Strategic Human Resource Management in Cadbury Schweppes
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Published: Wed, 07 Mar 2018
The strategic management of an organization’s human resource has been recognized as one of the keys to business success. This particular strategy generally involved the optimization of the employees’ potentials mainly through training and performance assessment. This organizational strategy has been integrated in several businesses mainly to improve profitability, establish stronger customer relations as well as achieve considerable business expansion. Strategic human resource management (SHRM) has indeed been applied to fulfill various important business goals and plans. Hence, major companies including Cadbury Schweppes, have been developing and applying various means on how to strategically manage one of their essential assets.
Cadbury Schweppes is one of the major global players in the food manufacturing sector, specifically confectionery and beverage products. About two hundred countries worldwide are enjoying the company’s world-renowned quality products and brands. The company has been able to expand successfully in different foreign countries mainly through its dedication to quality production as well as effective management and marketing practices. In order to progress further, the company still aims to continue on producing quality brands and products, meeting the needs of its shareholders and operating towards optimum performance. Cadbury Schweppes knows that its achievement to operate globally is attributable to its workforce. Thus, the company has been employing different strategies in order to strategically improve its human resources towards continuous global success.
This study then analyzes how the company applies strategic human resource management it its operations. In particular, focus was centered on the assessment of the company’s strategies for maximizing the potentials, assessing the performance and enhancing the skills of its workforce. This research was conducted mainly to determine the relation of Cadbury Schweppes’ global success to its SHRM practices.
1.2 The Research Background
Strategic human resource management (SHRM) was actually derived from the conventional HR concepts. Due to the growing pressures in business, particularly in the need to become more competitive and innovative, organizations and human resource departments see it necessary to reconsider existing HR practices. The application of the new concept involves the modification of HR policies, provision of training programs, development of performance measurement systems as well as the promotion of the employees’ overall well-being. In turn, the changes in the HR practice then allowed companies to overcome some of the major hurdles in the business sector.
Cadbury Schweppes is among the major companies operating in the world. Aside from multiple branches in several foreign countries, the product lines of the company as well as its market have continuously grown over the years. Along with its global growth and success, the company has constantly upgraded its SHRM efforts as well. The researcher then aims to determine how these HR strategies had contributed to the company’s global achievement. Investigating on this HR topic can stress the connection between workforce and business efficiency. As effective employees have long been considered as essential to good business operations, identifying how the strategic management of human resource can contribute to greater success will then be of benefit to many other companies. The researcher then attempted to achieve this objective by using some of Cadbury Schweppes’ HR staff for information. Using a survey as the research instrument, the data obtained were then analyzed to develop the findings.
1.3 Research Value
Considering the increasing competitiveness in the business sector, organizations are in need of maximizing its resources in order to operate successfully. One of these important resources is the organizational workforce. By means of determining the different approaches related to strategic human resource management, workforce issues encountered by other companies may be resolved. In addition, companies intending to operate of expand on the global level may achieve this goal by assessing and improving their human resource strategies. This research may also be of value to employees as this could encourage business companies in general to give due value to their workforce so as to achieve better business outcomes. This investigative study could also contribute to the human resource sector particularly by increasing awareness on SHRM and the new approaches other companies could apply. Clients or consumers may also benefit from this study as the increased awareness on SHRM approaches can likely enhance both production and service provision of other companies.
1.4 Research Aims and Objectives
This study aims to determine the role of strategic human resource management in the achievement of Cadbury Schweppes’ global growth and success. Below are the specific objectives of this research study:
- To determine the role if strategic human resource management in shaping the development processes of Cadbury Schweppes
- To analyze the performance assessment, training and potential-maximizing strategies of the global company
- To identify and analyze the human resource strategies of the company that allowed it to operate globally
- To relate various human resource management theories to the identified strategies of the company
1.5 The Research Outline
The entire study is divided into five chapters. The first chapter presents the background of the study, the objectives, research problems and its significance. In the second chapter, literatures and published documents pertaining to strategic human resource management and the strategies applied by Cadbury Schweppes are discussed. The research methodology used for this study is discussed in chapter three. Specifically, this chapter focuses on the description of the participants, sampling technique and the research instruments utilized in the process. In chapter 4, the results of the survey are presented. Literatures supporting the findings of the study are also integrated in the discussion section of the chapter. Finally, the fifth chapter summarizes the findings of the research; significant conclusions as well as appropriate recommendations are also included in the final chapter.
Chapter II: LITERATURE REVIEW
2.1 A Brief Historical Background of Cadbury Schweppes
Cadbury Schweppes is actually a company established by a merger involving two of the greatest companies in UK. Jacob Schweppe was the one behind the perfection of the carbonated mineral water manufactured in Switzerland in 1783. On the other hand, John Cadbury established the now world-renowned chocolate manufacturing company in 1824. Over the years, both companies have operated successfully and became household brand names in the British region. It was not until 1969 when these two manufacturing giants decided to merge. Through organic program and acquisition, both companies were able to expand the business worldwide (Cadbury Schweppes 2006a).
As two big companies joined into one, the new company developed and implemented several business strategies that led to its success. For instance, during the middle part of the 1980s, Cadbury Schweppes decided to center its attention on its international brand confectionery and beverages. Through this strategy, the company was able to strengthen its key brand names and even led to the purchase of some other major food brands such as Mott’s, Canada Dry, Trebor, Bassett, Dr. Pepper and Seven Up as well as Hawaiian Punch. The acquisition of other popular brands of the company continued up to the new millennium. In 2000 for example, Cadbury Schweppes acquired the Snapple and Hollywood and even took the second spot in the French soft drink sector when it acquired Orangina. In 2002, the company placed number two in chewing gum production by acquiring Dandy, a Danish chewing gum brand and became the number one company in confectionery at the global level. For $4.2 billion, the company also announced its acquisition of yet another major brand called Adams (Cadbury Schweppes 2006a).
2.1.1 A Brief History and Importance of SHRM
Strategic human resource management is considered as the extension of HRM. While HRM is focused on the theoretical concepts, SHRM is centered on how these theoretical foundations should be implemented. The concept of SHRM was actually brought about by the growing pressures of change. Organizations started to realize that changes in the conventional human resource activities must be carried out. This change would help much organization overcome new issues and challenges related to the human resource concept. In turn, human resource agencies and departments have been active in encouraging HR managers to develop means of applying strategy to the HR function (Niehaus 1995). This then gave rise to what is now called SHRM.
Strategic Human Resource Management (SHRM) is a strategic approach that helps in managing employee relations. This HR concept emphasizes that leveraging people’s capabilities is critical to achieving sustainable competitive advantage. SHRM is actually applied by means of a distinctive set of integrated employment policies, programs and practices. Considering the increasing competition in the working sector, it is important that the employees are equipped with the abilities so as to assist their organization in overcoming such challenge (Bratton & Gold 2003). SHRM gives emphasis on the integration of learning and organization. This means that the conception of learning must be considered by the organization as a purposeful business process (Ruona & Roth 2000). Walton (1999) noted that SHRM is made of the introduction, elimination, modification and directional procedures and responsibilities where all employees are armed with the knowledge, skills and competencies necessary for them to perform various organizational tasks effectively.
Through SHRM processes, employees are able to learn how they can improve their skills and enrich their knowledge, which are very useful in their overall work output. The efficiency of the employees will naturally lead to greater productivity and higher levels of customer satisfaction as well as loyalty. The application of SHRM is also essential for the personal and professional development of the employees, which in turn makes them more confident and committed in their work. The ultimate outcome of SHRM is the attainment of a strong and sustainable competitive advantage out of the company’s workforce. For companies, generating competitive advantages out of their workforces is an important key in becoming globally competitive (McWilliams, Van Fleet & Wright 2001). Schuler, Dowling and De Cieri (1993) noted that in order to successfully compete in the global market, human resources must be deployed effectively.
2.1.2 A Brief History of Human Resource Strategy of Cadbury Schweppes plc and its impact on the company
The human resource strategy of Cadbury Schweppes originated from the company main operation purpose which is to work together to produce brands that others would love. In particular, the company developed a goal related to corporate social responsibility (CSR) in order to achieve this. This goal would direct the company to become socially responsible not only to their consumers but to the people working for it as well. As this goal covers the workforce sector, Cadbury Schweppes develops human resource strategies that are patterned CSR and ethical practices. In fact, one of the essential factors the company uses in its business operations is ethical behavior as well as the establishment of close relations with its stakeholders. The company generally believes that ethical business practices and respect for human rights are core foundation on how the company works and deals with people; the company also claims that good ethics works well with good business, resulting to long term success (The Times 100 2006). These core values then became the main influence for the company’s human resource strategies.
The HR strategies of the company are also influenced by the Quaker values which promote social reform, justice and equality. Thus, from the beginning of its operations, the company has always treated its employees with respect; the company also cares for the welfare of its staff. This explains why the company included sport facilities, parks and housing opportunities for its employees. It is also part of the company’s human resource strategy to inculcate its ethical business culture to its employees by ensuring that all staff members understand the values and behavior the company expects from them; this has been achieved through the company’s â€œOur Business Principlesâ€? statement. The good practice of Cadbury Schweppes was even recognized in 2003 by the Management Today magazine where it was voted as one of the most admirable companies for fulfilling it environmental and community responsibility. During the same year, the company also placed second for the Food and Drink sector in the Business in the Community per cent club index for doing its social responsibilities (The Times 100 2006).
2.2 Human Resource Strategies of Cadbury Schweppes
Over the years, the company has implemented several means to manage its human resources strategically. These strategies include those that maximize potentials, train employees, manage HR risks and assess performance.
2.2.1 Maximizing Potentials
One of the key personnel of Cadbury Schweppes is its managers. Thus, in order to optimize their skills, the company applied various strategic programs. One of which is its Building Strategic Capabilities (BSC) program that was developed in 1998. This program course was applied in order to maximize the potentials of the company’s managers. The program is made up of three important elements. One is that the program course involved the study of real strategic issues rather than hypothetical cases; this made the course content more applicable to actual business problems the managers would encounter. Another important element of this program course was that the process of strategic decision-making is studied from goal-setting to performance-monitoring. This element of the program aims to enhance the managers’ strategic language, in order for them to be equipped with the necessary processes and standards for effective strategy implementation. Finally, this program is also made up of an element, which exposes managers to practical or hands-on training. This element is conducted by letting the program participants interact with the members of the top management. For the past five years since this potential-maximizing program has been implemented, Cadbury Schweppes’ BSC program is still used as the main approach for executive development (Morley & Hepplewhite 2004).
The company has continuously developed programs and strategies that would optimize the skills of its staff. For example, in 2005, Cadbury Schweppes pursued its People Strategy through its Building Commercial Capabilities program. This strategy is a group learning and development activity which is implemented to ensure that the full potential of all employees are realized. The program aims to develop the participants’ marketing and sales expertise as well as their commercial decision-making skills; this is done by studying the standard Cadbury Schweppes marketing and selling technique. A total of 1,000 managers have participated in this program (Cadbury Schweppes 2006b).
Training is an important aspect of the company’s SHRM strategy. Aside from ensuring that all employees have equal access to the company’s training opportunities, Cadbury Schweppes also develops training programs that improve the competency of its workforce. For this year, the company developed Passion for People, a people management training program. This aims to teach the standard approach used for managing people; it is also the goal of this program to refresh such management approach among current employees (Cadbury Schweppes 2006b). Bob Stack, Cadbury Schweppes’ Chief Human Resources Officer, also explained that this program is also conducted for the purpose of improving the drive performance skills of the managers. Furthermore, it is the objective of this training program to instill among employees the values and behavior that make up the company’s culture (Cadbury Schweppes 2006c). The company does not only provide training opportunities to the new employees but also offer regular updates of the existing staff members. This strategy is also applicable in cases when one of its employees becomes disabled. When this happens, Cadbury Schweppes sees to it that an alternative job is offered. Moreover, re-training efforts are also provided to the employee if necessary (Cadbury Schweppes 2006b).
2.2.3 Risk Management
In order to support the SHRM strategies of Cadbury Schweppes, the company include appropriate HR policies particularly in the recruitment, selection and hiring of employees. Other common work issues are also covered by the company’s HR regulations. Through these strategic policies, the company is able to maintain its standards and meet desired business outcomes. Patterned after its ethical business practices, the company’s policies promote equal employment opportunities within its global businesses. Thus, Cadbury Schweppes is a company committed to selecting employees based on their abilities and potentials; it is part of the company’s SHRM strategy to optimize the talents and experience the employees have and help them realize their other capabilities. The company believes that by shaping its HR policies with this ethical commitment, the business will not only employ people of talent but it will also help is establishing a good image in the communities where it operates (International Labor Organization 2002).
In recruiting and selecting employees, it is Cadbury Schweppes’ aim to hire the best people for the position it offers and use methods that are free from bias and discrimination. For employee selection, the company ensures that necessary criteria including skills, knowledge, qualifications and experience of the applicants are clearly defined. Psychometric testing, assessment techniques ad other selection methods should also be non-discriminatory. It must be clearly described why the applicant was selected; for this, records for employee selection decisions are kept and stored. The advertisements of the company for the job positions it is offering should also be patterned after the equal employment aspect. In particular, the company must ensure that the advertisements present enough opportunities that most people can apply for. Moreover, these advertisements must reach even underrepresented communities and groups (International Labor Organization 2002). In order to improve its selection process, the company had also recently used an online system for its testing procedures. An electronic version of its psychometric tests has been installed so as to make this vital phase of selection faster and more efficient (Graduate Recruiter 2006).
The risks involved in human resource management are also controlled by Cadbury Schweppes through relevant policies. For instance, the company follows a compensation structure which is not influenced by the employees color, race, ethnic origin, gender, marital status, religion, disability or age. The career development of the employees is also dependent solely on their merits and abilities. The access of the employees to training is also covered by the company’s policies. Specifically, regardless of the employees’ race or origin, all employees of Cadbury Schweppes have equal access to training. Moreover, if certain employees are in need of educational or skill support, the company provides them with the necessary training; this would allow them to progress equally with other employees (International Labor Organization 2002).
Fairness and equality are also part of the company’s policies used for handling work issues, grievance matters and discipline. When such issues arise, the company ensures that the situations are assessed fairly and on the same basis as with similar cases. For bullying and harassment, the company also requires all its business units to develop clear guidelines that would help manage these human resource problems. These ensure that the employees are aware on how to report and address these matters. The development and use of these guidelines also help these issues from happening (International Labor Organization 2002).
Aside from preventing HR-related risks through policies, the company also develops helpful programs that would promote the well-being of the employees. For example, the company conducts education programs for the employees’ health and nutrition; whole-family health management schemes are also implemented. In order to support these programs, the company also provides nutrition-oriented on-site cafeterias. Medical facilities are also made available in the company to meet the employees’ basic safety and health requirements. Aside from the employees’ physical well-being, their mental health is also cared for; this is done through the provision of counseling services. This aims to assist the employees in handling personal and work-related issues (Cadbury Schweppes 2006b).
2.2.4 Performance Assessment
The SHRM application of the company also involves the assessment or measurement of the performance of its employees. Specifically, the company uses a two-part performance measurement system. The line manager is the one in charge of assessing the individual performance of the employee every half and end of the year. Clearly developed performance objectives are used for the evaluation. The line manager presides a formal meeting with the employee to be assessed; during this time, the set objectives set at the beginning of the year is documented by the line manager and signed by the employee (Cadbury Schweppes 2006d).
The utilization of a performance measurement system at Cadbury Schweppes allowed the company to fulfill its goal of giving due value on its employees’ development, growth and performance management. Through this system, the company is able to recognize and reward the employees who have displayed exemplary performance and gave much contribution to the company’s success. Having a designed system allowed the company to apply a consistent approach for appraising the employees’ performance, even for those working in other international offices. This approach is composed of tools that facilitate the employees’ career development and personal growth; Reward programs are also included. These programs generally help in motivating the employees to contribute more for attaining business success (Cadbury Schweppes 2006e).
The managers of the company are also assessed using this system. Specifically, the company makes use behavioral factors that support its global leadership needs, which include accountability, adaptability, aggressiveness, forward-thinking capability, motivation, collaboration, teamwork and company values. A separate assessment process is also used by the company in order to evaluate other potentials of its managers; this enables the company to identify other roles its managers could perform. Due rewards are also provided to the individual based on the outcome of his or her performance appraisal (Cadbury Schweppes 2006d).
Aside from the individual performance of the employees and managers, the overall performance of the business in relation to the people it serves is also assessed. For this, Cadbury Schweppes uses the climate survey tool that has the ability to identify the relation between overall business performance and employee engagement. This tool was initially used for the company’s 10,000 global managers in 2004 and then applied too all employees the following year (Cadbury Schweppes 2006d).
2.3 Impact of the company’s HR strategies
The use of multiple strategies related to SHRM application has generally been beneficial for Cadbury Schweppes. The performance measurement system of the company for example, motivated the employees to work their best. This finding was further stressed when a study finding showed that almost 90% of the company’s global employees are proud to be employed by Cadbury Schweppes. The survey conducted by the company also showed that the employees are highly committed and engaged to good work performance. The commitment of the employees represents the employees’ attachment to the company while engagement indicates the level of effort the employees are willing to give for the company; they key factors have been directly related to the survey’s key areas. The findings clearly showed that Cadbury Schweppes’ succeeds globally through its employees’ engagement and commitment, which were brought about by its HR strategies. The outcome of the survey was further stressed by the employee turnover records of the company. As of 2003, the turnover rate was at low level of 2.5% at an annual basis; executive population has also dropped minimally from 180 to 165 in 2003 to 2004. The number of women working in the company on the other hand had increased from 11% in 2003 to 13% in 2004. Despite the promising outcome of the survey, the company sees it necessary to continuously improve the level of engagement employees have for good performance (Cadbury Schweppes 2006e).
The performance appraisal system also made the employees more aware of what the company expects from them; this strategy also encouraged the employees to constantly seek ways on how their performance can be improved. The utilization of the performance system has also been helpful for the company as it becomes more knowledgeable with the operation areas that need improvements (Cadbury Schweppes 2006d). In general, having a performance appraisal system in the company’s SHRM strategy helped it to become proactive in maintaining its good business practices and in developing ways on how to be a better company.
The training and programs of the company has also been showing positive outcomes. Its communication-related programs for example, have been able to enhance the employees’ communication and engagement level. These skill developments in turn, enabled the company to accomplish several collective bargaining agreements. The SHRM efforts of the company also encourage share ownership among the employees. Specifically, the HR strategy of Cadbury Schweppes made its all-employee share plan arrangements accessible to its employees in UK, US, Spain, New Zealand, Mexico, Portugal, Netherlands, Germany, Australia, France and Ireland. This achievement helped in bringing the company’s global employees together (Cadbury Schweppes 2006b).
The use of ethical practices in the recruitment and selection of the company’s employees has also been of benefit especially in ensuring the high standard performance of the staff. Improving the means of recruiting through information technology systems has also helped the company in short listing the best applicants. Since this development has improved the speed of the of the recruitment process, the company has more time to assess job-related exercises. The improved psychometric test allows Cadbury Schweppes to gain information that emphasize the candidates’ distinct abilities (Graduate Recruiter 2006).
Chapter III: RESEARCH METHODOLOGY
Strategic human resource management has been recognized by various companies as an important factor for achieving business success. Cadbury Schweppes is among those major companies who have long been applying various human resource strategies to achieve good business outcomes. This research was then conducted with aim of identifying the role of SHRM in the achievement of global success using the case of Cadbury Schweppes in UK. In order to achieve this research aim, the researcher used the descriptive method of research. A total of 30 respondents from the company’s human resource department were selected in random. The survey questionnaire, structure in Likert-format, served as the main research instrument for this study. In addition to primary information, the researcher also used books, journals and other literatures as sources of secondary data. By means of weighted mean computation and the Likert scale, the results of the survey were then analyzed; relevant literatures were used to discuss these results.
3.2 Data Requirement
In order to achieve the objectives of this research, the researcher would need data that would describe the role of SHRM to the global growth and success of Cadbury Schweppes. For this, the researcher would have to contact people who are knowledgeable of the HR strategies developed and implemented by the company; people who are aware of how these strategies had impacted Cadbury Schweppes’ would also be helpful in answering the needs of this study. Thus, the researcher saw it appropriate to use some of the human resource staff from the company. Considering their participation and experience with these HR strategies, they would be able to provide the data required of this study.
3.3 Research Design
In this research, the descriptive method was utilized. The purpose of employing the descriptive method is to describe the nature of a condition, as it takes place during the time of the study and to explore the cause or causes of a particular condition. The researcher opted to use this kind of research considering the desire to acquire first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study. According to Creswell (1994), the descriptive method of research is to gather information about the present existing condition.
This research method is advantageous for the researcher due to its flexibility; this method can use either qualitative or quantitative data or both, giving the researcher greater options in selecting the instrument for data-gathering. The aim of the research is to determine the role strategic human resource management in the global growth of Cadbury Schweppes; the descriptive method was then appropriate for this research since this method is used for gathering prevailing conditions. The research used human resource management employees as respondents from Cadbury Schweppes based in UK in order to gather relevant data; the descriptive method was then appropriate as this allowed the identification of the similarities and differences of the respondents’ answers.
3.3.1 Research Philosophy
In order to carry out the research, the researcher ensured that a certain research philosophy framework is followed throughout the process. In particular, as this study will make use of human participants for data collection, ethical considerations were taken into account. This is in line with the researcher’s aim of carrying out the entire process ethically. Among the significant ethical issues that need attention include consent, confidentiality and data protection.
Securing permission and gaining the consent of the participants for this study is an important ethical consideration. In order to do so, the researcher relayed the aims of the research clearly to all participants. Each participant was asked to accomplish a consent form, stating in detail all the activities involved as well as the purpose of the study. The reasons why the human resource staff of the company was selected as participants were also stated so as to enable the selected participants to connect the aims of the research with that of the participant qualifications. In the consent form, the researcher also discussed in detail all the treatments or procedures to be done in the process. The possible risks that may be part of the research were also discussed with the participants in orde
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