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Importance of Business Strategy and Human Resource Strategy, Difficulties to Determine the Impact of Human Resource Strategy on Business’s Performance

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Course: Bachelor of Business Studies (BBS)

Module: HRM2001S (Human Resource Management)

Assignment Title: Importance of Business Strategy and Human Resource Strategy, Difficulties To Determine The Impact of Human Resource Strategy on Business’s Performance.

Submitted by: Tan Zhi Xin (16204505)

Lecturer / Tutor: Mr Bernard Tay

Submission Date: 15th November 2016

Word Count: 1646 words

Table of Contents

1. Introduction        3

2. Definition        3

2.1 Business Strategy        3

2.2 HR Strategy        4

        4

3.1 Business Strategy        4

3.1.1 Customer Retention        4

3.1.2 Create Mission, Vision and Goals        4

3.2 HR Strategy        5

4. Reason why it is importance to have close relationship between HR strategy to Business strategy        5

4.1 Changing Environment        5

4.2 Business Sustainability        5

4.3 Profit Maximization        6

4.4 Higher chance of organization success and performance        7

5. Why is it difficulties to determine impact of HR Strategy on organisation’s performance        8

5.1 Lack of consensus        8

5.2 Different type of method        8

5.3 Limitation of HR practices        8

5.4 Difference of Multi-National Corporation (MNC) and Small Medium Enterprise (SME)        9

6. Conclusion        9

7. Bibliography and References        9

7.1 Works Cited        9

1. Introduction

Combining human resource management (HRM) and business strategy is an important process that set into Strategic Human Resource Management (SHRM). It is by vast perceived that SHRM can add to the accomplishment and achievement of the firm (Kluytmans, 1994; Kluytmans, 1994). HRM can also be seen as the pillar that supports the firm structure with its slow progressing and sequential step. In this report, having close relationship between business and HR strategy, importance of business and HR strategy, why is it difficult to determine the impact of HR strategy to firm’s performance, will be secured.

2. Definition

2.1 Business Strategy

Business Strategy is a long haul plan of activities intended to accomplish the firm’s mission, vision and goal. It also additionally builds up the heading in which the firm is going in connection to its surroundings. Business Strategy of a firm must reflect the aims of manager about what they expect to accomplish over the timeframe. It also ought to assess the changing needs and basic assets in order to complete the strategic aim (Shellee, 2012).

Figure 1. Business Strategy Model

[pic 1]

2.2 HR Strategy

HR Strategy is the procedure embraced by a firm, which goes for incorporating a firm's culture. HR will then plan an arrangement of HR activities to get the required business objectives. In this manner it must be adjusted to firm's main goal, vision and objectives. The qualities of the business in which the association is to be identified and its competitive advantage should be resolved for building up a HR strategy (MBA School, 2014).

3. Importance of Business & HR Strategy

3.1 Business Strategy

3.1.1 Customer Retention

One of the speediest approaches to lose clients is to not have a successful business strategy set up for client benefit. Build up a program for following up on clients, and for remaining in contact with rehash clients to ensure your items are working appropriately. For instance, have sales representatives contact clients at any rate once per month to talk about the client's business, and attempt to discover better approaches to help the client with your item. At the point when clients bring in with issues, there should be a set up and productive client benefit technique set up to lessen client's stress. By doing so, it will increase the customer satisfactory level and bring in more revenue (George N. Root III, 2014).

3.1.2 Create Mission, Vision and Goals

It is vital that all workers in the firm have clear objective or mission. A procedure can give this vision and keep people from dismissing the firm's objective. In this way, it creates a competitive advantage and understands more about themselves and where they are going (EvolveDesign, 2014).

3.2 HR Strategy

Strategic HRM (SHRM) has a clear focus on actualizing strategic change and developing the ability base of the firm to guarantee that the firm can compete effectively in the future. SHRM encourages the improvement of a human capital that meets the prerequisites of business strategy, so that firm's objectives and mission will be accomplished. SHRM is also an integral part of business strategy. The primary focus of this strategy is to accomplish the firm's goals. Therefore, a set of strategic choices must be formally arranged in order to accomplish the firm’s goals (CANIA, 2014).

4. Reason why it is importance to have close relationship between HR strategy to Business strategy

4.1 Changing Environment

The reason is because of the changing environment in a firm such as new technology or equipment are being introduced, HR can help the firm to arrange training program for employees. With the training provided, employees will attain a new skills learnt of how to operate the technology or equipment. Therefore, it will lead to them adaption to their mission, vision and goal.

4.2 Business Sustainability

Business sustainability is also another reason to why it is important to have close relationship between business and HR strategy. By using the Business life cycle model, at the start-up stage, HR must be flexible in term of their HR Practices in order to face environment changes for example, recession. Whereas at growth stage, it emphasize on the development and formalized on the HR practices. In the maturity stage, as margin decreases, HR will have to focus on cost control. Lastly, in the decline stage, HR will have to shift to rationalization with downsizing and redundant implications (Thompson, 2014).

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