HRM Case Study


Topic: Building a World Class HR Organization

The second option (the hybrid organization model) made more sense particularly in terms of allowing greater flexibility within the organization. Flexibility is what Sonoco desperately needs to redeem its declining fortunes in today’s highly dynamic era of globalization (Scullion & Starkey, 2000). Under this approach, divisions would have some degree of direct involvement with various HR functions, including staffing, personnel programs, succession planning, and compensation (Thomas, Groysberg & Reavis, 2004). Corporate HR would assume responsibility for HR planning, strategy development, as well as its implementation. At the divisional level, the HR issues to be addressed include rolling out initiatives, implementing HR activities, and performing consulting services. Under this arrangement, the element of flexibility would be enhanced because managers would be able to liaise with both divisional HR staff and corporate HR for assistance. Thus, the new model would lead to the creation of a strategic link between businesses and corporate HR functions. This would create a flexible environment in which Sonoco would be able to respond quickly to changes in the business environment while at the same time bringing divisional-level strategies in tandem with overall corporate strategy. Moreover, organizing the company under two sectors (industrial and consumer) would create a flexible framework through which changes in customer preferences could easily be accommodated.

The hybrid organizational model would also be better in terms of ensuring that the right people are put in the right positions at Sonoco (Thomas, Groysberg & Reavis, 2004). For a long time, the company faced challenges in this area. For example, Hartley’s HR staff demonstrated that they were strong in aspects of employee relations as well as labor but tended to encounter difficulties in their efforts to make the right decisions in relation to compensation and benefits. By facilitating the involvement of divisions in various HR functions, Sonoco would be creating numerous opportunities for various HR professionals to work in areas where they were best suited. The same case applies to the creation of the industrial and consumer sectors. Such a move would greatly encourage HR staff to develop competencies that are relevant for a specific sector. More specifically, the deployment of field HR representatives at the sector level would be informed primarily by competence, experience, and talent. Similarly, HR representatives would have their roles and responsibilities expanded to facilitate the achievement of different goals such as succession planning, talent management, and employee relations. No longer would HR be viewed as a backroom operation that only performs a tactical role of protecting the front-lines (Thomas, Groysberg & Reavis, 2004).

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In terms of meeting financial targets, the hybrid model would perform better over time. It would facilitate the consolidation of administrative functions in the long run, leading to economies of scale. By focusing on the entrenchment of appropriate systems aimed at getting the right people in the right places, productivity would drastically improve and employee satisfaction will increase. Other related benefits that will contribute towards double-digit returns include decreased turnover and reduced waste. The ongoing basis on which corporate-level HR function would facilitate the implementation of high-level initiatives in a manner makes the hybrid model the best choice for Sonoco. This is because it would allow field HR staff to offer suggestions on ways of making the arrangement work best for the division thereby profoundly contributing to the meeting of financial targets on a long-term basis. At the same time, the hybrid organization approach would place all critical HR processes at the point where corporate-level strategy implementation meets day-to-day business operations where they should generate the highest returns. The overall effect for Sonoco would be improvement in operations as well as cost reductions.

Sonoco’s philosophy that “people build business” is best demonstrated by the hybrid organization model. This is because it would promote the practice of constant engagement among employees during planning sessions. It would also create a platform where employees are in constant interaction with general managers as well as other divisional personnel. Such interactions would trigger awareness regarding business needs, and by extension, the kind of HR support that is required to meet those needs. Moreover, they would create an environment where employees receive the attention they need to maintain focus on the realization of the results that the organization wants. This proactive approach would enable the company to respond appropriately to business needs. Lastly, the approach would give Hartley the best opportunity to achieve the three goals she has set her eyes on, namely changing HR performance to make it less mechanistic, creating an employee development strategy, and developing a succession planning process. Of specific importance would be the HR Council that Hartley gave the responsibility of ensuring that all HR objectives were aligned with the company’s culture. The hybrid model would give Hartley an opportunity to avoid radically altering Sonoco’s desired culture to the point of alienating employees. At the same time, the measures to be put in place would facilitate the realization of the company’s financial goals as well as long-term strategy of establishing a HR function that plays more of a strategic role as opposed to a tactical one.

 

References

Scullion, H. & Starkey, K. (2000). In search of the changing role of the corporate human resource function in the international firm. The International Journal of Human Resource Management, 11(6), 1061-1081.

Thomas, D., Groysberg, B. & Reavis, C. (2004). Sonoco Products Company (A): Building a World-class HR Organization. Boston, MA: President and Fellows of Harvard College.


 

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