HR ORGANIZATION

January 16, 2018

Business Strategy Report - Motors and More, Inc.

In a small southern town of 28,000 individuals a fictional company by the name of Motors and More, Inc employs 116 employee but have found themselves in a dilemma of where the demand for employees has far outweighed the labor supply. The private company who manufactures small motors and accessories have determined that the current sales force has exceeded their objectives. The company recognizes this dilemma and attempts to counteract with an expansion of personnel. Recognizing the fact that employee growth and retainment is essential, the best course of action is resulting in the company reorganization to include a human resource department, a function that is new to the company and their employees after survival without. Motors and More must design a strategy to create a human resource structure in a decentralized organization structure (McCain, 2007). Corporate restructuring can be defined as, “a major change in the composition of a firm’s assets combines with a major change in its corporate strategy” (Heugens, 2004, p. 87). In this strategy, they must ensure that the labor force meets the market demands of their products, the new human resource department meets the demands of the company and the lines of communication are open during this corporate restructure.

Company Strategy aligning with Human Resource Strategy

Motors and More, Inc falls into line as a prospector strategic organization with the opportunity to grow with the advancement of markets and products (McCain, 2007). This growth into new markets mean that a strain could develop and possibly has developed on the employees. This outward growth will mean internal growth will be made on how to address the needs of the employees. Currently Motors and More, Inc does not have a human resource department and one cannot be created overnight. With Motors and More obtaining growth within the industry, management and leadership within the company needs to create a human resource strategy to address how employees to grow within the company and how the human resource management will be able to recruit more employees into the fold. The company must address the fact that a talent pool could be available, but they must look beyond their own walls and reach out to the current community and outline talent pools that could be harnessed.

Of the many factors in place, the true success of this restructure lines in place with the new Human Resource Department. They will find that their success strategy should be focused on retainment of the current employees but to also the recruitment of new employees. The Human Resource Department should go even further by assessing these employees new and old to determine the possibility of the creation of new products.

Industry Realities

The reality of today’s society and standard is the companies and communities need to be all inclusive. When industries and companies chose to alienate themselves from opportunities to encourage all genders, races and classes, a talent pool becomes much smaller. Motors and More, Inc has found themselves in a position in needing the workforce to meet the demand. Managers within the company need to take responsibility for the growth. This is not just an HR issues, it should be treated as a joint venture. The stance of it always has been this way, can no longer continue for a company that is starving for quality employees. The unemployment market in other communities is substantial so this where Motors and More, Inc could be viewed a competitive advantage not just for products but for internal industry growth.

Competitor Analysis

For Motors and More, Inc, employee turnover has increased. A company on the outside can view Motors and More as their own talent pool. Currently the company has taken the stance that seniority equates to promotional opportunities (McCain 2007). Without an appropriately working human resource department, recognition of individuals has been overlooked creating employee dissatisfaction. Dissatisfied employees do not stay with a company that fails to recognize their own talented employees. These employees will leave to seek other companies that appreciate what the employee has to offer. And there is rub for a competitor to take advantage and prosper off the back of Motors and More, Inc. Money is lost when an employee leave and more money is wasted with the time and effort to retrain a new employee. There is potential for competitor growth to offer Motors and More additional compensation and growth in turn for connections to new accounts. Competitors will exploit the opportunity to engage new employees who are developed and trained in the current industry.

Utilizing Competitive Rivalry in one of Porter's Five Forces of Competitive Position Analysis, due to the fact that there are other markets available to pull from the talent pool, Motors and More, Inc need to ensure their employees needs are being met with opportunities not currently being available. With these greater opportunities, Motors and More, Inc may obtain more than their share of available workers in the community and elsewhere. But the goal to keep in mind is that they create a sort of branding to attract these workers, not just to expect them to apply (Porter, 1979).

This issue presented with using Porter's Five Forces of Competitive Position Analysis to focus on Motors and More Inc is that we are unsure of these other companies in the Market. We do have the quality of the their employees and workmanship. Do we know that their focus is on innovation also. If these companies have been successful in obtaining previous Motors and More employees, was it the fact that they already had in place a Human Resource Department? Is Motors and More, Inc rational is that if they do create a Human Resource Department, will all their issues just disappear? It is one thing to create the department, but this privately owned companies’ own management and leadership will need to follow and comply with the recommendations set in place by Human Resources. Human Resource Management should be viewed as leadership on all levels of the company structure.

Motors and More Difference from the Market

Motors and More, Inc has created many differences from itself compared to the market. The market is finding itself dealing with employees that want to unionize themselves. Wells addresses the fact that individuals “argue that human resource management (HRM) is only compatible with weak unions or the absence of unions, or that it exists where union avoidance is not an option, there is a large body of industrial relations opinion that asserts that strong, autonomous unions are not only compatible with these innovations, but even necessary to their successful development” (Wells, 1993 p 56).

Also, being that Motors and More, Inc is a privately-owned company, this could present the company as a more desirable company for a joint venture. Motors and More, Inc has a great advantage to work with the local community college and technology school to develop their own employee-in-training program (McCain, 2007). With a proper Human Resource team, a plan could be set in place to develop the students they need to become a employee with guaranteed skills already in place. Someone else trains and Motors and More, Inc can reap the benefits.

Motors and More, Inc should align themselves with the community in the southern town. Many companies include community outreach programs and volunteering to connect to the community but to also raise awareness of the needs of the people. The fact that Motors and More, Inc has not had a relationship with the Hispanic and Kurdish community, they are obstructing the possibility that these individuals might be the workforce to help them succeed in the growing market. The Hispanic and Kurdish population should not be seen as a threat but as a benefit to the employee deficit as Motors and More, Inc (McCain, 2007)

Motors and More Strategy Role to be Competitive

With the current model in place, managers were in place due to seniority and not necessary due to productivity treating longevity as the reward (McCain, 2007). Longevity does not always equate to a leader. Leadership involves traits and behaviors that a senior manager may not possess. If Motors and More took more of the strategy to incorporate gainsharing, a pay structure could be created to reward cost reduction and improve productivity. The company needs to attract individuals with the means to grow the company within or focus outward. Recently employee turnover rate higher than normal because of the lack of growth opportunities. This HR issue of turnover is expense, when a new reward system could be step to reward employee longevity. Rewards could also be put in place to award employees with successful recruitment utilizing an employee recommendation program.

With the creation of the new Human Resource Team, they can create a new opportunity by offering benefits that will attract a broader range of individuals. Currently with only one female team member, a team could be created to seek out what needs are requested from the female population in order to attract them to the industry in regards to tuition reimbursement or even onsite daycare..

Activities that Motors and More Inc can utilize to deem themselves as being more competitive presented by Pfeffer include but not limited to “selective recruiting, information sharing, cross utilization and cross training, participation and empowerment and incentive pay” (Pfeffer 1994). If the Motors and More, Inc Human Resource department is more selective, the turnover rate could greatly be decreased because the right people are in place. With information sharing, they company would find themselves with employees who are better aligned with the goals and mission of the company. Cross utilization and cross training would give the employees to opportunity to learn and grow and help the company understand what the company might be lacking, this is what happens when the same individuals are only performing the same jobs over and over again, people need a challenge to help them understand where the growth is needed. Since Motors and More Inc is considered a prospecting strategic company that is decentralized, with participation and empowerment, it would further “encourage the decentralization of decision making and broader worker participation and empowerment in controlling the work process” (Pfeffer, 1994). Overall, incentive pay will help reward others who are productive for the company.

Promotion based on seniority (Leaders vs Managers)- Communication with employees about changes- constituents

Motor’s and More, Inc will be designing a new Human Resource Department. Management promotions have all been based off of seniority and all of the managers including the president are Caucasian men excluding one female from the customer service department (McCain, 2007). According to the local labor market population there is a growing Hispanic and Kurdish community that could help with diversity in this workplace. Also, there is a community college and a technical college that is within 50 miles of the organization that could also help with building the educational needs of the employees. As the Human Resource Department grows as will the training and education.

As the training plan gets developed a way to devise a leadership plan could ensure that the managers of yesterday are shaped into the leaders of tomorrow. They will need to be educated on how to communicate with new more diverse workforce that will be created. How to empower and educate others as they are educating themselves. This leadership would also need to make sure that their own culture promotes the contributions of their team members to encourage participation and productivity.

Dentchev and Heene with their article Managing the reputation of restructuring corporations: Send the right signal to the right stakeholder examines that constituents might receive and how the messages being sent might be construed by different individuals. If the message is handled effectively, it ensures the correct message is sent to the correct individuals (Dentchev & Heene 2003). Ultimately, this Human Resource team should be transparent to ensure the communication is being heard but they should be open to feedback from the employees during this time of change.

In Conclusion

Motor’s and More are expanding and will be able to drive their output up by 96%. Using Porter’s five forces, supplier power is the pressure suppliers have over businesses. They can use the demand for their product to create more profitability. “Strong suppliers can pressure buyers by raising prices, lowering product quality, and reducing product availability. All of these things represent cost to the buyer” (Wilkinson, 2013). If Motor’s and More, Inc cannot find suitable employees and retain them they may be in trouble. Other suppliers may be able to produce their product at a lower cost. An example of this is like the tire industry relationship to automobile manufacturers, many competitive suppliers standardizing the product. Where the company is now is ideal and the next steps that it takes is vital. They need to ensure that their suppliers will be getting them the products they need at the best possible price so that they will be able to continue to produce at the current rate without decreasing.

The industry that Motor’s and More, Inc is in is highly competitive and is currently taking advantage of new markets and products. Its organizational emphasis is on growth, innovation and new product development. As a prospector wanting to be first to market having a threat of entry is high. New companies desiring the same success can cause a shake-up. “The seriousness of the threat of entry depends on the barriers present and on the reaction from existing competitors that entrants can expect. If barriers to entry are high and newcomers can expect sharp retaliation from the entrenched competitors, obviously the newcomers will not pose a serious threat of entering.” (Porter, 1979) These six major sources of barriers to entry are economies of scale, product differentiation, capital requirements, cost disadvantages independent of size, access to distribution channels and Government policy. Keeping all of this in mind while developing the Human Resource Development plan will keep the company competitive and be able to strategize the competitions weaknesses if needed.

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