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The area of human resource management today is being supported, developed and understood using a variety of theoretical frameworks. Large numbers of MNCs are using different approaches of HRM for their business model. HRM has become an integrated part of the MNCs and highly influences their success or failure in achieving their competitive goals. Cadbury and Kraft are highly influential companies with large number of people working for them. As in Cadbury is U.K originated therefore they use slightly different approach in HRM then there counter partner Kraft. There are three basic approach used by companies all over the world the best practice (high performances work system), best fit (contingency approach) and resources based view.
According to John storey (1995): A strategic and coherent approach to the management of an organisation`s most valued assets-the people working there who individually and collectively contribute to the achievement of its objectives. John storeys model of HRM has been used widely in the U.K where as Harvard (1984) says HRM involves all management decisions and action that affect the nature of the relationship between the organisation and its employees. Harvard's model which is commonly practised in the U.S is based on central philosophy and strategic vision.
Cadburys approaches to HRM
Cadbury(2010) is a company with a history of 200 years of chocolate making in the UK. The Company has a strong believe that the success of the company highly depends upon the commitment and performances of the people working for it. Cadbury acknowledges that its people are important in achieving its goals. For managing its human resources Cadbury use contingency theory of SHRM which is aligned 'best fit'(Armstrong 2006) approch. In contingency theory of HRM argues that a firm can be effective if its practices and strategy are aligned with other aspects and strategies of the firm. Cadburys SHRM approach helps the company to align with the HRM activities to its business objectives, integrate the policies, practices and activities of the HR department to the goal of the organisation.
According to the Sims (2002) identified four basic approaches for the SHRM such as
- Identifying impact of the company's goal on specific department.
- Identify the knowledge and skill areas which were used to achieve organisational objectives
- Determining the additional human resources requirements in the light of the organisational current human resources.
- Developing specific action plans to meet anticipated human resources.
Cadbury (Cadbury 2010) integrated HR policies and practices with overall business in order to achieve its goals. Company uses different HRM strategies such as "managing for value" programme that aims to increase employees understanding of how the company could be more profitable .hr of the company provided few more programmes such as "working better together" and "growing our people".
Cadbury's Contingency perspective
According (Arthur et al 1994) argues that the contingency perspective is most effective for the HR practices and strategies and should be aligned with other aspects and strategies of the firm. Contingency perspective is also called fit alignment which is divided into two forms vertical and horizontal. The vertical alignment (external alignment) is the level of alignment between the components of the organization's human resource strategy and core features of its business strategy. Horizontal fit (internal alignment) measures the level of alignment among components of the organization's HR strategies such as recruitment, selection, training and compensation.
Cadbury and its emphasis on storey's model of HRM
According to the Storey's model (1985), he suggested four aspects which have been contained in Cadbury's business model as to improve the human resource management.
- HRM is constellation of beliefs & assumption
- The central involvement of line manager
- A strategic thrust informing decisions about people management
- Reliance upon a set of levers to shave the employment relationship
- Managers and workers are recognised as the key resource
- Focus on is people, practices and processes
- The importance of pathway dependency - the integration of HR policies with business strategy is central
- Looking outside the organization to the external environment as a key influencing factor is paramount
- RBV focuses on the institutional level - so there is a constant need to monitor what others do internally as well as externally.
- Incorporates recognition of a range of stakeholder interest;
- Recognises the importance of trade off either explicitly or implicitly, between the interest of owners and those of employees as well as between various internets groups;
- Widens the context of HRM to include employee influence the organisation of work and the associated question of supervisory style;
- Acknowledges a broad range of contextual influences on management's choices of strategy, suggestion a meshing of both product- market and socio-cultural logics;
- Armstrong, M (2006) Human Resources Management Practice, 10th edn,CIPD, London
- Boxall, P and Purcell, J (2003) Strategic Human Resources Management, Palgrave Macmillan, Basingstoke
- Harrison, R (2005) Learning and Development, 2nd edn, CIPD, London http://www.bbc.co.uk/blogs/daveharvey/2010/03/kraft_cadbury_and_keynsham_ent.html
- Ronald R. Sims (2002)
- Story, J (1995) from Personnel Management to Human Resource Management, in storey J (ed) new perspectives on Human Resources Management Routledge, London.
- Taylor, S (2002) People Resourcing, CIPD, London Wernerfelt, 1984, p172; Rumelt, 1984, p557-558
Cadbury always tried to constellate to their beliefs and assumptions, which made them successful and strong in their business attitude.
line managers at Cadbury's had a 'managing people' objective placed within their overall job objectives to ensure that talent management and employee motivation remained a key priority.
Kraft's approach on HRM
From appendix 1, Kraft Foods (2009) highly emphasize on Human Resources management by building an organisational culture which will attract and maintain talented, engaged and committed employees, who will contribute their efforts to achieve strategic business goals.
Kraft has implemented "Resources based view" so that they able to get competitive edge in its human resources management. Resources based view or competitive advantage exists if the resources are valuable, rare, inimitable, non-substitutable or organisationally specific (Wernerfelt, 1984, p172; Rumelt, 1984, p557-558). Kraft has specific training programme which is designed for human resources so that they are able to develop competitive advantage and which can only sustained through continued training, support of organizational culture, selection processes and other traditional human resource practices.
Kraft has recognised key areas of HRM policies which enable them and provides potential for sustained competitive advantage.
Kraft's emphasis on Harvard model of HRM
As Kraft's specific intersets for achieving competative advantage throught its HRM could not have been achievable with out their implimentation of harvard model.
Beer and this colleagues belived that today many pressure are demanding a broader, more comprehensive and more strategic perpective with regard to the organisations humman resources . Harvard model is more compatable for the mordern requirements of the company.
According to the Boxall (1992), the advantages of the model are that it;
On the base of the study of HRM of two companies Cadbury and Kraft, I have concluded similarities as well as differences in their approach of managing human resources. It has been every clear that Cadbury uses contingency theory in order to achieve success where as Kraft successes comes from the resources based view which is more oriented for the competitive advantage. Cadbury has to implement its HR policies and practices in a planned way so that they are able to coincide it with the company's business objectives and strategies whereas in Kraft's assumes an 'inside out' view of the organization and they focus on the market, the product, history or location of the organization which enables them with competitive advantage. Cadbury has to have HR planning at the centre of the formulation and implementation of the organization's strategies. Storeys model provides Cadbury that emphasises which they need it for the integration of business and HR strategies. Kraft's model of Harvard has much more long-term perspective in managing people and consideration of people as potential assets rather than variable costs.
It has concluded both the companies use different models of HRM due differences cultural and strategic approach. Yet both the companies are highly successful and global.