Case: Strategy & Human Resource Management

Background information

Peter Muller, the newly appointed Human Resources Manager of the discount food retailer “ABC”, has just been sent an invitation to the annual management board meeting. The main topic for discussion will be the future development of the company´s business strategy. “ABC´s” current business strategy focuses on cost leadership. However, the corporate management has decided to initiate a strategy shift. Customer needs have changed, they are willing to pay more, and at the same time they expect an excellent shopping experience. The initial findings of market research, conducted in several “ABC” stores, have resulted in the expansion and upgrading of the product range. From Mr. Muller´s point of view, these adjustments must be seen as responses to changes in competitors´ product ranges and ongoing competitive pressure.

Problem

Among the employees, the new strategy is mockingly referred to as, “Better, posher, cheaper”. The management board in charge now wants to discuss the contributions of every single department to the new company strategy at the annual meeting. Based on the contributions of every department, strategic action fields and internal departmental goals are to be derived. All departments are asked to elaborate the necessary steps and measures to support the development of the newly elaborated strategy based on these strategic action fields and goals.

Mr. Muller needs to be well-prepared for this meeting, as the leading managers of the procurement and sales departments still regard the human resources department as subordinate and of little strategic relevance. After studying the conference agenda, Mr. Muller reflects that, “As always, there is no time allotted on the agenda for key aspects of human resources management! Even though all of the other departments are always complaining about skill shortages and the lack of specialists in certain areas. This is going to be difficult. How can we plan to achieve our new strategic goals, such as a new, excellent shopping experience in our branches, if we do not have the necessary skill sets to implement these strategies?”

Questions:

1. Describe the current strategy of ABC.
2. What role does the HR department play within the company?
3. Imagine you are Mr. Muller.
   1. How can you contribute to the implementation of the new strategy and to achieving its inherent goals?
   1. How would you describe to your CEO the measures to be carried out by the HR department in support of the shift in strategy ?