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1. Introduction (review at end) Hindustan Unilever Limited (HUL), a first subsidiary of Unilever in India, has several issues in hand from the decline of the company’s market share, inter-union rivalries, and cultural problems. These issues need to be solved before it turns into a major problem for Hindustan Unilever Limited. The purpose of this report is to give recommendations to the CEO and Managing Director, management board, and unions of HUL, based on the evaluation from present theories and literature. From Delong and Sinha’s 2011 case study, the author found key problems, which are cultural integration, union conflicts, and Long-term settlement (LTS) agreement of three different departments. This report will include cultural integration, diversity management, changing Personnel Management into Human Resource Management, and Performance Management.
2. Main Body
2.1 Cultural Integration (Organisational Culture)
there are now three subcultures in the Tea Factory. . after implementing the “one factory” way. 2003) article defined that organizational culture form an inherent part of an organization’s functions that put all the employees in the same track. However. Complex subcultures in an organisation could bring a bad impact on organizational performance. inequality could affect an organization’s development because it reduces employees’ morale. From the case study of Delong and Sinha (2011). Robbins’s (1996 cited in Martins and Terblanche. Therefore. Witte and Muijen (1999) noted that. although the Innovation Unit moved into the Tea Factory three years ago.HUL is implementing a “one factory” strategy to reduce cost and decrease response time to changes in market demand. Recent literatures suggested that organizational culture is a significant part of an organisation and cultural integration can be improved by forming an organisational culture in the workplace. these subcultures could bring more conflicts into the factory if it is not solved quickly. This caused inequality and made the union and workers demanding to know why only the Innovation Unit gets those privileges since they are located in the same company and factory. the Tea Innovation Unit and Ice Cream Unit into the Tea factory is cultural integration as workers in different departments have different cultures. According to Adam’s equity theory. A huge problem created by the regionalization of 2 departments. they still maintain a distinct culture such as setting up a soup vending machine in their office and hosting their annual day in a five star hotel. which would affect productivity in the factory.
forming an organisational culture could motivate employees using different appropriate models for different organisations type. can communicate better as well as understanding each other more. Martins and Terblanche (2003) stated that the only disadvantage of creating an organisational culture is if the basis of communication and mutual affection organisational were not fulfilled while creating an organisational culture. The coordination function is used to create a competitive boundary. 2. Internal integration is used to create the organisation boundary. personality. Rashid et al. Their paper also stated that worker performance would increase when there is an organisational culture because employees would be able to coordinate with each other and finish tasks without disagreements when cultures are brought together. gender. and commitment to the organisation. 2003). it would greatly lower the efficiency of the organisation.2 Diversity management In the tea factory. there is a diverse population of employees with their own distinct cultures. (2003) researched that. using acceptable behaviour according to the environment and stability in the social system. feeling of identification among employees. This will bring the three different cultures in the factory together and minimise inter-union conflicts of the different departments. after the regionalization process by HUL to bring other departments into the Tea Factory. The diversity includes cultural factors such as age. work style and race. organisational culture is used to coordinate and integrate internal functions. Rodgers and Hunter (1993) noted that most managers utilize one . However.As summarized by Furham and Gunter (1993 cited in Martins and Terblanche. which is the social ingredient to bring the organisation together.
increase creativity and innovation. . and will form a productive environment. According to Fleury (1999). diversity management can be used to in the Tea Factory to increase motivation of workers. and enable problem solving. As defined by Groschl (1999).management style for every worker in the company. and most importantly improve work performance. it was proved that diversity management is used to attract and retain talents. Thus. employees are more loyal and their performance will increase. prepare a better environment for new employees from different cultures. Women percentage Better innovation and ideas= more benefit/performance Easier to recruit. improve organisational flexibility. it can create an environment that everyone feel valued and identified. the basic concept of diversity management is to accept that the workforce consists of several types of people with different cultures and by using them properly on the workplace. For example. which will cause disagreement and conflicts among some employees. a Heskett research found that companies with strong inclusive and diverse culture show average increase in revenues of 682 percent compared to 116 percent for companies that don't have a strong culture. a good method to solve that problem is to implement diversity management into the company. in a company where employees feel they are treated fairly when managers practise diversity management. Thus. since gender/race is not an issue Moreover.
The nine best practices are top leadership commitment by top-level executives where. they argued that the utilization of diversity management does not always fit the explanation of equality or equity to the people in certain countries. a diversity management theory created by Haas. making diversity as a part of strategy plan. cited in Rodges and Hunters. which is a disadvantage of that theory. 1993). They also noted that western principles in diversity management. This theory is effective in most employees but some employees who found out that they do not suit their unit or company will be deeply demotivated. Stated by Byrne (1971. managers can be sent to the head office for training to improve their cultural understanding and increase awareness of cultural difference in the company. measurement of impact of diversity program. succession planning of process to develop talents. which improves interaction. the SimilarityAttraction theory allow workers to distinguish themselves among themselves in the firm. accountability of leadership by leaders. Another . Fleury (1999) stated that diversity management could be applied in the company by using training policies. increases trust and cooperation between them. link diversity to performance. where special treatment should be used on diverse groups might be seen as unfair to locals in countries with their own local tradition especially with countries in Asia.There are nine best practices to improve diversity management in an organisation. and diversity training. From the research of Inge et al (2010).
Personnel Management (PM) style is used by the managers to manage the workers. which will be time-consuming and increases costs. Lundy (1994) noted that Human . the benefits outweighs the disadvantages in the short term provided that the employees stay and work for the company for a long time. He also states that there is also a risk where employees might leave the company in various circumstances and the management team will have to re-train new workers. 1994) stated that personnel management is an old management style that concerns about obtaining. which target many employees to work together as a team towards the company’s goal. These methods could work efficiently and is easy to understand but as argued by Rogers and Hunter (1993).3 Change Personnel Management (PM) to Human Resource Management (HRM) There are many literatures written by professionals that recommend companies should change their management style from Personnel Management to Human Resource Management. organising and motivating employees in the company. ___________ 2. but in the long term. Armstrong (1977 cited in Lundy. A personnel manager is help individuals to work toward their personal goals in the company unlike Human Resource Management.method that can be used is by investing in internal communication projects to improve the understanding between employees from different cultures. the cost needed for training and communication projects high and it takes a long time to complete. In HUL.
This shows the employee behaviours have changed and HRM is a good method to re-motivate employees (Wilkinson. competence.Resource Management (HRM) evolved from the PM style and has implemented a more “human feeling” into its management style compared to the PM style. 1993). HRM is only useful in the long term and not too effective on the short term if the organisation wants to reduce costs. management and guiding of workers in the organisation. The HRM policy is able to create a long-term effect of employee commitment. innovation and performance of workers in the firm will gradually increase from higher motivation. while HRM has a broader approach and is more holistic instead of administrative. overlooked emotional welfare and consider employees as a cost to the firm. It is also very time consuming and take a long time to train managers to learn the HRM function. HRM’s function is significant for implementing training programs to develop employees in relation to diversity management and to create an organisation culture. . Its disadvantages are the cost required to hire and train HRM employees and managers. which maintains a harmonious working condition. managers and unions to create harmonious working relations in the company. She argued that PM style is traditional and focuses into administrative roles only. workers need to be persuaded and paid overtime to work on Sundays. and cost-effectiveness. As the environment in the firm is changed to suit employees’ needs. Lundy (1994) defines HRM as a function that concentrate on the recruitment. Therefore. For example. It most important feature is to resolve disputes among employees. workers in the past voluntarily attend work for training on Sundays but in the current days.
4 Performance Management Performance management is important for companies especially if they are team-based. Since HRM look at employees as an important resource instead of a cost to the company. 1993). 2. Other than that. Performance Management is used to keep employees working at their best of their ability (Brumback. the author believe that Human Resource Management can create a more harmonious environment for employees in HUL’s factory to work on instead of maintaining their Personnel Management function. The author believes that as long as the Long Term Settlement (LTS) agreement is not resolved. which is significant to create motivated and high-performing employees in the Tea Factory and boost company production. Performance of individual employees needs to be managed to ensure they keep a consistent and high performance. 2003). This will demotivate workers and unhappiness in the Tea Factory. Changing PM style to HRM will help resolve the LTS problem quickly. the HRM team can apply diversity management and form an organisational culture.From the literatures and theories. worker will lose money and other benefits everyday. HRM can also be used to solve the Tea Factory’s inter-union rivalry and to settle the Long Term Settlement Agreement as soon as possible because the HRM department have a special knowledge to solve these problems (Wilkinson. it not only can create a harmonious environment in the tea factory but also bring the three different departments together. .
2003). Furthermore. In performance management. there is a drawback to performance management as old employees will be more reluctant to change as they have their own believes and methods in doing their job (McAfee and Champagne. Moreover. coaching workers.From the research of Brumback (2003). human resource managers are also required to meet employees on a yearly basis to form a development plan that includes job-performance and expectations. in some companies. However. They also argued that senior workers would not be able to accept the decision for training nor develop themselves more since they have been using the same method for a long time without problems. performance management can be managed by developing clear job descriptions. Waal and . Another problem will be accepting young Human Resource manager’s decision as the older workers think they are more experienced in their working field (Brumback. Performance Management consists from a range of difficult theories and methodologies as well as requiring managers to complete high amount of work for it to be successful. 1993). This is where Performance Management becomes the most suitable to use to help or guide them to enable them to develop their skills quickly. providing feedback so that workers have a clear goals and targets to develop themselves. employees especially new workers do not know what to do or how to do their work. Performance reviewing between managers and workers are significant as it allow workers to change their mistakes so the employees can work in their best ability and increase the overall company performance.
the theories researched have both advantages and disadvantages respectively. Forming an organisational culture has a risk of lowering the efficiency and performance of the organisation more if managers fail to implement the organisational culture properly. The author believed that. the risk of failure is low and the benefits are high. in HUL tea factory. if the Performance Management system is not implemented correctly. They also noted that problems from Performance management could be caused managers that are unable to understand the complex system of performance management. the failure rate of Performance management in companies around the world is disturbingly high. performance management would be useful to advice and guide new workers to maximise their ability and generate higher production for the factory.Counet (2009) stated from their research that. which is a significant reason for many large corporations to invest into it. and lack of knowledge toward performance management that could easily cause managers to use the wrong methods while implementing Performance Management into the company. . 3. 2003). Although the risk is high. However. low priority and commitment on implementation due to time limitations and job pressures. Therefore. it could be repetitive and waste large amount of time (Brumback. Conclusion In conclusion. since many old experienced workers retired and are replaced by new employees Delong and Sinha (2011). Performance Management can help organisations to improve their level of motivation and performance rate.
which improves motivation and show higher performance during work. managers and unions. Performance Management is useful to most large corporations.Organisational culture enables employees to be able to communicate better. It is used to guide employees and maintain their top performing ability. which will benefit the organisation. solve disputes in the organisation. there are a few drawbacks in this strategy. Even though this method is easy to understand and implement. Unfortunately. . there are also disadvantages. It can make recruitment easier for managers and workers can form better idea and innovation. Diversity management might not be suitable for certain cultures especially in Asian countries. It can also reduce conflicts between employees. It was proven that Performance Management have a high failure rate and could cost corporations high amount of money while achieving nothing. Diversity management could increase fairness and form a harmonious environment in the organisation. Although diversity management have many advantages. Changing Personnel Management into Human Resource Management is a good strategy that could improve teamwork. and sustain a harmonious working environment in the organisation. The only problem with HRM is its cost to hire HRM managers and train HRM employees. which will only be useful in the long run. its costs is high and require a high amount of time to implement.
Recommendation The findings and conclusion from the report supports these recommendations: Train employees to . 4. The risks are high in some strategies but the benefits will definitely outweigh its risks to form a workplace with a harmonious environment and a highperforming workers. all the strategies are related to each other and could help improve conditions the Tea Factory but there are also risks.Lastly. which require a high amount of consideration and research to determine what strategy to implement into the Tea Factory.
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