+1(978)310-4246 credencewriters@gmail.com
  

Ascertaining HR Supply
Copyright © 2019 by Nelson Education Ltd.
1

•
•
•
The gig economy
â—¦ Topcoder
â—¦ Tongal
Greater HR differentiation
Mass customization (hyper-personalization)
• Know your customer
• AI Coaching
• Know Your Audience
Employee Segmentation
Internal supply: Existing employees who can be
retrained, promoted, transferred, or otherwise
redeployed to fill anticipated future HR requirements
 External supply: Members of the workforce not
currently employed by the firm, who are currently
undergoing training, working for competitors,
members of unions or professional associations, in a
transitional stage, between jobs, or unemployed

Copyright © 2019 by Nelson Education Ltd.
3
 Employee segmentation: The grouping of
employees based on characteristics that are relevant
to the employee experience such as career
preferences, demographics, work–life preferences,
or benefits
Copyright © 2019 by Nelson Education Ltd.
4

A situation in which the supply of a particular form of
human capital available to the firm is inadequate to
address the demand
Copyright © 2019 by Nelson Education Ltd.
5
 Role of employers
 Other labour pools
 Influence of government programs
 HR retention programs

Mass customization of HR
• The ability to customize HR practices at the
employee level efficiently and at low cost
Copyright © 2019 by Nelson Education Ltd.
6

Skills inventory, includes:
• Personal information
• Education, training, skill competencies
• Work history
• Performance ratings
• Career information
• Hobbies and interests
Copyright © 2019 by Nelson Education Ltd.
7

Management inventory includes:
• A history of management or professional jobs held
• A record of management or professional training
courses and dates of completion
• Key accountabilities for the current job
• Assessment centre and appraisal data
• Professional and industry association memberships
Copyright © 2019 by Nelson Education Ltd.
8
 A model that produces a series of matrices that detail
the various patterns of movement to and from the
various jobs in the organization, including:
• Remaining in the current job
• Promotion to a higher-classified job
• A lateral transfer to a job with a similar classification
level
• Exit from the job
• Demotion
Copyright © 2019 by Nelson Education Ltd.
9
 Movement patterns are historical
 Depends on stable transition probabilities, so dynamic
and unstable environmental scenarios may preclude
the effective usage of Markov models
 Sequence of movements between jobs are called
Markov chains
 Vacancies create a multiplier effect
 Movement is tracked annually
Copyright © 2019 by Nelson Education Ltd.
10
 The number of employees who move annually, and
over specified time periods, between various job levels
 The number of external hires that are required by the
organization, and where the specific jobs are needed
 The movement patterns and expected duration in
specified jobs associated with patterns of career
progression for employees in the organization
 The number and percentage of all starters at a
particular job level who will successfully attain a future
target job level by a specified time period
Copyright © 2019 by Nelson Education Ltd.
11
Copyright © 2019 by Nelson Education Ltd.
12
 Determine the list of mutually exclusive states
(promotion, transfer, termination, demotion, or status
quo)
 Based on the pattern of transitions between jobs,
develop a matrix of jobs that are linked by career
progression or historical movement
 Use historical data to determine the probability of
moving from one state to another
 Populate the matrix with an initial distribution of job
holders across the various states of the model
Copyright © 2019 by Nelson Education Ltd.
13
 A mathematical procedure commonly used for project
analysis in engineering and business applications
Copyright © 2019 by Nelson Education Ltd.
14
 A technique used to analyze the chain or ripple effect
that promotions or job losses have on the movements
of other employees in an organization
Copyright © 2019 by Nelson Education Ltd.
15
 Also known as renewal or sequencing model
• Analyzes flows of employees throughout the
organization by examining inputs and outputs at
each hierarchical or compensation level
Copyright © 2019 by Nelson Education Ltd.
16
 The effect caused when one promotion or transfer in
the organization causes several other personnel
movements in the organization, as a series of
subordinates are promoted to fill the sequential
openings
Copyright © 2019 by Nelson Education Ltd.
17
 In the event of a gap, firms must hire externally in the
short term
 Long term strategies include:
• Outsourcing the extra requirement
• Focusing on retention strategies to reduce voluntary
terminations
• Increasing training and development efforts to
further develop the internal labour pool
• Substituting human efforts with automation
Copyright © 2019 by Nelson Education Ltd.
18
 Occurs when errors in estimating the supply of human
capital are amplified along the supply chain, resulting
in large overestimates of hiring needs
Copyright © 2019 by Nelson Education Ltd.
19
 Range of methods used in organizations to determine
future HR supply requirements
 As any forecasting method may lead to error, it is
important for planners to understand the potential
sources of error in forecasting supply, and to monitor
past forecasts and forecasting methods in order to
continuously improve forecasting practices
Copyright © 2019 by Nelson Education Ltd.
20
Chapter 4
HR Forecasting Process
Strategic Benefit of Forecasting
•
Alignment with firm strategy
•
•
Provides the KSAOs necessary to
implement the value proposition
Reduces HR costs
•
•
Anticipates human capital needs, reducing
costly last-minute changes.
Increases Organizational Flexibility
•
Minimizes HR gaps or surpluses
Strategic Benefit of Forecasting
•
Alignment with firm strategy
•
•
Reduces HR costs
•
•
Anticipates human capital needs, reducing
costly last-minute changes.
Increases Organizational Flexibility
•
•
Provides the KSAOs necessary to
implement the value proposition
Minimizes HR gaps or surpluses
Ensures Organizational Requirements
Take Precedence Over Resource
Constraint and Scarcity
Value of Human Capital
•
Generic Human Capital
•
•
Human capital that is of equal value to any
firm
Firm Specific Human Capital
•
Human capital that is of more value to the
focal firm than to other organizations.
Value of Human Capital
•
Human Capital Stocks and Flows
•
•
Stock refers to the human capital at a given point in
time. Stock comes from selection and is influenced by
transfers, promotions, turnover, etc.
Flow refers to how human capital changes over time.
Flow is influenced by HR practices such as employee
development, internal hiring policies, etc.
Value of Human Capital
•
Forms of Human Capital
•
•
•
•
Specialist/Technical/Professional workers
Employment Equity – Designated Group Membership
Executives & Managers
Alternatively, Human Capital can be viewed in
terms of
•
•
•
Strategic jobs – that implement the value proposition
Necessary (but not strategic) – these jobs support the
implementation of the value proposition.
Non-core – jobs that are no longer aligned with the
KSAOs needed to implement the value proposition
Forecasting Process
•
Determine staffing needs
•
•
Determine number of required employees
•
•
•
High level – what KSAOs are required?
How do KSAOs needs translate into full-time
equivalent employees?
Create budget to determine costs
Put HR programs and policies in place to ensure
demand and supply requirements are met.
Forecasting Methods
•
Survey the business line
•
•
Simply ask line managers for their needs
Norm-based rules
•
•
Uses knowledge of past experiences to anticipate
future needs
Time-series & Regression Models
•
•
Uses data from previous years to predict future needs
Mathematical & Econometric Models
•
•
More complex statistical models that may integrate
artificial intelligence to predict future needs based on
both stocks and flows of employees.
Qualitative Models
•
Uses human expertise to develop prediction of future
needs.
Forecasting Time Horizons
•
From current to long-run forecast.
•
Prediction, Projection, and Envelope
Demand and Supply – Chapter 5
An organization’s failure to properly match the
supply of products or services with the demand
for those products or services can lead to excess
inventory and/or temporary price
increases/decreases.
Demand and Supply
The supply of labour can lag
demand by months or even
years depending on the
amount of training and skill
required to perform the job.
Demand and Supply
The lag in the supply of
labour can lead to shortages
of workers and temporary
increases in pay rates as the
organizational demand
outstrips the supply.
Demand and Supply
An organization’s failure to match its demand for
labour with the supply of labour can lead to large
cost overruns, the inability to execute its strategy,
and downsizing.
HR Demand
There are 2 main categories of approaches to calculating HR
Demand.
• Qualitative approaches – based on personal judgment
• Quantitative approaches – based on hard data
14
HR Demand
Quantitative approaches include:
• Trend/Ratio analysis
• Regression analysis
• Machine learning (and Artificial Intelligence)
15
HR Demand
Example:
Predicting the success of a tablet
computing device is based on a
new set of factors and customer
attributes. Quantitative methods
can not easily capture these
unknowns.
16
HR Demand
Qualitative approaches include:
•
•
•
•
•
Delphi technique
Nominal Group Technique
Management Survey
HR Budget/Staffing Table
Scenario Planning
17
Quantitative – Trend Analysis
â–ª Trend Analysis – the
historical relationship
between an
operational index and
the number of
employees required
by the organization
(demand for labour)
18
Trend Analysis
Historical
J
J
A
S
O
N
D
Forecast
J
F
M
A
M
J
J
A
S
O
N
D
J
F
M
A
19
Ratio Analysis
â–ª Employee
Requirement Ratio – a
Operational Index = Sales
# Employees in year X
ERR = Operational Index
divided by # Employees
Future Requirement =
operational index divided by
the ERR.
ratio of the operational index
to the number of employees
required to fulfill that
operational index. The ERR can
be based on a single time
period, and average of time
periods, or a running average.
Operational Index = $2,800 in sales
Number of Employees = 155
Employment requirement ratio = $2,800/155 = 18.06
20
Effective Trend Analysis
Five steps to conducting an effective index/trend
analysis:
1) Select the appropriate Business/Operational Index
2) Track the Business Index over Time
3) Track the Workforce Size over Time
4) Calculate the Average Ratio of the Business Index to
the Workforce Size i.e. employee requirement ratio
5) Calculate the Forecasted Demand for Labour
21
Trend Analysis
Economies of scale: ratio of number of employees required to
the operational index decreases as the index increases.
70
60
50
40
30
20
10
0
0
1
2
3
4
5
6
7
8
22
Delphi Technique and Nominal Group
Technique
â–ª Delphi technique – a formal program of
sequential, individual interrogations (usually
conducted through questionnaires)
interspersed with information feedback on the
opinions expressed by the other participants
in previous rounds
23
Six Steps Using the Delphi Technique
1) Define and Refine the Issue or Question
2) Identify the Experts, Terms, and Time Horizon
24
Six Steps Using the Delphi Technique
3) Orient the Experts
4) Issue the First-Round Questionnaire
25
Six Steps Using the Delphi Technique
5) Issue the First-Round Questionnaire Summary and
the Second Round of Questionnaires
6) Continue Issuing Questionnaires
26
Delphi Advantages
• Solves many issues around group dynamics
such as
Groupthink
Fighting
Time loss
27
Delphi Disadvantages
• Does not work well if experts are ignorant or
misinformed.
28
Nominal Group Technique
• NGT – long-run
forecasting
technique utilizing
expert assessments
29
Seven Steps Using the Nominal Group
Technique
1) Define and Refine the Issue or Question and the Relevant
Time Horizon
2) Select the Experts
3) Issue the HR Demand Statement to the Experts
4) Apply Expert Knowledge, State Assumptions, and Prepare
an Estimate
5) Meet Face-to-Face
6) Discuss the Demand Estimates and Assumptions
7) Vote Secretly to Determine the Expert Demand
Assessment
30
Seven Steps Using the Nominal Group
Technique
5) Meet Face-to-Face
6) Discuss the Demand Estimates and Assumptions
31
Seven Steps Using the Nominal Group
Technique
7) Vote Secretly to Determine the Expert Demand
Assessment
Expert 1
ranking
Expert 2
ranking
Expert 3
ranking
Average
ranking
Estimate A
1
2
1
1.33
Estimate B
2
1
3
2
Estimate C
3
3
2
4
In this example, Estimate A receives the highest ranking overall,
and would be selected as the forecast.
32
NGT Advantages
• Avoids group conflict
• Offers equal participation opportunities
• Helps participants overcome fears of criticism
33
NGT Disadvantages
• Lacks flexibility to deal with more than 1
problem at a time, or with problems that
arise.
• No spontaneity.
• Time involvement.
34
HR Budgets
â–ª HR budgets quantitative,
operational or shortrun demand estimates
that contain the
number and types of
personnel required by
the organization as a
whole and for each
division/department
35
HR Budgets: Staffing Table
Staffing Table:
â–ª Total HR demand
requirements for
operational or shortrun time periods
36
Scenario Planning
â–ª A method for imagining future possible
organizational states.
â–ª Challenges participants to question their mental
models.
â–ª Done in groups
37
Scenario Planning
 Scenarios serve multiple functions:
1.Present a background for the design and selection of
strategies. Since no single strategy can perform best in
each scenario, special selection criteria, such as “bet
on the most probable scenario” or “preserve flexibility”
are needed
2.Make others aware of the environmental uncertainties
facing them
3.Provide a tool to identify what might happen and how
an organization can act or react (e.g., early warning
systems)
4.Help to stretch managers’ mental models by explicitly
confronting them with their own biased viewpoints
Scenario Planning
1.
2.
3.
4.
5.
6.
7.
Set the parameters – decide on an industry and time frame
Generate a list of factors that could influence the industry in the
future using STEEPLE
Create clusters from the list and plot the clusters according to
their potential impact and probability of occurrence
Choose two clusters in the “high impact/low probability” quadrant
and “stretch” to develop two continuous variables plot them
Understand and name the 4 worlds
Suggest strategies for each world that could be implemented
today in order to prepare for that world
Generate a list of common strategies
STEEPLE
•
•
•
•
•
•
•
Social: Income distribution, Demographics, Labour/Social mobility, Lifestyle
changes, Work/life balance, Portfolio careers, Education, Fashion/fads,
Health/welfare, Living conditions, Poverty levels, Job security.
Technological: Government spending on research, Governments and industry
focus on technological effort, New discoveries and developments, Speed of
technology transfer, Rate of technological obsolescence, Energy use and costs,
Impact of changes on IT, Internet, Mobile communications, IT spend, New
communication channels.
Economical: Global economy, Information/knowledge economy, Monetary policy,
Government spending, Unemployment policy, Taxation, Exchange rates, inflation,
Stages of the business cycle, Economic ‘mood’.
Environmental: ‘Green Agenda’, Global warming, Climate change, Carbon
emissions, Recycling, Environmental regulation/protection.
Political: General election result, Lisbon strategy, White papers e.g. Actions on
Competitiveness.
Legal: Statutory and regulatory conditions, Corporate governance, Compliance,
International trade regulations, Compliance, International trade regulations,
Competition regulation.
Ethical: Business ethics, Consent, Client confidentiality, Official Secrets Act,
Security access, terms of business/trade, Trust, Reputation.
Exercise: Step 1
 Get into groups
 Your parameters are “How technology will change the
HRM profession in 5-8 years time”
 Answer the following question: What are the factors in
the environment that could lead to change in the face
of the HRM profession through technology in 5-8
years? Write each factor on a cue card. Use STEEPLE
to inform your factors:
 Social
 Technological
 Economical
 Environmental
 Political
 Legal
 Ethical
Exercise: Step 2
• Put the cue cards on the table so that
everyone in your group can see them
• Group or cluster the cue cards into
common themes – do not reduce the
ideas, rather find underlying structural
themes that integrate the ideas
• Give a name to each cluster
Exercise: Step 3
• Rank the clusters according to two criteria, namely,
predictability and impact and plot them on a chart that
looks like this:
High
Impact
Low
Predictability
High
Predictability
Low
Impact
Exercise: Step 4
• Choose two clusters that fall into the “high impact, low predictability
quadrant”
• Stretch them out so that there is high and low of X, or more or less
of X, or X and its opposite
High X
Low Y
High Y
Low X
Exercise: Step 5
• Understand and name the 4 worlds
• Answer the following question about each world:
• (a) What does this world “look” and “feel” like?
• (b) What are some triggers that would lead to this
world coming to existence?
• (c) What strategies do we need to put in place
today in order to be successful in this future
world?
Exercise: Step 6
• Find common strategies
• These may be themes or competencies,
rather than specific strategies
Scenario Planning – Steps
â–ª Propose the forecasting question. Eg. How many
households will own an electric car in the next 10 years?
â–ª Generate factors that are likely to influence the outcome of
the question.
â–ª Sort the factors into naturally occurring groups.
â–ª Select the 2 groups of factors that are most likely to have
the strongest and most unpredictable influence on the
outcome.
â–ª Create 4 quadrants and stretch the 2 groups to their
extreme states.
â–ª Name and describe in story form each of the 4 quadrants.
47
Estimate
employee demand
when vehicle can
carry 1 passenger
600km
Estimate
employee demand
when vehicle can
carry 7
passengers
600km

Estimate
employee demand
when vehicle can
carry 1 passenger
80-100km
Estimate
employee demand
when vehicle can
carry 7
passengers 80100km
F1 Extreme Negative Perspective
Driving range 80-100km between
charges
F2 Extreme Positive
Perspective
Seating for 7 passengers plus
cargo
F2 Extreme Negative
Perspective
Seating for 2, no cargo
F1 Extreme Positive
Perspective
Driving range of 600km
between charges
Final thoughts
• No single strategy tool is superior to another
• SWOT/5 forces and Stakeholder Analysis look
at the past and the ‘here and now’, whereas
Scenario planning looks towards the future
Regression Analysis
â–ª Regression analysis very effective,
quantitative forecasting
technique for short-,
medium-, and longrange time horizons
â–ª Can be easily updated
and changed
50
Regression Analysis
IV1
DV
IV2
â–ª This diagram shows
that nearly half the
variance in this
dependent variable can
be accounted for by the
2 independent
variables.
51
Regression Analysis
Using regression we can use sales (the independent variable) to
predict the number of marketers (the dependent variable)
required.
Marketers
8
7
6
5
4
3
2
1
0
0
10
20
30
40
50
60
70
52
Regression Analysis
Here’s our data in Excel.
53
Regression Analysis
Select the data by leftclicking and running the
cursor over all the data. It is
now highlighted in blue.
Notice that the independent
variable is in the first
column (or the column
before the dependent
variable).
54
Regression Analysis
After selecting the data and column names, click on “charts”.
55
Regression Analysis
We are interested in the “X Y (Scatter)” plot.
© 2007 by Nelson, a division of Thomson
Canada Limited
56
Regression Analysis
Once you click the “X Y Scatter” button, Excel will produce the plot.
© 2007 by Nelson, a division of Thomson
Canada Limited
57
Regression Analysis
With cursor over any data point, right-click: select “Add Trendline”
© 2007 by Nelson, a division of Thomson
Canada Limited
58
Regression Analysis
Select ‘Options”, and check “Display equation…” and “Display Rsquared”
© 2007 by Nelson, a division of Thomson
Canada Limited
59
Regression Analysis
Here is the trendline with the regression equation and amount of
variance explained.
Interpretation:
A one-unit change in
x (the independent
variable, or ‘sales’)
results in a change of
9.172 in y (which is
marketers).
The units of the X value
(sales) is in millions of $.
60
Regression Analysis
Coefficient of X: 9.172
Tells us how much the
dependent variable changes
with a 1-unit change in the
independent variable, holding
all other variables constant.
61
Regression Analysis
R-squared: 0.997
Tells us the percentage of total
variance in the dependent variable
attributable to the model.
Intercept: 0.8089
The value of the dependent variable
when the independent variable =0.
When sales = 0, the organization
needs 0.8089 marketers.
62
Regression Analysis
IV1
DV
IV2
â–ª IV1 overlaps roughly
25% of the dependent
variable (DV)
â–ª IV2 also overlaps
roughly 25% of the DV
â–ª Together, IV1 and IV2
explain roughly 40% of
the variance in the DV
63
Regression Caveat
â–ª Regression analysis – presupposes that a linear
relationship exists between one or more
independent (casual) variables, which are predicted
to affect the dependent (target) variable- in our
instance, future HR demand for personnel
â–ª Linearity- assumes that the direction of correlation and the
rate of change in the relationship between the independent
and dependent variables is stable.
64
Regression/Trend Analysis
Example of a non-linear relationship. As the dependent
variable increases, the independent variables increases at a
decreasing rate.
70
60
50
40
30
20
10
0
0
1
2
3
4
5
6
7
8
65
Strategic HRM
– Huselid (1995)
– Combs, Liu, Hall, & Ketchen (2006)
ROA = 5%
ROA =
14%
What is the Purpose of HRM?
• To bring about technical and operational
efficiencies
• To motivate and empower the Human
capital within the organization
• To consistently and unambiguously
communicate how the firm brings value
to its customers.
Universal Mode
Training
Incentive
Comp
Comp Level
Participation
Selectivity
Firm
Performance
Internal
Promotion
HR
Planning
Flextime
Grievance
Procedures
Employment
Security
Contingency Mode
Comp Level
Firm
Performance
Selectivity
Participation
Firm
Strategy
Configural Mode
Organization
HR System
Participation
Comp Level
Selectivity
Job Autonomy
Manager Support
Mission
Strategy
Firm
Performance
Competencies
Broadly defined behavioral themes that
are consistent with the organization’s
strategic goals.
Competencies
Wal*Mart
– Everyday low prices
– Exceptional customer service
Respect for the individual
Service to our customers
Strive for excellence
Extensive community involvement
Competencies
TDBFG
– Be the better Bank
Customer driven
Respect each other
Execute with excellence
Know our business
Enhance our brand
Increase shareholder value
Best Practices Compensation
– Incentives that are perceived as fair.
– Incentives that have clear line-of-sight
to performance.
– Incentives that link individual
performance with group/organizational
performance.
Benefits
– Benefits serve 2 purposes:
1) Strategic parity – best practices;
flexible.
2) Strategic competitive advantage.
– Fixed set of benefits.
– Each benefit aligns with a strategic
competency.
Performance Appraisal
– appraisals are clearly connected to
important employee goals.
– employee goals are connected to
higher level goals.
– goals setting for PA involves multiple
goal-types.
Recruitment & Selection
R&S establishes how well employees “fit” into
their environment
Person-Job fit (KSAOs)
Person-Organization fit (goals & values)
P-O fit is strategic to the degree that it
– allows applicants to asses their fit to the org
(realistic job preview)
– Assess applicants based on fit to culture or
strategic competencies.
Environmental Influences
• SWOT
• Strengths and Weaknesses
– Internal to the firm
• Opportunities and Threats
– External to the firm
Environmental Influences
• PESTDLG – environmental influences
• Political (change in gov’t policy)
• Economic (eg., slow or fast growth)
• Social (eg., the move away from smoking cigarettes)
• Technological (eg., always connected via the internet)
• Demographic (eg. sandwich generation has young children
and older parents to care for)
• Legal (eg. changes to regulations)
• Global (eg., changes to trade agreements)
Environmental Influences
• Combine SWOT and PESTDL
– Consider the firm’s strengths, weaknesses,
opportunities, and threats in the context of
each of these influences.
SWOT Strategic
Planning Process
Factors Internal
to program
Strengths
Factors External
to program
Weakness
Opportunities Threats
SWOT: Internal Factors
• Strengths
– Positive tangible and intangible attributes, internal
to an organization.
– They are within the organization’s control.
• Sample brainstorming questions:
– What do you do particularly well?
– What do you do that is unique in the
“marketplace?”
– What do your customers/clients/patrons ask for
you to do over and over again?
– What do you have the right tools/resources to
accomplish?
SWOT: Internal Factors
• Weaknesses
– Factors that are within an organization’s
control that detract from its ability to attain
the core goal.
– Which areas might the organization
improve?
• Sample questions
– What do you not feel comfortable doing?
– What is needed resources, staff, or skills
that you lack?
SWOT: External Factors
• Opportunities
– External attractive factors that represent the reason for
an organization to exist and develop.
– What opportunities exist in the environment, which will
propel the organization?
– Identify them by their “time frames”
• Sample questions
– Are there new situations coming down the road that
you can take advantage of (new programs being
offered, new faculty joining the department, new tools
available to you)?
– Are there gaps in the “market” that you can fill?
Simple Rules SWOT Analysis
1. Be realistic about the strengths and
weaknesses of your organization or group
2. Distinguish between where your
organization is today, and where it could be
in the future
3. Be specific
4. Keep your SWOT short and simple.
5. Avoid complexity and over analysis
SWOT MATRIX
Strengths – internal
Weaknesses – internal
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
Opportunities – external
1.
2.
3.
4.
5.
Threats – external
1.
2.
3.
4.
5.
Stakeholder Analysis
• Stakeholder Analysis (SA) is a methodology used to
facilitate change by accounting for and often incorporating
the needs of those who have a ‘stake’ or an interest in it.
• With information on stakeholders, their interests, and their
capacity to oppose change, management can choose how
to best accommodate them, thus assuring changes are
adopted are realistic and sustainable.
• When used at the right time it can inform team strategies
to overcome opposition, build coalitions, and channel
information and resources to promote and sustain
proposed change.
Steps
1. Generate a list of
stakeholders by
brainstorming with
different parts of the
business (impact &
influence)
2. Rank order in terms of
interest
3. Rank order in terms of
power
4. Chart them on a 2 x 2
diagram; focus on how
to get more in the
promoters quadrant
Handling each stakeholder
• Promoters: these are the people you must fully
engage and make the greatest efforts with
• Latents: provide sufficient information to these
people to ensure that they are up to date but
not overwhelmed with data
• Defenders: keep these people adequately
informed, talk to them to ensure that no major
issues arise.
• Apathetics: provide these people with minimal
communication to prevent boredom
Porter’s 5 Forces
Model
SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in industry
BARRIERS
TO ENTRY
Absolute cost
advantages
Proprietary learning
curve
Access to inputs
Government policy
Economies of scale
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products
THREAT OF
SUBSTITUTES
-Switching costs
-Buyer inclination to
substitute
-Price-performance
trade-off of
substitutes
BUYER POWER
A Model for
Industry Analysis
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers’ incentives
DEGREE OF
RIVALRY
-Exit barriers
-Industry
concentration
-Fixed costs/Value
added
-Industry growth
-Intermittent
overcapacity
-Product differences
-Switching costs
-Brand identity
-Diversity of rivals
-Corporate stakes
Some terms
• Culture The organization atmosphere and operating context (cohesion, collective sense of purpose)
*What is our identity?
• Vision The desired future state of the organization
*What should we aspire to?
• Values Moral framework guiding corporate behaviour
*Against what criteria should our actions be judged?
• Beliefs Assumptions about the organization mode of operation and interaction with environment
*What do we take for given?
• Mission Defines scope of corporate activity in terms of culture, vision and values
*Where do we compete and how?
• Goals Sets direction of corporate accomplishments
*How to judge progress in performance?
• Objectives Defines milestones and targets for goals
*What to evaluate in performance?
• Strategy Defines a “fit” between the organization’s capabilities, goals and the market opportunities
*What should we sell to whom, where should we sell and how; given our competitors’ situation.
Strategy
• “The plan for how the organization intends to achieve
its goals. The means it will use, courses of action, &
how it will operate & compete”.
• A strategy is successful if it addresses customer
needs and creates competitive advantage.
• The key to successful strategy is to evaluate the fit of
that strategy with a changing environment & forecast
its performance if adopted.
Porter – What is Strategy?
Firms lean towards operational effectiveness (i.e., efficiency) instead
of focusing on strategy.
•temporary fix
•easily imitated
•important, but does not lead to sustainable profitability.
•benchmarking is a popular activity.
Perform different activities (or the same activities in different ways)
•cannot satisfy everyone all the time (choices/trade-offs are required)
•focus on what is core to the organization.
•the best strategies involve ‘fit’, where activities are reinforcing.
3
A Mission Statement
• Defines the organization’s purpose.
• Tells why the organization exists.
• Tells what the organization hopes to achieve
in the future.
• Resonates with employees and focuses
energy.
• Shapes organizational culture and values.
• Adds focus, direction and a sense of purpose
to daily decisions.
3
©SHRM 2009
Mission Statement
1. What is the organization’s
purpose?
2. What is the organization’s
business?
3. What are the organization’s
values?
4
©SHRM 2009
Mission Statement
What’s wrong with this mission statement?
“Our mission is to continue to continually
utilize world-class intellectual capital so that
we may proactively maintain emerging
content while maintaining the highest
standards.”
5
©SHRM 2009
Mission Statement
“The American Red Cross, a humanitarian
organization led by volunteers and guided by its
Congressional Charter and the Fundamental
Principles of the International Red Cross Movement,
will provide relief to victims of disaster and help
people prevent, prepare for, and respond to
emergencies.”
Mission statement of the American Red Cross
www.redcross.org/services/govrel/0,1082,0_193_,00.html
6
©SHRM 2009
Whose Mission Statement Is This?
“__________’s mission is to organize the world’s information and
make it universally accessible and useful.”
“____________is to be one of the world’s leading producers and
providers of entertainment and information. We create happiness
by providing the finest in entertainment to people of all ages,
everywhere.”
“Saving people money so they can live better. To become the
worldwide leader in retailing. Our first responsibility is to provide
all consumers with the best products and services with
guaranteed satisfaction under one roof.”
_____________
7
©SHRM 2009
Relating the Mission and Aligning with HR
• How do organizations relate their mission
statement to the public?
– What does the organization say about itself?
• How do HR functions align with mission and
values?
8
©SHRM 2009
Wal-Mart’s Mission, Vision and Values
• Mission –
– “Saving people money so they can live
better”.
• Three basic beliefs:
– Respect for the individual.
– Service to the customers.
– Strive for excellence.
9
©SHRM 2009
Mision (Mission, Vision, Values)
The existence of a formal statement may actually mean very little; the critical factor is
whether the vision has permeated the organization.
McDonalds Mission: “To be our customers’ favourite place and way to eat”.
Walmart: “People, saving money, living a better life”.
Starbucks: to inspire and nurture the human spirit – one person, one cup and one
neighborhood at a time.
Apple: Not so obvious
Achieving a powerful sense of mission depends very heavily on the day-to-day decisions
and actions of an organization’s leaders.
Formulating a Strategic Proposal
• Mission, vision, & values are based on
4 related components of strategy:
Goals
Value
proposition
Product
market
focus
Core
activities
Formulating Strategy
• Goals
What are the business’ aims? (can be specific & measurable growth, profitability; or refer to social conduct – safety, green
practices, etc).
• Product Market Focus
What to sell & to whom?
• Core Activities
What value-adding activities to do, & how to do them (drivers of
advantageous costs)?
• Value Proposition
How do we attract customers? Competitive advantage is achieved
if the value proposition is important to customers, different from
competitors, & hard to match.
Value Proposition
• What is Tim Hortons’ value proposition?
• What is Starbucks’ vp?
• What is Apple’s vp?
14
The Value Chain
• Value chain is the system of core
activities. Can be for an organization, or
for an entire industry.
Exploration
Mining
Smelting
Refining
Semi-finished
product
fabrication
Finished
product
fabrication
Distribution
Manufacturing
Design – Raw materials Parts production – Assembly
Marketing
Distribution
Service
Porter’s 5 Forces
Model
SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Differentiation of inputs
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in industry
BARRIERS
TO ENTRY
Absolute cost
advantages
Proprietary learning
curve
Access to inputs
Government policy
Economies of scale
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products
THREAT OF
SUBSTITUTES
-Switching costs
-Buyer inclination to
substitute
-Price-performance
trade-off of
substitutes
BUYER POWER
A Model for
Industry Analysis
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Price sensitivity
Threat of backward integration
Product differentiation
Buyer concentration vs. industry
Substitutes available
Buyers’ incentives
DEGREE OF
RIVALRY
-Exit barriers
-Industry
concentration
-Fixed costs/Value
added
-Industry growth
-Intermittent
overcapacity
-Product differences
-Switching costs
-Brand identity
-Diversity of rivals
-Corporate stakes
The grocery business saw broad changes over the course of the Covid-19 pandemic. As
restaurants closed their doors to all but take-out orders, grocery store revenues increased by
approximately 10% overall. However, those increased revenues were off-set in the early months
of the pandemic by increased expenses in extra pay for essential workers as well as increased
investments in e-shopping (online shopping and delivery). It is estimated that up to 40% of the
foot traffic formerly seen in the physical stores has shifted to online shopping and delivery.
Furthermore, the items that grocery shoppers are buying has shifted. More shoppers are looking
for fresh foods (perishables) rather than canned, boxed, and frozen foods.
The larger grocers moved quickly to develop an online presence where shoppers can browse the
contents of the various sections of the store to fill an online grocery cart. After check-out,
shoppers either drive to curbside pick-up their order or wait for home delivery.
All this upheaval in the grocery business has caused a great deal of uncertainty. Grocers like
Loblaws have attempted to compete with the largest retailers such as Walmart by creating
superstores that carry not just groceries, but beer, pharmaceuticals, kitchen and home supplies,
and even clothing. With its investment in infrastructure, Loblaws’ transition to online not
surprisingly involved keeping its stores open as much as possible, and using employees as
shoppers to fulfil online orders.
Sobeys on the other hand used the societal change to at-home shopping and delivery to invest
significantly in its automated inventory and home delivery systems. This has caused a shift in
capital costs away from in-store employees such as inventory workers and cashiers to warehouse
robots, computer systems to manage ordering and inventory, and delivery drivers.
Longos is a smaller, but growing grocery chain with 35 locations in the GTA. Started by the
Longo family in 1956, who still run the chain, Longos grocery stores differentiate themselves
from the larger chains by holding onto their roots as a fresh fruits and vegetables market. They
have expanded on this core offering to include a full range of groceries as well as hot foods
prepared as though they were home cooked. Shoppers can pick up the groceries for the next few
days on their way home from work and pick up a pizza right out of the oven or a baked chicken
and some roasted vegetables for dinner. Many Longos stores also contain a Starbucks Cafe for
shoppers to grab a coffee while shopping. Longos likes to have a family atmosphere at their
stores by hiring people who live near the stores, and Longos prides itself in having low employee
turnover in customer-facing positions like cashiers, stock-persons, and store managers. When
customers go to their local Longos they might run into their neighbour’s son or daughter working
at the store, and are also likely to see familiar faces working the cash register, etc.
Longos purchased one of the original home delivery grocery services called Grocery Gateway in
2004. While Grocery Gateway is the largest home delivery service in Canada, the recent moves
from Loblaws, Instacart, and especially from Sobeys have taken significant share of the rapidly
expanding market for grocery delivery and pick-up. Grocery Gateway operates under a
subscription-based model for its customers, and carries higher operating costs than the more
recent and heavily automated services. If Grocery Gateway is to maintain a strong portion of this
market, Longos will need to invest heavily in upgrading and transforming its home delivery
model.
Assignment
Part 1
Moving forward, should Longos focus their business on in-store sales, continuing with Grocery
Gateway as is, or should they invest much more deeply in the home delivery model by
automating much of the order fulfillment process?
In order to answer this question, briefly describe Longos’ value proposition, including an
analysis of the political, economic, social, technological, demographic, and legal (PESTDL)
factors that influence the grocery industry. Do scenario planning around the primary question.
Your scenario planning should develop 4 quadrants (worlds) based on the 2 factors that emerge
as having the highest potential impact and that are difficult to predict (see the class slides for
review).
1.
Based on your analysis, describe each of the 4 worlds that emerge in terms of what kinds
of activities grocery store shoppers will engage in in each world, and how they will
interact with the stores.
2.
Describe what kinds of jobs are important in each world, and describe what kinds of
KSAOs/competencies would be critical for Longos in each world? What are the
most important changes to KSAOs/competencies required in a shift from in-store
sales to a home delivery model?
3.
Based on what you know about Longos’ strategy, is the company in a better position to
focus its business on in-store sales or home delivery? Use what you know about Longos,
as well as what you know about HR practices such as recruitment and selection to inform
your response.
Part 2
Longos pays slightly better than its competitors for in-store jobs, with a particular focus on
paying cashiers above market for speed, courteousness, and accuracy.
In order to provide fast and efficient service to its customers, Longos uses the following to
calculate its employee requirements:
Always required, regardless of hourly sales rates
1 store manager
1 assistant manager
for every $1,000 in hourly sales, Longos requires
2 cashiers
3 produce workers
3 deli counter workers
2 bread/dessert counter workers
2 dairy department workers
2 meat department workers
1 freezer section employee
3 general stock workers
2 hot foods counter workers
If Longos expects to sell at an average rate of $6,000 in hourly sales per store per day, how many
of each workers are required per store?
If in-store business is expect to increase by 40% after the pandemic is finished, how many of
each worker will be required per store?
If business is expected to decrease by 25% (of its original expected rate of $6,000 in hourly
sales) after the pandemic due to the shift to home shopping, how many of each worker will be
required?
If Longos moves to a home delivery model, it will have to make significant capital investments
in technology and equipment. Under which scenario will the business be at greater financial risk
in the event that it has significantly over-estimated sales; under a home shopping business
strategy or under an in-store shopping strategy? Why?

Purchase answer to see full
attachment

  
error: Content is protected !!