Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance.
The word ‘strategy’, deriving from the Greek noun strategus, meaning ‘commander in chief’, was first used in the English language in 1656. The development and usage of the word suggests that it is composed of stratos (army) and agein (to lead). In a management context, the word ‘strategy’ has now replaced the more traditional term – ‘long-term planning’ – to denote a specific pattern of decisions and actions undertaken by the upper echelon of the organization in order to accomplish performance goals. Wheelen and Hunger (1995, p. 3) define strategic management as ‘that set of managerial decisions and actions that determines the long-run performance of a corporation’. Hill and Jones (2001, p. 4) take a similar view when they define strategy as ‘an action a company takes to attain superior performance’. Strategic management is considered to be a continuous activity that requires a constant adjustment of three major interdependent poles: the values of senior management, the environment, and the resources available. Model of strategic management
In the descriptive and prescriptive management texts, strategic management appears as a cycle in which several activities follow and feed upon one another. The strategic management process is typically broken down into five steps: 1.Mission and goals
1. Mission and goals
At the corporate level, the strategic management process includes activities that range from appraising the organization’s current mission and goals to strategic evaluation. The first step in the strategic management model begins with senior managers evaluating their position in relation to the organization’s current mission and goals. The mission describes the organization’s values and aspirations; it is the organization’s raison d’être and indicates the direction in which senior management is going. Goals are the desired ends sought through the actual operating procedures of the organization and typically describe short-term measurable outcomes. 2. Environmental analysis
Environmental analysis looks at the internal organizational strengths and weaknesses and the external environment for opportunities and threats. The factors that are most important to the organization’s future are referred to as strategic factors and can be summarized by the acronym SWOT – Strengths, Weaknesses, Opportunities and Threats.
3. Strategic formulation
Strategic formulation involves senior managers evaluating the interaction between strategic factors and making strategic choices that guide managers to meet the organization’s goals. Some strategies are formulated at the corporate, business and specific functional levels. The term ‘strategic choice’ raises the question of who makes decisions and why they are made. The notion of strategic choice also draws attention to strategic management as a ‘political process’ whereby decisions and actions on issues are taken by a ‘power-dominant’ group of managers within the organization. Child affirms this interpretation of the decision-making process when he writes: When incorporating strategic choice in a theory of organizations, one is recognizing the operation of an essentially political process, in which constraints and opportunities are functions of the power exercised by decision-makers in the light of ideological values. In a political model of strategic management, it is necessary to consider the distribution of power within the organization. According to Purcell and Ahlstrand , we must consider ‘where power lies, how it comes to be there, and how the outcome of competing power plays and coalitions within senior management are linked to employee...