Accessible text version of a thirteen-slide presentation. Each heading below is one slide, in order.
LER 565, Week 1: Introduction to Strategic Thinking and HR. Instructor: Ryan Lamare.
Five assumptions frame the course. Strategy is everywhere. You must consider others. Self-interest is rational. HR is strategic. General strategy shapes HR strategy.
Strategy is studied across three traditions: business schools, labour relations, and economics. This course is a hybrid that sits at their intersection.
HR has shifted from an administrative function to a source of strategic advantage. Each week, we will tie key strategic elements back to HR.
Two routes are usually offered. Best practices: a universal, one-size-fits-all approach. Best fit: an approach matched to the firm's values and culture. Most managerial thinking on HR stops here.
Game theory adds five ideas. Consider the other side. It is never a unilateral decision; it is a broader game. It combines economics and psychology, and mixes art and science. Everyone has strategies and payoffs. Everyone tries to give their best response to others.
Two of many applications. First: HR trapped in a cycle of bad policies is a prisoner's dilemma, which settles at a single equilibrium, marked with a red ring. Second: HR and management needing to align is a coordination game, which has two equilibria, shown as two rings. Recognising that every player pursues self-interest gives power and respect to overlooked actors in HR.
On balance. Pros: it explains real behaviour and crosses every discipline. Cons: it relies on mechanistic assumptions and is often better in theory than in practice.
Game theory assumes mutual awareness: each side's choices affect them both, and each side knows that the other knows it. Related media: "A Common Knowledge Example" (canvas.illinois.edu).
An equilibrium is the cell where neither side wants to switch. There is not always only one equilibrium, and it is not always optimal. Related media: "The Battle of Wits" (canvas.illinois.edu), the equilibrium when one side knows the truth.
Games vary along four axes: sequential versus simultaneous; zero-sum versus non-zero-sum; single play versus repeat play; complete information versus incomplete information.
Five counter-intuitive results. One: it is better to be third than first or second. Two: the leader should imitate the follower. Three: success can mean letting competitors win. Four: tying your hands gives you power. Five: not playing can mean winning.
Where we land, and what comes next. Week 1 gave us two things: the strategic lens — it is never a unilateral decision, so always read the other side; and game theory, with its players, payoffs, and equilibrium. These are the lens; next we start solving real games. Next week: sequential and zero-sum strategies and their applications to HR.