Redefining strategic business initiatives

ORGANIZATION REDESIGN AND INNOVATIVE HRM: Ashok Som; Oxford University Press, YMCA Library Building, Jai Singh Road, New Delhi-110001. Rs. 545.

This book is an analysis of five large firms, French and Indian, which are market leaders — Lafarge a global leader in cement and construction materials; Renault-Nissan and Maruti Suzuki, two leaders in the automobile industry; Mahut Group, an Indian multinational company in cements; and Bharat Petroleum (BPCL).

An earnest attempt has been made by the author in the first part of the book to provide an interesting organisation redesign model, including differentiation, integration and uncertainty avoidance mechanisms, coupled with human resource management (HRM) strategies. The author has indeed exhaustively quoted all the leading researchers very meticulously throughout the book, which is also interspersed with the earthy observations of practising managers.

The case of BPCL illustrates organisational change from a functional to a divisional enterprise with strategic business units. As a director of the firm pointed out “BPCL has undergone a very interesting HRD-powered transformation process… Some 2500 managers participated in the envisioning exercise. It was facilitated by trained individuals, many of them volunteers from functions other than HRM.” After the redesign, each strategic business unit had an empowered “embedded HRM”.

In the case of Maruti, having adopted a Japanese work culture with Suzuki’s joint ownership, it struggled with cross-cultural, political and social issues. There was also a change in leadership. The organisation ran smoothly as long as it was a market leader. When competitive pressures mounted, internal communication being historically weak, union unrest was brewing and the organisation turned to the inadequate HR department for support. The case is all about having the HRM itself redesigned.

The case of Lafarge which had as its origin humble French roots and which is now a world leader in the building construction materials industry is a very interesting one. It took over Tata Steel’s cement division and Raymond’s cement plant as well. Lafarge is a storehouse of best practices and best specialists among the industry. But, the style had to change: “The style is a very traditional, technology-minded one. It is based on repeated evaluations. French people have rules for everything, accurately and methodically documented, but no one follows the rules.” To be global leaders, they have even two official languages – French and English. Lafarge had institutionalised special recruitment processes for various categories. The retraining and redeployment cycle was critical for effectively managing local business units. They did not believe in downsizing.

Priorities for organisational redesign at Renault were clearly laid out – flexibility, reducing cost and management of competencies. With the Renault -Nissan alliance, the objectives of the HR department were to improve the performance of its management, reduce the costs, adapt the management of HR to the changing qualifications of the personnel, reduce dysfunction between different levels of HR management and to master the challenges of the redesign programme. In other words, they believed that “charity begins at home.” How it coped with French legislation to cut the work week from 39 to 35 hours makes an interesting story. Renault has a joint venture with Mahindra and Mahindra in India for manufacturing the Logan model.

Even the failed case of Mahut Group finds mention. In the concluding parts of the book, the author has analysed the cases and anchored them to the redesign model. Pradip N. Khandwalla’s foreword to the book is a good curtain raiser.

It may be apt to add that when changes in organisation are made without attention to HR issues, problems snowball into the national scene like what happened to the airlines industry recently. Thus the importance of proper HRM going hand in hand with any organisational redesign becomes paramount. The author must be commended for this publication, coming as it does in troubled times, attempting to provide a redesign approach for effecting organisational changes without pain.

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