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In: Operations Management

Describe the alignment between the three different types of business strategies and its association with HRM...

Describe the alignment between the three different types of business strategies and its association with HRM strategies and functions. What business strategy has Xiaomi adopted and how would this strategy impact their SHRM approach? ( should apply on Xiaomi about 600 words)

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Expert Solution

The three types of business strategies are Cost leadership, differentiation and focus strategies. And all of these known as porter's generic strategies.

These business strategies associated with HRM strategies should by these instructions understand the business strategy and current state challenges where goal and expectations are considered for the organization, find how people contribute to the organization's growth and achievement, measure HR strategy, design and measure the better HR strategy and HRM functions associated with Business strategies by understanding the business strategy, analysis of current conditions Plan, implement the better HR strategy, measure and evaluate results and according to need.

Xiaomi adopted cost leadership business strategy. This impacts on SHRM (strategic human resources management) here cost leadership means the lowest cost of the product to take competitive advantage. It helps to SHRM by building meaningful objectives of the organization, evaluate HR capability and helps in estimation company's future requirements.

2. HRD (human resource development) means training and development provided by organizations to increase the knowledge, skills, education and abilities of employees. In Xiaomi, it conducts by giving training and development for their employees to analyze the HRD needs such as knowledge, attitudes, values and skills to perform tasks.

3. Xiaomi evaluate the effectiveness of HRD program by four levels as Reaction in this course content, key takeaways, strength and weakness consider 2. learning, in this score after and before training, applied project learnings, report feedback 3. behaviour, in this Self-assessment questionnaires, focus group, customers feedback analyzed 4. results in which after training business results, employee retention, customer satisfaction index.

In cost leadership strategy, a company focuses on creating the most affordable product for the consumers. This means their product/services usually cost lesser than the competitors. When it come to HRM strategies, the HR division would need to focus on hiring workers who are affordable and also the work should be replicable by the employees. This means that the employees may be well suited to leverage economies of scale. Overall company culture may be to copy the innovation and trends from other companies but do it in a cheaper way.

In case of focus strategy, a company focuses on creating value for a small part of the market and attempts to establish leadership in those category. The most common examples can be luxury goods that focus only on niche segment of the market. Naturally the products need to be unique and the HRM strategy should focus on providing innovative culture and nurturing R&D efforts through unique talents.

Differentiation strategy focuses on making products that stand out and can appeal to wide array of consumers. Here the target is on the entire market but the focus is on making products that have different offerings. This is commonly seen in electronic products and their offerings. The HRM strategy in this case focuses strongly on the marketing aspect and product management. As a result the organization is tuned into making products that stand out.

In case Xiaomi, they have approached the market with a cost-leadership strategy. Their products are often identifical to that of Samsung or other bigger brands. However, their products cost considerably less. They have been able to do so by merely following the industry trend and leveraging cheaper labor cost from China and saving on innovation. Their strategic HRM likely focused on handling factory and manufacturing systems with more focus on efficiency and productivity. The best approach for this is to have a market standard of salaries for workers, have a general policy for employees and workers and focus more on improving efficiency through training.They have visualized the entire process and designed with senior executive in mind and tried to restructure their organization. Previously and many company as of now also have a very complex structure, this creates a misbalance for proper functioning of the organization as the bigger hierarchy an organization have the more authority it creates. Xiomi tried to have and focused on having a flat organization, the good thing about this was people started to take part in the decision making with responsibility of their work. This culture was successfully in cultivating the Xiomi success and resulted as one of the core reasons for its effectiveness. With management interested to increase their work span of control and reduced the number of sub-ordinates layer. In addition to this the Xiomi categorised the department and formed them on the basis of products and services the company offer which was earlier a simple mechanism of functional specification. Identifying changes in the organization at the right time can be a winning strategy and Xiomi did the exact thing. It was Xiomi HRD program effectiveness which could finally change the structure and made it fruitful for the organization. Moving forward it is well known fact that “Man and Machine” if combined effortlessly a magic could happen, it came during the Xiomi HRD discussion that the combination of man and machine should be in such a way that each can complement to other. It simply means that certain technological changes were crucial to implement in the organization, since Xiomi has a global presence it must have a setup which could focus on cost reduction techniques, minimizing the production time, quality mapping of services. Having better tools will definitely boost the management of resources. Last but not the least the success of HRD programs at Xiomi leads to have a better employee turnover; they became a reason for employee motivation and good organization climate. Having a good employee is tough but retaining them for a longer period of time is even hard, with HRD success one could not forget that it has contributed to employee stability. This develops a sense of responsibility among the employee and the company is saved from investing so much on the recruitment drives. Finally a long term employment with positive feedback on the business was seen.


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