Reference no: EM133477052

HR's ROLE IN SUPPORTING ORGANISATION'S STRATEGY

Timoci is the human resource (HR) manager at The Cheapest Supermarket (TCS), with 20 supermarkets operating in Fiji's urban, rural, and island zones. The company has recently acquired Your Choice Stores (YCS) Ltd, with ten stores nationwide. Your Choice Stores struggled in its operations and had been trading at a loss for three years. Consultant reports highlight that amongst other things, employee turnover being the principal reason for YCS's underperformance. The Cheapest Supermarket acquired the TCS at a competitive price. Strategically, the acquisition by TCS was seen as an opportunity to enhance its market and industry presence at the local and international level. In the two years that Timoci has been with TCS, he has tried hard to transform its traditional administrative HR function to that of a more proactive strategic function. He realized that he and his small team of 10 HR personnel are often inundated with daily HR issues of payroll administration, recruitment plans, recording and tracking of employee entitlements. Despite being overworked, Timoci sees the acquisition of Your Choice Stores Ltd as an opportunity to demonstrate HR's capacity to contribute to its commitments at a strategic level. Today is an important day of his meeting with the company's chief executive officer (CEO). His phone rings, and Timoci jumps from his seat, a bit nervously, though. It's Kamala, the CEO. 'Ready when you are, Timoci!' she chirps. 'On my way!' Replies Timoci in his most enthusiastic voice. He gets his papers together, takes a deep breath gathers his thoughts and marches purposefully towards Kamala's office. For the past few weeks, Timoci has been familiarizing himself with the company's focus and strategies and more recently on its three-year plan details. The Cheapest Supermarket's business plan includes rebranding of all Your Choice stores as The Cheapest stores, establishing an online purchase store and website based at the Headquarters in Suva. These change strategies are envisaged to strengthen its services toward its current customers and potential consumer base at large. Currently, The Cheapest Supermarket Ltd has a workforce of more than 300 people in its supermarkets, of which 200 are full-time, and remaining employees work on a part-time and casual basis. Your Choice stores currently have 80 full time employees. Recent HR audit of Your Choice Ltd.'s operations and costs has revealed that most of the stores are overstaffed, and full-time, and contingent workers' balance is incorrect. Furthermore, financial audits reveal the company's poor financial performance over the last three years .Your Choice Ltd does not have a separate HR function. Instead, in-house store managers handle dayto-day employment matters while the payroll function has been outsourced. This got Timoci thinking about the way his HR department operates. Taking on board Your Choice Stores Ltd.'s payroll and recruitment functions would add to its already heavy workload. Maybe it would be better to adopt Your Choice Store's model of the devolving day-to-day operations like recruiting to store managers and outsourcing payroll so that he could focus on HR's efforts more strategically. Your Choice Ltd also has no human resource information management (HRIS) system. There is almost no workforce data available on the movement of employees in the organization. Fortunately, The Cheapest Supermarket Ltd has an excellent HRIS system capable of generating a wide range of reports about workforce characteristics and trends. Incorporating data from the Your Choice Ltd workforce should be possible into this new HRIS system. It is clear to Timoci that a certain amount of downsizing in the Your Choice Stores will be necessary. It will also be necessary to reduce the dependency on full-time employees. Staffing levels in The Cheapest Supermarket Ltd are based on revenue and input from store managers about local conditions and seasonal fluctuations. Based on the revenue figures, Timoci has calculated that 20 full-time positions at Your Choice Stores Ltd will either need to be abolished or converted to be part- time or casual mode. Timoci also thought about the company's planned new venture like the online supermarket. However, this will have staffing implications such as new roles to define, new people to recruit and so on. Kamala is expected to appoint someone from abroad to oversee this new business operation soon. Despite he's efforts to raise the profile of the HR functions in the past years, Timoci also suspected that, unless he took the initiative, HR probably would never be part of the decision-making processes, especially issues related to the acquisition and the development of the new venture. So, he writes a discussion paper for Kamala, outlining the various HR issues he envisages, and highlighting the decisions that needed to be made. He submitted the paper to Kamala a week ago, and their meeting today is to discuss it. The discussion paper included the following issues: • The downsizing strategies for the Your Choice Stores Ltd • The need to incorporate the Your Choice Stores Ltd workforce into the existing HRIMS • The need to plan staffing needs of the new entity as well as for the enlarged network of stores • Addressing the differences in the way that The Cheapest Supermarket Ltd and Your Stores Ltd manage their HR issues and processes. As Timoci enters Kamala's office, she rises from behind her desk and ushers him to the upholstered chairs and coffee table that lie to the left of the office. She is smiling. 'Well Timoci', she begins, 'You've certainly given me a lot to think about! Must admit I've been focused more on the financial side of the acquisition and the new venture and hadn't even thought about the workforce issues, Thanks for reminding me! She goes on to say that she agrees that the issues Timoci has raised are important and integral to the business plan; She then assigns him some tasks. About the downsizing of the Your Choice stores, she asks Timoci to determine exactly how many full-time positions should be abolished or converted into part-time or casual positions and to recommend a process for identifying which employees would be made redundant. Both agree on targeting employees who are closer to retirement age for various economic and social reasons. She also instructs Timoci to ensure that employee and workforce data for the existing Your Choice employees are uploaded to the existing HRIMS as soon as possible and to configure the system to provide data that will help the company to develop a staffing plan, something which has never been done before. Kamala also wants to internally track workforce trends and identify potential problems well before they become too large. She charges Timoci with responsibility for coordinating the HR planning process as well. Finally, he expresses interest in the possibility of restructuring HR, though he isn't entirely sure which model would be better. She concedes, however, that given the company's acquisition and growth plans, it seems somewhat wasteful to have HR focused on administration aspects when there were higher level roles to be performed. She asks Timoci to explore the options in more detail and to provide her with a further paper outlining the implications of devolving day-to-day HR functions such as recruiting to store managers and outsourcing the payroll function entirely. At the end of their conversation, Kamala shakes Timoci's hand and thanks him for his foresight and initiative. Timoci can barely keep the smile from his face as he leaves Kamala's office and returns to his desk. Surely, this is what being a 'strategic partner' is all about, he thinks. Now the work starts!

QUESTIONS

Read and analyze the above case study on organizational merger and then answer the following questions.

1. The first paragraph mentions employee turnover as the principal reason for YCS's underperformance. Discuss a few causes of employee turnover and explain its challenges to organizations and their employees. How could managers address employee turnover situations at their organizations?

2. The second paragraph reads "In the two years that Timoci has been with TCS, he has tried hard to transform its traditional administrative HR function to that of a more proactive strategic function" With appropriate examples, explain the difference between traditional administrative HR and proactive HR functions.

3. Explain downsizing and discuss its potential negative implications for employees at Your Choice stores. Besides downsizing, discuss alternative strategies organizations such as The Cheapest Supermarket (TCS) could adopt to restructure their organizations. Provide examples to support your explanations.

4. Merger and acquisition strategies mostly fail due to conflicts from integrating two previously independent organizations into a new entity. With relevant examples, explain managerial strategies that can be implemented for a merger and acquisition plan to succeed.

5. Imagine Timoci and others in authority asked you to prepare a training needs assessment for their underperforming employees after the merger and restructuring process. Discuss what information you would include in the needs assessment process. Further, suggest training methods Timoci and colleagues could implement to upskill its employees to support its business needs if lack of training were the principal reason for underperformance. Give reasons for your recommendations.