What is strategy?
The Oxford English Dictionary defines strategy as: "The art of a commander-in-chief; the art of projecting and directing the larger military movements and operations of a campaign." Take out the military references and you have a definition that implies taking care of the big picture in a systematic way. Organisational strategy generally amounts to an organisation making a statement about its business direction, where it aims to go and how it is going to get there. It then defines a framework within which important business issues can be addressed.
A strategy might contain the following elements: a plan or a conscious set of actions; a set of goals, such as better customer service or the development of a new product; policies on how actions should be carried out; and values that help determine which goals take priority.
It is perfectly feasible for a producer of dog food to have a business strategy to become a producer of high-quality chocolate
Where does people management and development fit in?
This is the billion-dollar question for human resources managers. Is an HR strategy developed to help an organisation achieve its business strategy? If you make sweets and your strategy is to become a producer of quality chocolate, do you develop an HR strategy that aims to develop people in quality chocolate production techniques? Or do you take the view that you cannot become a high-class producer of chocolate unless you know that you have the talent available to achieve such a goal? According to Michael Armstrong and Phil Long in their book, The Reality of Strategic HRM, the strategy "aims to provide a sense of direction in an often turbulent environment so that organisational and business needs can be translated into coherent and practical policies and programmes. Strategic HRM should provide guidelines for successful action." HR strategy is of course about managing people and someone has to take responsibility for deciding and directing policies and practices to do just that. Such policies will be of little value, however, unless they help to move the organisation towards business objectives. So if your business objective is to produce quality chocolate, it is not a good idea to have a bonus scheme linked to quantity or to provide training in cake-making.
Knowledge of your workforce – how skilled it is and how receptive it will be to learning new skills – will inform how, or even if, you will be able to achieve your business objective. It is perfectly feasible for a producer of dog food to have a business strategy to become a producer of high-quality chocolate. But it may take time to achieve unless the firm has staff who already know about chocolate as well as dog food.