Wednesday, May 18, 2011

Challenges require organisations to build new capabilities.

‘Regardless of their industry, size or location, today’s organisations are faced with five critical challenges viz; Globalization, profitability through growth, Technology, Intellectual capital and change, Change and more Change. Collectively these challenges require organisations to build new capabilities.’
Critically comment on the above statements with respect to your experiences with the organisation you have been working for/known to you. Give relevant details of the organisation you are referring to.


Regardless of their industry, size or location, today’s organisations are faced with many critical challenges. Such as globalization, profitability through growth technology, intellectual capital and change, change and more change. Collectively there challenges require organisations to build new capabilities. Above statement gives an insight how modern organisations small or big are to face variety of challenges. It is the prerequisite for the management to face there challenge effectively and effectively in order to turn them into their strength and win competitive advantage for their organisations.

The last decade of 20the century has brought management practices across the world and India has not been an exception to that. There changes have put various challenges before the management to adopt new strategies for managing business since HRM is the prime mover of management of people at work; it has to encounter that challenges effectively in order to enable organisations to achieve their objectives. Following trends which are emerging at the global level as well as in India, have far reacting impact on human resources management practices.
(i) Globalisation of economy
(ii) Corporate Restructuring
(iii) Newer Organisational designs
(iv) Emphasis on total quality management (TQM)
(v) Emphasis on Kaizen
(vi) Changing job profile
(vii) Changing work force profile
(viii) Increasing role of women employees
(ix) Emphasis on knowledge management

1. Globalisation of economy:
Today geographical boundaries of a country have only political relevance. The economic relevance has extended beyond that. Today, the market classification does not take into account only national parameters, but also global parameters. Many Indian companies have spread their wings beyond their national territory. Globalisation of business is helpful in earning profit but at the same time, it creates many challenges for management, particularly in the area of HRM. HRM practices are culture-bound and the culture of a nation differs from that of other countries. Therefore many of the HRM practices which are relevant for its operations in the country of its origin may not be relevant for its operation in other countries. HR managers are required to be familiar with the attitudes, beliefs and values prevalent in the host countries of other conditions prevailing in those countries which have bearing on HRM practices.

2. Profitability through growth:
Organisational development and growth efforts broadly aim at improving the organisational effectiveness and job satisfaction of the employees. There aims can be attained by humanising the organisations and encouraging the personal growth of individual employees. The objectives of this development and growth are to increase the communication among people, to increase commitment, self direction and self control, to enhance personal enthusiasm and satisfaction levels and to increase the level of trust and support among employees, to increase the level of individual and group responsibility in planning and execution. Thus the major task of HR managers is to harmonise the individual goals to those of broad organisational objectives

3. Technology:
With the removal of restrictions on technology import and acquisitions, many organisations have opted for newer technologies increased use of computers have added new dimension to technological innovation. With the result, old skills are fast becoming obsolete. In their place the operatives have to acquire new skills which has increased the training needs in such organisation and HR developments have to be more active. Technology brings the changes in the span of control, delegation of authority. These changes influence the changes in the present organisational structure. Technology influences the organisational structure through job redesign and change in job description demand for men. Skills and knowledge from the employees . There factors invariable necessitate the development of human resource.

Intellectual Aspects:
Enhancement of the level of the technology needs high level skills and knowledge. There high level skills and knowledge should be incorporated in the job description. Job handled by semi-skilled employees are how to be handled by a computer programmer Advance technology degrades some employees and retrenches some employees from, employment unless they are trained and developed on the application of new technology and methods. These factors demand for development of human resources. Hence it becomes imperative for the Human resource managers to take adequate steps to build the competencies and capabilities of their employees in order to make them important assets for the organisations.

Management of change
Change the order of the day. “Change before the change changes you”. And “change or decay” are the buzz words of the day. The factors that force the change include nature of the work force, technology, economic shocks, competition, social trends and world of politics. There is cultural diversity and need for unification. Also there is increase in professionalism, increase in formal education, increased level of soft skills and positive attitude in the employees. In the field of technology there is the advent of faster and cheaper computers, total quality management and business processing re-engineering. Then there are global competition, mergers and acquisitions and e-business fostering fierce competition. In social trends there are new concepts as (c1o2) Career first and others two, and increased career orientation among young ladies. In the world of political system changes major issues are collapse of Soviet Union, opening of markets in china and china becoming world number two economy. India is not far behind and is bound to catch up in near future if present trend continuous.
There changes require individuals and organisations to make new adjustments. Complexity and fear of adjustment give rise to resistance and problem to change management, especially the HRM is said to be an agent of change. HRM has to overcome the resistance and make it a successful venture. Management can take following steps for smooth transition of change;

• Participation of employees in decision making
• Planning for change
• Protecting Employees interests
• Group Dynamics and positive relationship among people
• Cautious and slow introduction
• Sharing the benefits of change
• Training and development
• Career planning and Development
• Organisational Development

Apart from above mentioned challenges there are plethora of other challenges organisation have to face, such as changing job profile, changing work force profile. Emphasis on total quality management and increasing role of women employees


Hindustan Organic Chemicals (HOC) has adopted various strategies to tope up various challenges put forward by changing scenario. They have adopted three-tier workers participation system, which is practised by most of the public sector enterprises. Three-tier participation operates through shop councils, joint councils and worker director.
Shop councils have equal representation from management and workers. The decisions of the council are made on the basis of consensus. Unsettled issues are referred to joint councils. Joint council also has equal representation from management and workers. CEO of firm is its chairman. The decisions of the councils are implemented within one month period. Meetings are held at least once in three months. A workers director is appointed from workers side to two years. He should have eligibility criteria as per ARC Administration Reforms Commissions of PSUs. Work director is appointed by the government. He takes parts in Board of Directors proceedings and draws fees and allowances as admissible to non executive directors.
Due to this healthy and purposeful participation of the workers the HOC management is able to face the challenges imposed by globalisation, technological advancement and social cultural aspects, very effectively and efficiently.

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