New Organizational Forms - Innovativeness To Attain Competitive Advantage - Essay Example

NEW ORGANIZATIONAL FORMS: INNOVATIVENESS TO ATTAIN COMPETITIVE ADVANTAGE By College: Presented New Organizational Forms Currently, the rapidly changing globalised economies are resulting in major challenges to many organizations in trying to move in accordance with global changes in the business world. An important aspect is to remain competitive in the highly competitive market and retain the highest caliber of workforce to ensure the organization maintains its competiveness in the market. In order to achieve these objectives, the human resources manager is mainly the focal point in ensuring organizations achieve and maintain benchmark performance to ensure leadership in the global market. The challenges faced by HR managers in attaining these objectives have led most of them to rethink strategies of ensuring organizations attain and surpass the intended goals. An article by Green in the BusinessWeek (July 19, 2012) indicates that more than 600 HR managers, advisers, and academicians have come together to draft guidelines that would lead to standardized measures regarding diversity in a workforce, job training, turnover, and other factors that are important in ensuring high caliber of workforce in an organization. The argument behind the above move is that companies stand to benefit through the use of a single set of metrics in gauging human capital. Erica Karop, Head of Global Sector Research at UBS Investments Bank, one of the participants, explained that any client choosing between two banks is most likely to choose and factor the one that spends much more on training and rewarding its workforce, which translates to lower turnover of employees – a costly expense to most organizations (Green, 2012). The U. S. HR Policy Association (HRPA), a lobby group with a membership of more than 300 top HR managers in the U.S, noted that in the current business environment, information regarding how much a company spends on training, and the type of workforce the company hires would be much more important to rival companies than to potential investors (Green, 2012). Therefore, as the business environment rapidly evolves, companies have to be more creative and innovative in training, motivating, and retaining their workforce to remain competitive in the global market. Clegg, Kornberger and Pitsis (2012) noted that more and more companies are embracing new organizational forms. The new forms, as Clegg et al. explain, are readily replacing reliance on market oriented governance arrangements and embracing stronger centralization and joint decision making approaches. Organizations are rapidly changing their operations towards larger customer oriented units and relying on a rich set of integration mechanisms within these entities. This largely results in different forms of internal hybrids that enhance lateral sharing of individual and organization knowledge, aimed at achieving economies of scale and scope. Similarly, as Green (2012) elaborates, companies through the HR have to strategize on setting a single set of metrics to gauge all the manpower, in ensuring effective integration of these business units as businesses reshape into larger customer oriented units according to the global business environment. Weber’s bureaucracy theory presents the best scenario of the new organizational forms. Clegg et al. (2012) note that Weber’s bureaucracy theory requires that jurisdictional areas be well specified with activities that are well distributed as personal official duties, whereas the traditional approach requires activities to be delegated by the leader and can be changed at any particular time. In addition, Weber noted that officials in the organization have to be chosen based on technical qualifications, appointed and not elected, and well compensated to motivate them to perform. To ensure low turnover of employees, as Green (2012) explains, Weber’s theory indicated that employment by an organization has to be a career where the worker is a fulltime employee and yearns to have a life long career where they get tenure of their respective positions and are insured against arbitrary dismissals (Clegg et al., 2012). In order to achieve these objectives, managers in different organizations embrace creative and innovative methods to recruit, train, and retain their workforce through different strategies that characterize the new organizational forms. As Clegg et al. (2012) argue, organizational competitiveness results from innovativeness, which leads to a competitive advantage and leadership in the global market. Case Studies GlaxoSmithKline Assessment Centers GlaxoSmithKline is a giant multinational in pharmaceuticals that has effectively integrated the new organizational ideologies in its recruitment and training strategies. The use of integrated recruitment centers is a benchmark innovation strategy in its human resource department that clearly brings out the competitive advantage the company has in the global market. The recruitment centers have, over the time, played a crucial role in critically indentifying and enhancing the qualities required by the company to maintain its competiveness (Saiyadain, 2009). The company is able to indentify, tap, and utilize the best skills in the market and improve staff skills and competency in the company. Vertical alignment exists when the HRM system correctly fits with other elements of the organizational elements, which include strategy, culture, and technology (Jackson, Schuler and Werner, 2011). Therefore, when an organization introduces a new strategy and adopts new values, it has also to introduce new programs, change its approach to performance management, and achieve its vertical alignment. GSK in its recruitment strategy seeks to achieve the above objectives. In determining the effectiveness of an assessment center, the HR carries out a detailed analysis to determine skills through relevant behavior related to an effective job performance, and what has to be evaluated in the assessment center (Saiyadain, 2009). Skills and techniques applied in these centers have to be validated to ensure the dimensions of abilities and skills are correctly assessed. Other factors in the assessment centers include extensive training of the assessors, preparation of reports by the assessors, recording observations, and integration of the information generated in these centers through systematic methods. These strategic recruitment strategies amount to operational excellence in the company. According to Deloitte Global Group (2012), operational excellence is a comparative advantage, which translates to production flexibility, cost minimization, and customer responsiveness. Targeting the right employees with the right skills and impacting additional skills and organizational culture as attained in GSK assessment centers would lead to increased production and reduce the time required for staff to respond to customers, which would lead to cost minimization in the organization. Therefore, the assessment centers in GSK lead to competitive advantage in the global market. A prospective employee is taken through detailed screening regarding their past experience, education background, skills, and bridging the lacking skills in the assessment centers (Saiyadain, 2009). The centers prepare the prospective employee to understand and be ready to deal with the actual relationship between the core objectives of the company and the job applicant (Saiyadain, 2009). As Weber’s theory explains, the employee develops a long life career though such attachment with the company. Johnson & Johnson Johnson & Johnson is another multinational pharmaceutical, which has, over the time, embraced a new organizational form and has been able to maintain its leadership in the global market to date. The sustainable success behind J & J is the company’s credo which acts as the heart of all operations in the company. Though the credo was designed more than 70 years ago, currently it is the backbone which offers the company its competitive advantage derived from the strongly articulated values that are considered absolute in all operations in the company (Haydon et al., 2011). Gautam (2012) notes that many companies demand unhealthy levels of responsiveness from their workers, with managers being especially under tremendous pressure in balancing between their official duties and organizational goals. This was particularly in the conventional organizational forms which treated the worker as an asset for producing and not as an essential part of the process. According to Haydon et al. (2011), the credo has undergone major transformations over the time and is more than a moral compass; it is a compass for success in preparing the staff to handle their respective tasks effectively and avoid stresses that result from improper employee integration. The credo has four main winning concepts: the first one targets the customer as the duty of the company to the doctors, patients, surgeons, and nurses (Haydon et al., 2011). Haydon further asserts that the second concept focuses on the employee and the extent of fairness and respect to ensure utmost satisfaction of employees, which, as Green (2012) elaborates, has been the major agenda in many organizations, as the utmost goal to ensure low employee turnover and competiveness in the global market. The third stance of the credo is the responsibility of the company to the community and the environment, and taking care of the less fortunate (Haydon et al., 2011). In addition, the company focuses on paying a fair share of taxes, ensuring that suppliers earn a decent profit and are committed to developing sustainable long time ethical relationships. Lastly, the credo emphasizes returns to the stockholders, with the philosophy that if the company gets the above three philosophies right, the fourth philosophy would automatically apply, which has been a philosophy to success (Haydon et al., 2012). To ensure these objectives have been met, Beiske (2003) explains that J & J pays utmost attention to the recruitment process to ensure all recruited individuals have values that fit the company’s beliefs, values, and practices. The credo is, thus, a set of more than 60 criteria that guide and streamline the recruitment process to ensure all employees are integrated with the company’s philosophy, and are the lifeline of the company. As Weber’s theory indicates, for employees to ensure a competitive advantage for an organisation (Scotts, 2012), the worker has to feel part of the company and develop a lifetime career with the company, which implies such a company has to have a low employee turnover. The J & J credo, through integrating the company’s values with those of the employee, aims at establishing this life long career development in workers in accordance with set values; these are responsible for the great success and benchmarking in the company. In addition, J & J has a culture of recruiting its staff from MBA graduates in leading business schools across Europe and in U.S. (Beiske, 2003). To J & J getting the right employee is not only a recruitment process but is also dependence on the quality of their education, which makes the company tap the cream of processionals from leading universities across the globe. The increased knowledge retention, as Anderson and Sun (2010) explain, directly impacts employee’s knowledge, skills, experience and observations. These factors make the above companies have deep expertise in the pharmaceutical field, coupled with detailed R & D programs in setting benchmarks in the global market today. While the above companies are more focused on their recruitment and training programs to ensure company’s values are integrated with beliefs and values of the employee, other companies take the approach of having elaborate Corporate Social Responsibility programs, which make the company develop close relations with its customers. Hemphill and Lillevik (2011) explain that capitalist systems with no elaborate CSR would eventually fail in the market, as customers continuously demand companies to be more sensitive to their needs and have policies to address the current environmental degradation. For example, Austin (2011) argues that there has been a growing debate in both corporate and political cycles to create green jobs, which would facilitate people to work while at the same time conserving the environment. This would be facilitated through allocation of research and development budget, which would create the “green color jobs.” One of the companies that have used such CSR to ensure a competitive advantage in the market is John Lewis Partnership Plc. John Lewis or Waitrose deals with virtually any type of product from fashionable clothing, to household goods, eatables and electrical products (BusinessWeek, 2011). According to Fortenberry (2010), social factors such as demographics, values, and beliefs affect the marketing activities of a company. To ensure employees retention and the benefits accrued, as Schmitt et al. (2011) argue, more than 70,000 permanent partners in John Lewis have a stake in sharing benefits and profits in the fast growing company. The SCR in this approach is that the long-term future and competitive advantage of the company can only be achieved by respecting and addressing the interests of all stakeholders. It is the energy and passion of the business partners consisting of workers, suppliers, clients and supplier that drive the business to operate at responsible and sustainable limits (John Lewis, 2011), and ensure the company achieves a competitive advantage in the market today. The company ensures its responsibilities and strengths are rooted in fairness, respect of values, and honesty in sharing rewards and responsibilities – the best ideals as indicated in the company’s constitution and which have ensured the company’s success (John Lewis, 2011). For example, the 2010/2011 “Bringing Quality in John Lewis and the Waitrose Way” was a strategic approach in CSR that required employees in the company to train customers on making the best and sustainable choices while buying – a policy that worked great in cementing the relationship among the stakeholders (John Lewis, 2011). As Clegg et al. explain, in the current globalised market innovation in organizations leads to a competitive advantage, implying that companies with leadership in the market have to design benchmark strategies that would offer a competitive advantage in the highly competitive market. The above three companies have approached this issue differently but all have been able to ensure competiveness with employee recruitment, training, motivation, and retention being the most outstanding factors that would lead to such competitive advantage. Apart from staff recruitment and retention, other companies such as John Lewis Partnership have innovatively initiated a different approach that offers leadership in the market by ensuring all stakeholders are part of the company. All the efforts utilized by these companies to maintain their market leadership are characteristic of well grounded operational excellence strategies. Creativity and innovation are, thus, the key to ensuring competiveness in the global market today. References Anderson, M. H. and Sun, P.T., 2010. What have scholars retrieved from Walsh & Ungson (1991)? A citation context study. Management Learning, 41(2), pp. 131–145. Austin, E.G., 2011. The great green-jobs hope: developing the markets. The Economist, Oct. 13. Beiske, B., 2003. Recruitment: Johnson & Johnson vs. Unilever. Norderstedt: GRIN Verlag. Bloomberg Business, 2011. John Lewis Partnership Plc. Bloomberg Business Week, 7 October. [Online] Available at: http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=874389 [Accessed 23rd Oct. 2012]. Clegg, S., Kornberger, M. and Pitsis, T., 2012. Managing and organizations: an introduction to theory and practice. London : Sage Publications. Deloitte Global Services, 2012. Operational excellence. Deloitte. [Online] Available at: http://www.deloitte.com/view/en_BB/bb/services/consulting/strategyoperations/operationalexcellence/index.htm [Accessed 23rd Oct. 2012]. Fortenberry, J. L., 2010. Health care marketing: tools and technique. London: Jones & Bartlett Gautam, T., 2012. Real men don’t need work life balance. Forbes, May, 23. [Online] Available at: http://www.forbes.com/sites/forbeswomanfiles/2012/05/23/real-men-dont-need-work-life-balance/ [Accessed 23rd Oct. 2012]. Green, P.S., 2012. HR group creates workforce metrics. Bloomberg Business Week, July 19. [Online] Available at: http://www.businessweek.com/articles/2012-07-19/hr-group-creates-workforce-metrics [Accessed 23rd Oct. 2012]. Haydon, J., Msell, P., Collins, C. and Carmichael, L. J., 2011. Leadership and management development. London: Oxford University Press. Hemphill, T. and Lillevik, W., 2011. The global economic ethic manifesto: implementing a moral values foundation in the multinational enterprise. Journal of Business Ethics, 101 (2), pp. 213–230. Jackson, S.E., Schuler, R.S. and Werner S., 2012. Managing human resources. OH: Cengage Learning . John Lewis Partnership, 2011. Corporate social responsibility report 2011. [Online] Available at: http://www.johnlewispartnership.co.uk/content/dam/cws/pdfs/our%20responsibilities/our%20progress%20and%20reports/John_Lewis_Partnership_Corporate_Social_Responsibility_report_2011.pdf [Accessed 23rd Oct. 2012]. Saiyadain, 2009. Human resources management. New Delhi: McGraw Hill. Schmitt, A., Borzillo, S. and Probst, G., 2011. Don’t let knowledge walk away: knowledge retention during employee downsizing. Management Learning, 43(1), pp. 53–74. Read More