Recommendations should be a reference to the models and theories covered, during this semester we have covered:
– HR planning and metrics
– Pay, reward and Engagement
Some of the main issues and subjects to focus on are
– The merge and its impact
– Structural changes and its impact on culture, behaviour and attitude
– Talent retention
– Transformational change
– Employee motivation and engagement
There is a big emphasis on using theory and models to offer solutions regarding the issues.
Case Study ‘Transformation at Galactic Manufacturing Corporation’
Your Task (2000 words +/10%)
1. Critically evaluate the key issues faced by leaders and operational managers in bringing together the new combined GMC UK business.
2. Identify the range of HR related issues which are, or might be, faced by GMC and make recommendations regarding the bundles of HR policies and practices which would be appropriate for GMCUK to adopt
[Support your answer with reference to relevant HR, organisation behaviour theories and models, and make appropriate recommendations.]
Case- Transformation at Galactic Manufacturing Corporation
Galactic Manufacturing Corporation [hereafter referred to as GMC] is a UK based global consumer product group, selling products to 120 countries and with global staff of over 140,000. GMC UK employs more than 6000 people
GMC UK has recently moved from its main offices in the Yorkshire (Northern England) to a large UK headquarters office site in Reading, Berkshire which is approximately 25 miles from London. This modern office complex office space is designed to be energy efficient, maximises natural light, has state-of-the-art gym, café and coffee outlets among other facilities for its employees. It is a 5 minute walk from the nearest railway station.
But the move to this striking and impressive building was not only about providing a pleasant and environmentally friendly workplace for the 2,500 employees who have only very recently moved into this new building. According to Harry Maloney, Director of Human Resources, for GMC UK, it is also the result of much bigger changes across the GMC.
In the past GMC’s food, home and personal care businesses operated as separate companies. In the UK the three businesses were recently merged (6 months ago) but were still based in different locations, one in Newquay and one in Yorkshire (England) one in Aberdeen (Scotland), until the more recent move to Reading near London. This has meant that, as an organisation, GMC UK has operated as one business for only a short period of time, but the Head Offices have now moved to operate in one physical place in the new Headquarters building. This represents big changes that are being undertaken, globally, across the GMC organisation as whole.
The merger of the three businesses areas (food, home and personal care), is part of a wider corporate transformation project known as “One GMC”. This is the result of a series of initiatives intended to simplify the business, restore its competitiveness and help deliver business growth.
Before these recent companywide organisational changes the Universal Manufacturers Group (GMC) was functioning as a collection of “mini-GMCs”, rather than a single entity – the result of an historical approach dating back to the 1930s, which saw entrepreneurial managers setting up individual companies around the world. This strategy gave the Group a global reach and meant that consumers, wherever they lived, tended to think of GMC and its brands as local. But the downside was that with the different businesses all doing their own thing, GMC could not use its size to advantage.
“One GMC”, the business transformation project was designed to streamline systems and approaches and enable us to bring our scale to bear where it was appropriate,” says Harry Maloney,
“For example in the UK alone by bringing the three GMC UK businesses together we can go to organisations like Asda, Lidl and Aldi and other retailers, as a single point of contact – with the full might of GMC behind us. Instead of three UK organisations approaching these customers, at different times and with different agendas, we now have one business to be brought to the table.”
As Mr Maloney emphasises,
“We can potentially achieve significant advantages though the “One GMC” transformation programme, but the changes represent a big change and considerable challenges for our employees and managers. It is a very testing time but with the potential for a significant and long term benefit across our global business as a whole.”
GMC now has to introduce a flatter corporate organisational structure across its global businesses. This will mean a need for less managers and will ultimately involve removing over half the senior management jobs from the organisation and giving those who now hold senior roles a greater range of responsibilities. This will be a very challenging process for an organisation that has not experienced such substantial structural change in its 70 year history.
All of these developments have placed new demands on GMC’s support functions, including Human Resources (HR), which is going through its own ambitious transformation. The aims are similar to those of the wider business transformation: to make the HR function simpler, more globally aligned and cost effective. Maloney admits that living through two such massive upheavals at the same time is challenging – especially given the scale and complexity of GMC UK’s business. In the UK, along with the new centralised head office which employs around 2,500 people, there are a further 3,500 people in 3 factories and a Research & Development centre.
Maloney, Director of Human Resources for GMC for UK, stresses that there was no question of doing either one or the other.
“I don’t believe we could have helped the business transformation without also looking at reorganising and transforming the Human Resources function at the same time,” he says.
An outsourcing contract with Global HR Services [a world–wide consultancy specialising in the global outsourcing of HR functions] lies at the heart of the HR transformation. Perhaps the largest and most complex deal of its kind ever signed, this is worth nearly $1.2 billion over eight years and covers HR services in almost 100 countries. Implementation has been taking place country by country with HR organisations throughout the GMC Group changing the role of HR to one of business partners, experts and shared services, as they outsource the transactional HR work (such as payroll, annual leave and pension administration, HR Metrics and activities such as recruitment campaigns), to Global Reach. This represents a considerable change to the jobs of most HR employees, who have been used to delivering such activities themselves. For many this will be a new way of working and they will be operating within different groups and teams. Whilst recruitment campaigns will be managed by Global HR, the selection of new employees will be managed by GMC UK head office. Learning and development programmes will also be designed in-house in the UK, alongside Reward programmes and Employee Engagement and Wellbeing initiatives.
For the UMUK business, which had moved to an in-house HR shared service centre, this model did represent a significant change but this will be felt even further for many of GMC’s operations in other countries. However with a range of services now provided from Global HR Services service centre in Bangalore, India, Maloney says:
“It’s still a significant change when it’s not our own people in the UK who provide a shared service any more. Even within the UK business HR staff will have to adjust considerably to new ways of working and within in and across new team.”
More than 120 HR service centre jobs have disappeared in the UK as a result of the outsourcing deal. But other roles have also been affected. GMC , which has a worldwide workforce of more than 140,000, is aiming to reach a ratio of one HR professional to every 200 staff. This has already led to the global HR organisation shrinking from over 2,000 people to around 1100. To meet this target there will be further downsizing by, 500 people, over the next two-three years.
In the Human Resources Department there have also been some key changes in the organisational structure. While each of the three UK businesses used to have its own Human Resources Director, they now have just one person –Maloney, who now leads the function for the merged organisation. HR business partnering job roles have similarly grown rapidly in terms of scope and responsibilities, becoming more strategic, with an increasing focus on organisational development, talent management and change management. This has represented a major challenge for many GMCUK HR staff.
As in other companies that have adopted an outsourced routine transactional work, these changes have resulted in fewer opportunities for newcomers to HR to learn their trade in lower-level jobs. Maloney states that GMC would not even be averse to people leaving to gain relevant experience in other companies and then returning to the company. For an organisation that traditionally grew its own people, this attitude represents a radical break with the past, and reflects a wider cultural change that’s gone hand in hand with the transformation of HR and of the business as a whole.
“Our values have remained constant, of course,” says Maloney, “We have moved towards a much more performance-driven culture, supported by work on developing people in the business against a new set of behaviours we wish to encourage and with relevant changes in the way we assess and reward the performance of our people.”
The development of the talent that is already within the group and the attraction of some from outside are priorities for Maloney and her team for the foreseeable future. At the same time, work on the HR transformation programme will continue. In the latest effort to simplify and harmonise the way the function works, similar systems and processes have recently been adopted throughout the world. The intention is to make it easier to collect data, make well-informed decisions and act on them.
“We brought together three businesses in the UK that historically operated independently into a purpose-built location where we have got the environment we want for some very talented, proud and driven people who really want to win,” he says.
The decisions to move to that new location and to embark on two simultaneous transformation projects were obviously taken long before the storm clouds started gathering over the economy. GMC, like many companies, is feeling the impact of the recent recession but, even with the benefit of hindsight, Maloney believes that the company made the right decisions. “The external environment is clearly different from what it was when we started this journey,” he says. “We have done what we knew we needed to do.”