chapter - iii - shodhganga : a reservoir of indian theses @...
TRANSCRIPT
Chapter - III
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Methodology
The Indian FMCG industry witnessed significant changes through
the 1990’s; many players have been facing severe problems on
account of increased competition from small and regional players
and from slow growth and recession across its various product
categories. As a result, most of the companies were forced to
revamp. Their product, Marketing, Distribution and customer
service strategies are being re-engineered to strengthen their
position in the market.
By the turn of the 20th Century, the face of the Indian FMCG
industry has changed significantly with the liberalization and
growth of the Indian Economy. The Indian customer witnessed an
increased exposure to new domestic and foreign products through
different media, such as television and internet. Apart from this,
social changes such as increase in the number of nuclear families
and the growing number of working couples resulting increased
spending power also contributed to the increase in the consumer
personal consumption. The realization of the customers growing
awareness and the need to meet changing requirement and
preference on the account of changing life styles required the
FMCG producing companies to formulate customer centric
strategies. These changes had a positive impact leading to the rapid
growth in the FMCG industry.
In this complex and highly competitive market, organizational
effectiveness is a critical ingredient for success in any business. In
order to achieve its goal, organizations need to define and apply
strategies that optimize people efficiency, engage them, delight
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customers and justify to stakeholders; regardless of prevailing
market conditions. However, there are enough anecdotal evidences
that even established corporations often struggle to align its human
resources effectively to achieve its desired goals.
Business performance is a combination of people engagement,
productivity, efficiency and key financial metrics (revenue, profit
etc.). To create company-wide effectiveness, business leaders need
to focus on streamlining their people, the people management
systems, the structure and capabilities (including organizational
culture) to the overall goals. Failure in fulfilling these often result in
lower levels of customer satisfaction, channel partner engagement
and employee retention.
In February 2004, the Harvard Business Review published an
article, where Kaplan and Norton argued that ‘an organization is
aligned when all employees have a commonality of purpose, a
shared vision, and an understanding of how their personal roles
support the overall strategy.’
Although simplistic at the first encounter, deeper exploration would
reveal challenges that organizations confront while implementing
the same. Successful organizational alignment requires a holistic,
coordinated effort to ensure that a number of key elements or
‘building blocks’ are in place. These can be broadly categorized into
three interrelated and interdependent business components:
People, Strategy and Operations, which can be rearranged to define
a set of attributes that characterize successful organizations. This
in turn depends on having the right people, in the right jobs, at the
right time, to meet rapidly changing environmental requirements.
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In an aligned organization:
1. People know what has to be done
2. They know why it must be done
3. They are capable of executing strategies with training and
access to resources
4. They learn from implementing, and use feedback to improve
processes
5. They maintain positive energy and enthusiasm despite
difficulties
6. They feel recognized for their contributions
7. Ultimately, they ensure financial success of the organization
An important aspect of achieving high levels of aligned organization
depends on the company’s human resource (HR) management
practices. It has been empirically demonstrated that HR
contributes directly to profitability, quality, and other goals in line
with the mission and vision of the company. Staffing, training,
compensation and performance management are key tools in HR’s
kitty that helps the organization to satisfy stakeholders needs.
Typically, businesses devote a lot of effort for developing a good
strategy, and aligning operations to support that strategy. However,
most organizations struggle to streamline or align their human
capital with strategic priorities of the company.
This is where Strategic Human Resource Management (SHRM)
comes. The goal of Strategic Human Resource Management is
simply to develop people processes that enable the firm achieve its
targeted outcomes. In other words, SHRM is about leveraging
peoples’ capabilities that is critical to achieving sustainable
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competitive advantage, through integration of employment policies,
programs and practices.
Importance of the Study:
This study will be a significant endeavor in the area of Strategic
Human Resource Management in particular, and this research will
be beneficial to HR professionals and executives. It will also serve
as a future reference for researchers on the subject of strategic
human resources and it will lead the companies to attain
organizational effectiveness. The rapid changes in the business
environment remind that, for a business to survive, it has to focus
on its core competencies in order to keep ahead of the competitors.
The understanding in Indian companies about the relationship
between strategic HR and business success is still at a nascent
stage. This body of work attempts to bridge the gap through an
empirical investigation of SHRM practices on the functioning of
Human Resources function in HCCBPL, and identify gaps in
current setup which needs to be addressed in persuasion of
company’s goals.
The choice of HCCBPL as a case study was driven by the pro-
active role of HR within the organization, as well its impact on the
overall business strategy. Further, HCCBPL also meets the
general parameter of the study’s objective and shares the defined
core characteristics, thereby making it an apt candidate for
investigation and exploration of the study hypotheses.
At a secondary level, this study also examines the impact
changing role of HR from a purely administrative to a strategic
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entity. We also touch upon management perception about HR,
along with expectations and responsibilities of the function. The
shift towards a more strategic role of the HR function implies the
need to develop a different level of awareness about the role of the
HR manager, by top management as well as employees, along
with their perceptions and expectations from the HR department.
The importance of this research is linked to the significance of
developing unique human resource practices in the Indian
industry that affect both the HR’s capital pool and the overall
human resource behavior towards achieving the organization’s
goals through developed and sustainable competitive advantages.
This work assumes that the shifting role of the HR department
towards a more strategic function in the future is a key element in
today’s business since HR acts as the conduit between the top
management and the staff. Using response data from a survey of
managers at HCCBPL, this study investigates the importance and
performance of HR in a multi-dimensional framework, while
conducting dipsticks on core fundamentals like communication,
culture, connection and capability. The statistical novelty of this
study is exploited in identifying core drivers of managers’
perception using a customized version of Rotational Factor
Analysis.
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Need for the Study:
The beverage industry is vibrant and growing in choices. It thrives
on brands and the Coca – Cola Company knows better than anyone
how to create branded beverages that people are passionate about.
This is the time that Company has great opportunity to reinvent
itself not just as a Growth Company, but as a sustainable growth
Company. Sustainable growth means meeting the short term
commitments while investing to meet our long term Goals.
Sustainable growth means ensuring that each one in the
organization continues to grow, too. The time is right for everyone
to commit themselves to working together for this common
purpose.
To establish foundation for the people to move forward towards a
common direction the organization has launched a ”Manifesto for
growth” which lays the frame work to invent every part of the
company in integrated, holistic way with the following building
blocks.
1. Mission, Vision and Values
2. Strategies growth paths
3. Living the values
4. Working as a Global team
5. Enabling the peak performance
6. Building distinctive capabilities
Every organization must know how it conducts its business and it
must be aligned to ensure that all are working towards the same
goal in a way that is efficient and will allow the organization to be
the best.
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This includes developing an integrated system to guide business
decisions and drive result. The system will link strategies,
business, planning, metrics, management routines and individual
performance management and rewards.
At this junction, it becomes inevitable for the organization to design
and implement the best and available strategies for achieving the
organizational effectiveness. The present study is conducted on this
ground, focusing on Hindustan Coca- Cola Beverages Private
Limited, one of the leading pioneers in the beverages industry in
India.
Objectives of the Study:
The understanding in the Indian companies about the relationship
between strategic HR and business success is at a nascent stage.
The body of work aims to investigate the impact of SHRM practices
on the functioning of Hindustan Coca- Cola Beverages Private
Limited (HCCBPL) and industry gaps in current setup which needs
to be bridged for HCCBPL to realize its potential.
In other words, the research attempts to explore the role of SHRM
in developing competitive advantage and also provides actionable
recommendation on what organizations need to ensure to create
the knowledge worker and to diffuse that knowledge to others in
the organization. The study in particular focuses on the following
aspects:
• To Study the Human Resource practices that promote
socialization, such as orientation programs, development
assignments, Project teams, etc. in creating talent.
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• To know the People development practices such as formal
training in creating and sustaining competitive advantage
through internal growth and career paths to employees
• To Examine the other initiatives to meet the abilities and
alignment of people and HCCBPL Goals/Strategies
• To Know the effectiveness of HCCBPL’s business strategy
in transporting the organizational effectiveness
• To assess the HR Function’s competency to drive, lead,
train and synchronize organization’s strategies to deliver
results.
At a secondary level, this study also examines the move of HR from
a purely administrative and operational personnel function to a
more integral component of business success. The study also
touches upon the manner in which management perceives the
importance of HR department and its expectations regarding the
HR function, as well as the responsibilities given to that function.
Sampling:
The universe for the present study is in a Multinational company
which has presence across India namely the Hindustan Coca- Cola
Beverages Private Limited. HCCBPL is a 100% subsidiary to the
Coca-Cola Company. Since the undertaking chosen as the
universe is a beverage process and sales organization, it is largely
manpower intensified and holds 8500 permanent employees in
different cadres in the organization. For the purpose of this study,
researcher has considered 3 categories of managerial associates.
These consist of managers in different cadres, junior level
managers, Middle level managers and senior level Managers. Junior
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managerial cadre 149, Middle level 251 and Senior Top level
managerial cadre 48. The name of the respondents in each category
figure in the sample is picked up through the Stratified Random
Sampling method. A pilot study was conducted prior to the
administering of the questionnaire. The respondents of the pilot
study have also been included in the actual size of the sample for
the purpose of analysis. Finally, the size of the sample has worked
out to be 448 of which 149, 251 and 48 represent junior level
managers, Middle level managers and senior managerial categories
respectively.
S. No. Classification No. of Employees
1 Junior Level Managers 149
2 Middle Level Managers 251
3 Senior Level Managers 48
Tools for investigation:
Different methods are adopted for investigation of the different
aspects relating to the sample, which includes Primary and
Secondary data. The researcher has personally visited the various
locations of the organization spread across India and administered
the schedule to the Junior level managers, Middle level managers
and Senior level managers and collected the first hand information
through a questionnaire. Secondary data was collected through
documented feedback sessions of business plans, previous internal
survey reports, and the number of training programs conducted on
leadership development for various categories of managers,
company report, online tools and company internet etc. of HCCB.
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The study is mainly based on the Primary data collected from the
officials of Hindustan Coca-Cola Beverages Private Limited, India.
Data was collected from the officers of Human Resource
department of region/unit/corporate office. Further, the researcher
has also incorporated the views of the executives and belonging to
different departments and divisions of Hindustan Coca- Cola
Beverages Private Limited.
The researcher, on completion of the pilot study has collected the
required data by using the methods of questionnaire and
observations. One comprehensive schedule was designed for the
purpose of the study, which forms the third important source of
data collection. The questionnaire contains in all about 24 items
besides the items eliciting the personal information of the
respondents. The 24 items in the questionnaire has been
categorized under four broad dimensions / attributes based on the
following empirical approach:
The Organizational Effectiveness Model (OEM):
While considering the above inputs, for simplicity we define a
business as comprising of the following factors:
•Capabilities and Ownership- Do we understand our core
capabilities and instill ownership among associates to leverage
them?
•Operational Effectiveness- Do processes and interactions create
powerful internal synergies or create barriers?
•Strategy and Leadership- Do we have actionable strategies and
clear directions?
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•Trust and Motivation- How much trust does staff have in
management, and how motivated and committed is the workforce
to achieve results?
While these dimensions alone can no way simulate the complexities
of real operations, they do help to indicate the key areas of
concerns and relative effectiveness of each function.
Each of these 4 factors are further defined in terms of 4
independent attributes respectively. Here too, we make a departure
from reality in assuming zero interdependence among the
attributes, while empirical evidence is likely to indicate otherwise.
The following section presents the final questionnaire
administered for the Organizational Effectiveness survey.
Diagnostic Questionnaire
Please rate the following items on scale of 1 to 5, where 1
represents complete disagreement, 3 neutral and 5 overwhelming
conformity to the statement.
1. Major developments are communicated in a way that I can
relate to my work
2. Important information is effectively disseminated
throughout the organization
3. In my work group, people are valued for their contribution to
the team
4. I have confidence in the leadership ability of the senior
management
5. I understand how my compensation is tied to my
performance
6. My work unit/group has clearly defined goals and objectives
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7. I understand how my performance determines rewards and
incentives
8. I know what is expected of me at work
9. People are held accountable for delivering high levels of job
performance
10. My opinion is considered for decision making at work
11. In the last seven days, I have received recognition or praise
for good work
12. 12. My job allows me the opportunity to do what I do best
every day
13. 13. We have clearly documented work processes
14. 14. I trust the senior management of the company to
implement their commitments
15. 15. In the last one year, I have had opportunities at my
work to learn and grow
16. 16. I understand how my work contributes to the overall
success of HCCBPL
17. Capabilities and Ownership
18. I know what is expected of me at work
19. People are held accountable for delivering high levels of job
performance
20. 15. In the last one year, I have had opportunities at my work
to learn and grow
21. 16. I understand how my work contributes to the overall
success of HCCBPL
Operational Effectiveness
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1. Important information is effectively disseminated throughout
the organization
2. There is good teamwork and cooperation between different
units / departments
3. My job allows me the opportunity to do what I do best every
day
4. We have clearly documented work processes
Strategy and Leadership
1. Major developments are communicated in a way that I can
relate to my work
2. I have confidence in the leadership ability of the senior
management
3. My work unit/group has clearly defined goals and objectives
4. I trust the senior management of the company to implement
their commitments
Trust and Motivation
1. In my work group, people are valued for their contribution to the
team
2. I understand how my compensation is tied to my performance
3. I am proud to say that I work for HCCBPL
FIGURE 3.1: OEM – Framework
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The Alternate OEM Framework:
The 4 quadrant model framework described in the previous section,
viz., Capability and Ownership, Operational Effectiveness, Strategy
&Leadership and Trust & Motivation can also be viewed in an
alternate perspective.
In fact, careful observation would suggest that with minor change
of verbiage and subsequent reordering, the questions help to define
effectiveness of SHRM practices in an organization. The schematic
representation of the revised OEM framework is given below:
FIGURE 3.2: Schematic Representation of OEM framework
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How well do employees
understand and resonate
with HCCB’s strategy
Do employees perceive HR
as Strategic or Operational
asset within HCCB?
Are HR resources capable
of delivering in line with
employees’ expectations?
How far is HR aligned to
support HCCB’s strategy?
Where are the gaps?
Business
Goals
Function 1:
Bottling
Function 2:
Sales
Talent
Development
Induction &
Skill Training
Retention &
Engagement
Recruitment
Strategy
Competency
Assessment
Role of HR as
Stakeholder
ST
RA
TE
GIC
AL
IGN
ME
NT
OR
GA
NIZ
AT
ION
EF
FE
CT
IVE
NE
SS
1
2
4
3
OEM in action @ HCCBPL
The schema represented in the diagram above, serves as a proof of
concept to evaluate effectiveness of the Human Resource function as
an item of strategic importance for achieving HCCBPL’s goals.
The framework has four interdependent components, Business
Strategy, Role of HR, Functional Capabilities and Strategic
Alignment. HR at HCCBPL is evaluated on each of these
parameters to deliver an Organizational Effectiveness Report Card
for Hindustan Coca-Cola.
The questionnaire discussed earlier can be adopted to take the
following form:-
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Business Strategy:
I understand the business strategy of HCCBPL
HCCBPL business strategy is effective to compete in the marketplace
1. I understand how my work contributes to HCCBPL
2. Important information is effectively disseminated throughout
HCCBPL
Role of HR: Strategic vs. Operational/Administrative:
1. I understand the accountabilities of HR at HCCBPL
2. The HR strategy has an impact on the business growth of
HCCBPL
3. HR policies and processes impact my work at HCCBPL
4. The culture at HCCBPL encourages proper execution of HR
processes
HR: Competency Assessment:
1. HR at HCCBPL has the right capabilities to lead people
processes
2. The talent management initiatives are effective in creating future
leaders
3. The line managers are trained to drive HR processes efficiently
4. People are held accountable for delivering high level of
performance
People Process Alignment:
1. The HR processes in HCCBPL are easy to understand and
practice
2. My job allows me the opportunity to do what I do best
3. In the last one year, I have had opportunities at my work to
learn and grow
4. I understand how my performance determines rewards
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Each attribute indicates a directional significance towards a
combination of factors. Every item is provided with five alternative
responses on the pattern of the Likert’s five point scale. The face
validity of the items is established through the specifically selected
from among the faculties of management. Similarly the
questionnaire has been originally administered to a small sample of
24 respondents. The reliability of the questionnaire has been
establishment through Test – Retest method. The interval between
test – retest was two months.
Considerations for Administering Survey Questionnaire
• Each attribute is represented as a positive statement from an
associate perspective, which respondents would confirm
according to their perception, using a 5 point Likert Scale.
• The sample is best composed of representation from all key
functions/ units, with no group comprises less than 10% of
the total survey sample.
• It is recommended to analyze results at a work
group/function level to capture difference in perceptions
among departments.
The attributes corresponding to a factor are randomly ordered to
avoid pattern matching, outliers and pre conceptions on an
element.
Statistical Tools Used for the Study:
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The researcher has applied CHP – Score Test, to find the
association between the demographic profile of the respondent and
the four dimensions of Strategic HRM and its impact on
organizational effectiveness in HCCBPL. Further the researcher
used correlation analysis to check the relationship within the four
dimensions of Strategic HRM in HCCBPL. The correlation is one of
the most common and most useful statistics. A correlation is a
single number that describes the degree of relationship between
two variables.
Reliability of the Questionnaire: Cronbach’s alpha
Cronbach’s alpha is a measure of interval consistency that is how
closely related to a set of items as a group. A high value of alpha is
often used as evidence that the items measurement an
understating construct. However, a high alpha does not imply that
the measure is un dimensional. If, in addition to measuring
internal consistency, it is required to provide evidence that the
scale in question is un dimensional, additional analysis can
performed. Exploratory factor analysis is one method of checking
dimensionality. Technically speaking Cronbach is not a statistical
test – it is a coefficient of reliability. Cronbach alpha can be written
as a function of number of test item and the average inter
correlation among the items. Below conceptual purpose, the
formula for the standardized Cronbachs alpha is shown below.
N C
A = ----------------
V+ (N-1).C
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Here “N” is equal to the number of items, C-bar is the average inter
item covariance among the items and V-bar equals the average
variance.
The researcher has administered the alpha scale method of
reliability analysis and it is found that the alpha coefficient is
0.9233, which suggested that the pattern of questions possess
internal consistency.
Period of the study:
The study covers normally a five year period beginning 2006 the
selection of the period is governed by considerations of availability
of data from Hindustan Coca-Cola Beverages Private Limited, India.
Moreover, the purpose of the study is basically to study the effects
of strategic Human Resource Management in recent years and as
such the five years period is considered as sufficient for the
purpose.
The researcher has approached the region Human Resources
department of the organization after taking the necessary
permissions from the authorities. The records verified thoroughly
by the researcher are:
i. Annual reports of the organization
ii. Online tools relating to the Performance management
system
iii. Career development process and its linkage to strategic
road map of HCCBPL
iv. Internal and External trainings on Leadership
development.
v. Internal survey results and So on.
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On scrutinizing the records, the researcher has prepared separately
notes relating to each of the variables under the study.
In the second stage the researcher has consulted Human
Resources managers and on their advice, with the assistance of the
department managers belonging to various functions, the
researcher personally investigated the understanding of the
Strategic Human Resources Management and its linkage with
business objectives. A note on the content of the personal interview
is prepared separately for each of the respondents.
The third phase involved the researcher administering the interview
schedule to the respondents figured in the sample. The perceptions
of the respondents are surveyed by using a pre-standardized
schedule. The researcher has administered the schedule to the
respondents on the prior appointment fixed for the purpose. The
researcher was present when each respondent was answering the
questions. The researcher has taken care that respondents
answering on their own do not consult anyone. As part of the
precaution, the researcher carried both English and the local
dialects of the area of research with the copies of the schedule, and
served the one which the respondent felt that can answer on his
own. The respondents were told about the purpose of the Study
and they were given limited time to answer with a view on that only
spontaneous response can be recorded. On completion of the
answering of the questionnaire, the respondent was asked whether
he likes to add anything to what he/she has already was answered.
The oral statements and elaboration also have been recorded on the
questionnaire with a view that they can be content analyzed.
Limitations:
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One of the methods used in the enquiry is the case study, which
has some limitations associated with the method. The
generalization of the study cannot be expected to have universal
application, even when we try to apply to the organizations of
similar nature. These must be applied with caution.
Limitations of the study may briefly stated as follows
1. This thesis primarily investigates the strategic implication of
the HR function in achieving business excellence. Other
themes that are closely connected to the problem, namely,
approaches to compensation, motivational techniques,
performance measurement, diversity or change management,
will not be treated in depth in this study primarily due to time
and space limitations. The nature of the subject demands the
support of an extensive literature review as well as a detailed
empirical research to give a complete understanding of the
implications of the subject.
2. At the onset, lack of relevant resources and case studies in
the Indian context that tackle the core issue of the thesis with
regards to linking SHRM with organizational effectiveness,
posed a considerable challenge. We were thus obligated to
rest upon previous studies, articles and refer case studies of
western economies while discussing the theoretical section.
3. The paucity of relevant references in the Indian context was
in fact an encouragement to the role of HR as a strategic
partner to a company, as opposed to being a mere support
function. The conclusions of this study are based on an
empirical survey research conducted with managers in
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HCCBPL, which may give encouragement for further
investigation in this area.
4. During the collection of information, it was found that
officials were rather hesitant ambivalent in providing the
desired information and same time officials tolerated to
discuss in some cases.
5. This study brings a case analysis of Hindustan Coca- Cola
Beverages Private Limited and its conclusions need not
necessarily apply to all Multinational and food and beverage
industries in India. While this does constitute limitations of
the study, one cannot deny the fact that there could be many
conclusions that could be applied to other industries in the
country.
6. Employee was hard pressed for time in view of the job
demands and rigorous work questionnaire. The researcher
has to persuade them for sparing time for responding to the
questionnaire and interview when he found that the
respondents were not in a position to spare adequate time
for the purpose, he had to request them to allot time after
the office hours. To overcome the suspicions of the junior
level managers, Middle level managers and senior level
managers, the researcher took the help of the unit HR
Managers in establishing identity and explaining the nature
and purpose of the study. However the above mentioned
limitations do not detract from the quality output of the
present study.
Chapterization:
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The study has been organized into seven chapters, which are as
under.
Chapter –I - Introduction
Chapter-II - Review of literature
Chapter-III - Methodology
Chapter-IV - Profile of the organization
Chapter-V - SHRM Initiatives at HCCBPL
Chapter-VI - Data Analysis and Interpretation
Chapter-VI I- Conclusion and suggestions