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    SHRP01

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    Arju Lubna
    Air Canada faced strategic challenges including decreased passenger traffic, increased competition, heavy debt, and declining revenue. To address this, Air Canada pursued several strategic decisions: [1] acquiring its competition Canadian Airlines, [2] divesting some assets to focus on its core business, [3] creating multiple brands to compete with low-cost carriers, [4] increasing international business travel to offset stagnation in domestic travel, and [5] downsizing through job cuts to reduce labor expenses. These strategic decisions had implications for human resource management at Air Canada.

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    SHRP01

    Uploaded by

    Arju Lubna
    19 views19 pages
    Air Canada faced strategic challenges including decreased passenger traffic, increased competition, heavy debt, and declining revenue. To address this, Air Canada pursued several strategic decisions: [1] acquiring its competition Canadian Airlines, [2] divesting some assets to focus on its core business, [3] creating multiple brands to compete with low-cost carriers, [4] increasing international business travel to offset stagnation in domestic travel, and [5] downsizing through job cuts to reduce labor expenses. These strategic decisions had implications for human resource management at Air Canada.

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    Air Canada faced strategic challenges including decreased passenger traffic, increased competition, heavy debt, and declining revenue. To address this, Air Canada pursued several strategic decisions: [1] acquiring its competition Canadian Airlines, [2] divesting some assets to focus on its core business, [3] creating multiple brands to compete with low-cost carriers, [4] increasing international business travel to offset stagnation in domestic travel, and [5] downsizing through job cuts to reduce labor expenses. These strategic decisions had implications for human resource management at Air Canada.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    19 views19 pages

    SHRP01

    Uploaded by

    Arju Lubna
    Air Canada faced strategic challenges including decreased passenger traffic, increased competition, heavy debt, and declining revenue. To address this, Air Canada pursued several strategic decisions: [1] acquiring its competition Canadian Airlines, [2] divesting some assets to focus on its core business, [3] creating multiple brands to compete with low-cost carriers, [4] increasing international business travel to offset stagnation in domestic travel, and [5] downsizing through job cuts to reduce labor expenses. These strategic decisions had implications for human resource management at Air Canada.

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    Concept of Strategy

    and Planning
    Kamal Uddin Ahmed Ph.D.

    NSU MBA HRM 602 SHRP&S Fall’22, Friday 30 Sept’ 22


    Crucial strategic challenges
    Air Canada :
    • Drop in passenger traffic due to unstable
    political condition around the world
    • Increased competition from the low-cost
    carriers
    • Heavy debt and
    • Declining revenue

    – SOUGHT BANKRUPTCY PROTECTION


    Strategic decisions
    Air Canada – In an attempt to survive and become
    profitable :
    • Acquire its competition-Canadian Airlines
    • To focus on key business – attempted to divest
    some of its assets
    • Create multiple brands – Tango and Zip to
    compete with low-cost carriers
    • Try to increase the market share of international
    business travel because of stagnant domestic
    airlines market
    • Downsize by laying off 10% of employees in an
    attempt to reduce $3-billion labor expense
    Strategic decisions
    • Acquisitions
    • Divestiture
    • Downsizing
    • Going International
    Each of the above strategic choices have
    implications for management of human resources

    Indicates a need for common understanding of


    strategy, its importance, and link to HRM
    Strategy and HR
    • Unless the HRM strategy is
    – appropriately formulated and
    – skillfully implemented
    • the success of the organizational strategy is at risk

    • Managers who implement any kind of change within


    organization realize the importance of matching the HRM
    practices with organizational goals

    • Strategic Management of people within orgs affects


    important orgl outcomes such as survival, profitability,
    customer satisfaction levels and employee performance

    • HR practices support organizational strategies


    Strategy
    • Strategy is the formulation of
    – organizational missions, goals, and objectives,
    – as well as action plans for achievement that
    – explicitly recognize the
    • competition and the impact of outside
    environmental forces.

    • Strategy is the plan for how the org intends to


    achieve its goals.

    – The means it will use,


    – the courses of action it will take, and
    – how it will generally operate and compete constitute the
    organization’s strategy
    Mintzberg’s 5Ps of strategy
    • Plan : an intended course of action a firm has
    selected to deal with a situation
    • Purpose : a consistent stream of actions that
    sometimes are the result of a deliberate plan
    and sometimes the result of emergent actions
    based on reactions to environmental changes or
    shifting of assumptions
    • Ploy : a specific maneuver at the tactical level
    with a short time horizon
    • Position : the location of an organization relative
    to its competitors and other environmental
    factors
    • Perspective : the gestalt or personality of the
    organization
    Formulation and implementation of
    strategy
    • Define the vision, and thus provide the
    organization with a sense of purpose, a mission,
    and a clear direction
    • Convert this vision into measurable objectives
    and performance targets
    • Determine the plan to achieve the strategy
    • Implement the plan in ways that are both
    effective and efficient
    • Measure the results against goals and revise
    plans in light of actual experience, changing
    conditions, new ideas, and new opportunities
    adapting to changes
    • Logical incrementalism : redirecting strategy to
    accommodating changes
    • Strategic planning is viewed as a dynamic
    process, moving and shifting and evolving as
    conditions warrant changes.
    • No straight path to goal, strategy calls for a
    series of actions to react to changes in
    competitor actions or new legislation : emergent
    strategy
    • this cumulative process - looks like revolutionary
    change to those on the outside; to those inside :
    strategy has been incrementally implemented
    • Firms can wait passively to see changes to
    occur, and then react or they can anticipate
    moves and adopt proactive stance.
    alignment with external contingencies
    • Intended strategy : formulated at the
    beginning of the period
    • Realized strategy : what actually happened
    (the implemented plan)
    • A good strategy recognizes the complexity of
    realities.
    • To be effective, strategic management
    anticipates future problems, provides an
    alignment with external contingencies and
    internal competencies, recognizes multiple
    stakeholders, and is concerned with
    measurable performance
    Strategy : classifications and typologies
    • no two organizations are identical so
    uniqueness in strategies may be possible but
    it is also possible to group strategies into
    categories or generic types
    • typologies and classification schemes aid our
    understanding
    • the more we add variables to approximate
    the reality of an organization, the more the
    typology becomes unwieldy
    • identifiable basic strategies classified into -
    corporate strategies and business strategies
    Corporate Strategies
    Company-wide strategy – focused on overall strategy
    for the company and its businesses and interests; long-
    term growth and survival goals – involve major
    decisions
    1. Restructuring Strategies
    a. Turnaround strategy
    b. Divestiture strategy
    c. Liquidation strategy
    d. Bankruptcy
    2. Growth Strategies
    a. Incremental growth
    b. International growth
    c. Mergers and acquisitions
    3. Maintenance Strategies : neutral or do-nothing strategy
    – current profitable situation will not last forever, milk
    investment – retrenchment strategy - harvest strategy
    to restructuring goal
    Business Strategies
    • Many large organizations operate several
    businesses under the same or different names.
    Each of these businesses within the
    organization might have its own strategy.
    • Action plans to build a competitive focus in
    – one line of business
    – in a diversified company or public organization
    – how to build a strong competitive position
    • become or remain competitive based on
    – core competence,
    – specialized expertise that rivals do not have and
    cannot easily match
    Corporate Strategy Business Strategy
    Which competitive strategy to choose How to build a strong competitive position
    Long-term survival and growth Remain competitive based on core
    competence, specialized expertise that
    rivals don’t have and cannot easily match
    Action plan for managing the whole Action plan for managing a single line of
    corporate body business
    Should we be in business ? How should we compete ?
    What business should we be in ? Should we compete by offering products at
    prices lower than those of the competition
    or by offering the best service ?
    What is the best way to compete in that
    line of business

    Overall strategy of the company All about means and ends


    Focuses on company-wide strategies Focuses on the best way to compete in a
    particular sector
    Single corporate strategy for the There can be one corporate strategy but
    company many business strategies
    Business strategy models
    • Boston Consulting Group Model : Orgs
    with multiple businesses – to analyze the
    strategies of different business units
    • Portfolio matrix analysis
    • Indicators : industry growth rate, market
    share, long-term industry attractiveness,
    competitive strategy, stage product/market
    evaluation etc placed on the graph
    The BCG Growth in Share
    business position
    Relative Market Share

    High Low
    Above 1.0 below 1.0

    High Stars
    Industry Question marks
    Growth
    Rate

    Low Cash cows Dogs


    Miles and Snow’s Organizational Types

    • Defender : competes in a relatively stable and


    predictable environment
    • Prospector : operates in a dynamic environment.
    Innovation and adaptation are critical to success
    • Analyzer : combination of the defender and
    prospector, attempting to achieve efficiency with
    an interest in new markets and products
    • Reactor : no apparent strategy, imperfect type
    that lacks a consistent response to changing
    conditions.
    Porter’s Model

    • Low-cost provider strategy


    • Broad differentiation strategy
    • Best-cost provider strategy
    • Focused or market niche strategy based
    on lower cost
    • Focused or market niche strategy based
    on differentiation
    Thanks

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