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Nowadays, strategy is the focal point of all business ventures. It is essential to any successful business. In a nutshell, a strategy means the actions that manager's take to attain the goals of the firm (Mintzberg, Quinn and Voyer, 1995, 57-60). Strategy planning is the process of developing and implementing plans to reach goals and objectives. Strategic planning, more than anything else, is what gives direction to an organization and actions necessary to improve its performance.
The basic organisational requirements are management commitment to HRM, strong human resource force and integrated operations staff administration. The commitment of top management to effective HRM is an important basic organisational requirement crucial to its competitive success. The formulation of business plans should take into account human resource issues. Low top management commitment means that important human resource advice will often be ignored. This gives rise to the need of a strong human resource force at a high level within the organisation. However, the common problem faced by many organisations today is the inadequate influence by the human resource department. If the human resource force becomes too powerful, HRM decisions inadequate for the operational process might dominate. So a balanced integration of responsibilities between operations managers and human resource department is fundamental to the strategic integration.
The pursuing of a coherent range of human resource policies contributes to business success (Tyson, 1995, 210-15). The policies adopted by an organisation are strongly influenced by the economic and institutional environment. An organisation should design
Human resource policies that suit its strategy and technology (Baron and Kreps, 1999, 70-72). Management needs to consciously promote motivating policies, especially concerning salary and working conditions, to reduce dissatisfactions of employees (Kakabadse, 1983).
Why organisations need to change
Change management is need of the hour in todays competitive business environment as the same is relevant through number of research that find change is taking place at an ever-increasing pace, the evidence suggests that most change initiatives fail. For example, recent CIPD research suggested that less than 60% of re-organisations met their stated objectives which are usually bottom line improvement (http://www.citehr.com/15527-change-management-role-hr.html). This is consistent with other published research.
The failure to initiate/introduce effective change can also be reflected throygh high losses, fall in companys market position, removal of senior management, loss of stakeholder credibility, loss of key employees.
Finally, one organisational response to change is one of the most key concepts in the growth and survival of any organisation. Therefore, the concept of change management response will have to be adaptive. For example, in country like India increased competitive challenges due to globalisation and entry of multinationals and the need to be responsive to the changing environment has resulted in emerging organisational models. Some of the traditional organisational models followed functional or matrix lines supplemented by new models. These might rely on project teams, on networks, on virtual structures.
In theory, certain of these newer models, for example virtual and project-based structures, allow increased flexibility to respond to change. However such models are not always introduced uniformly, and in practice often introduce other issues that also impact upon change management, for example ability to share knowledge and to operate efficiently. Also, as more companies rely on these 'new structures', for example, sub-contractors and agency staff, the traditional psychological contract between organisation and employee can no longer be relied upon to elicit employee engagement, motivation and ultimately superior performance, all of which are particularly important in times of change. These 'structures' may also impact effectiveness of communication, which again has implications for change effectiveness.
Issues have been identified in the change management process?
A number of research have identified large number of issues as having negative impact on effective change management. Some of the key issues are identified below, with result to organisational issues and individual resistance to change.
Individual change initiatives are not always undertaken as part of a wider coherent change plan, for example through considering linkages between strategy, structure and systems issues. Therefore a change that considers a new structure but fails to establish the need to introduce new systems to support such a structure is less likely to succeed.
Lack of effective project management and programme management disciplines can lead to slippages in timings, in achievement of desired outcomes, in ensuring that the projects do deliver as planned.
Insufficient, relevant training, for example in project management, change management skills, leadership skills can all impact negatively on the effectiveness of any change initiative.
Communication problem i.e. poor communication has been a serious issues surrounding the effectiveness of in achieving effective change in various ways. For example, imposed change can lead to greater employee resistance.
Finally, lack of effective leadership has been identified as an inhibitor of effective change.
Individual/group resistance to change
Resistance to change can be defined as an individual or group engaging in acts to block or disrupt an attempt to introduce change. Resistance itself can take many different forms from subtle undermining of change initiatives, withholding of information to active resistance eg via strikes.
Resistance to change can be considered along various dimensions:
individual versus collective
passive versus active
direct versus indirect
behavioural versus verbal or attitudinal
minor versus major.
Similarly two broad types of resistance can be considered:
Resistance to the content of change - for example to a specific change in technology, to the introduction of a particular reward system.
Resistance to the process of change. This concerns the way a change is introduced rather than the object of change per se, for example, management re-structure jobs, without prior consultation of affected employees.
Management need to be aware of these different criteria to ensure they respond appropriately.
Suggested reasons for resistance include: loss of control, shock of new, uncertainty, inconvenience, threat to status, competence fears. It is important to try to diagnose the cause of employee resistance as this will help determine the focus of effort in trying to reduce/remove the issue.
What can be done to make change management more effective?
From the issues raised in the section above, it can be seen that change is complex and there is not a single solution. However, a number of key areas of focus emerge.
Effective leadership is a key enabler as it provides the vision and the rationale for change. Different styles of leadership have been identified, for example coercive, directive, consultative and collaborative. These different styles may each be appropriate depending on the type and scale of change being undertaken. For example, when there is a large-scale organisation-wide change a directive style has been identified as most effective.
Appropriate and timely training is frequently identified as key to effective change. Examples of training requirements might include:
Project and programme management skills to ensure change initiatives are completed both on time and to budget.
Change management skills, including communication and facilitation.
Two-way communication with employees (see our factsheet on Managing the psychological contract) and their active involvement in implementation has also been identified as a key enabler of change. Active participation is one suggested means of overcoming resistance to change. However, research has indicated that part of the communication/participation issue might arise from a potential mismatch between what the employer and employee opinions are regarding levels of communication. For example, in a recent study of both employers and employees, employers believed they were involving and communicating with employees at a considerably higher level than was reported by employees.
Finally, linking all the change initiatives within an organisation coherently, rather than completing changes in isolation is vital to ensure that change effectiveness is maximised. Seven areas of activity that make successful change happen - 'the seven c's of change':
Choosing a team.
Crafting the vision and the path.
Connecting organisation-wide change.
Coping with change.
HR's role in change management
People management and development professionals have significant role to play in any change management process. HR's involvement in certain areas was identified as sometimes being the difference between successful and less successful projects:
Involvement at the initial stage in the project team.
Advising project leaders in skills available within the organisation - identifying any skills gaps, training needs, new posts, new working practices etc
Balancing out the narrow/short-term goals with broader strategic needs.
Assessing the impact of change in one area/department/site on another part of the organisation.
Being used to negotiating and engaging across various stakeholders.
Understanding stakeholder concerns to anticipate problems.
Understanding the appropriate medium of communication to reach various groups.
Helping people cope with change, performance management and motivation.
Examples of some organisation:
Tesco plc is a British-based international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, and is the world's third-largest retailer, behind Wal-Mart of the United States and Carrefour of France.
Tesco now controls over 30% of the grocery market in the UK, approximate to the combined market share of its closest rivals, Asda and Sainsbury's. In 2007, the supermarket chain announced over £2.55 billion in profits.
Originally specialising in food, it has diversified into areas such as discount clothes, consumer electronics, consumer financial services, selling and renting DVDs, compact discs and music downloads, Internet service, consumer telecoms, consumer health insurance, consumer dental plans and budget software. It is now entering into the housing market, with a self-advertising website called Tesco Property Market.
Tesco has achieved its current postion due to effective management of change by the HR department and it is clearly visible that HR plays a very important role in HR change managrment.
Asda was formed in 1965 by a group of farmers from Yorkshire, and its activities are still mainly based in the north of Britain. It expanded south in the seventies and eighties, in 1989 buying rival chain Gateway's superstores for £705m. This move overstretched the company and it found itself in deep trouble trying to sell too many different products. It came close to going bust and had to raise money from shareholders in both 1991 and 1993.
In 1991 Archie Norman was recruited from Kingfisher as the new chief executive, and Asda returned to its roots as a food retailer, standing out from the crowd by being significantly cheaper than its three large rivals. This was achieved through concentrating on prices instead of loyalty schemes. This was result of the management efficiency as they felt that there was a need to change in order to survive in morden competitive business. The loyalty scheme was highly successful due role of the HR in successfully managing change.
Pizza Hut has been sponsoring The Simpsons (when it appears on Channel 4, at least) for years, but just recently they've changed their strategy. A few years ago the sponsor's notice was something composed by an advertising executive on autopilot: a laugh-track, a picture of a pizza, and a reassuring voice telling us who it was who sponsored The Simpsons.
They must have read up on marketing psychology in the mean time, because the new branding is a crafty little trick of turning the sponsor's notice into a pseudo-game that consists of a random selection from a set of silly voices responding to the question, "Who's called the Hut?". The unpredictability of the responses makes it quite a lot like the in-joke in the Simpsons opening credits (when something different happens to the sofa every time the credits roll), and the daft voices used are designed to be imitated and for viewers to have fun with. When people make something their own - through imitation etc - that's when it really sinks in.
HRM plays a very crucial role in an organisation. If there is any change in HR management than HR plays a vey important role in the organisation. In other words HR changes require HR to play a very important role in an organisation.
Hence what is necessary in order to survive in today's competitive world is lot of innovation and creativeness on part of organisation. The HR department must be aware of all the possible developments relating to its industry. It is very necessary to adapt to the changes in the technology, technological development in modern times, some of which may be introduce by the company or others by its competitors. So change is essential in order to survive in the competitive business world and to ensure the growth and expansion of the organisation and the same can be effectively implemented through initiation and creavitness on part of the HR. Change is necessary in all industries and is not only limited to the retail sectors.
Can HR contribute to re-engineering process? Discuss and debate. Explain using theoretical concepts and revelant examples?
Business process reengineering (often referred to by the acronym BPR) is the one of the ways in which organizations has become more effective, efficient and modernize. Business process reengineering results in transformtion of an organization in ways that directly affect performance and has a postive impact of its growth and survival.
Why are so many companies still eager to experiment with reengineering, even when they have experienced previous failures themselves? Companies such as American Express and Amoco were able to learn from earlier reengineering failures, and succeed on later attempts. It seems that "experience, more than the possession of the right approach or methodology, is the key to reengineering triumph." (Cafasso, Rosemary, Rethinking Reengineering, Computerworld, March 15, 1993; Pg. 102). This acknowledgement may help explain the increasing interest in reengineering, despite the high failure rate.
Wheatley, on the other hand, describes the appeal of reengineering as a sign of "collective desperation." She notes "when a star is in its death stage, about to collapse on itself, it burns at its brightest, with tremendous energy and fury. Reengineering is the supernova of our old approaches to organizational change, the last gasp of efforts that have consistently failed." (Brown, Tom, De-engineering the Corporation, Industry Week, April 18, 1994; Pg. 18. )
Role of HR in Business Reengineering process (BPR)
HR plays a very vital role in BPR and the same defers from organisation to organisation depending on many factors including Organizational Culture and Dynamics.
Some of the Key Contributions from progressive HR can be
1. Fecilitating benchmarking of New Operating Procedures.
2. Acting as a catalyst to promote smooth acceptance of change
3. As a systems specialist on New Processes, can be of great support in implementation, Training.
4. Communicating to the give clarity.
5. Identification of in house talent to take New responsibilities.
6. Integrate HR plan (Recruitment, Induction, Training) to new processes.
Business process reengineering (BPR) began as a private sector technique to help organizations fundamentally re think how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors. A key stimulus for reengineering has been the continuing development and deployment of sophisticated information systems and networks.
Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing work.
Source: Reengineering guidance and relationship of Mission and Work Processes to Information Technology.
Business process reengineering is one approach for redesigning the way work is done to better support the organization's mission and reduce costs. Reengineering starts with a high-level assessment of the organization's mission, strategic goals, and customer needs. Basic questions are asked, such as "Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?" An organization may find that it is operating on questionable assumptions, particularly in terms of the wants and needs of its customers. Only after the organization rethinks what it should be doing, does it go on to decide how best to do it.
Within the framework of this basic assessment of mission and goals, reengineering focuses on the organization's business processes-the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets. As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modeled, and improved. It can also be completely redesigned or eliminated altogether. Reengineering identifies, analyzes, and redesigns an organization's core business processes with the aim of achieving dramatic improvements in critical performance measures, such as cost, quality, service, and speed.
Reengineering recognizes that an organization's business processes are usually fragmented into subprocesses and tasks that are carried out by several specialized functional areas within the organization. Often, no one is responsible for the overall performance of the entire process. Reengineering maintains that optimizing the performance of subprocesses can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded. For that reason, reengineering focuses on redesigning the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. This drive for realizing dramatic improvements by fundamentally rethinking how the organization's work should be done distinguishes reengineering from process improvement efforts that focus on functional or incremental improvement
Hence the above clearly HR contribution to re-engineering process and show how HR plays a vital role for successful implementation of re-engineering strategies
Some of the examples of success engineering strategies by organisation are:
Ford Motor Company
Ford reengineered their business and manufacturing process from just manufacturing cars to manufacturing quality cars, where the number one goal is quality. This helped Ford save millions on recalls and warranty repairs. Ford has accomplished this goal by incorporating barcodes on all their parts and scanners to scan for any missing parts in a completed car coming off of the assembly line. This helped them guarantee a safe and quality car. They have also implemented Voice-over-IP (VoIP) to reduce the cost of having meetings between the branches.
One of the best examples of the benefit of re-engineering at American Express is the retooled benefits function, according to Kaufman and Burrows. The team "literally re-engineered the entire benefits process," Kaufman says, folding the benefit plans of several operating units into one centrally administered plan that is more economical and still offers a variety of choices.
The HR department learned how to best meet the needs of its internal customers by looking at American Express' own customer service process. With a touch-tone telephone, customers can check their credit card balance without talking to another human being. If they have further questions they can be connected with a customer service representative. http://findarticles.com/p/articles/mi_m3495/is_n6_v39/ai_16097354/pg_2/?tag=content;col1
GTO Inc. is a small company which manufactures automatic gate openers based in Tallahassee, Florida. When the founder died suddenly, the company was in the type of dire straits that would appear to have made it an ideal candidate for reengineering: GTO was losing money on a monthly basis, it lacked a line of credit and suppliers shipped only on a COD basis. Employees were required to work 24 hour shifts to fill important orders and the salesmen were reduced to writing up minuscule orders to supplement their incomes. The new CEO, Chuck Mitchell, adopted "...a strategy made up of small gestures rather than sweeping moves."
These gestures consisted of creating an atmosphere of trust and optimism among GTO's harassed employees; by listening to and adopting their suggestions, improving their health and disability insurance, and when things started to turn around, increasing their pay and distributing bonuses from a profit sharing plan. The salesman were put on salary with with incentives. Acts such as fixing the leaky roof, allowing ten minute breaks, and keeping the coffee machine stocked convinced the employees that that Mitchell was "genuine." The following year, GTO witnessed a cultural and company turnaround. Net profits moved from being in the red to nearly $500,000. This was accomplished by a 9% increase in gross sales along with a 33% decrease in total operating and administrative costs. Employee turnover decreased equally dramatically. As employees began to seek outside education and were promoted from within, the number of returned goods fell.
GTO's dramatic turnaround was a result of many small steps which could be said to foster precisely the "culture of incrementalism" that Hammer and Champy warn against. The focus was on human resources rather than on processes.
When IBM started reengineering in 1992, the guiding principle was to become more customer-centered. Twelve customer relationship processes were identified and used as a basis for the reengineering project. One example is "solutions delivery": a contract between IBM and the customer for a complete IT system, including hardware, software, technical support, consulting services and third party products. The redesigned process moved the responsibility for pricing to the case team, who used "pricing tool" software. This eliminated a nearly two month delay that formerly occurred when pricing was referred to IBM headquarters.
MechanicNet.com is the premier Internet-based automotive aftermarket network and infrastructure for business-to-business transactions and information exchange. MechanicNet.com started reengineering by providing consumers with an unparalleled platform for lifecycle management of their automobile, the company empowers car owners with the ability to troubleshoot car problems, estimate automotive/labor costs and maintain automotive maintenance records. In addition, MechanicNet.com provides mechanics with the ability to develop location-specific Internet web pages, aggregate requests from car owners searching for automotive services and receive group parts and supply buying requests. This promising startup has received coverage in the New York Times, Fortune Small Business, CBS Market Watch, ZDTV, Business Week and Upside.
Three-year relationship has positioned Jetstream as leader in Voice over DSL and next-generation broadband services. Agency has successfully led company through reengineering each critical PR stage, from category definition and company launch to product and service introductions, channel communications, authority leadership marketing, international expansion and pre-IPO positioning. Extensive ongoing coverage in Wall Street Journal, Business Week, Red Herring, Upside, Interactive Week, Network World, Telephony, Telecommunications Magazine, Xchange, America's Network, Internet World, San Jose Mercury News, San Francisco Chronicle, CNET as well a various wire services, online trade publications and radio. Secure over 30 speaking slots annually at major shows.
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