S3 group9 hrm_sonoco - copy

Building a World-Class HR

Organization

To suggest which model to use out of the two alternatives for restructuring the HR

function such that :

It cuts cost of HR

function

Only the best flexible

survive

The right people are in the right

position

Bestembodies Sonoco’s

time ordered principle that

“ people build

businesses”

• 17300 employees in 32 countries

• Packaging Industry is moving to India and China with cheaper labor force

• 10 businesses occupied two segments: industrial packaging and consumer packaging.

• The industrial segment generated 55% of company revenue and employed 11,000 people.

• The consumer-packaging segment’s 6,000 employees produced packaging for food and consumer products and high-density film.

• Explosion in the variety of consumer packaging

• Industrial packaging suppliers are consolidated

To evaluate Sonoto’s current situation, we evaluated its degree of fit or alignment

among all the seven Ss.

• Structure -

Highly decentralized and non-uniform HR before

HR has no strategic role in the organization

Centralized HR Administration aligned to the company goals

• Strategy -

Adaptive to end customer needs

Solution-orientation strategy than a mere physical goods

manufacturing

Key Account Management

Reach to changes in environment and minimize potential

damage

• Systems – Society is becoming technological and

systems driven.

Prior to Hartley,

Divisions with separate systems and no uniformity in HR

practices

Benefits and compensation not used to drive performance

but as entitlement

No succession planning

After Hartley was hired,

Advisory HR council from all divisions and corporate

Performance was measured and linked to pay

Annual succession planning

• Skills -

Skills refer to what a company and its personnel do best.

Sonoco’s core strengths are its market share, brand

value, diversity in products, adaptability and culture

Performance management system and the compensation

system based on the measured performance are the

initiatives to develop skills

Six core competencies: excellence, communication,

teamwork, technical/professional skills and knowledge,

strategic integration, and coaching/mentoring

• Staff -

Reluctance to hold underperformers accountable

New focus on succession planning

Global diverse workforce

• Style –

Management style is not very participative

Leadership is not completely effective as managers are

reluctant to take unpopular decisions

Teams preferred over individual performers

• Shared Values -

Collaborative and team-oriented

Company loyal employees

Ethical and paternalistic

Diminished sense of responsibility

• Centralized Model

– Most HR services

would be handled by

four centers of

expertise.

Divisions to be served

by a pared-down field

staff

Advantages –

Decrease in cost of

driving administrative

and other process

improvements.

Disadvantages –

Restricted

opportunities to align

directly with individual

business’ needs and

Source : HBS Sonoto case , Exhibit 4

• Hybrid Structure –

• Divisions will have direct involvement in staffing, succession planning, personnel programs, compensation and benefits.

• Advantages – Left intact a divisional HR presence on which GMs could rely.

• Disadvantages –

Concern whether changes could be easily driven across the company with this new structure.

Ownership of Functions – Which would be owned by corporate and which would by the divisions?

Source : HBS Sonoto case , Exhibit 4

Based on alternatives available our

recommendation would be to go for a

Hybrid Structure because of the following

reasons –

• Survival of the Flexible – This structure

would be more aligned to the flexible

strategy of the organization and it would

be more equipped to cater to the dynamic

environment.

• Mirroring of HR Organization with that of

Company’s Organization – HR will be

organized into two sectors – Consumer &

Industrial.

• Appropriate systems in place to get the right people in place –Ex Presence of field HR reps, who can provide proactive business-related support, including talent management, succession planning and formal coaching.

• “People build businesses” – By having the right people with the right skills in such a way that they are most beneficial to the organization, Sonoco’s time-honored principle that people build businesses is also being retained.

• Financial Target – As people will get the right development and attention required, their performance will go up and in the long run organizations financial target will be met.

THE END