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This essay will be composed of three sections which involves types of staffing arrangement's, strengths and limitations to quality of service (In house, Contracted Out and Outsourcing) and a discussion related to in house verses contracted out and how service delivery may be affected within each avenue. With the expansion in globalization, rapid need for technology, and increased diversity, human resources management has certainly changed in response. Companies need to ensure that they are constantly evolving and changing strategies to keep up with their respective industries and remain competitive.
Globalisation over the past two decades, organisations throughout the world from most the emerging economies and expanding industries have experienced avenues of downsizing, outsourcing, reorganisation and global expansion organically or through strategic acquisitions in order to remain competitive in various markets and ultimately to provide a better service and make a profit. In today's markets CEOs and boards have examined the next level of what their competitive angle will be for the future. These business leaders have quickly learned that human resources or hr departments is no longer just a hiring service or a role that they just have to have to fill positions, they have finally realised the hr function a strategic line of business and need to be treated differently than just another non profitable business line. Human resources has become one of the solutions for helping organisations meet their business goals, deal with changing times and meeting the demands to better serve customers and make a profit. More often today, companies are reaching out for opportunities overseas to maximize their profits and maintain market leadership. Human resources have played a big role of in this avenue, especially in relation to information technology. In today's world of business information technology plays one of the biggest parts in connecting, communicating and aligning company goals with information technology. This task is not an easy one, however it has now become the role of the hr departments to find the correct candidate that can deliver the companies vision through technology on a fundamental level and a strategic level.
Human resources functions are forever trying to meet the needs of the ever so diverse demands of the business with uncompromising deadlines, small budgets and specialised job functions. This makes it very hard for any human resources department to fill these positions. The pressures from the external environments include increased competition, volatile markets, diversified consumer demands and new technology. The world is so uncertain that planning for the future is impossible. This has led to the adoption of more flexible decision making processes that were more suitable for the changing environments. Flexibility means the ability of the organisation to exploit changes in the environment and turn them into opportunities that lead to sustained favourable market positions. Consequently, flexibility implies that the firm must be capable of responding quickly to shifting market conditions and product demand (University of Leicester, Management people and organizations, chapter 15).
There has been many theories put forward in this area. John Atkinson's 'flexible firm' model (Atkinson, 1984) suggests that organisations can design workforces to proactively meet business needs through flexible staffing arrangements. His model comprises of three types of employees: core workers, peripheral workers and subcontractors. Over recent years other have suggested similar models (eg Loveridge and Mok 1979, Handy 1989). Charles Handy argues that companies are rapidly moving away from being labour intensive organizations (The Age of Unreason, Handy, 1989). The future organisations will be one of knowledge-based structures, run by key people at the centre.
Types of flexibility
There are three types of flexibility usually identified.
Numerical flexibility - the expansion or contraction of labour to address market fluctuations through primarily peripheral groups, part time or contractual workforce. Another popular form is franchising.
Functional flexibility - this is achieved through the 'core' workers. These workers are employed on a full time, permanent basis and undertake tasks that are central to the success of the organisation. They do not work to rigid job descriptions but carry out a broad range of duties.
Financial flexibility - many companies associate pay and career progression with individual performance. There is no fixed rate for a job. This is a shift from the traditional 'personal management' to a human resource management approach.
Organisation and management strategy - to be flexible
Flexibility is central to most of the new models of organisation structure suggested by modern management theorists. Most of these theories suggest that organisations need to break up their bureaucratic nature and disintegrate into smaller, autonomous units. Handy and Kanter are two of such people who have proposed such organisational models.
A number of others have come out in opposition to some of these ideas, and particularly to Atkinson's model, such as Anna Pollert who has argued that there is nothing particularly new about flexibility as it is described by Atkinson. Firms have always had to slim down their workforces when faced with difficult business circumstances, and they have always shed subcontractors and peripheral workers first. Thompson and McHugh, 1995 argue that mass production is still active. Industries such as food are adopting global standardised products and marketing. For small companies flexible manufacturing systems are too expensive and they still rely on 'Fordist' type production.
There are several distinct structural types and they need not be mutually exclusive:
Â· Â Â Â Â Â Â Value chain - to provide useful framework for dividing a firm's activities into a set of distinct activities, which add value.
Â· Â Â Â Â Â Â Â Â Modular - to outsource non-vital function, but retain full control of them. It drives down overall cost and enables company to focus scarce resources on areas of competencies. Incorrect identification of core areas would lead to a hollow company and losing of competitive edge.
Â· Â Â Â Â Â Â Â Â Virtual - a continual evolving network of independent companies which are linked to share skills, cost and access to market This arrangement need not be permanent and participating companies need to give up part of the control and be dependant on partners for success.
Flexible organisation is able to continually develop new strategies and adapt to new manufacturing realities. It is not a matter of team-based or matrix or vertical structure. It is the ability to change from one design to another when needed.
Believing that a flat organisation is the answer to survival is not right. The concept of flexible organisation uses the bottom line approach like meeting consumer satisfaction to improve itself. It is not a single model that fits all business situations. If the external environment is so dynamic, then how can the organisation structure be not dynamic in order to survive? Sometimes, a hierarchical structure may just work as well as a flat structure. The issue is how fast the organisation can acquire, process and use information in a timely manner, and how fast the organisation can execute these decisions precisely. A vertical structure can be optimised within a function and when coupled with strong linkages front and back, it can be a potent and flexible organisation too.
How Quinlan should respond to the new challenges
Â· Â Â Â Â Â Â Â Â Horizontal structures - break down the vertical structures and create structures around workflows or core processes. People involved in say, new product development or fulfilment have access to one another. Cross training of employees will give job security as well as giving the functional flexibility. Computer Associates (my present employer) - a leading software vendor uses, a combination of matrix and divisional structures for greater flexibility.
Â· Â Â Â Â Â Â Â Â Special teams - teams can be formed for a special purpose, Quinlan could use this approach for example, marketing a new product line, creating a new product line for next season, new quality initiative in the company etc. These teams can be of a global, virtual nature linked through advanced information technologies. Pepperl-Fuchs Singapore Pte Ltd (one of my previous employers) used this approach when they implemented an enterprise wide ERP system as well as during new initiatives such as TQM, ISO 9001 certification.
Â· Â Â Â Â Â Â Â Â Network approach - Outsource some of the functions such as marketing, R&D to 3rd party companies. Quinlan could therefore concentrate on its core competencies and let another company that is specialized in certain specific areas to do the job. This would give greater numerical flexibility to Quinlan. In Singapore DBS bank (one of the largest local banks) have outsourced their IT services to IBM.
Â· Â Â Â Â Â Â Â Â Part time/contract staff - during seasons of peak demand college students, school leavers could be employed for product sales, marketing, packing activity. This would be cost effective and also make Quinlan numerically flexible.
Â· Â Â Â Â Â Â Â Â Integrated worldwide supplier network - Quinlan should look for suppliers from low cost countries and they should be connected through an internet based supply chain network. To operate efficiently and produce high quality goods, the organisation must have a cost effective and reliable network of suppliers. By having an integrated supply chain network, the level of co-operation with the suppliers could be improved and response to consumer demand can be much faster.
Â· Â Â Â Â Â Â Â Â Look out for new market segments - focus on the younger generation and cater for their needs. Quinlan has been traditionally focusing its clothes towards the adult and affluent market and they neglected the younger generation that was also spending a lot in clothing. The brand positioning has to be re-defined to attract young people and an icon such as pop, sports stars could be used in advertising.
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Fowke, D. (1999), Shaping Corporate Culture, The New Management Network, Volume 12, Number 2