Presentation F& HR

7/31/2019 Presentation F& HR

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Function Level Strategies

Presented By :

11MBA020

11MBA022

11MBA028

11MBA034

Financial Strategies

&

Human Resource Strategies


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Most of the time, Strategies should not be

Formulating strategies at all; they should

be getting on with IMPLEMENTINGStrategies they already have

- Henry Mintzberg


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Financial Strategies


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Financial Strategies are related to several Financing

Concepts like

Acquiring needed Capital/Source of Fund

Developing projected Financial budget/statements

Management/Usage of Funds

Evaluating the worth of Business


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Acquiring needed Capital/Source of Fund

Successful Strategy implementation often requires additional

Capital.

Basic Sources of capital for an Organization are Debt & Equity.

Proper Ratio of Debtmust maintain by organization in short

earning period or in long period Too much debt in Capital Structure resulted in Stockholder return

& Company Survival.

Special Stock is issued to finance strategy implementation ,ownership and control of the enterprise to avoid of hostile

takeovers , mergers and acquisitions.


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Major Factor for Strategies Formulation :

Capital Structure

Procurement of Capital & Working Capital Borrowings

Reserve & Surplus as Source of Funds

Relation ships with lenders, Banks and Financial Institution

Most of the company may rely on External borrowings oranother may follow policy of Internal Financing.


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It allows an organization to examine the expected result of

various action and approach.

E.g.

1. To increase promotion expenses by 50 % to support a market

development strategy

2. To increase salary by 25% to support a market penetrationStrategy

3. Sell common Stock to raise capital for Diversification.

Company today are being much more attentive in projectedFinancial Statements to Reasonably rather than too

optimistically project future expenses and earnings.

Developing projected Financial budget/statements


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There are almost as many different types of Financial budget as

depends on Organization.

Cash budget s, Operating budgets, Sales budgets, Profit budgets,

fixed budgets, flexible budgets , Variable budget s and Divisionalbudgets

Limitation with Budgets:

1. Over budgeting and Under budgeting cause problems.

2. Financial budget can become a substitute for Objectives.

3. Budget can hide inefficiencies

4. Budget are sometimes used as instrument of domination that

result in frustration and other negative impact.


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Management/Usage of Funds

The important factors regarding which plans and policies are to be

made are:

Capital investment Fixed asset acquisition

Current asset

Loans and advances

Dividend decisions

Relationship with shareholders

Management Funds have to made are :

System of Finance

Accounting and Budgeting

Management control system; Cash, Credit and Risk management

Cost control and reduction and Tax Planning


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E.g.

Gujarat Ambuja Cement , Currently a highly profitable cement in

the Country , has achieved tremendous financial success primarily

on the basis of its policies of cost control. This Company has beenparticularly successful in maintaining low cost for power, which is

a major input in cement manufacturing.

The priorities of management may often conflict with those ofshareholders. It is the responsibility of the strategies to minimize

the conflict of interest between management & Shareholders.


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It is Central to Strategy implementation because integrative ,

intensive, and diversification Strategies are often implemented

by acquiring other firm.

The various methods for determining a businesss worth can be

grouped into three main approaches:

1. Determine Net worth/Stock holders equity . After calculating

net worth, add or subtract an appropriate amount of goodwill

and over valued or undervalued assets.

2. Measuring the Value of Firm. A five year average profit level

could also be used.

Evaluating the worth of Business


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3. Letting the market determine a businesss worth, involves three

methods.

a. Base the firms worth on the selling price of a similar Company.b. Price earning ratio method.

c. Outstanding Methods


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Human Resource Strategies


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Strategies responsibilities of the human resource manager

include assessing the staffing needs and cost for alternative

strategies proposed.

Linking Company and personal benefits is a major new strategicresponsibility of Human Resource managers .

Other new responsibilities for human resource managers may

include Establishing and administering an Employee Stock

Ownership Plan (ESOP) Human Resource Problems that arise when business implement

strategies can usually be traced to one of three causes :

1. Disruption of Social and political structures ,

2. Failure to match individuals aptitude with implementation task

3. Inadequate top management support for implentation activities


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Managers and employee may become engaged in resistance

behavior as their roles , right , and power in the firm changes.

Matching the strategies is difficult task , Commonly used that

matched exact with the situations are to be implemented includetransferring managers , developing leadership workshops, offering

career development activities , promotions, job enlargement and

job enrichment .

Best methods for preventing and overcoming human resource

problems in Strategic management is to actively involved many

managers and employees as possible in the process.

Although its time consuming ,this approach builds understanding,trust, commitment and ownership and reduce resentment and

hostility.


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In a growing number of organizations, Human

resources are now viewed as a source ofcompetitive advantage. There is a greater

reorganization that distinctive competencies

are obtain through highly developedEmployee Skill, Culture and management

process and System.

- Charles Greer


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An organizations recruitment ,selection, training , performance

appraisal and compensation practices can have a strong influence

on employee Competencies .

Recruitment and Selection

Training

Appraisal of Performance

Compensation


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Strategic Role of Human Resource Management

The prominent areas where the human resource manager can playstrategic role area as follow :

1. Providing Purposeful direction :

Goals of an organization states the very purpose and justify itsexistence.

2. Creating Competitive Atmosphere :

Cost leadership and Competitive Strategy are two important way toachieve it .

3. Facilitation of Change :.

HRM will have to dedicate more time to promote changes rather

than to maintain the status quo.4. Diversion of Workforce :

Its observed as Male- Female, young old, skilled unskilled. Notonly money but Non Financial incentives will play major role inmotivation of work force.


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5. Empowerment of Human resources:

It involves giving more power to those who , at present , have little

control what they do .

6. Building core competency :if the business is organized on the basis of core competency , it likely to

generate competitive advantage. It need creative, courageous and

dynamic leadership having faith in organization's human resources.

7. Development of works ethics and culture :

As changing work ethics requires increasing emphasis on individuals

and Groups. A vibrant work Culture will have to be developed in

organization s to create an atmosphere of trust among people and to

encourage creative idea by the People.


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It's not necessarily size that matters,

it's how fast you move that

implement.- Bryan Clay

Presentation F& HR

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