most people believe. This is the reality of strategic HRM that must be borne
in mind when dealing with this compelling but often elusive concept.
The chapter starts with definitions of strategy and goes on to describe the
fundamentals of strategy in more detail. It concludes with a review of the
process of strategy formulation.
STRATEGY DEFINED
Strategy has two fundamental meanings. First, it is forward looking. It is
about deciding where you want to go and how you mean to get there. It is
concerned with both ends and means. In this sense a strategy is a declaration
of intent: ‘This is what we want to do and this is how we intend to do it.’
Strategies define longer-term goals, but they also cover how those goals will
be attained. They guide purposeful action to deliver the required result. A
good strategy is one that works, one that in Abell’s (1993) phrase enables
organizations to adapt by ‘mastering the present and pre-empting the
future’.
The second meaning of strategy is conveyed by the concept of strategic fit.
The focus is upon the organization and the world around it. To maximize
competitive advantage a firm must match its capabilities and resources to the
opportunities available in the external environment. As Hofer and Schendel
(1986) conclude, ‘A critical aspect of top management’s work today involves
matching organizational competences (internal resources and skills) with the
opportunities and risks created by environmental change in ways that will
be both effective and efficient over the time such resources will be deployed.’
Strategy has been defined in other ways by the many writers on this
subject. For example:
Strategy is the determination of the basic long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation of resources
necessary for carrying out these goals.
(Chandler, 1962)Strategy is a set of fundamental or critical choices about the ends and means of
a business.
(Child, 1972)[Strategy involves] the constant search for ways in which the firm’s unique
resources can be redeployed in changing circumstances.(Rumelt, 1984)22 l The conceptual framework of strategic HRM