Question

Read the case study below and answer the questions that follow.

Strategic Management: A Taiwanese story about strategy and structure Before 2000 the Taiwan-based company Acer had competing strategies. For 15 years one part of the firm had been building computers for other PC sellers who would put their own labels on the machines, while another part sold very similar computers under the company’s own brand. The latter strategy was predicated on direct sales to consumers, which had brought the firm into direct competition with companies such as Dell. However, in 2000 the firm decided to adopt a new business strategy in order to increase its global market share. Acer’s manufacturing division was made an independent company (Wistron) and this enabled a smaller and more nimble sales firm to emerge. The strategy based on direct sales was discarded and replaced with a strategy focused on selling as many low-cost laptops and netbooks as possible to consumers but via a network of partners and retailers. A new logo was adopted to reflect this new strategic direction, which had proved very successful despite the industry downturn. By 2008, Acer had replaced Hewlett-Packard as the market leader in Europe, the Middle-East, and Africa, partly as a result of Acer’s success in the booming netbook market. This strategy enabled the firm to become the world’s second largest PC vendor. However, in 2011 tensions at board level over the firm’s strategic direction culminated in the resignation of Acer’s CEO Gianfranco Lanci. The difference in opinion appears to be about whether the firm’s future lay in PC’s or mobile devices. Acting CEO J.T Wang announced that the PC would continue to be the firm’s core business. In 2009 the firm entered the smartphone market with the launch of four different smartphones and the promise of more in the pipeline. Unlike Apple, which was focused on developing one phone only, Acer’s strategy is based on targeting each of its phones at a different market segment. In march 2011, Acer announced that revenue projections for the first quarter in 2011 will fall short of expectations by about 10% due to weaker demand in the PC market in the US and Europe. (Source: New York Times, 2009, Bloomberg Business Week, The Financial Times, PC Pro)

QUESTION 1 (60) Discuss the purpose of Strategic Human Resource Management for organisations today. In your discussion, identify which organisational strategies have been employed by ACER over the years, justify your answer using evidence provided in the case study and discuss how these organisational strategies affect the HR strategy.

Answer 1

Ans.

Strategic human resource is the collaboration between the human resource and strategic goals. This collaboration of two functions in an organisation will help in improving the performance and culture in the organisation. It will facilitate in achieving competitive advantage. In today’s dynamic environment with increasing globalisation in the economy, human resource plays a very important role within the organisation and linking the human resource with organisational goals and objectives will improve the business decisions. The human resource is aware of internal and external factors and these factors will help in understanding and making business strategies as per the market and its demand. Strategic human resource helps in focusing on the action planned and allocation of resources to the employees by the management. It enhances the communication within the organisation that will help in cooperative organisational culture.

As per the case study, ACER was into supplying the laptops to other companies as well as direct marketing of their laptops. ACER adopted change and decided to sell laptops and netbooks through retailers and partners and not by direct selling. By doing this, ACER utilises its competitive advantage in the market and increased its marker share. The company designed its new logo and changed its perception in the minds of the customers. With the growth in telecom sector, the company launched its mobile phones in the market.

All the above organisational strategies were focused on the growth of the company. The company loses its the CEO due to conflict in the decisions. As per the case study, the company failed to align its HR with strategic objectives which lead to resignation of CEO and later downfall of the company in the market. The company was rigid on meeting its organisational obligations and failed to entertain its employees. Understanding and respecting employee’s point of view plays very important role in the growth of the organisation as they are aware of the internal and external factors affecting the business. ACER might be able to compete and survive in the market if the organisation understood its CEO’s viewpoint on laptops and mobile phones.