Directorate of distance education master of business administration

Strategy Formulation
Strategy formulation involves the choice of appropriate strategy in 
the light of corporate mission and objectives, environment opportunities 
and threats and corporate strengths and weaknesses.
Corporate world uses SWOT analysis in every situation. 
 
Expansion of SWOT is 
S   -   Strength
W  -  Weaknesses
O  -  Opportunity
T  -  Threat
HRM contributes to the choice of strategy by providing strength 
and weakness of human resources.  The threat is also exposed and 
opportunity is provided by training and development.
Environmental 
opportunities & 
threats
Corporate 
mission & 
objectives 
Strategic 
alternatives 
Corporate 
strengths & 
weakness
Personal value 
and aspirations 
strategists 
Role of HRM
Acquiring 
Developing 
Integrating and 
Retaining Personnel 
Choice of 
strategy 
Strategy 
implementation 
Activating strategic 
Structural implementation
Behavioural 
implementation 
Function implementation
    

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Self-Assessment Questions (SAQS)
1.  Explain the objectives of HRM.
2.  Explain the scope and functions of HRM.
3.  State the differences between personnel Management and HRM.
4.  What is role of HRM in strategic management?
Summary
The main objective of HRM is ensuring the availability of right 
people for right jobs so as to achieve organizational objectives effectively.
HRM has many objectives such as i) societal objectives ii) 
organizational objectives iii) functional objectives and (iv) personal 
objectives.  The various sub functions border on legal compliance, 
benefits, smooth union-management relationship, Human Resource 
planning, Selection, training and development, appraisal, placement, 
assessment, appraisal  and compensation.
Though personnel management and HRM in general parlance 
are interchangeably used there are subtle differences.  PM is a routine 
maintenance oriented administrative function whereas HRM places 
emphasis on a continuous development of people at work.  PM takes 
a narrow view of its scope and objectives.  It concentrates mainly on 
improving the efficiency of personnel in isolation of the organization.  
But HRM takes a systems view and attempts not only in making people 
efficient but also in creating proper organizational culture.  HRM is being 
used to develop competitive advantages and therefore its role in strategic 
management is the continuous process of relating the organization 
with its environment by suitable course of action involving strategy 
formulation and its implementation.
Answer Key
1. 
Its objectives are manifold.  They are societal, organizational, 
functional and personal objectives each objective having functions.
2. 
Scope-Acquisition, Development, Maintenance & control.  Functions 

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are managerial and operative.  See the functions from the chart in the 
lesson.
3. 
PM and HRM differences – see 8 points of differences listed in this 
lesson.
4. 
 Strategy formulation –SWOT analysis – HRM is linked with corporate 
strategic management – Strength & weaknesses of HR could be 
transmitted by HRM to the management for strategy formulation.
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