Question

Is it easier to change human resources to fit the corporate strategy as discussed by Michael Porter or change the corporate strategy to fit human resources.

Answer 1

Michael Porter's Five Forces Model

Every industry has its own set of characteristics, that allows them operate business differently. There is a difference between aeronotics sector and civil engineering, mining and pharmaceutics in respect of customers' demands, product delivery, innovations, marketing areas and so, their strategies are also completely different. According to Michael theory, a sustainable strategy should be maintained to meet the level of competition in the respective sector.

Given below are forces that are threats to an organization' competitiveness, and hence to retain their position, they should be removed.

Competitiveness

Competitor's Rivalry

Power of Negotiation of Intermediary

Power of Negotiation of Suppliers

Threat of new entrance

Threat of substitutes

1. Competitor's Rivalry - There is higher degree of competitveness between organizations of similar nature and size. Some of the organizations use lower pricing strategy to attract more customers, however this is only a short-term strategy. In the presence of globalized economy, eliminating the competitors is a weak factor to get an edge over competitor.

2. Power of Negotiation of Intermediary - If there are small number of industries for a specific product or service, the client's influence can be strong. As they may threat the suppliers of switching to another supplier at relatively lower prices. So, their is power of negotiation can be seen. This analysis should be considered for intermediate customers.

3. Power of Negotiation of Suppliers - If there are smallnumber of suppliers in the market, monopoly or oligopoly may arise, that gives them unbound power.

4. Threat of new entrance - New entrance may restricted by entry barriers such as economies of scale, networking, supremacy like intellectual properrty, discount from suppliers. However, to combat these siutution , the strategies of organization may plan for initial losses until they establish their position in the market.

5. Threat of substitutes - Substitutes can be a threat for any industry, if there product is more competitive. To compete with this situtaion, lower product cost or differentiation may be adopted.

Workforce is an essential element for transforming input into output in an industry. People doest not belong to an industry, they only get a consideration for their competencies during the employment contract. Therfore, the importance of employees depends on their contribution of competencies.

Business Strategies changed to fit HR - If an organization do not change strategy, it may end up where it is. In addition to fit human resource there are several other components that demands changes in strategies such as : Stakeholders expectation, environment (internal and external), management needs, organizational structure, policies and procedures, regulatoory measures, competition in the market and various other forms.

In today's business world , it is essential to know how to successfully adopt changes and develop appropriate steps to properly manage such changes. In some of the industries like, poject, portfolio management etc. obstancles and ambiguity are inevitable.