The paper "Building a World-Class HR Organization - Sonoco Products Company" is a perfect example of a management case study. In the advent of globalization, many organizations across the globe were compelled to change their business strategies in order to conform to the new trends in the world market. HR management practices had to be integrated moving away from the traditional way of doing business while defining new roles that could sustain the organization’ s business activities (Moulden, 2007). Sonoco Product Company is one among many companies across the world that was highly affected by globalization coupled with new changes that the packaging industry was experiencing.
Owing to this fact Sonoco opted to change its business strategy to become a world-class HR organization. This paper is focused on analyzing the changes in the packaging industry; impacts of the changes on Sonoco business strategy; identifying the objectives for implementing change at the company; determining the success of change; the sequence of change implementation; the appropriate organizational structure; and change sustainability at the company. Situation Analysis The packaging industry was booming while also undergoing rapt changes that were initiated by increased customer demand and globalization.
The industry earned substantial revenues from consumer packaging. Metal and glass packaging was being supplemented by durable and cost-effective plastics particularly in foods and cosmetics industries (Kotelnikov, 2001). By late 1990s globalization took centre stage across different industries resenting new opportunities and challenges; for instance, most heavy manufacturing firms were relocating from their home countries where the cost of labour was high to countries with low labour costs. In this regard, the US manufacturing firms moved to China and India and capitalized on overseas investment. The packaging industry was growing at a tremendous rate, between 1998 and 2000 the market share of the five biggest packaging firms in the US had integrated from 40% to 60%.
The market dynamics were evident, for example, consumer market segmentation was real and products were geared towards satisfying distinct customer preferences especially in the food and beverage industry. The packaging had largely used for wooing and retaining customers and thus it was regarded to be more influential than advertising (Kotelnikov, 2001). Owing to this fact, it was essential for packaging firms to be highly equipped with the necessary expertise and technologies to innovate and produce packaging materials that conform to market demands for them to maintain their market positions. Following the above observation, packaging firms invested heavily in sophisticated equipment for them to aptly handle random changes in product designs.
The one-stop-shop concept was now becoming the norm within the industry and most packaging manufacturing firms consolidated their stables of suppliers (Levitt, 2003). It was established that having fewer suppliers, the manufacturing company shortened the initial-packaging-concept-to-market-delivery cycle. Impacts of the changes in packaging Industry to Sonoco’ s Strategy The traditional and potential customers of Sonoco were companies like Procter & Gamble and Nestle.
Sonoco originally operated to satisfy the needs of their major customers; however, with regard to changing trends in the industry, Sonoco had to re-strategize its business operations to focus more on the end consumer while also keeping in mind their major customers (Ulrich & Lake, 2004). In this regard, Sonoco had to not only understand what their main customers wanted but also instead produce packaging materials that the consuming public wanted (Novo, 2008).
Consequently, because of the new dynamics in the industry, it was essential for Sonoco to employ coordinated marketing strategy where a single point of contact within the company would coordinate the business needs of the company’ s major customers (Melcrum, 2006).