October 19, 2008

Human Resources Management: Lesson 8 – Exercise:

Question 1: With reference to your own experience, critically evaluate the idea that there is a business case for family friendly working practices

Two concepts have to be defined in order to correctly answer this question:

  • What “level” of “family friendly working practices” we want to deal with

  • What do we mean by “there’s”: in my personal experience? In my country? In my actual position? Generally specking all over Europe? ...

I mentioned the “level” of “family friendly working practices” because, in my opinion, the concept of all those policies that helps in responding to employees' needs for what concern their “private” life is quite simple and shared all over the world. It includes the “common issues” of: childcare, home working, flexible time, old/ill parents take caring… What really changes and make the difference among countries and among companies operating in the same territory is the degree this policy can reach.

This level is influenced by several factors:

  • Country environment (individualistic or collectivist[1]?? just an example: the leave for pregnancy may last from 3 to 12 month depending on the European country you live in)

  • coercive framework: what the national law requires companies to do

  • ethical framework: what the social values a requires companies to do

  • what kind of job we’re dealing with (obviously a job in direct contact with the public offer less opportunities then an operational/management one)

  • the facilities the company you work with offer (a mobile phone, a fast intranet connection from home, a laptop…)

  • the company's policy itself (there’re still companies where employees are obliged to daily claim their presence in office)

  • the relationship of trust you’ve with your management

  • … this list may continue…

I personally strongly believe in the benefits taken by the adoption of family-friendly policy BUT only

  • if the contest allows it

  • after a period in the company in which each employee can show his/her “commitment”, “intentions”, “seriousness”…

Among the main benefits it takes I recognize:

  • for the company: higher productivity (i.e. personally I work harder from home then in the office), higher employees commitment and trustness, lower absenteeism

  • for employees: higher job satisfaction and morale, increase in the “pay” (no expenses to go inside the office and lower expenses in baby sitters / housekeepers)

For sure this policy cannot solve at all the conflict between family and work that exist when single or couples have to work more then 10 hours a day but it really helps (in my personal experience and actually I've not found strong critics in the literature proposed).

For sure the flexibility and availability (of both employers and employees) are the keys word to solve issues and request. An employee usually allowed to work from home, has to understand that, in particular critical period, has to be present for the whole time he/she’s needed and according to management requirements/expectations.

The risk is for sure that some employees (less motivated, less committed) may take advantages from this “freedom” despite in my opinion the same employees would have done the same (i.e. nothing at all!) staying at office sites!

In my personal experience I’ve seen a quite good level of “family friendly working practices” in IBM Italy. I’ve to admit that usually we’re required to work more then 10 hours/day but we’ve all the facilities to work from home and we’re usually allowed to do it (except in peak periods).


[1] Trompenaars, 1996

References:

  • The Warwick MBA for IBM – Human Resource Management (IB811Z), Lesson 8

  • Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007


October 17, 2008

Human Resources Management: Lesson 7 – Exercise:

Question 1: What implicit expectations do you and the employees you manage/work with have of your employer?

IBM’s employees’ expectations enormously changed in the past 10 years and actually they’re still evolving and changing.

Fixed remain the low level of “self-management” that departments have; the strong rigidity and the high bureaucracy (so often criticized by employees and management).

Also the explicit expectation for a fairly pay, benefits like pc, car and mobile phone remain but I feel it’s really less then it was in the past.

Bureaucracy and rigidity united to the growing competition and the fewer wealth in the IT sector make IBM more difficult to maintain its attractiveness towards highest market skills that still have implicit expectations like gratitude for the work performed, highlights in the value for extra-ordinary work, proposing challenging and rewarding career growth.

A complete new feeling is also emerging in these last few years (I’m especially referring to Italy but I do not think we’re the only country) that is the “survivors” one.

The reaction to all the mergers and takeovers and to the redundancy programmes performed in these last few years has been different from department to department:

  • Administrative/supporting department started developing an implicit expectation as that described by Greenhalgh and Sutton, 1991 (“less willing to accept change, more resentful of imposed change and more secretive and competitive”). Restorative strategies are strongly suggested.

  • Consultants / high skill technicians department started developing an implicit expectation as that described by Brockner et al., 1991 (“greater motivation”).

By the way we’ve to admit that job insecurity is a complete new feeling for several IBMers especially the less young ones.

The implicit expectation of “having maintained his/her own job” has been substituted by a wish of continue investment on one person skill improving and training.

IBM use to give several opportunities of learning (always outside and after the working hours) despite job rotation (also immediately after training session) is strictly submitted to bureaucracy and to single department needs.

Question 2: Analyse how and why these expectations might be different from the implicit expectations in another organisation with which you are familiar

Let’s compare IBM to a medium/small consultancy Italian company (Thera)

Talking to a consultant his expectations are: high pay, good salary raising plan, complete benefit set (mobile phone, car, pc…), flexible working hours, high investment in his learning programme and an immediate exploitation of the “new skill level” by the company, high level accommodations when he travel for working purpose…

Actually all these expectations are still present only in some IBM department, the richest ones, but we cannot consider them valid all over the company.

Being a small company Thera is strictly connected to new contracts / new projects developed so consultants know that  planning the future is hard and that career progression depends on their effort but also on the money the customer they’re working on wants to spend.

In IBM this is less perceived by consultants that can be easily moved form one customer to another.

Dealing with extra working time and “work hard” these “negative expectations” are quite common both in IBM and in Thera.

In a smaller company perhaps fewer holidays and a worst medical insurance are guarantee. IBM despite the worsening conditions seems to still believe in employees’ values.

From all the above and because of the differeces hilighted I found Robinson and Rousseau (1994) theory: in the smaller company turnover rate is higher, there’s a lower level of trust between employees and managers, perhaps less job satisfaction and several employees intend to leave the company.

Question 3: How convincing do you find the idea of the psychological contract as a theoretical framework for understanding the employment relationship?

In the psychological contract count “what employees are prepared to give” (that is what they believe they have to give) in exchange for what an employer is supposed to give (job security, pay, benefits and training according to Newell and Dopson - 1996).

So it deals with the concept of “mutual obligations” quite common in each relationship.

I strongly believe in the psychological contract and accortding to (Nicholson, 1996) I believe it may become one of the main causes of dissatisfaction and turnover.

Being implicit and psychological this contract has to be considered individually and “works” for singular relationship “employer-employees” (what I perceive I’m prepared to give is different from any other employee, what I suppose I should receive is different from any other employee).

I think each manager should be aware of what his/her employees’ expectations are and it should be understood at singular level and not at team level.

As per my experience (in IBM) the interaction should be between employee and his/her first line manager since is the most direct contact, is the one who have a reasonable number of employees, is more directly involved in day by day experience.

HR dept or higher management level should intervene only when communication problems are perceived / highlighted.

Always dealing with my experience it’s also important to “write” and to “leave some written message” of the psychological contracts. Managers change position quite often so contract violations may occur: the next manager may not know anything about the previous relationship! HR databases with singular career path/ wishes and "promises" help in this sense.

References:

  • The Warwick MBA for IBM – Human Resource Management (IB811Z), Lesson 7

  • Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007


Human Resources Management: Lesson 6 – Exercise:

Question 1: Thinking about an organisation that you know well, evaluate the extent to which it conforms with the LO model.

In my opinion it’s not easy to give an answer to this specific question: in lesson & readings we do not have one preferred LO model, “there is not an agreed consensus about what a learning organisation is”[1] and none of the proposed authors’ definitions and opinions are defined as the 'right' or 'most correct' one.

Among the several definitions and concept proposed in literature about the LO concept two characteristics are, in my opinion, the most important ones:

  1. An LO organization has a systematic and well-organised structure for managing learning and development[2]

  2. An LO one is an organization where[3] new skills and capabilities are developed (i.e. new things can be performed), new awareness, attitudes and belief are created.

The organization I’d like to deal with in this question is the delivery department of “GL Informatica” (already mentioned in my blog 2). This department mainly deals with customization and personalization of SW sold to customers and with development of new SW product perceived needed from customers. Stimulated by the need to be competitive and looking for new way of achieving competitiveness this company define itself “oriented to learning” that is a concept, in my opinion, still far from the LO described in this lesson but whose aims include those 2 characteristics I mentioned above.

In fact I recognize the particular way in which this organisation designs itself “to value, manage and enhance the skills and career development of its people” but I’ve also to sincerely admit that it seems not due to “ensuring continuous organisational transformation”[4] but to increase market share, market attractiveness, maintain competitive advantage…

Another characteristic that may let us think to “GL Informatica” as an LO organization is the low “rigid organization” it’s based on. Variety is widespread despite, in my opinion, it may be more due to the fact that we’re dealing with a quite small company then to the awareness that "to learn is to disorganise and increase variety”[5]

So summarizing, according to the definition given at the beginning of this answer, “GL Informatica” is not a complete LO organization.

Compared to several competitors it’s really learning oriented but it may 'improve' this position. It should make its “commercial” targets match the LO goals and should exploit its small dimension in order to get all the long term advantages brought by being a L.O.

Question 2: What changes would need to take place within the organisation to make it into a learning organisation?

In order to become a real LO, several activities may be started/implemented. For instance, managers could act more as “mentors, coaches and facilitators”, could more encourage risk-taking approaches and could try to develop some experimentation. As per my experience job rotation encourages learning as well.

Decision-making process, company strategy, reporting structures may be modified in order to exploit the “perceptions of the nature, legitimacy and outcomes of learning that are likely to be central to employees”[6]. This is a shared goal between management and employees that shouldn’t be ignored: it’s one of the main part of the “psychological contract” that ensure companies a continuous commitment in a contest of high dynamic labour market.

I also suggest “GL Informatica” to implement these changes as soon as it can since growing in size its bureaucratic structure is increasing as well. As stated by Salaman (2001) bureaucracy and rigidity are obstacles to any learning activities.

Less “isolation” is also suggested. Consultants are often alone at customer site and brain storming sessions seldom occur. The idea that “learning is a social and participative activity rather than merely a cognitive activity”[7] should be more developed in the company. Communities of practice, non formal and high socialized should appear as well.

Question 3: To what extent do you think these changes are a) feasible and b) desirable?

In my opinion employees, management and also HR dept could benefit from all the changes described in the previous paragraph.

Analyzing the “feasibility” all the changes suggested don’t seem to me too hard to be implemented, but it depends strictly on the “level” GL want to reach.

Again becoming a complete LO organization is perhaps a not reachable target for GL (still wandering if organisation and learning are essentially at odds[8]...?) in a so dynamic and competitive environment but (in a medium to long term strategy) investments in this contest are recommended. As already mention all the above should occur now that the already established boundaries are still editable.

Dealing with the “desirability” in my opinion

  • employees should like and appreciate a similar approach;
  • management may find new challenges in it and, in a medium-long term optic should understand the benefits it may take;
  • HR dept (centralized) may find only opportunities in it and I think also a reduction in the contrast between HR and management will occur.

[1] Lesson 6

[2] Marchington and Wilkinson (2005)

[3] Senge's (1994)

[4] Swan and Preston (1998)

[5] Salaman (2001)

[6] Findlay et al. (2001)

[7] Gheradi (2001)

[8] Salaman (2001)

References:
  • The Warwick MBA for IBM – Human Resource Management (IB811Z), Lesson 6
  • Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007

October 06, 2008

Human Resources Management: Lesson 5 – Exercise

Question 1: To what extent do you think that the employment relationship is necessarily based on conflict between employers and employees who have competing interests?

Simplifying and summarizing any employment relationship may be based on:

  • Partnerships: structured and cooperative relationships between employers and employees that brings advantage to both  
  • Conflict: employers and employees compete and “struggle” between different and opposite interests  

In an “ideal” world the 1st contest should drive whole companies’ behaviours but obviously it’s not what may always happen since

  • commitments/goals aren’t always shared among employers and employees 
  • employers’ resources aren’t unlimited so all employees’ requests cannot be completely satisfied 
  • growth employers’ objective doesn’t bring the same advantage to employees
  • several others issues...

Often contests of complete conflicts occur and real struggles are taken on by employees: Italy, but not only, has a story full of this kind of disputes.

Especially when conflicts occur between big company and Unions a real stop not only in evolving and growing but also in the day by day production may occur.

For sure the complete harmony isn’t conceivable or desirable from a growing and evolutionary point of view: this isn’t the way in which a company (and the whole society) may grow and improve its own condition.

In my opinion different historical period and different environment have shown different balance of harmony / conflicts. It’s perhaps in this alternation that a single company may find enough resources to grow and the whole society may improve its starting condition.

It’s in fact recognized that in each relationship conflict is inevitable and that a particular level of conflict is optimal[1]: the period immediately after a conflict is among the most productive ones!

Finally I strongly believe that:

  • a too harmonic contest deletes that “pressure” needed if a group want to perform better
  • conflicts haven’t to remain unresolved if employers want to avoid employees’ commitment loosing

Question 2: What factors influence the extent to which the employment relationship is harmonious or conflictual?

Several factors influence harmonic or conflict employment relationship.

One of the first is the place in the world it’s occurring in: perhaps east employees has less "opportunities" of engaging struggle to make employers hear their voice.

I also want to underline that perhaps this occurred only up to this moment since now new opportunities are offered them while “west” employees seems to have less and less contractual/negotiation power.

Legislation is in fact another important external factor that influence the way in which employees and Unions compete against employers’ targets.

The economic contest, competition in labour market and level of employees’ skill influence as well: the more difficult is for employers to find others employees the most they will be obliged in satisfying employees' requests.

Shared interests of employers, employees and unions may be found and relationship may be based on them rather then on differences.

Still strongly believing in communication, in my opinion, if more consultation is performed less negotiation/conflict may occur. I believe in the long-term investment that led to a consensual decision-making process, based on consultation.

References:
  • The Warwick MBA for IBM – Human Resource Management, Lesson 5
  • Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007

[1] Rosenfeld and Wilson, 1999


Human Resources Management: Lesson 4 – Exercise

Question 1: Thinking about organisations you are familiar with (it must not be IBM), what mechanisms and procedures have different organisations used for employee involvement and to give employees voice?

I want to answer this question using 2 different companies that work in the same contest: call centres. One is Telecom Italia (I’ll consider only the call centre department) and NumeroBlu (that provides call centre services to several customer among which Telecom itself.

Despite working in exactly the same environment and (when the customer is Telecom) side by side 2 companies’ employees’ conditions are strongly different:

  • in Telecom Unions have a real power and manage the main part of management-employees relationship;
  • in NumeroBlu (a small company) Unions are almost absent and each employee has to find way to get what he wants.

Dealing with “power-centred involvement policies” (that is dealing with fundamental issues of managerial authority) I’ve noticed “top down” approaches in both company but:

  • in Telecom we can to talk about “indirect methods” of involvement since all the management attention in focused on Unions’ voice and on getting Unions’ agreement
  • in NumeroBlu “radical changes” are simply imposed on employees.

On the other hand dealing with “task-centred methods” (“smaller” or more “operative” changes):

  • in Telecom, also because of Unions’ too strong presence, employees have difficulties in expressing their own opinion, in suggesting new ideas and in being voluntary for new opportunities: Telecom has the entire typical problems related to being a big-almost public company. Only some employees’ satisfaction surveys are performed but often Telecom makes them be led by Unions.

  • In NumeroBlu several “direct methods” have been developed to exploit employees’ opinions in operational growth: brain storming session, blogs,… that all contribute in enhancing productivity and quality

Question 2: How effective were each of these voice mechanisms in a) giving employees an effective voice at work and b) adding value to the organisation?

Obviously there cannot be one single answer in both the contest described.

  1. In Telecom Unionized environment employees’ rights are represented by Unions but we’ve also to consider that because of the enormous employees’ number it’s quite hard to become one unique voice. As mentioned above Unions’ voice seems effective in strategic issue. As the literature suggests the majority of people would like to be involved on the day-to-day issues: in Telecom this should be deeply improved.
  2. Moving to NumeroBlu, it seems: to take employee engagement in account and quite open in reacting to what employees say. Perhaps a great value to the organisation would be given if some “unions” or employees representatives could participate and being involved also in strategic issues and decision. Only in this way it can go over the fact that actually Unions are often a channel that helps in the effective issues’ resolution.

Question 3: Account for any variation in effectiveness of different mechanisms

Since Telecom, as an enormous company, can count on resources and funds I’d suggest introduce some classical HR tools that give more effectiveness to employees’ voice like: “management open doors” days, executives’ web pages where employees can directly write…

NumeroBlu seems to believe in advantages of managing without unions (i.e. speed of change thanks to the fact that managers are not obliged to perform time-consuming negotiations with unions’ representatives[1]). I’d suggest them that this is not what seems to happen in practice: Unions are important in obtaining a meaningful employee voice in any change process[2]. As stated by Storey (1992) if they still impose change from above a lack of participation and of commitment from lower levels of managers, supervisors and employees, may occur.

[1] Flood and Toner, 1997.

[2] McLoughlin, 1993.
References:
  • The Warwick MBA for IBM – Human Resource Management, Lesson 4
  • Mick Marchington and Adrian Wilkinson, Human Resources Management at Work.     People Management and Development, Third Edition, CIPD, 2007

September 29, 2008

Human Resources Management: Lesson 3 – Exercise

Question 1: Reflecting on your own experience as an employee and as a manager, to what extent do you think pay motivates or demotivates employees? Why?

Several considerations (personal and “perceived” in the team I am/was working with) may be taken about this topic.

Up to decades ago payment (in goods first, in money then) was the only reason to work, to perform any activities.

Nowadays (and in my personal experience) this is not true any more.

Several jobs (especially in this flexible market) that give you the same payment (or even more) may be performed but there’re OTHER reasons that persuade you to invest time & forces in one particular “project”.

My personal working experience started quite early, with several very short term contracts that gave me low pay and no “security” nor career evolution opportunities.

In that period pay was a need (to pay my university) and really it was my only motivator.

In my next working experiences (especially after the degree), in the choice among different opportunities, I started to consider other targets/elements like the possibility of

  • abroad work experiences,
  • changing position in few years,
  • growing in the same sector,
  • having training sessions…

All above obviously taking in account “relativities” and “differentials”[1].

Applying Herzberg’s (1996) two-factor theory to 2 of my personal experiences:

  • in administration sector: medium “hygiene” + low “motivational” factors à employees were not motivated and did many complaints.

  • in operations sector: medium “hygiene” + high “motivational” factors à employees were motivated but did many complaints; it was exciting and competitive working contest but pay and conditions should be improved if company wants to retain highest skills.

Around 10 years working experience make me feel that:

  • I completely agree that a pay above the market average (or a salary increase) is a “motivator” ONLY at the beginning,

  • I’ve also experienced (and seen around me) that underpayment feelings lead to a complete lack of motivation ONLY if no hope of career / growing opportunities (both in salary and position) are given,

  • A great motivator is often the direct award on salary of one employee’s work.

Obviously all the above is based on my personal experience, the working contest I’ve been living in, my desire for professional growth, market conditions and so on.

Those are (some of the) factors that influence the pay view, changing one (or some) of the above may radically change these conclusions.


Question 2: Thinking about different pay systems that you have experienced, which have been the most effective? Why?

I think there’s no most effective pay system.

My answer will be “it depends” and it will be based on my wishes and on my personal experience.

Nowadays what I feel (obviously?) is that the worst is a COMPLETE FIX PAY system. In this contest there’s no motivation at all and employees tend to work as less as they can. By the way when this contest is imposed (for instance in public sector) other “motivators” (like job rotation, job enlargement, working conditions improvement...) may be applied by management

I think that “individual performance-related pay”[2] works effectively.

It’s accused of being too dependent on the judgement of managers but I’ve personally experienced an improvement in its application through the involvement of a 360° employees review. This kind of evaluation revealed itself helpful also in organization where team working is widespread and where a single employee may be simultaneously part of more then one team.

We’ve also to remember the important “message” a company that adopt a PRP method gives to stakeholders.

Several appraisal systems may be used to calculate the PRP.

For sure the “comparison with objectives” is the most objective one but it’s not always applicable. In my opinion when “Narrative report” or “Critical incidents” are used they’ve to be fully supported and motivated. The next employee’s managers understand, only in this way, all the previous evaluations given.

I strongly believe in the “Potential review” especially for employees that shows a desire for professional growth.

In conclusion I believe there’s no perfect system; we’ve to remember that pay is only ONE among performance managing elements.

It has to be flexible and adaptable to changing circumstances.

References:

1) The Warwick MBA for IBM – Human Resource Management (IB811Z)

2) Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007


[1] The Warwick MBA for IBM – Human Resource Management (IB811Z) Lesson 3

[2] Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007


Human Resources Management: Lesson 2 – Exercise

Question 1: Reflecting on your own work experience, and with reference to the theoretical models discussed in Lesson 1, how would you characterise the role of the HR function in an organisation that you are familiar with?

In order to evaluate the role of the HR function and to discover an application of the HR theoretical models seen up to this moment, I’ll analyze the “GL Informatica” company[1].

It’s a medium size (150 employees) company founded in 1988 that sells:

  • its own SW products
  • services (application and assistance consultancy on system)

G.L. is a young and dynamic company that encourages the spirit of innovation and teamwork, rewarding the commitment and determination in achieving the goals. The strength and success have always been based on professionalism, expertise and know-how.

Let’s analyze the internal context with attention to the external one (since where the organisation operates is fundamental to understand HR role ad evolution).

In last few years GL managers seemed to place an emphasis on individualism[2].

The worldwide political and economic context (especially in IT “business sector”) change and (d)evolution had an effect as well: only few and highly specialized company survived standing alone and without being absorbed by big ones.

GL Management, at a first sight, seems to have chosen a “Sophisticated human relations” style (Purcell, 1986).

Employees are professionals and highly considered within the company: as stated in its home page website: “The value of our human capital is considered one of the most strategic and competitive advantages”.

Their wages are appropriate to their skills and quite above the average.

This approach, up to this moment, has proven successful (at least looking at the growing company’s revenue[3] and thinking about the “particular” situation IT companies are living).

GL is organized in 5 Business Units. I’ve not noticed differences in management styles among each of these groups and within groups themselves.

GL has a single centralized HR department (at corporate level) that

  • maintain attention in developing integrated HR policies across the organisation,
  • develop and maintain long-run human resource policies despite the attention paid to each quarter financial result
  • collaborate with line-managers 

It doesn’t seem a bureaucratic structure and using Storey (1992) matrix I can describe GL HR function as “change makers” or, at least, “adviser” according to the importance of the specific decision that has to be undertaken.


Question 2: Why do you think HR played this role in the organisation?

As mentioned above GL Management tries to develop relations with employees as individuals. In last few years it has not been difficult and may has been due to

  1. the growing Italian “labour market” liberalization/change  
  2. the changing “legal context”  

whose main effect has been a change in employees’ contract type (FROM full time/long term TO flexible time/short term contracts).

Looking at the management style, above I’ve defined it as a “Sophisticated human relations” one. In my opinion and analyzing it deeply, since GL operates in Italy I should more refer to a “consultative” style. In Italy, despite last few years evolution, Unions are highly recognized and play a key role in defining and addressing HR management rules and decision.

Since “the strong influence that the structure of an organisation may have on the way HR is managed is recognized[4] the choice of maintaining a centralized HR department has been undertaken.

GL medium size could make it adopt a complete Mform that would have led to self-contained divisions where resources operate independently.

Each division would have been headed by an executive responsible for investments, developments and performance, profits would have not been automatically returned to the divisions that generated them and corporate would only deal with strategic planning. This kind of organization would have led to the complete loss of HR policies across the organisation.

Employees are seen as the most important resources, competition is high and dealing with high specialized skill GL have to protect against other companies recruitments policy.

GL HR role is central and quite active; it operates at a corporate strategic level, works and continues to invest in order to maintain the relationship and develop skills.

Question 3: What are the strengths and weaknesses of this role in the context of the organisation?

One GL HR role weakness is to remain at a too “strategic” level and to loose sight of the day to day needs and experiences. It could participate more actively in making the profit grow (according to the revenue increase) through the exploitation of new kinds of employees’ contracts (offered by this “new” flexible labour market).

Another weakness is the contrast with line management (especially in overload periods).

One of its strength, up to this moment, has been a good internal fit[5] between its strategy/policy and Italian labour market changing contest.

The good relationship with Unions has to be considered strength as well.

[2] Trompenaars (1993)

[4] Purcell and Alhstrand, 1994

[5] Marchington and Wilkinson, 2005

References:

1) The Warwick MBA for IBM – Human Resource Management (IB811Z)

2) Mick Marchington and Adrian Wilkinson, Human Resources Management at Work. People Management and Development, Third Edition, CIPD, 2007


May 31, 2008

Operation Strategy Lesson 8 Exercise

Within IBM I work for the Services (Global Business and Software) Customer Fulfilment (CF from now on). We deal with all the contractual & administrative relationship with IBM customers (from the contract acceptance to invoices payment) and with all the financial analysis / economic report of the contracts.

Being a supporting structure (not directly producing revenue) its main objectives deal with cost saving, accuracy and auditability (picture 1 for result in 2006).

lesson_8_picture_1.jpg

Nowadays a continuous struggle between Corporate Operation Strategy and the Local (Italian) one occurs. The Corporate require as much operations’ commonality as possible in order to reduce cost creating centre (operating in low cost country – Picture 2) that support several Countries. Through commonality all Countries perform the same request to CF centre.

lesson_8_picture_2.jpg

The Italian Operation function “fights” to make Corporate understand the peculiarity and uniqueness of some customers (the Public Sector ones for instance) that do not accept common process.

Sometimes these requests are accepted by headquarters, sometimes we’ve to change our way of facing customers.

The “moving to centres” strategy is common, clearly defined and followed by the entire Countries. It’s providing a strong cost saving but it still has to improve in terms of internal support and customer requirements satisfaction.

In a contest of competition growing this strategy needs to be remodelled and adjusted by local Operation Managers.

In my opinion the attention on creating fit, sustainability and the attention on risk is present both at Corporate and Local level.

The Corporate tries to align operations resources with the market while the Local Managers (especially in the protectionist Italian labour market) try to align the market (customers/internal stakeholders) with operations resources.

Cost leadership is the ‘generic’ type of competitive strategy that describes how CF presents itself. It’s seen now as a strategy to earn a higher profit margin and in the long term to reduce IBM selling prices.

As highlighted by Slack and Lewis (but not enough considered by IBM in my opinion) it would be:

  • Important to develop a dynamic sustainability

  • Helpful to create a double-loop learning system

Within the CF a planned strategy, more then and emerging one, exists. Actually this is true if we focus on the strategy decided at Corporate level, while if we deal with Local decisions they seems to me more emerging.

CF operation has to face both internal and external stakeholders. Its declared aim is to support the reaching of these directions (picture 3)

lesson_8_picture_3.jpg

The direction, purpose and an opportunity to be creative in these complex tasks is present.

Analyzing the Hayes and Wheelwright ‘four-stage’ model and trying to understand where the CF is now, in my opinion, the stage is 3 in fact the following occur:

  • Frequent discussion with internal and external customers

  • Improvement of relationship

  • Explicit link between strategy and operations practice

  • Continuous improvement of operations practice

I’ve to affirm that it’s hard to recognize the ‘lower status’ associated with operations in the CF. Both corporate and local operations managers actually seems to have a strategic role even if sometimes the lack of strategy formulation experience is present. What is surely missing is the senior executives’ awareness about CF capabilities. We’ve seen that it’s difficult, in this condition, to direct an organization towards fitting within key business objectives.

References:

  • Slack, Nigel and Lewis, Michael (2008), "Operations Strategy", 2nd Edition, Prentice Hall, Great Britain

  • University of Warwick(2008), The Warwick MBA: Operations Strategy", Lesson 6, Warwick Business School.

  • University of Warwick(2008), The Warwick MBA: Operations Strategy", Lesson 8, Warwick Business School.

  • Customer Fulfillment Operation Communication Meeting (http://w3-05.ibm.com/isc/customerfulfillment/emea/csoemea.nsf/bef928bbebab9e43c12566fd00429f10/ddfd9e141fb5538f802573d00034f3d6/$FILE/CF%20Comm%20Meeting%20260207_Parte%20I.pps)


May 27, 2008

Operation Strategy Lesson 7 Exercise

The entire lesson emphasizes the strong connection between “operation resources” and “market resources” in the development of a new product/service.

These resources have to be seen as forces that drives the ideation and leads the final production/providing.

The development of “something” new is perhaps more important in services then in products: it possible that a minimum level of market request for a consuming object resists over time; a services provider, not able to renovate/introduce new services, cannot hope to maintain its revenue stream over time.

The services “demand” seems to me more changing over time then the products one.

The “time to market” is as important as for products but we have to consider that:

  • the idea of a new service often born more at direct contact with customers (i.e. providing an already existing service) then in a laboratory/industry

  • services are often developed and personalized at customer site (once the new service is already “in production”)
In the relationship between product/services and process, if we deal with a new service it’s quite hard to create a new one without changing the process itself.

For instance talking about a mobile company a new phone may be created in the “old laboratory” but it’s quite hard to set up a new supporting call-centre without involving new employees (or old ones organized in a new way).

Let’s analyze the 4 “organizational routes” in product/service development described in picture 1

Picture 1

In my opinion it’s possible to affirm that:

  • in services, more then in products, the approach is more a bottom-up then a top-down one (only with a direct contact with the daily “operations” new requirements/ideas can emerge; while with product a new great idea may come from top management)

  • in services, more then in products, the operations resources has to be proactive from 2 point of view:
  • adapt themselves to new market requirements

  • being able to make customer understand new need that may be provided by the organization

In services communication seems to me more complex and time requiring then in products (a new “SW” description/business case is easier then a new “support/consulting activity on SW” description/business case).

The “internal design chain’s resources” is more chaotic in services then in products contest. The management involvement in products seems to me more strong during the very early stages (when the new product has to be conceived) while with services it seems to me later on in time, when the services have to be designed and developed.

Analyzing “time” in services projects are a continuous overlap of different stages. It often happens that the idea of a new services and its early design are performed in other projects that are in their more active providing phase (it often happen in IT services).

About the “team strategy”, in services more then in products market, usually we have one person that share responsibility for N development project.

Moving to the “external design networks” in services the risk that a supplier (more then to collaborate with its customer to develop something new) works by its own in order to become one competitor is high.

The only way to mitigate this risk is to create a “partnership” more then a “transactional” relationship with suppliers hoping to persuade them that “common” performance may bring some competitive advantages and not the “personal” one.

Becoming the “final end user providers” more then a “supplier” in services is easier then in product so it’s important not to share all the information and maintain a direct contact with the final customer not to be substituted by one own supplier.

References:

Slack, Nigel and Lewis, Michael (2008), "Operations Strategy", Prentice Hall, Great Britain

University of Warwick(2008), "The Warwick MBA: Operations Strategy, Lesson 7", Warwick Business School.


May 25, 2008

Operation Strategy Lesson 6 Exercise

The importance–performance matrix is used by operations to prioritise the particular competitive factors or performance objectives on which they should be concentrating. The gap between ‘customer importance’ and ‘company performance’ should drive any improvement action.

I’m going to apply this technique to the “Nespresso Capsule” described in my 2nd blog (http://blogs.warwick.ac.uk/chiaraserini/entry/operation_strategy_lesson/)

The importance–performance matrix method is split in 5 steps.

Step 1 deal with selecting one product or service into one market: “Nespresso Capsule” offering includes coffee, tea, cappuccino and herbal tea tastes. In order to avoid generalities on the matrix I’m going to focus only on the coffee capsules.

In the Step 2 relevant competitive factors have to be identified. For this product the selling is direct from producer to the immediate purchasers (that are also the ultimate consumers). We’ve to focus on what is relevant for those last mentioned ones. We’re analyzing a quite good product so, in order to debate over the way it’s managed, let’s consider factors that may be improved. Splitting these factors according to the 5 performance objectives let’s focus on:

  • Quality: Error Free products, Taste, Reliable products
  • Dependability: On-time arrival of products, Knowledge of delivery time
  • Cost:Productive process, Low Prices

Step 3 and 4 require to rate these factors and operation performance (on a 1-9 importance scale - 1 is the best, 9 the worst). This is my analysis (we’ve to remember that is a quite subjective one)

Factors and operation performance subjective rates

In the Step 5 we’ve to plot the points on the importance-performance matrix. In order to put the factors on the matrix I’ve assigned them a letter (A to G).

This is the (subjective) result: Importance Performance matrix

The analysis shows that a really urgent action has to be developed in order to reduce the price (G) for customers. Competitors are increasing in number (Lavazza, Costadoro, Gaggia..), in service offering and price competition.

Assuming that customers do not care about the productive process (F), this factor appears in the appropriate area. In my opinion this is one of the most important “weapon” in the “price war” so has to be considered more in the improve area then in the appropriate one. As mentioned above and in my 2nd blog, we’re dealing with a very good product so it didn’t surprise me that reliable (C) / error free (A) products and taste (B) are in the appropriate area. Attention has to be paid on services – on time arrival of products (D) and knowledge of delivery time (E) - directly connected to the sales that need to be improved especially in this growing competition contest.

References:

Slack, Nigel and Lewis, Michael (2008), "Operations Strategy", Prentice Hall, Great Britain

University of Warwick(2008), "The Warwick MBA: Operations Strategy, Lesson 6", Warwick Business School.

http://blogs.warwick.ac.uk/chiaraserini/entry/operation_strategy_lesson/

http://www.nespresso.com/precom/home_uk_en.html

http://www.lavazzamodomio.it/home.jsp?http_sez=0&ecommerce=1

http://www.costadoro.it/espresso/capsula-caffe.asp

http://www.gaggia.it/linee_famiglia_professionale.asp?CA_ID=27


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