Strategic Human Resource Management - Case Study Example

THE DESIGN AND IMPLEMENTATION OF JEWELLERY DISTRIBUTOR’S ASSOCIATION (JDA) STRATEGY IN UK AND THE POSSIBILITY OF PARTICIPATING MORE EFFECTIVELY IN THE NATIONAL AND GLOBAL MARKET Student Name: Registration Number: Lecturer Table of contents Introduction pg 1 Strategic paradox : Outside-in vs. Inside-out pg 4 Trying out VS planning pg 5 Creative vs Analytical thinking pg 5 Continuous change vs. Revolutionary pg 5 Collaboration vs competition pg6 HRM page 7-19 Reference Pg 14-17 Introduction Strategic Human Resource Management falls under strategic management. Strategic management utilizes the Strengths, Weakness, Opportunities and Threats (SWOTs) theory in its planning method. In the theory, strategic management involves setting goals for the organization and goes ahead to meet them as planned, this engages strategic resource pooling with the objective of attaining the set goals on the base of the SWOTs theory. SHRM is defined as the connecting of human resources of an organization with strategic objectives and goals in order to develop organizational culture that enhances innovation, flexibility and competitive advantage while enhancing business performance through the Human Resource activities. Some scholars such as Mary Lee Hu have invested in the career metalsmithing and jewelry at Rochester Institute of Technology with Hans Christensen; Cranbrook Academy of Art with Richard Thomas, BFA, 1965; and Southern Illinois University-Carbondale with Brent Kington, MFA, 1967.  She taught at Michigan State University, 1977-80, and at the University of Washington, Seattle, from 1980 until her retirement in 2006.  She served as president of SNAG from 1977-80. Her jewelry made with twined wires has been exhibited internationally and is in many major museum collections. On the same note Samwel the Jeweller has boost a wide array of engagement rings, watches, earings and other jewelries on the market with very high quality. According to Society of North American Goldsmiths, (1997), Jewelry Distributors' Association (JDA) is a non-profit-making trade body, within the British Jewelry, Giftware & Finishing Federation It is specializing in distributing, exporting and importing precious and fashion jewelry, clocks, watches, accessories, and other items to the Jewelry and Allied Trades. The JDA's headquarters are in the heart of the Jewelry Quarter in Birmingham, UK and are run on a day to day basis by Lynn Snead, the Association Manager. A group of 8 senior level executives from all segments of the jewelry distribution industry comprise the Officers and National Committee who manage the affairs and activities of the Association. In order for the organization to participate more actively in the national and global market, the board of directors needs to have some advice pertaining this activity. For instance they need to know their customers well, there competitors and the environment they are working in. The management has to have good strategic management skills in order to overcome this problem. The strategies paradoxes have been used to explain this is are being use in a stronger side.   Raynor (2007, p 205-303) describes how companies can achieve successful results while minimizing their risk. For instance Outside-in vs. Inside-out is a strategy that the management can use to rate their customers and competitors’. Customers need strong technologies and strong individuals plus strong cultures in order to buy from them. The Jewelry being distributed by the organization needs to be looked in the internal perspective first before they are being sold to the external people. They should be checked if they are satisfying the needs of the customers before they are being rejected by the outside customers. There are strong external opportunities which can boost the market, but the internal affairs need to be looked at first. The board of directors can use the OUTSIDE-IN approach by identifying its audience. Jewelery Distributors' Association (JDA) can build strategy using research and market intelligence in identifying the brand drivers for its audience. If the organization adopts the outside –in approach, then it means that they are able to tell the organization, what the brand should stands for. Unlike the inside-out brands, where by they will be required to tell the audience. The board of directors should adopt the outside-in brands because it produces a brand strategy that resonates with the organizations’ target audience and reflects with their wants and needs. . Jewelery Distributors' Association (JDA) need to be able to deliver on a promise that really resonates with people and it should be something that the competitors are suck at .Therefore they should adopt the outside –in approach for successful business. Perves N.2003, p 87, highlighted out about Trying out VS planning strategy paradoxes that can be used by the management of Jewelery  Distributors' Association (JDA) . He talks of trying out new and innovative products, and accepting a certain level of uncertainty in sales contracts. A strategic plan is a way forward strategizing and achieving long-term results. Therefore the board of directors must decide what to do, when, by who where, how, and or with whom. For instance they should focus on their objectives they want to accomplish at the end global of the day. By trying out first on their business, means that JDA will be in a position to know if they can manage or to determine if customers will buy it and if it will have a good positive impact on customers globally.  JDA should also plan for the future activities required to create a desired goal on trading in Jewelry globally so as not to have fluctuations in future. Since the business is shaped by their own planning, they need to be to be prepared adequately for what may arise in future. Jewelry Distributors’ Association (JDA) should have a systematic goal on trading in Jewelry globally so as not to have fluctuations in future. Jewelery Distributors’ Association (JDA) needs good strategic planning for the organization to move on well and be able to determine the dangers of the future. Creative vs Analytical thinking is also another Strategy Paradox that the organization can adopt in order to do their business well globally. Creative is the ability to innovate new ideas by combining, changing, or reapplying existing ideas. JDA may use variety of thinking styles, methodologies and creative processes in order to have a successful business. They should innovate new ideas by changing and reapplying the existing ones. .  JDA will have to explore what they do not know and exploit what they already know. They should predict the future needs of the customer. Jewelery  Distributors' Association (JDA) needs good strategic planning in order to succeed. Continuous change vs. Revolutionary change can be adopted by the Jewelery Distributors’ Association (JDA) organization. According to Burke (2000, p 477-512), In order to have a successful organization change, JDA requires different techniques and tools for innovatory process. Thus they should be aggressive and be ready to undergo the transformation easily. Evolution is seen as generally smooth and continuous and how revolutionary is claim to be intended to be punctuated. The organization can adopt the continuous change because there is some sense of renewal perspective that focuses on making change if the business will seem not to pick. On the other hand the customers globally may not have the taste of the goods and services being offered by JDA, in that scenario, the organization needs to change its strategies in order to make maximum profits. JDA can also adopt the Collaboration vs competition has a strategic paradox to run their businesses across the countries or globally. Real collaboration involves constructive confrontation and coming together make decisions, improve processes and develop products and services. It’s about people working together to create value in our communities, governments collaborating across agencies and departments, with citizens and with other governments. JDA can succeed in the trading of Jewelries’ globally if they adopt the collaboration. According to Mick, m (2005 , 124-406), JDA management may strategize and use highly committed and capable workforce to compete their competitors. They should bargain , maneuver, and attack, with the intention of securing their own interests. The organization should be strategic enough to be able to able to embed in a network of interactions and exercise their power to their own advantage. Different authors have offered contradictory opinions on the subject of “fit” in consideration of strategic human resource management. The relationship of strategic human resource management and the organizational objectives is a controversial subject considering that the relationship is founded on the word “fit”, which defines relative relationships rather than absolute relationship. The “fitness” of strategic Human Resource Management to the organization’s objectives tends to be judged subjectively depending on the perception of the appraiser, rather than objectively. According to (Boxall and Purcell, 2003, p10), the “best fit" school of thought argues that Human Resource Management strategy shall be effective when, when the strategies are appropriately integrated with the organizational specific and broader environmental context. The theory is founded on proposing questions about examining the most critical contingencies in the organizational context and how the contingencies are best connected. Essentially, the argument of the best practice approach is that implementation of some human resource practices potentially contribute to lower levels of absenteeism, higher levels of productivity, quality and customer service. This ultimately generates higher levels of profitability. The aforementioned theories are however in agreement that HRM practices have to emphasize on critical choices associated with competitive strategy. Understanding or lack of understanding the concept of best fit has been argued by some commentators to be the underlying reason for the lack coherence and consistency in the design and implementation of sets of 'strategic' human resource practices in some organizations. Arguing that the development of the best fit model is derived from the New York, Michigan and Harvard models, some researches such as Luc, (2010) claim that these models could be grouped as ‘matching models’ since the similar founding objective is to match the human resources strategy with that of the organizational strategy. (Drucker,1954, p205), highlights the Strategic management as an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors. (Bill Harrison, 1998, p 175, recommended techniques for analyzing industries and competitors as way forward for organizations to lay down their strategies. Strategy and other systems, can improve organizational effectiveness, organizations have tended to implement strategic human resource practices in line with organizational strategies, failing to appreciate that human resource is specialized area, with unique demands. Such organizations tend to fail to appreciate the “fitting’ link of human resource and organizational objectives, therefore resulting to design and implementation of 'strategic' human resource practices which lack coherence and consistency. Furthermore, the view is supported by the suggestion by some commentators that effective performance depends is a consequence of the link between Human Resource policies and the business strategies. Organizations have to create the “best fit” between the human resource and the organization’s strategies, such that organizations can be successful in cost-competitive with a cost minimization approach to Human Resource markets. JDA by adopting high-performance work practices may match competition considering quality and service, hence there being a close fit between strategy and human resources. The design and implementation of the Human Resource policies should match the core competencies of the organization as presented by Warner et al (2008, 477-512). Some literatures such as Shahzad, Peer and Edward, (2010) highlight the importance of both ‘coherence’ and ‘consistency’. To expound on the extent to which Human Resource Management fosters and enhances organisational performance. Management system has been given diverse understanding by the organizations. JDA therefore should implement strategic human resource practices such as Employee ownership and participation in decision making internal fit which refers to the coherence or consistency of the Human Resource. This will impact on implementation of the activities since. Whereas some researchers have emphasized internal fit, whereas other studies have insisted on the strategies of external fit. The insistence on Internal fit is the conception that human resource management practices have exercise consistence within organizations so that they work together not against each other. The internal fit notion is immensely impacted by the perception on high performance work systems. Organizations that have implemented resource management practices while considering internal fit as argued by Scott, (2010), have failed to appreciate that there are different variants of internal fit, and have rather approached the issue of fit in a generalist manner hence compromising on the coherence and consistency in strategic HRM implementation. Accordingly, organizations should rather approach the issue of strategic fit from a specialized view; otherwise strategic human resource implementation shall lack consistency and coherence (Jeffrey et al, 2009, p 321). The research suggests that failure to understand internal fit is a recipe for disastrous implementation of strategic human resource strategies. The temporal consistency approach in internal fit holds that the staff should be treated consistently always, to enable them rely on the future of human resource management policies. There is also among employee consistency as a form of internal fir, which is founded on ensuring employee equity in the workplace. In this internal fit, human resource management policies are developed to guarantee same treatment of the workforce and are based on notions of equity. Therefore, internal fit ensures the synchronization of the strategic HRM activities, so that the entirety of the HRM system exceeds the sum of its parts. Failing to understand internal fit, organizations have approached design and implementation of HRM policies and practices in a modular perspective which may make sense when they are independent nits, but when evaluated within the context of other Human Resource Management practices they are a technique for disaster if applied throughout the organization,. Failing to appreciate external fit is also cited as a cause of lack coherence and consistency in strategic human resource implementations. Organizations while appreciating the need for the concept of “fit”, do not understand external fit which refers to the fit of organizational human resource management policies with the business strategy of the organization. In most cases, some organizations have treated external fit as the direct descendant of Storey’s notion of hard human resource management. However some researches support Schuler’s, 1996, p 327, view in relating human resource management practices to the Porter prescriptions of competitive strategy. In the suggested model by Schuler the design and implementation of strategic human resource practices is founded from organizational view where organizations have to work out the requisite employee behaviors to implement a particular competitive strategy, it is also the organization that devises supportive human resource management policies and procedures to enable these behaviors to be inculcated and absorbed in the workforce. Accordingly, the concept of fit, does not immensely impact on the implementation of strategic human activities, but rather the particular competitive strategy being undertaken by the organization plays a crucial role. The issue of understanding ‘fit’ has limited consequences. Moreover, the concept of fit has been argued by some researches to have minimal impacts on the organization, have has been the subject of much criticism.. Consequently, arguing that strategic human resource practices continues to lack coherence and consistency, primarily because the concept of fit is baseless since the concept of fit in itself does not exist. According to (Michael A Hitt, 2008, p 210-402), objective criteria explaining the greatest amount of total variance in evaluation of target firms have strong support for the rational/analytical normative choice perspective. It is a commonly accepted fact that the design and implementation of sets of strategic human resource practices continues to lack coherence and consistency. However, the actual culprits impacting on coherence and consistency of the design and implementation of the HRM activities are varied as can be attested by the diverse views attempting to explain. Since organizations are conglomerate made up of diverse units, there is need for synchronization of the activities of the various modules so as to achieve strategic organizational objectives. Most researches and literature are in agreement that design and implementation of strategic human resource practices by most organizations has faced diverse myriads of challenges. Creating a fit and ensuring that organizational processes and procedures are interrelated is therefore of paramount importance. Whereas some Organizations have implemented strategic human resource practices with due regard to the organizational strategic objectives and understanding the concept of fit, such organizations have enjoyed more coherent and consistent strategic human resource activities. However the organizations which tend to have little understanding of the concept of fit, and those organizations which tend to undermine the concept of fit, have tended to design and implement strategic human resource practices in inconsistent and less coherent manner. This therefore suggests that limited understanding of the concept of fit is responsible for the lack of coherence and consistency. In terms of new market entrants, entry into the Jewelry business is restricted by diverse factors such as high initial capital investment, protection of the products by patents, the low intake of jewelry by the customers, the long duration to establish production units, the need for technical expertise as well as established suppliers who may threaten new entrants. These factors serve as barriers to market entry. Product Differentiation and Cost Advantage are important considerations in the sector. There are various companies offering Jewelry products globally and therefore have to differentiate its products from other products in the market while watching on costs. Quality attributes play an important role in the utilization of Jewelry. The sector is further influenced by the Knowledge and Technology in that, the production of quality jewels requires knowledge on chemical skills, which is low. Furthermore, whereas general production of man-made jewels tends to be similar, the specific production of each product varies, hence demanding technological resources. The access to Distribution Channels is also a market barrier in that new entrants may find it challenging to enter into the distribution channels already dominated by established industries. (Randall S. 2007, p 13), highlights the behaviors of buyers. Buyers are also an important force. Buyer driven factors include switching costs, where buyers can alternatively switch to jewels of different resources such as gold, silver and bronze or opt for other alternatives of manmade jewels. The products are used for decoration purposes, which is a basic need; therefore, the number of customers and volume of sales is therefore unlikely to be negatively impacted. (Michael Porter,1980, p381-396) tries to show how a firm can be best positioned to compete in the long run. Customers however have a strong bargaining power, since they can opt for various other alternative products, which serve the same purpose. Moreover, the customers immensely influence the pricing of the products, in the gold jewels sector. The gold companies sources their raw products from limited suppliers, therefore the supplier has an upper hand, and can dictate the terms of agreement. The ability to substitute is also a factor; the companies in the sector have been working to enhance the products characteristics to surpass what is offered by the substitutes. The presence of substitutes may immensely influence the industry’s options considering that changing one part of dependant products means altering the entire production line. The competitive rivalry is also exhibited in the environment as suggested by the inability of the companies to increase prices, yet the cost of production has been increasing. Therefore, that the company operates in an environment with a low uptake of the class of products it offers. (Girard, 2009, 204-354), highlighted the Performance evaluation and planning methods that a company can apply in order to succeed in business. The company has been concentrating in one country, UK, where the jewelries represent forty percent of the total jewelry production. Products The need for a strategic move by the company is occasioned by the expected expiry of the company’s patents of Jewelry in U K – Utility patents of1900-1929 With the expiry of the patent, there are different possible scenarios, which may negatively impact on the performance of the company, these factors are external and not within the control of Doman Jewelry Internal Environment There are also several internal factors, intrinsic to the internal environment. The company has a strategic based dynamic management, where the management faces possible future issues in advance. The company also has sufficient manpower and potential to raise finance, as and when needed. Another internal factor is a secure niche in the gold market, which assures that its products are sold, hence optimizing the production capacity of its machineries. The company has a strategic advantage in terms of dynamic product development. Strategic Alternatives There are different strategic options that the company can pursue. According to (R. King 2009, P 3-23 )he view the Knowledge Management and Organizational Learning as a process that support organizational processes involving collaborative decision-making, individual learning, innovation, and collective learning. She has gained a reputation as a prize-winning, best-selling author who holds an undying place in the hearts of readers ranging from 14-year-old girls to members of the House of Lords to ninety year-old retired Air Force colonels. The company can continue producing gold items such as wedding rings, watches necklaces, earrings of high quality without heavily investing in silver jewelries. In the predictable future, when all assumptions were put in place, this alternative offered the highest cumulative cash balance. However, with the expiry of the patents, the assumptions made may not be true, hence jeopardizing the suitability of the option.. The company can also pursue the alternative of producing both gold jewlries and silver. In the near future, the company has to source of a cash injection of 2.0 M to fund the strategy. This strategy enables the company to run both products simultaneously while satisfying customers of both products. JDA can opt to offer both products without premium on other types of jewelries goods , this shall however lead to higher cash injections needed and reduced net profit before tax, is comparison with the premium alternative. The company can also opt for instant changeover without premium, this alternative has the highest cash injection needed by JDA to fund the strategy and lowest cumulative net profit before tax, and this makes the option unviable. References Antiques & collectibles, 1997, Jewelers’ Circular-Keystone: JCK volume 164, issues 7-9: Chilton. co Bill Harrison, 1998, Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free press. Pp 175. Boxall, P and Purcell, J 2011 Strategy and Human Resource Management, Palgrave  Macmillan, UK. Pp 10 Critical Thinking and problem solving. Available: www.learningtree.com/courses /284.htm  - United State Drucker, Peter, 1954.The Practice of Management, Harper and Row, New York. Pp 205 Girard B, 2009, A Leader's Guide to Knowledge Management: Springer pp 204-354 H Samwel(2011 ), Wedding & Diamond Jewellery, Available: www.hsamuel.co.uk (14 October 2011) JCK, (8 October 2011) Jewelry News, Trends and Analysis: Available: www.jckonline.com (14th October 2011) Jeffrey S. et al., 2009, Foundations in Strategic Management, New York : Cengage Learning, pp 321 John W & sons, 1999, Contingencies within dynamic managerial capabilities, New York: Luc K. Audebrand, 2010, Sustainability in Strategic Management Education: The Quest for New Root Metaphors, The Academy of Management Learning and Education (AMLE), Volume 9, Number 3 / September 2010, pp 413 – 428 Michael E. Raynor, 2007, The Strategies Paradox: Why committing to success leads to failure, and what to do about it. Currency Doubleday, pp 205-303 Michael A. Hitt. R. Duane Ireland. Robert E. Hoskisson 2008, Strategic Management: Competitiveness & Globalization, Concepts. Cengage Learning, pp 210-402 Michaël E. Porter ,1980, Competitive strategy: techniques for analyzing industries and competitors. Free Press. Michigan pp381-396 Mick Marchington, Adrian W, 2005, Human resource management at work: people management and development. CIPD, pp 124-406 Pervez N. Ghauri, Jean-Claude Usunier 2003, International business negotiations. Emerald; pg 87 Peter F. Boxall. John Purcell 2003, Strategy and human resource management, Auckland, New Zealand: Palgrave Macmillan 204-287 Randall S. Susan E, 2007, Strategic human resource management: Wiley-Blackwell, pg 327 Scott Sonenshein, 2010, We're changing—Or are We? Untangling the Role of Progressive, Regressive, and Stability Narratives During Strategic Change Shahzad M. Ansari, Peer C. Fiss, Edward J. Zajac, 2010, Made to Fit: How Practices Vary As They Diffuse, The Academy of Management Review (AMR), Volume 35, Number 1 / January 2010 Snagmetalsmith(17 August 2011 at 22:06) Society of North American Goldsmiths[online] Availabl:e http://www.snagmetalsmith.org /Get_Involved/Auctions/- (Society of North American Goldsmith 14 October 2011) Society of North American Goldsmiths, 1997, Goldsmiths Journal.. Society of North American Goldsmiths. Michigan, pg 91 Walter A. Bogumil, Randall S. Schuller,1996. Effective Personnel Management. West Pub CO. pp 204 - 324 Warner, Burke et al. 2008, Organization Change: A Comprehensive Reader. New York Implementation, The Academy of Management Journal (AMJ), Volume 53, Number 3 / June 2010, pp 477 – 512  W. Warner Burke, 2000, Organization Change: Theory and Practice. Sage. New York. Pp23 William R. King, 2009, Knowledge Management and Organizational Learning. Springer. Pp 3-23 Read More