This report analyzes and evaluates three important dynamisms of an organization which are ‘Culture’, ‘Change’, and ‘Strategic human resource management’ (SHRM). The dynamic and competitive nature of the today’s business world poses a number of opportunities and challenges for the organization and its decision makers. This report specifically discusses and evaluates the three dynamism culture, change and SHRM in relation to Jaguar Land Rover case study ‘The car that saved JLR’ by (Reed, 2012).
According to Handy (2011), culture is defined as “the way things get done around here” and organization culture is share value and beliefs of the employee which shape the pattern of behavior. Change is inevitable in today’s dynamic business world and failure to anticipate and manage change result in strategic drift for the organization. Likewise, strategic human resource (SHRM) is concerned with alignment of human capital with long-term goals of the organization (Kotter and Schlesinger, 2014).
Nevertheless, these three elements are interlinked to an extent such as employee follow the culture of an organization and change required a shift in culture to adapt to the new behavior. The change in an organization needs SHRM to provide training, employee evaluation and realign the human capital. Therefore, understanding these dynamics is important to understand how organization pursues its objectives and dynamism alignment to achieve long-term success.
According to Eagleton (2013), culture is made up of company’s existing value, belief, ideas to provide the guideline in which employee think, act and feel unconscious. In other word, culture is the glue that holds employee together, provide direction and affect decisions and actions in an organization.
Jaguar Land Rover (JLR) cavernous factory in Halewood, Merseyside, UK, is Europe largest car manufacturing plant under one roof and it was built in 1962 by JLR former owner named as ‘Ford Motor’. The culture at the plant is manual working, busy assembly lines, normal working hours and no night shift since 1990, pride as British premium car industry and strong union militancy with wildcat strikes (Barbera, 2014).
The Company has always pursued the same practices over the period of years and management has made decisions with perspective of the union. For example, when JLR was in process of the sale, ex-owner, Ford asked Tata to present to the unions before sale goes ahead (Pandey, 2014).
According to Schein, (2010) organizational culture is a pattern of shared assumption and belief of the group in an organization which is used for problem-solving, integration and adoption. Culture is found in three assumptions which basic assumption, espoused values and observable artifacts. The espoused values are marked by leadership and JLR management at Halewood plant was previously managed by Ford Motor and it has a long period of success attached to them. The leadership has stories and ritual of long success for the company (Mezias et al., 2015).
The basic assumptions attached to the company where it has been successful and have managed to deliver the premium quality products. For example, on recent issue of relocating to India, JLR CEO has made statement that “We have a clear commitment to the UK we want to keep” (Schein, 2010).
Madu (2012) stated that the company had a tradition of union militancy that stretched back to the many wildcats has been part of organization attitude. The observable artifacts of hale wood plant includes the heyday of Ford’s Escort (penurious American uncle) was pride and success of the company along with ageing dowager of an SUV brand (Land Rover), and older gentleman who makes executive limousines (Jaguar).
The state of art products, highly value company reputation and success stories, reserves of British engineering, design and shop-floor talent that survived the industry’s long decline from its early-1970s peak.
These have given company enriched and strong culture over the years along with behavior control, stability of processes as well as source of identity (Barbera, 2014).
According to Fiske and Taylor (2013), the attributes of the culture is that it define the characteristics and dimension of an organization. Organizational culture is used to differentiate organization from one to another through providing identity and direction. There are no fixed patterns or logic behind organizational culture and there might be subcultures in an organization.
For example, Evoque has impacted upon the direction and dimension of the organization. The company is operating under three shift 24-7 production at full capacity and employees are willing to work at low pay. The differentiate factor is products and practices of the JLR is different from those competitors such as BMW and Kia Brands. The emergence of china and other emerging markets as the customer of the company has provided a new direction for the company. Nevertheless, a new subculture has appeared based on espoused values provided by the leadership (Hewison and Holden, 2017).
For example, JLR is formidable to its competitors in which big procedure have competitive advantage. JLR competitors for premium car market such as BWM, Audi and Jaguar have its own brands and corporate culture which differentiate them from each other (Holt and Cameron, 2016).
Jex and Britt (2014) added that culture has its liabilities to organization and impeded actions of the mangers. This is often true when organization wants hard element changes such as structure and strategy. The plan to assemble and provide the ‘Freelanders’ in Brazil has does not coincide with existing practices. The union of the company has raised concern to the new plant and causing a threat to company competitiveness.
The response is naturally based on the cultural practices which glued in the organization. Therefore, on the negative side culture is barrier to hinder the change, innovation and improvement.
According to Senior and Swailes (2014), change is an important issue for any organization and ignoring the change result in failure of organization (e.g. Kodak, Blackberry). The change affects the system, people, process and structure of the organization. Organizational change is a reaction of an organization to environment or response to the crisis or changes even trigger by the leader of the organization.
For JLR, the number of changes has occurred which has affected it people, culture, processes and products. Change in an organization is process to optimize and respond to changing environment and conditions to move to the ideal state. In general, there are two type changes occur in an organization which is either revolutionary or evolutionary. JLR is experiencing evolutionary change which has transformed its process, product and mission (Burke, 2015).
According to Boje, Burnes and Hassard (2012), socio-technical change is important aspects manage the relation of employee and technology. The development of the Evoque is revolution change for an organization. The financial crisis of subprime mortgage and rise in fuel prices has directly affected the company. However, the company successfully changes to innovate and introduce new Evoque which has helped to the company to revive from financial loss.
Evoque is a downsized which is re-image of 21th century SUV which is completely different from the first range rover made by the company in 1948. The innovation and new products have helped the company to mark its survival (Boje, Burnes and Hassard, 2015).
According to Al-Shammari (2012) the change in company market in terms of new emerging markets has changed the product and culture of the organization. The changing demographics and preference of the customers has change the profile of the company customers. JLR has to change to realign its resources as well as capabilities to meet the changing need of the customers.
For example, the company has sold more than 93,000 of the SUV in china as well as new markers of the company products are Italy, Australia, US and Hong Kong. The evolutionary change in terms of company markets and customers has revolutionized the system and procedure of the company (Cawsey, Deszca and Ingols, 2015).
Grover and Markus (2015) elaborated that the business variations which are either planned or unplanned, company system or processes need to adapt and realign to changes in order to effectively allocate the resources and efficiency. Companies with better structure and systems survive during the period of difficult time. JLR plant in Merseyside operates at full capacity and open 24 hours days and produces a car every 77 seconds. The incremental change in working practices of mature company such as JRL has changed the traditional practices of the company.
For example, the company has not worked night shift but now company Halewood plant shifted to 24 – Hours production. The company has recently hired 1000 worker to expand its workforce which is part of the organizational change. Company is planning to start production in Brazil, making £7.5 billion and investment at Solihull to make new Evoque. The company wide change has transformed the JRL because of change implementation at macro level in context of organization life cycle (Hanks, 2015).
According to Griffin and Moorhead (2014), to meet the demand, the company has experienced the expansion phase. The re-alignment of the company procedure and practices has increased in the number of an employee of the company. There was time during the financial crisis when the company had its 3500 employees on the voluntary basis and the production was at a crawl. The next change occurs when the company hired 8000 people at its plant after the recession period.
The company has hired a number of young staffs and today half of the company employees are under the age of 25. This mark the age diversity of the workforce at the plant, for example, Steve cooper 53, work alongside Patrick McMullan 24, at the Halewood plant Patrick is hired as temporary worker (Griffin and Moorhead, 2016).
According to Armenakisa and Harris (2016) traditional practices and working condition has changed recently at Halewood plant. According to Mickensey 7s the soft and hard element of the organization includes style, skills, strategy, system, structure and staff. The number of changes at Halewood includes a new strategy for the company in terms of products and market. The leadership style has changed with the new leadership with new vision and mission for the company. The company is planning to expand international markets as well as introducing new products to stay competitive in the market.
Moreover, staff and structure of the company has changed after the new management. The diversity of the new work, as well as skill set, has a change in the company. For example, more educated workforce like McMullan has added value knowledge to the organization. The company has German CEO, Ralf Speth as well as Rata Tata as chairman of the company. The new vision has changed the company practices and culture. Company leadership has successfully managed to change the share believe of the employee of the companies (Campbell, 2014).
The compromise and negotiation to minimize the employee resistance has helped the company to keep all stakeholders on board and successfully achieve the objectives of the organization (Smith, 2015).
SHRM involves patterns of planned human resource deployment and activities which enable the organization to achieve its mission through aligning human capital with the organization. SHRM is concerned with the formulation and implementation of HR policies which mutually reinforce and deliver the objectives of an organization.
The three perspective of HRM strategy are the universalistic approach (best practices), contingency approach (best fit) as well as resource-based view. (Torrington, Hall and Taylor, 2008) The best practices involve high-performance system, high involvement system as well as high commitment system (Wright and McMahan, 2014).
On the other hand, Burke (2013) discussed that horizontal integration ensures that the HR policies should complement each other. For examples, resources, reward system, training and employee should complement each other. The shortcoming of universalistic approach involves is a black box problem that is how HR can make a difference. Contingency approach designing HR strategy designs specifically to organizational and broader environment context.
Contingency approach involves the linkage of a mission to the competitive strategy alignment of resources (reward and training) to HR policies. Strategic fit involves alignment the vertical integration includes linkage of the corporate and business strategy with HR policies (Truss, Mankin and Kelliher, 2015).
JRL has deployed the best-fit approach to managing the employee at the Halewood. During the period of the financial crisis company, 3,500 workers of the organization were working on the voluntary basis and there was no production at the plant. The best-fit approach has helped the organization to manage the situation in different context. Leadership has paid attention to style and situation to achieve the best results.
During the lowest time of the company back in October 2008, the company decides that it might shut one of its two plants and relocate the production to India. However, the strong union culture of the company has vetoing to keep the plant open. The flexibility from leadership and union has helped to reach an agreement. The management efficiently manages the workforce through reduced pay and temporary worker. Therefore, during the period of the financial difficulties company has managed to adapt to the scenario (Boje, Burnes and Hassard, 2014).
The adoption to external to external pressure and learning from specific situation helped the company to align the human capital to business strategy. The recruitment of new staff and mixing with new labor has helped to achieve vertical integration. The reduced pay helped to achieve the long-term objectives because of the compromise. The leadership ‘head of human resource – Des Thurlby’ made the statement that “Confrontation hasn’t worked in the past – let’s try a new approach”.
This vision and flexibility of leadership has helped to focus on the situation and interact efficiently. The outcome of contingency was company successfully integrate the lower manufacturing cost into business and manage to rejuvenate the workforce of the company. The best-fit approach has helped to develop age diverse workforce resulting in half of workforce under the age of 25 (Eagleton, 2013).
The contingency fit model discuss that HR policies should be aligned with strategies of the organization. In this external approach is mattered the most and vertical integration of the activities is fundamental. (Schuler and Jackson, 1987) In today’s business environment company has hired 1,000 employees to meet the production target. The changing business environment, system, and processes have an impact the culture of the company and 24-7 operations have deployed to achieve the strategy of the organization (Wright and McMahan, 2011).
The best-fit approach has helped the company the alignment of reward, recruitment and performance system and company workforce in last year’s reach a new level of 4,500. The HRM policies are aligned with the external environment.
Moreover, to meet the need of the customer and pursue its strategy company in 2010, decide to hire 8,000 people for its three plants in the UK. The need of the skills for the Solihull plant to build new range rover has been managed through best-fit approach for HR (Smith, 2014).
In addition, the company does use the temporary staff as a buffer to even out the fluctuation and volatility in the demand for the new SUV and manage the performance. This mark the important spirit based on the ‘Celtic-Liverpool like community’ and the Head of the HR celebrate the integration and successful of the HR policies through saying “With our success comes enormous buzz and pride.”
The best fit approach has helped to manage the journey from the low of the financial crisis, when all the employees of the company were volunteers to the high when company had the plan to hire 8,000 employees with full production capacity and producing care at every 77 seconds (Akingbola, 2013).
JRL had its pride and a long history of success with ex-owner ford. The company has a strong culture based on the vision of the leadership, quality products, superior engineer as well as union workforce. The company has been the pride of the UK engineering and premium car industry. The strong culture of the company has remained the dominant factor. The acquisition of the JRL by Tata and financial crisis has resulted in numerous changes in the company.
The strong culture has shifted and company system, people, processes have experienced numerous changes. The change work environment, pay reduction, working 24 hours, the voluntary workforce has marked the changes in the culture of the organization. The company has experienced an evolutionary change in the past five years.
The period of crawl production, low pay, reducing the demand of company products as well as the new leadership has transformed the practices of the company. The best fit HRM approach has helped the company to manage the human capital and HR strategies to the business strategies of the company.
The HR policies were design and deployed based on the external fit approach and it has helped to rejuvenate the workforce while aligning of human capital and business strategy.
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