The case analyses a period of an approximated 100 years of Sonoco company existence as an industrial and service provider company. Sonoco generated about 75 percent of its revenues from consumer packaging and the other remaining 30% from Industrial packaging. The company was advantaged to have a large pool of human resources and readily available distribution networks, as well as sound organizational cultures. These increased competitive advantage in early 1980s where it effective outcompeted its global competitors. The company came under threat during 1990s.
In this case study, Sonoco Product Company analyses and categorizes key challenges the company was facing while it strived to grow into a world class business venture. The Company decided to revise its organizational structure in order to cut down the costs of operating and other internal volatilities. The reviews were careful performed and product production framework, as well as human resources management structures were reformed to facility smooth growth in the competitive and ever-changing packaging industry in the world. The human resources have been the one of the key challenges facing Sonoco since its inception times. For example when Cindy Hartley came in into the company, the human resources functions were totally in a mess. This initiated her to rejuvenate the services and align them with the Human Resources processes so as the business goals within Sonoco could be realized. Cindy re-engineered a cost effective HR strategy that include a new management system of 360-degree feedback that ensured transparency and evaluation in task performance as well as management. Further, Cindy brought in coordinated tasks in which performance was goal oriented. She replaced the eighteen job grades with a band of five salary grades. These included succession planning, talent management, and leadership developments. She brought in two new Human Resources model that included, the centralized and hybrid models. These models were blended aligning compensation and employee management. Her intention was to nature primary talents, increase employee retention capacity and efficient system in succession. She aimed at linking together organizational goals and human resources functions, as well as their goals (Sonoco Case p4).
As Ms. Cindy was on her right track to reform the HR functions, Harris DeLoach was appointed as a new Chief Executive Officer in early 2000. This is the time when human resource services needed earnest reformation. Concerning this, explicit strategic plans and policies to encounter the already diminishing returns. The Hr restructures approximated to cost Sonoco $ 2.8 million. The rights human resource structure could have clearly indicated the responsibilities for all job positions. First the top levels could have comprised of leaders who would foster talent management and crystal clear career ladder. In other words, he or she should ensure that employees are properly trained, managed and upgraded somewhat. He or she should provide efficient supportive and motivational programs. In this, case there has been using and utilization of the 7 s model that elaborates how employee and managers should perform their tasks and exploit opportunities to meet the targeted goals.
The centralized HR function system aligned and linked HR policies and procedures linking strategies as envisioned in the mission statement. The model applied management skills to enact its core functions and will reduce confusion, and any other arising dissipates. Complex tasks can be efficiently handled since there will be the emphasis of teamwork and lines of reporting any matters that arise. The model is, therefore, easier to understand. On observing the 7s, all the problems that may arise can be adequately solved. The structure will provide a centralized administration function in which the services and core functions will be realized.
Despite the above essential functions and the use of the centralized model, I suggest the human resource management system to be restructured in a way that their services are aligned towards objective realizations. This can be possible by blending some of the best factors observed in the centralized organization system with a highbred one while observing the 7 s management factors. The company should, therefore, change from centralized model to adopt a hybrid model will champion changes and effective risk management. The model defines core departments as individual or separate from the central control point creating a retrogressive picture and broader viewpoint. Sonoco Company was able to save an approximated amount of $2.7 million while using a hybrid model. This type of model is more appealing to both the clients and stakeholders. The competing interests are taken care of and hence linking all departments and other proactive decision making processes. The model initiated active and collaborative decision making criteria where all employee was involved, and hence they felt ownership of the company. This increased efficiency in task handling capacity. In addition, the managers were required at divisional levels facilitating easy policy formulation
The hybrid model also includes line managers in managing and decision making at departmental levels. In a nutshell, highbred model transforms human resources functions while handling complex tasks. Further, all the strategic aspects proposed by Sonoco Company will be easily implemented due to the focused and task oriented role definition within the model. Based in Sonoco case, the hybrid model will be valid if applied together with the 7s of management. The incorporation will facilitate increased service delivery standards, and it is cost effective when reforming a management structure.
I recommend for this model because it will eliminate any drawbacks such as mistrust of the central management and increase transparency, unlike the centralized model. The hybrid model will increase efficiency, and employee-employer interactions are creating strategies for optimizing outputs. Further, policies can be analysed together increasing returns. In addition, the model is advantageous in a way that it outlines specific roles to specific departments. For instance, the risk department functions are clearly described and distinguished from other units thus increasing efficiency. Finally, the model was simple to understand and formulate since it was the most cost effective as it cost 2.7 million dollars unlike the $ 2.8 million invested in the central model formulation. The model can perfectly incorporate the 7-s framework making it more perfect over the centralized model.
The 7- s framework ensures that all department in the company works in harmony. The aim of incorporating the 7-s structure into the model is to stimulate improvement in performance, enact positive changes both at the present and in future, align departments effectively and implement various proposed strategies effectively with encountering any difficulty. The 7-s include, strategizing, structuring, systems, sharing core values, stylings, and staff management. These are the elements that define the management strategy in any organization defining the key roles and processes in a formal and recognized way. The 7-s framework isas shown below;
1) Based on the argument of the case study, I recommend Sonoco Product Company should use a hybrid structure that incorporates the 7-s framework and advanced technology in managing the changing business environment. The company should employ right people with right skills and result in oriented professionals. The company should consolidate administrative functions to save more and speed performance, increase customer satisfaction levels, reduce wastage of resources and cut down employee turnover rates hence more profits. Workers should work together as a team to realise high output levels. The HR functions should be proactive, and communication needs should be adequately addressed. The company should regularly evaluate performance to enable practical changes where necessary.
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