Using HRM Principles in Understanding the Issues at Sonoco Products Company - Case Study Example

Introduction Initially established as the southern Novelty Company in Hartsville in the year 1899, Sonoco Products Company is among the oldest players in the industry. Much like all other organizations that had to continue existing as going concerns from the 19th century into the 20th century, Sonoco Products Company has been through many success and failures. Such has been the trend since the late 1970s. Notably, the organization enjoyed quite a number of successes both financially and as per the industrial standards, during the 1990s. The era of success for the company began in the mid 1980s. During this time, Sonoco Products Company was heavily levered and had quite a booming business in North America. The company’s success has been attributed to the serial acquisitions it engaged in during the mid 1990s. Although much of the business for the company was in North America, the organization had operational divisions internationally, operating in a total of 32 countries. However, the acquisitions had some negative implications. For instance, having the human resources adopt one policy and ideology was quite an uphill task for the corporate human resource managers. This paper endeavors to explain human resource restructuring in light of Sonoco Products Company. Evaluation and analysis of the contextual issues at Sonoco Products Company The company’s issues are many; they range from financial, external forces as well as internal inefficiencies. The organizations human resources function is one of the functions that are not in a good shape. The human resources function has problems has problems within itself. Additionally, the human resources function is being rendered irrelevant by the organizational structure. Fundamentally, the main issue is that the human resources function is not being accorded the significance it deserves. For instance, the function is not linked to the strategic direction of the organization. The fact that the line managers do not report to the corporate Human Resources Manager but report to the general manager instead, is an indication that the personnel function is sidelined. The personnel function is said to be linked to the strategic function via a dotted line. This way, the bureaucratic internal structures limit the relevance of the human resources function (Aladwani 2001). Prior to the second month of 1998, the link between human resource management and the strategic direction was as weak as can be. It was until the coming of Cindy Hartley, the new vice president of the human resources function that links were established between the HRM performance and the strategic goals of the organizations. Apparently, talent management and accountability is a key weakness in Sonoco Products Company since the managers are not ready to monitor and nurture talent among the members of staff. Arguably, talent is one of the most efficient ways of upholding creativity within the organization. Such creativity can be of great benefit to the organization. Employing talent in the workplace can as well foster good relations between the manager and the employee whilst building effective teams (West 2012). In Sonoco Products Company’s case, the lack of effective talent management can be attributed to bureaucracy and ineffective structures. Poor communication is both a cause and a result of poor talent management and accountability. Apparently, the divisional managers are not communicating effectively with the human resource managers. Non-cooperative competition among the departments of Sonoco Products Company is another cause of the human resource function’s ineffectiveness. Typically, successful organizations are associated with coordination among the departments of the organization (Upadhyay 2009). The departments should work like a network and not a patchwork that is in bitter competitions with one another. This weakness was prominent prior to the coming of Ms Cindy Hartley. The human resources department was not embraced as a central part of the organization. As such, there was no link between the performance of the organization and the efforts of the human resources function. This as well contributed to the poor communication between the human resources and the strategic team. Worth noting is the fact that Sonoco Products Company’s personnel was not motivated prior to the coming of Hartley since the general manager attributed success to the systems and processes. Bureaucracy is a root cause of the problems within the personnel department of the organization. Bureaucracy is characterized by rigidity and unnecessarily long procedures (Storey 2007). For instance, divisional managers cannot embrace flexibility as to communicate without following the stipulated order and predetermined sequence. The organization’s structures are in such a way that there is solid communication between the divisional managers and the general manager. It may not be clear why such communication is not existent between such line managers and the human resource function. Perhaps, this is an inference that the human resources function is a subordinate function. Such subordination of the human resource department is associated with inefficiency and ineffectiveness. Other issues within the organization revolve around the fact that there is no connection between performance and the reward systems. The systems of rewarding employees do not recognize the employee’s contribution to the success of the organization. This works negatively on the motivation levels of the organization. The employees are not motivated as their efforts are not appreciated at all (Sims 2007). When Cindy Hartley joins Sonoco Products Company, at the top of her recommendations list is the fact that there should be a link between the human resources strategy and output, and the rewards and compensation systems. This is a way of initiating a people oriented organization. Cindy Hartley is trying to prove the point that the success of the organization has a direct connection to the state of the personnel function. Much like many multinational organizations, Sonoco Products Company experienced resistance to change, in the years before 1995. This is evidenced by the fact that the recommendations of the revolutionist vice president Cindy Hartley are not much welcome by some members of the restructuring group. It is only amid much convincing that the team buys the idea of continuous training and nurturing of skill. This way, the organization develops a breeding ground of future managers. The continuous training is as well considered a weapon of fighting resistance to change (Blyton & Turnbull 2002). Using HRM and OB principles in understanding the issues at Sonoco Products Company The case of Sonoco Products Company can be described and evaluated by quite a number of human resource principles and organizational behavior theories. The major concept of human resource management that can be used to explain the case of Sonoco Products Company is consultative management. According to Cole (2004) bureaucracy has no place in contemporary human resource management. The concept of bureaucracy has long been replaced by such concepts as consultative management. This is to say that Sonoco Products Company would have used its staff in achieving better results if it had replaced bureaucracy. Bureaucracy emphasizes the use and observation of structures. On the contrary, consultative management is a people oriented approach that makes the employee part of the organizations development process. The aspect of teamwork has been explained by Satvinder et al (2007) as a result of consultative management. Arguably, consultative management, also referred to as participative management is the most effective way of achieving teamwork as a way of upholding collective decision making. On the contrary, bureaucracy creates superheroes in the organization. Such perceived heroes make decision making inefficient since all decisions made contain the personal inefficiencies of the authoritarian manager. The fact that Sonoco Products Company did not employ such novel concepts explains why the human resource function was viewed as a lesser department. It as well explains the resistance to change among the employees and divisional managers in the organization. There should be a direct connection between the human resource management and the strategic management. This means that the function, through all members of staff, should be part of the decision making process. The fact that Sonoco Products Company has a small team concerned with decision making and strategic directions is responsible for the inconsistencies within the organization. According to Parikh & Gupta (2010) connecting the employee to the long-term goal of the organization gives such employees a feeling of affiliation. This way, the employees endeavor to achieve positive results. In turn, the organization’s overall performance improves in such a way that it ranks well in the industrial rankings. It is for this reason that Cindy Hartley recommends the establishment of a link between the human resource function and the reward system. Perhaps the most important aspect of organizational behavior that can be employed in explaining the case above is the relationship between motive and behavior. Motive has been described variously as the driving force behind an individual’s will to do something. The motive, or intent as a psychological aspect of human behavior, has been identified as the argument behind the concept of motivation. Mathis & Jackson (2012) explains motivation as being one of the most significant contributory factors when it comes to organizational performance. Motivating the employee can take various forms. Clearly, from the case study of Sonoco Products Company, the employees are not motivated at all since there is no connection between performance and the remuneration. According to Laurent (2006) establishing a connection between the performance of an individual and their payment and reward is an effective way of motivating the employee. Motivation is concerned with the deliberate efforts of an organization, through its personnel function, to influence the conduct of the employees. One of the reasons as to why an organization might perform poorly, according to the explanation given by Huselid (2005), is lack of adequate use of technology. Employing technology can bring tremendous positive changes into an organization for instance; the organization can use technology to improve its communication as well as the efficiency of the employees. Arguably, an employee that is exposed to the use of machines is better placed to produce more than the one that uses his bare hands. In the case of Sonoco Products Company, it is only after Cindy Hartley’s recommendations that technology is embraced. In other words, the ineffectiveness within the organization during the period before January 1998 can be connected to the lack of use of technology. Heneman (2002) points out that continuous training can make an organization’s employees overcome the tendency to resist change. Additionally, such training ensures the presence of continuity within the organization. Training members of the workforce continuously is a good way of ensuring that the present management has people that will replace it when their time is due. Arguably, it is better nurture future managers from within the organization than to train new ones from the labor market. This is because; according to Devanna et al (2007) an employee from within has proper knowledge of the organizational culture and systems. This way, the organization will not have to spend so much money on the training and development of the new managers. Justification of the study in relation to contemporary practice The issues identified in the Sonoco Products Company case are significantly relevant to management practice today. In actual fact, the issues of personnel management encountered in various organizations are quite similar, but vary significantly because of differences in time and context. The nature of the industry in which an organization operates determines the relevance or otherwise of many concepts (Maxwell 2008). The observations that were made from the case of Sonoco Products Company are relevant to contemporary organizational management. For instance teamwork is the most valuable virtue in contemporary management. Much like the aspect of formal and informal groups, teams can be informal or formal. Informal teams are a recommended feature in management today. This is because such teams can enhance morale and creativity within the organization. Additionally, teams are breeding grounds for future leaders (Cole 2004). A team leader, whether formal or informal can be nurtured to become an efficient manager in future. Teamwork is a way of ensuring maximal cooperation and minimal conflicts. As such, contemporary business consultants have given much credit to those organizations that employ teamwork in decision making processes. The connection between individual performance and the remuneration of employees is remarkably important in the contemporary business world since such a practice is the foundation of motivation. In the contemporary world of business, the employee is the most important stakeholder in the organization (Blyton & Turnbull 2002). Contemporary business organizations are people oriented and consider employees the most important resources within an organization. The human resources are considered an invaluable asset within the organization since they are the most difficult to obtain and train. Training an employee to learn and use the internal structures is not easy. As such, the shortcoming of lack of connection between remuneration and performance can be blamed for the poor conditions at Sonoco Products Company. Unlike Sonoco Products Company contemporary organizations embrace consultative management. The bureaucratic management style has been described as the root of many problems within the organizations of the modern world. Actually, the concept of bureaucracy has no place in the contemporary world as it wastes too much time and reduces efficiency. The biggest shortcoming is the fact that red tape management does not encourage creativity and innovativeness (Aladwani 2001). Creativity is the center of attention in the business world today. Such a virtue as creativity can bring into the organization, that which the structures could not have devised in the following century. Related to the aspect of creativity is the factor of technology. Technology, from the case of Sonoco Products Company, is among the top recommendations made by Cindy Hartley. Technology is an integral part of human life in the contemporary world. As such, the management of any company that aims at making headway in the industry must embrace technology. Much like Sonoco Products Company embraced the aspect of cultural diversity and globalization by venturing into other countries, so do the companies in the contemporary world embrace the concept of globalism and diversity. Having people from various cultures in one organization is inevitable considering that everything is global in today’s world (Blyton & Turnbull 2002). Almost all big corporations operate in the global scene. It is not common to find an organization that operates within the borders of one nation only. For better sales and exposure to more market opportunities, all business organizations are embracing globalization as one of the most important ways of accessing affordable labor, capital and markets. Such aspects as globalism affect the human resources function in various ways. For instance, globalism is a way of reaching for varied ideas. Personal opinion on the intervention on Sonoco Products Company There are many ways, in my opinion, through which the case at Sonoco Products Company can be handled. Among the most important ways in which the organization can handle matters relating to the human resources function is through the use of consultative methods of management. Such consultative methods can help eliminate such things as resistance to change. Resistance to change can as well be eliminated through continuous training. Continuous training and instruction are the most effective ways of ensuring that the employees participate in, rather than resisting positive change. Use of talents, proper communication and informal teams are other intervention measures that can help the organization out of the human resources crisis. The second aspect I would recommend is that the human resources function should adopt a hybrid model which, even though it appears expensive, will enable all the branches to come up with policies that are line with organizational philosophy while offering opportunities that suit the circumstances of the branch. Worth noting that for any branched organization, there are differences in the processes and systems of each individual branch. Thirdly, I would recommend extensive use of technology. Such technology would no doubt improve communication as well as the efficiency of the employees. I would further recommend performance appraisal and stable reward systems. The fact that an employee will be motivated as a result of proper remuneration and rewards should form the basis of the concept of motivation within Sonoco Products Company. Reference List Aladwani, A. M. 2001. Change Management Strategies for Successful ERP Implementation. Business Process Management Journal, 7(3), 266-275. Blyton, P., & Turnbull, P. W. 2002. Human Resource Management: Conflicts and Contradictions. SAGE Publications Cole, G. A. 2004. Organizational Behavior: Theory and Practice. London, Thomson Maxwell, J. C. 2008. Teamwork 101 What Every Leader Needs To Know. Nashville, Thomas Nelson Devanna, M. A., Fombrun, C., Tichy, N., & Warren, L. 2006. Strategic Planning and Human Resource Management. Human Resource Management, 21(1), 11-17. Heneman, R. L. 2002. Strategic Reward Management: Design, Implementation, and Evaluation. Greenwich, Conn, Information Age Publications Huselid, M. 2005. The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance. Academy Of Management Journal, 38(3), 635-672. Laurent, A. 2006 The Cross‐Cultural Puzzle of International Human Resource Management. Human Resource Management, 25(1), 91-102. Mathis, R. L., & Jackson, J. H. 2012. Human Resource Management: Essential Perspectives. Mason, Ohio, South-Western Cengage Learning Parikh, M., & Gupta, R. K. 2010. Organizational Behavior. New Delhi, Tata McGraw Hill Education PTE. Ltd Satvinder Kaur Mann, Prem Lal Kashyap, & Santokh Singh Kang. 2007. Plant Pathology: A Competitive Vision. New Delhi, Kalyani Publishing. Sims, R. R. 2007. Human Resource Management: Contemporary Issues, Challenges and Opportunities. Greenwich, Conn, Information Age Publ. Storey, J. 2007. Human Resource Management: A Critical Text. London, Thomson. Upadhyay, S. S. 2009. Compensation Management: Rewarding Performance. New Delhi, Global India Publications. West, M. A. 2012. Effective Teamwork: Practical Lessons from Organizational Research. Chichester, West Sussex, John Wiley & Sons Read More