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Research paper topic: Human Resource Managementa Case Study - 1002 words

Human Resource Management-A Case Study Management of Human Resources-Assignment 1 Introduction: In order to critically assess and recommend alternatives, I would like firstly to give a brief description of the business crisis the company was facing and the subsequent need for change in the company's overall business strategy. I would then like to focus on the key aspects of the firm's human resources strategy and the changes that were made in order to supplement the overall changes in the business strategy. Business Crisis: International Computers Limited (ICL) was born in 1968 out of the merger between English Electric Computers (EEC) and International Computers and Tabulators. With 40 million of government support it developed over a period of 6 years, an independent series of computers that was incompatible with IBM computers. IBM had garnered a 50% share of the UK computer market and the government felt the only way to stem this growth was through the integration of British high tech firms.

With the government as one of its major customers and through several strategic acquisitions and product diversifications during the 1970's, the company managed to achieve growth rates of around 20%. But this growth did not continue for long as the recession struck in 1979 and growth rates spiralled. By late 1980 the company was facing a 100 million shortfall in orders, in spite of having taken some major redundancy procedures. The firm was on the verge of bankruptcy when the government agreed to act as a guarantor for a 270 million bank overdraft. The government subsequently exercised its power of guarantee by installing a new chairman and two new directors, one of who was Robb Wilmott, the new MD.

Wilmott was a perceptive man who realised that the only way ICL was going to survive was by planning for the long-term and this was to be achieved by formulating a new product strategy and a complete change in the way it did business. Sparrow P 1995 International Computers Limited (ICL) In: Hiltrop J, Sparrow P (eds.) European Casebook on Human Resource and Change Management Prentice Hall, pp 110-122 Downsizing: The rapidly changing global environment with regard to competition and technological advances in the industry and ICL's subsequent decision to shift from hardware to total systems differentiation, led the MD to pursue a new strategy based on strategic alliances. The main reasoning behind this was that it allowed the company to break into new markets and gain access to new technologies quicker than would be possible if the company were acting on it's own. This new focus, and the ongoing financial crisis led to the need to restructure the financial side of the organisation. This was achieved mainly through downsizing in a number of product areas and a series of redundancy procedures. As the case does not explain in detail the actual redundancy procedures, it is difficult to make critical assumptions of the firm.

The availability of additional resources, coupled with the need for a newer set of skills and scarce financial resources appears to be a justification for the course of action taken by the company. Cultural changes: Armstrong (1999) cites the work of Furnham and Gunter (1993) defining culture as 'the commonly held beliefs, attitudes and values that exist in an organisation. Put more simply, culture is 'the way we do things around here'. With shifts in the product strategy and the recent collaborations came the difficult task of changing aspects of the cultural values of the organisation. The company traditionally embraced what theorists would generally refer to as a role culture.

This referred to organisations operating in relatively stable environments with more of a focus on procedure, hierarchy and bureaucracy rather than dynamism (Amstrong, 2000 citing the works of Harrison, 1972; Handy, 1976; Schein, 1985 and Williams et al, 1989). For the organisation to succeed in the more volatile and competitive environment it found itself, its cultural values need to be revised to a certain extent. It started to become necessary that the top management understood the major changes that the company was undergoing and the need for refining of thinking processes and general management values. Though it is clear from the case that the new cultural values were widely communicated, it is not very clear about the levers for change that had existed in the organisation and the way they were used. The commonly identifiable levers could deal with the areas of performance, commitment, quality, learning and values among others. From the initial response by the organisation, it appears that the organisation did embrace the new values, but only as a short-term response to the ensuing financial crisis and not really through an understanding of the business' long term strategy.

Though the Core Management Programme (discussed later in the essay) managed to eventually address the long-term strategic need for cultural change, a criticism may be levelled that this approach should have been adopted initially. Decentralization: One of the biggest changes made to was to the organisational structure of the company. ICL's structure had traditionally been based on the concept of functional grouping i.e. dividing the organisation on the basis of the distinct functions they were aligned with, for example Marketing, Production, Finance etc. Though this concept did foster good communication and co-operation skills within the functional units, there was the disadvantage of very little or no co-ordination across these functions.

In the case of ICL, it was highly apparent in the lack of communication between the product development and marketing functions and the ensuing financial crisis brought about by it. The developers were into designing advanced and very high technology equipment for which marketing had failed to capture a market. With the company's focus shifting towards product differentiation, decentralization of the organisation into smaller self-managing business units based on the matrix structure seemed the order of the day. A mechanised and bureaucratic system of centralization would no longer lend itself to the dynamic environment the firm now found itself in. The idea was to bring together the essential functions to work more closely together in achieving the company's new strategic goals. McKenna (2000) citing Ford & Randolph ...

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