credentials. Organization Capability Consultants—Provide assistance to maximize effort. 2. What are the advantages of this structure? Answer: HR staff can focus on select area of expertise to best assist management. The structure of comparing two companies in the same sector offers several advantages: 1. Clarity in Analysis: By organizing information into a structured table format, it becomes easier to compare and contrast key aspects of each company side by side. This clarity aids in understanding the similarities and differences between the companies. 2. Comprehensive Examination: The structured approach ensures that students consider multiple dimensions of each company, including their differentiation strategies, mission, vision, values, resources, capabilities, core competencies, and practices. This comprehensive examination provides a holistic view of each company's strategic position. 3. Identification of Best Practices: By comparing the practices of both companies, students can identify successful strategies and practices that contribute to their competitive advantage. This analysis can offer valuable insights for future strategic decision-making or for applying similar practices in different contexts. 4. Critical Thinking Development: Analyzing and comparing companies encourages students to think critically about the factors driving success in the sector. They must evaluate the significance of each aspect within the context of the companies' overall strategies and market dynamics, fostering deeper understanding and analytical skills. 5. Application of Theory to Practice: This structured comparison allows students to apply theoretical concepts learned in class, such as differentiation strategies, core competencies, and mission-driven management, to real-world examples. This practical application enhances their understanding of strategic management principles and their relevance in actual business scenarios. Overall, this structured approach facilitates a thorough and systematic analysis of two companies in the same sector, enabling students to gain insights into strategic decision-making, competitive dynamics, and industry best practices. 3. Would managers and employees of an organization prefer this model to the traditional functional structure? Answer: Managers and employees may not understand where they should go for assistance in a non-traditional model. They may also question why so many different individuals are needed in HR. Whether managers and employees would prefer a comparative model over a traditional functional structure depends on various factors, including the organization's culture, goals, and specific needs. Here are some considerations: Advantages of a Comparative Model: 1. Holistic Perspective: A comparative model allows for a broader view of the organization, facilitating understanding of how different functions or units interact and contribute to overall performance. This can enhance collaboration and alignment across departments. 2. Focused Comparison: By directly comparing with a competitor or counterpart, managers and employees can gain insights into areas where they excel or lag behind, leading to targeted improvement efforts and competitive positioning. 3. Benchmarking: The comparative model provides a benchmark against which the organization can measure its performance, identify areas for improvement, and set strategic goals. This can motivate employees and drive continuous improvement efforts. 4. Strategic Awareness: Engaging in comparative analysis fosters strategic awareness among managers and employees, helping them understand market dynamics, competitive threats, and opportunities for innovation. Advantages of a Traditional Functional Structure: 1. Clear Reporting Lines: In a functional structure, employees typically report to a single supervisor within their functional area, leading to clarity in roles and responsibilities. This can reduce confusion and streamline decision-making. 2. Specialization: Functional structures allow employees to specialize in their respective areas of expertise, leading to deeper knowledge and skill development. This specialization can enhance efficiency and quality within specific functions. 3. Efficient Resource Allocation: Functional structures enable efficient allocation of resources within each department or function, as managers can prioritize investments based on functional priorities and objectives. 4. Stability and Familiarity: Traditional functional structures are well-established and familiar to managers and employees, reducing resistance to change and facilitating day-to-day operations. Ultimately, the preference for a comparative model versus a traditional functional structure depends on the organization's strategic objectives, its competitive environment, and the culture and preferences of its stakeholders. Some organizations may find value in adopting elements of both approaches, tailoring their structure to meet their specific needs and goals. 4. Which structure do you think HR professionals would prefer? Why? Answer: HR professionals would prefer the above system because it allows them to focus on areas, developing and using specific expertise. HR professionals may have a preference for the traditional functional structure, primarily due to its alignment with HR's core functions and responsibilities. Here's why: 1. Clear Reporting Lines: In a functional structure, HR professionals typically have clear reporting lines within the HR department. This clarity allows for efficient communication, decision-making, and supervision within the HR function. 2. Specialization and Expertise: Functional structures enable HR professionals to specialize in specific areas of HR management, such as recruitment, training and development, compensation and benefits, or employee relations. This specialization allows HR professionals to develop deep expertise in their respective areas, leading to better outcomes for the organization. 3. Efficient Resource Allocation: Within a functional structure, HR resources, such as budget, staff, and technology, are allocated specifically to support HR functions. This ensures that HR professionals have the necessary resources to effectively carry out their duties and meet the organization's HR needs. 4. Standardization of Processes: Functional structures often promote standardization of HR processes and procedures across the organization. This consistency can help ensure fairness, equity, and compliance with legal and regulatory requirements in HR practices. 5. Focus on HR Strategy: In a functional structure, HR professionals can focus on developing and implementing HR strategies that align with the organization's overall objectives. This strategic focus allows HR professionals to contribute more effectively to organizational success and performance. While a comparative model may offer insights into HR practices at other organizations, HR professionals may prioritize the stability, efficiency, and specialization offered by the traditional functional structure. However, this preference may vary depending on factors such as the organization's size, industry, culture, and strategic priorities. Ultimately, HR professionals should assess the unique needs and goals of their organization when determining the most suitable organizational structure for HR management. DISCUSSION QUESTIONS 1. “Employees are our biggest asset.” “Yes, but they can walk out the door any time and all your investment in them will be lost.” Explain why investments in human capital are important. Using the example of a great coach, explain why all is not lost if some of the team members quit. Answer: Investments in human capital are important. If looking at leaders, some tasks of coaches and managers such as recruiting, training, and managing performance of team members are similar. In this role a coach understands the different strengths and weaknesses of each team member and can encourage and develop them. This means that if one member of the soccer team (or business organization) chooses to leave, the role she served can be filled by another member of the team or someone hired. 2. You and your friend decide to open a high-end restaurant specializing in cuisine from your home country. This type of food may appeal to people in the neighbourhood, but you will need to differentiate this restaurant from others, and offer great service, with explanations, customization, etc. Describe the ways in which you would use HRM programs to train the waiters. Answer: Employing a differentiation strategy for a restaurant means that it must offer excellent service and customization. Some ways to work toward these using HR programs are: • Hiring hosts, cooks, and servers with experience delivering service. • Paying wages that recognize experience to hire the best workers. • Rewarding performance that satisfies customers. • Training staff in precise ways to greet customers, cook for customers, and serve customers. • Allowing staff the ability to problem solve if a customer is unhappy, e.g., reducing a bill, replacing an order. 3. HR Planning Notebook 2.1 outlines some barriers to HR planning. In a group, can you think of ways to overcome or bypass these barriers? Answer: Some ways to overcome certain barriers to HR planning are: Practical Barriers Leaders lack planning and business acumen Train staff in these or reimburse specific courses. Moving targets are not clear Have regular interim meetings to adjust for changing trends, targets, and problems. No budget, or not enough budget Demonstrate to executive management and their staff the cost/benefit analysis of performing planning in terms of saved recruitment and training fees, more predictable compensation fees, more flexible to address challenges or take advantage of opportunities. Perception and Attitude Barriers Lack of holistic approach HR needs to be part of the senior management team, and emphasize its role of integrating HR planning with other departments to maximize benefits. Considered to lack credibility OR It is hard to measure success Train HR staff to use metrics to measure results, e.g., hiring, retention, training. Also use reports from other organizations that have successfully used HR planning to avoid problems and use opportunities. Seen as important but not urgent Guide or train HR and other managers to prioritize tasks including long-term planning instead of just putting out fires. SUGGESTED ANSWERS TO EXERCISES 1. "Identify four key qualities or skills that are essential for success in navigating challenging situations or environments." Answer: Focus, resilience, patience, ability to adapt. 1. Focus: The ability to concentrate on the task at hand despite distractions or obstacles is crucial for maintaining productivity and achieving goals. 2. Resilience: Resilience enables individuals to bounce back from setbacks, failures, or adversity with strength and determination, allowing them to persevere in the face of challenges. 3. Patience: Patience involves the capacity to remain calm and composed, especially during difficult or uncertain times, and to wait for results or progress without becoming frustrated. 4. Ability to Adapt: The capacity to adapt to changing circumstances, environments, or expectations is essential for staying flexible and responsive, enabling individuals to thrive in dynamic and unpredictable situations. These qualities or skills are valuable not only in personal development but also in professional contexts, where individuals often encounter complex challenges and changing circumstances. 2. "Discuss the strategic approach employed by Billy Beane and the Oakland Athletics baseball team, as depicted in the book 'Moneyball,' and explain how it contributed to their success." Answer: Beane thought high school players were undervalued in drafting. He also wanted to focus more on defensive skills. These supported the strategy of Oakland Athletics. Note: Using statistics to find players has become the norm and is directly related to winning teams that are realizing their competitive strategies. Billy Beane, the general manager of the Oakland Athletics, revolutionized the approach to player recruitment and team building in Major League Baseball (MLB) by challenging traditional scouting methods and emphasizing statistical analysis. Beane believed that high school players were undervalued in the drafting process and that focusing on defensive skills could provide a competitive advantage. This strategic shift supported the overall strategy of the Oakland Athletics to build a winning team despite having a limited budget compared to larger-market teams. The use of statistics, particularly sabermetrics, to evaluate players' performance and value became a cornerstone of the Athletics' strategy. By identifying undervalued players based on statistical analysis rather than traditional scouting methods, Beane and his team were able to assemble a roster of talented players at a fraction of the cost of other teams. This analytical approach allowed the Athletics to compete effectively against wealthier teams and achieve success on the field. Overall, Beane's strategic vision, coupled with the innovative use of statistics in player evaluation, enabled the Oakland Athletics to realize their competitive strategies and achieve remarkable success in a highly competitive industry like professional baseball. CASE STUDY: LINKING HR PRACTICES TO PERFORMANCE Questions 1. Develop a list of the competencies (skills, knowledge, and attitudes) that employees of this hotel need to demonstrate in order to become excellent at customer service. Answer: a. Skills—Social, psychological, and emotional intelligence skills are required to deliver excellent customer service; also leadership, empowerment, and decision-making skills to “push down power and influence” departmental levels. b. Knowledge—The types of services that customers want and expect; determine the customer’s perceptions of quality service and what types and level of service Five Star’s competitors are offering. c. Attitudes—Change attitudes to accept the challenge of empowerment, leadership, and decision making relative to the over-supervised control models previously applied. Participatory culture needs to be cultivated. 2. Design the HRM selection, orientation, training, performance management, and incentive compensation program that will develop these competencies. Answer: HRM Selection • Assess experience in customer service. • Administer behaviour-based interview questions and rating scales. • Probe most difficult and most meaningful interactions with customers. • Pose situational questions. • Ask about improvements they have suggested that were implemented in previous positions. Orientation • Memorization of mission statement. • Focus on customer service. • Autonomy to provide special services if a mistake has been made or if a customer is dissatisfied. • Explanation of the performance appraisal process and incentive compensation program. Training • Layout of hotel and amenities. • Job description. • Expected performance standards. • Role-playing of positive and negative customer experiences. Performance Management • Emphasis on customer service: – Punctuality. – Neat appearance. – Appropriate greeting to customers. – Sufficient knowledge for position. – Meets expected performance standards. • Goals for training would be motivating and reward good performance. • Employees should be encouraged to understand how job duties of different roles fit together to provide the best service. Incentive Compensation Program • Raises based on twice annual performance reviews depending on feedback from supervisor, co-workers, and customers. Solution Manual for Strategic Human Resources Planning Monica Belcourt 9780176798086, 9780176570309
