Understanding Strategic Human Resources at ITC
In order to achieve a sustained competitive advantage in the business environment companies must try to align their human resource strategies with the business strategies of the company. This strategic alignment gives the company a futuristic visioning towards the growth of the company and the ability to adapt itself to the contingencies emerging in the future. Strategic Human Resource Management is done by linking of HRM with strategic goals and objectives in order to improve business performance and developing organizational cultures that foster innovation and flexibility
ITC, being a pioneer in the Indian business area, understands the value of people to the success of the organization and therefore it aptly has a strategic approach to human resource management. Human resource department at ITC follows a proactive approach to future strategic issues instead of being just a Hire and Fire function. The vision and mission of ITC plays a crucial role for designing the annual business strategy that serves as a framework for the year s targets and goals for the company s multiple divisions. The HR strategy for the coming year is also prepared simultaneously along with the business strategy.
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Business level strategies are designed with a motive to fulfill the company s long term corporate strategies which define the direction and force of action at the various business units to realize superior results.
At ITC, Human Resource activities such as recruitment, selection, training and rewarding personnel are done by keeping in view the company's goals and objectives. Alignment of the Human Resource system with the strategic goals and objectives of the firm has facilitated ITC to achieve its fast growth.
ITC believes that their mission to enhance value creation for the stakeholder can only be achieved through the quality and commitment of their people. Therefore to achieve this, they continuously strive to unleash the potential of each individual. They claim to do this by nurturing knowledge, entrepreneurship and creativity. ITC also values ideas and gives people the space to execute them. The ability to manage change proactively and to reinvent continuously without compromising the ideals and values, ITC has managed to become one of the leading business conglomerates in the country.
ITC, through it s people policy, employs some of the most talented people in the country and outside, this strategy gives it the edge over others to achieve it s mission. At ITC the following human qualities are highly respected.
? ? Integrity ? ? Ability to think strategically
? ? Intellectual rigour ? ? High energy
? ? A 'will do' attitude ? ? Creativity
? ? Team skills ? ? Leadership
The strength and weaknesses of the company's human resource can have a determining effect on the viability of the firm's strategic options. Organization's employees are its human capital as they are assets of the company, which have lone term value for the company. There should a Strategic approach to Human Capital planning. The acquiring and developing of staff should be according to their skills in order to meet critical needs and therefore organization culture should be performance oriented.
Create distributed leadership within the organization by nurturing talented and focused top management teams for each of the businesses
Nurturing talent is one of the major objectives for organizations following the SHRM approach towards business, and this same perspective guides the corporate strategy of ITC.
To create a people centric, competitive organization ITC's Core Values are also aimed at developing a customer-focused, high-performance organization which creates value for all its stakeholders. While hiring human resources for the company it is essential that the values that define the foundation of the company are matched with the values cherished by the prospective employee.
This SWOT analysis shows ITC s internal strengths such as their experienced management team, a competitive product line vis- -vis a few weaknesses they inherit. Some of the possible opportunities identified as part of SWOT analysis are the emergent markets for packaged ethnic foods and healthier food products manufactured by the company. Another opportunity is the disposable income of Indian consumers.
Although ITC has several strengths, limitation lies in the fact that the company is very large and could possibly lose focus or have internal conflict problems. A few of the threats ITC must stay aware of are the ease of replication of its product line, the almost pure competition in pricing for its products, and the quickness of technological advances.
Analysis of ITC through VRIO approach
The VRIO approach to human resources was given by Jay Barney in 1991. VRIO framework is resource-based view or an economic tool used to determine the strategic resources available to a firm. The fundamental principle of this approach is that competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm s disposal
If we consider the VRIO framework in ITC s perspective we shall be able to relate the success of ITC according to the VRIO approach. For this study, we shall only consider the resources in terms of HUMAN RESOURCES.
For ITC to create and sustain competitive advantage in the market, it must employ talented and skilled work pool who will be experienced enough to implement the business level strategies by controlling the operations. This is looked after by the Human Resources department, which through its policies and practices, ensures that the human resource employed is fit for the job and is able to create VALUE for the company. Only value-adding resources can lead to competitive advantage, whereas non-value-adding capabilities may lead to competitive disadvantage. To separate the value adding employees from the others companies like ITC have a excellence performance monitoring system in place paired with a reward for performance policy.
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The second question which arises is that is the Human Capital available to ITC rare? To an extent is is, since ITC in itself offers the kind of experience which makes all its employees rare in the industry. The company also visits the best management schools every year to pick up the rarest resource in the country Talent. It trains and develops it s staff at all hierarchical levels to foster competent leaders who will be able to take on more responsibility in the future, this makes it s HR a distinctive resource.
Then arises the question of Imitability. Valuable and rare resources and capabilities are a source of competitive advantage only if competitors have a difficult time imitating them. Indeed, ITC has managed to build a work culture and knowledge capital which is very difficult for other organizations to imitate. Lastly we talk about the last element of VRIO i.e the organization. For people to provide competitive advantage, organizations systems and practices must be exploited to the maximum. This involves a complex task of creating synergies between different departments and units in order to exploit the resources available to the company. The organizational structure of ITC is not the simplest, as it has multiple units across industries and regions. This does lead to confusion and wastage of resources. It is an area where there is room for improvisation as more synergies and harmonies between different business units can create more wealth for the company and its stakeholders.
CHANGING ROLE OF HR AND THE IMPACT OF RECESSION
Traditionally, the role of the Human Resource professional in many organizations has been to serve as the systematizing, policing arm of executive management. In this role, the HR professional served executive agendas well, but was frequently viewed as a road block by much of the rest of the organization. In today s organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives. Strategic partnership impacts HR services such as the design of work positions; hiring; reward, recognition and strategic pay; performance development and appraisal systems; career and succession planning; and employee development.
The role of human resources has been transforming for some time. The shift from "personnel" to "human resources," was accompanied by a call for HR to become a strategic partner with the leaders of the business-to contribute to significant business decisions, advice on critical transitions, and develop the value of the employees-in short, to have a seat at the table.
So the changing role of HR can be summed up as below:
As an employee sponsor or advocate, the HR manager plays an integral role in organizational success via his knowledge about and advocacy of people. This advocacy includes expertise in how to create a work environment in which people will choose to be motivated, contributing, and happy.
The constant evaluation of the effectiveness of the organization results in the need for the HR professional to frequently champion change. Both knowledge about and the ability to execute successful change strategies make the HR professional exceptionally valued. Knowing how to link change to the strategic needs of the organization will minimize employee dissatisfaction and resistance
Strategic approach to HR in the recession
The recession is an opportunity for HR professionals to step and contribute strategically. HR Managers in large firms in today s business climate have to start at the very top of the strategic process. Being proactive is an important element to succeed in the dynamic environment. The recent slowdown has put the human resource in the forefront of all issues. Human resource s responsibility lies in the constant motivation of people who are worried about the ill effects of the slowdown in their lives. It must give reassurance that the company will value the contributions of their inputs at all times.
Effective HRM : key to effective operation of the ITC:
Most of the organization s budget is spent on its people (or their associated costs- accommodation, travel etc.) At the same time, the people are the only thing that ITC has that adds value: all of its activities are dependent on the effective choice, allocation, deployment and motivation of capable people. Effective HRM means that the policies and practices related to the management of HR must be fully integrated with the strategic mission and future of the organization, which is the case at ITC.
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Effective HRM is an activity carried out by all managers with HR section that provides enabling and supporting systems for them to carry out their work.
HRM includes all HR: permanent staff at all grades, short-term staff and consultants
Although ITC operates within the United Nations (UN) Common System rules, Which both provides benefits in terms of clear principles and procedures and provides difficulties in aligning HRM to the specific mission and future of ITC, it is clear that the organization has more scope than is believed in the way that HRM may be managed within those rules.
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