Strategy in business is matching the internal resources an organization has, like opportunities and risk brought by its external environment for a competitive advantage over the competitors of the organization. Strategy alignment of various departments within the organization is vital for the development of the company. A combination of culture, norms, values, and beliefs need to be developed to achieve successful strategic alignment within the organization. Human resource strategy can be defined as a set of coordinated actions presumed to integrate the organizational culture, organization itself, and the people working within the organization (Thomas 6). Business strategy, on the other hand, is an outline of ways to which an organization will be able to achieve its set goals either short term or long term and at the same time being ahead of the competition. The business strategy communicates to every person in the organization what needs to be achieved, how and the time it should take to achieve the set goals.
The components of a business strategy are business scope, governance, and distinctive competencies. The scope of the business refers to all the environmental factors that affect the business either positively or negatively. They are factors like location of the business, products, services, buyers, suppliers, customers, potential competitors and much more. Governance refers to the existing relationships between the board of directors, stockholders, the government regulations and those between the organization and other business partners. Finally, the distinctive competencies are the unique this to the business that makes it successful in the industry (Chapter III Business Strategy And Human Resource Strategy- The Interaction 119).
In depth, a business strategy establishes the direction an organization wants to take. The business plan will, therefore, determine the vision of the organization. The concept needs to be realistic, attractive, credible and for the future, as it is what firm hopes to achieve not what is already present or in the past. The management through business strategy also establishes the mission and goals which are closely related to the vision (Chapter III Business Strategy And Human Resource Strategy- The Interaction 118).
The business strategy establishes how the organization is going to achieve the vision, mission, and goals mentioned above. It does this by creating an organizational design and functional strategies. It is at this stage that allocation of resources and budget requirements are stipulated to establish a clear path for the organization to follow. The strategy is therefore meant to reflect the intentions of the management to the entire enterprise.
The other function of business strategy is the emphasis on how the organization is going to succeed in the targeted market. The role can be termed as establishing the means of getting a competitive advantage over other similar organizations. Competitive advantage may also be considered in marketing because the whole point of a marketing strategy is to get better than the competitors. However, there is a difference between business strategy and marketing. Corporate strategy considers the changes that might take place during the period when the organization is working towards achievement of the set goals (Chapter III Business Strategy And Human Resource Strategy- The Interaction 119). Therefore, a business strategy as much as it aims at getting a competitive advantage while fulfilling customer needs, it takes into account all the external forces that might affect the organization. In business strategy, I competitive strategy is formulated to strengthen the business for long term purposes. The factors considered to gain the competitive advantage, in this case, include pricing of the products, quality of the product or even value addition on a product.
Competitive advantage is, however, higher when an organization has people who are capable of making the customer experience even better. In today’s world, technology is taking over the workforce, but even with that, it’s hard to replace the value added by just the human interaction in an organization. It is at this point that we integrate the human resources strategy (Chapter III Business Strategy And Human Resource Strategy- The Interaction 118).
The human resources strategies look to man the human resources to achieve the organizational goals. The approach focuses on the intentions of the company and through proper deployment of staff according to the human resource policies and practices they are fulfilled. The human resource strategy also involves motivation of the employees hence Impacting directly on the business strategy. If the employees are not motivated in the proper ways, they might not see the need to work hard resulting t delay in the implementation of the formulated business strategy.
Human resource strategy serves the purpose of providing professionals who will directly contribute towards value addition in the business (Chapter III Business Strategy And Human Resource Strategy- The Interaction 120). The process takes the shape of recruitment, deployment, and engagement of the employees within the organization in various roles. They all follow the goals set and achieved by means stipulated in the business strategy. Through this, the enterprise sets itself up with the competition in the market. Human resource strategy forges uniformity in an organization allowing for consistency and development of an organizational culture that positively affects the firm propelling it to the achievement of its goals.
Linking human resource strategies and business strategies serves not only the organization but also the investors, customers and the employees. The two serve each other in some ways hence contributing to the growth of the organization. These include;
Communication. The business strategy allows managers to easily communicate about company’s goals and objective to the employees. The human resource plan ensures that employees communicate to the management about any concerns in the process which allows for easy resolution without sacrificing productivity or profitability of the company (Barnes).
Technology, demographics and social trends. In the present day, millennials have a different perspective on jobs as well as job satisfaction. To help Millennials adapt to the environment and to help the older generations with the new technology, the human resource strategy stipulates ways by which to assist each in the organization as well as achieving the goals set out in business strategy (Barnes).
Employee development. The management usually stipulates the business plan. The human resource department provides employees to work on various tasks to achieve the ultimate goal. When an employee has performed better than expected, it is the responsibility of both human resource and business management departments to reward the employee. The two departments are also responsible for employee training and development (Barnes).
Although there is the line drawn between human resources strategies and business strategy within an organization, there is no definitive way of separating them. Without the proper human resource, the business strategy through a plan of activities may not be achieved. For a successful business, it is important to develop human capital (Mayhew). Proper human resources strategies align with the business strategy hence leading to achievement of the organizational goals. The two are an integral part of the organization working together.
Barnes, David. "The Relationship Of HR With Business Strategy." Smallbusiness.chron.com.
N.p., 2017. Web. 28 July 2017.
Chapter III Business Strategy And Human Resource Strategy- The Interaction. 2017. Web. 28
Mayhew, Ruth. "Relationship Between HR Strategies & Business." Smallbusiness.chron.com.
N.p., 2017. Web. 28 July 2017.
Thomas, Mark A. "What Is A Human Resources Strategy?." Health Manpower Mangement 22.2
(1996): 4-11. Web. 28 July 2017.
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