Why a Focus on Organization Design?
The demands on the human resources function have never been greater. Since 1970, the world’s 50 biggest companies have tripled in size, and the number of consumer products introduced each year has increased 16-fold (Useem & Useem, 2005). Many firms have expanded internationally, and even those that have not face new competition from abroad as their products and services rapidly commoditize.
As businesses become more complex, so must the HR organizations that support them. The design of the HR department must parallel the many dimensions of the business. If there are multiple products, customers, geographies, or service lines, then HR needs to support them all. As a result, today’s HR organizations face many of the same dilemmas as the businesses they work with, such as how to:
1. Build strong functional/product expertise while aligning around customer segments
2. Design in flexibility without adding cost
3. Connect the front and back of the organization and have them work together seamlessly
4. Deliver complex solutions through the formation and dissolution of teams
5. Get the benefits of both centralized infrastructure and decentralized decision-making
A fundamental principle of organization design is that a change in strategy requires a new set of capabilities and a realignment of the core elements of the organization (Galbraith, 2005). There are some basic choices in design, but it is not easy to say that there are “best practices.”
The notion of best practice implies that there are configurations that can be copied and applied successfully in a variety of situations.
However, the unique combination of strategies, market factors, and the life cycle stage of a given company and its existing capabilities will determine what type of design is appropriate. The HR department cannot guide line managers through the process of managing these organizational challenges if they have not been thoughtful and deliberate about solving these quandaries themselves. For the new HR, organization design has become a core competence, and it must begin at home. What Are The Most Widely Used HR Strategies?
If you study successful organizations around the world, you'll find that there are a finite number of HR strategies in use. Although each of the strategies listed below is a distinct category, many firms use them in combination in order to arrive at an approach that best fits their situation. For example, stable business units that provide the core revenue base for an organization may operate under one strategy while a business unit that focuses on future development may operate under another. Widely admired firms like Intel, General Electric, Cisco, Nucor and Microsoft have found that a "performance culture" is the best approach to drive their success. While other excellent companies such as Hewlett-Packard, Oracle and Dell Computer have adopted an e-HR strategy where technology permeates everything they do in HR. Other successful companies have achieved good results using the more traditional business partner or personnel strategy. Each category has its advantages, costs and disadvantages so be sure and compare and contrast them before deciding that any one is the overall best. Summary of the 10 Basic HR Strategies
The 10 basic HR strategies or models are:
3. Business Partner
4. Call Center
6. Centers Of Excellence
8. Fact-Based Decision-Making
10. Performance Culture
1. Personnel Model
Priority And Focus:
| Low costs, basic transactions and legal compliance.
| The traditional approach to HR and the most common strategy. HR serves as an employee advocate. A strong emphasis on managing centralized transactions including payroll and benefits. HR is "reactive" with little outreach, change management or the use of generalists.
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