.. (1992) states the matrix system could be highly effective in a complex and rapidly changing environment. Davis & Lawrence (1977) add that the matrix style is applicable when there is a high need for information processing. However, there are certain criticisms that could be levelled against the matrix system. McKenna (2000) again cites Daft (1998) and Davis & Lawrence (1997), among others in pointing out some of the key problems associated with Matrix organizations.
The most appropriate in this situation appears to be with regards to role conflict of subordinates. The firm has very much shifted its focus from technology to market-driven and there appears to be a danger of the marketing function dominating authority, thereby leading to operational problems. Skills Restructuring: Along with the shift towards decentralized units and product differentiation came the need to restructure the essential skills of its engineering workforce. The major increase in the development of small and distributed systems was achieved through a combination of upskilling of existing, and creation of a new entry-level grade of service oriented representatives. Managing Change: The majority of the new business initiatives had been implemented to reasonable success.
Through the various tactical changes made including downsizing, re-structuring and the new product strategy, the company’s financial situation had stabilized and things were back to normal in the short term. However, the most difficult issue had still remained unresolved. During the period of the financial crisis, it appeared that there was a complete buy-in to the new strategy. But this appeared to be a misconception as once the company had started to stabilise, the realisation that the cultural issues still very much remained, began to dawn. In order to achieve the long term strategic goals of the company, the MD knew that he had to address these issues by educating the organisation of the need for a significant cultural change.
The initiation of the Core Management Programme turned out to be brilliant idea. It was a brave gamble (the costs of implementation amounted to 25% of the firm’s profits) that eventually paid off. The programme built on identifying the existing levers for change in the organisation and making use of these in communicating the new strategy at all levels. After initial resistance, people gradually started to understand the concepts of the new strategy and the importance of human resources in gaining competitive advantage. It is assumed that one of the biggest issues in the firm’s HRM strategy had been addressed eventually Shift from Personnel and HR Planning: In response to the significant changes that had been made to the overall strategy of the firm came the need to expand the Human Resource side of the organisation in comparison to the personnel aspect.
The was a significant shift away from traditional personnel values such as industrial relations and employee relations towards a much broader, strategic and critical viewpoint of the company’s human resources with an emphasis on competitive advantage. With reference to the writings of by John Storey (1989), it appears that the focus had shifted from the ‘soft’ to the ‘hard’ side of HRM. In order to achieve its new strategic goals and to ensure long term stability, the personnel function needed to actively forecast the firm’s future HR needs based widely on manpower planning and skills retention through a series of new processes including appraisals, pay flexibility, assessment and career planning. As this process known generally as Human Resource Planning, is to be discussed in detail in the next assignment, I shall not go into much more depth on this particular subject. Recommendations and Conclusion: In view of the facts that have been presented in the original case and the assumptions made by myself, it appears that the Human Resource Strategy adopted by the new MD was in fact very efficient. It managed to address most of the major HR issues associated with the implementation of a new business strategy and also added a new dimension to the personnel function of the organisation.
The major criticisms that I could level against the new strategy would be the initial efforts made to change the corporate culture and the structural changes made to the organisation. I am of the belief that corporate culture is one of the most difficult aspects of an organisation to change. A change in culture entails a change in individual beliefs, values and attitudes, and this could be no mean task. The members of the organisation require very good reasons to be willing to make changes to what is basically a set of personal assumptions. The problem with HR as opposed to Personnel is that the focus appears to shift from the individual to the organisation and the accent seems to be on keywords such as competitive advantage.
In order to integrate an efficient HR strategy with the business strategy, it is vital to stress the goals of the organisation and also to place an emphasis on the needs and wants of the individual. The other area in which the strategy could be made more efficient is in the re-structuring of the firm. Taking into consideration the environmental factors affecting the company, the matrix structure appears to be ideal. However, as has already been noted there are a number of disadvantages associated with this type of structure. McKenna (2000, citing the work of Daft, 1998; Davis & Lawrence, 1977; Larson & Gobeli, 1987 and Lorenz.
1994a) discusses the main problems associated with the implementation of this structure, including the possibility of role conflict, power struggles with regard to establishment of authority, inappropriate decision making techniques and difficulty in establishing accountability. Though it may be argued that every form of organisational structure has both strong and weak points, maybe a structure that is applicable to the environmental context, as well as having fewer disadvantages attached to could be applied. My personal view would be implementation of a structure based on product grouping, which in essence is similar to the matrix, but appears to posses fewer disadvantages. Reference: Sparrow P 1995 International Computers Limited (ICL) In: Hiltrop J, Sparrow P (eds.) European Casebook on Human Resource and Change Management Prentice Hall, pp 110-122 Business Reports.