Book Review from The Hindu: Organization Redesign and Innovative HRM

Date:23/12/2008 URL:

Redefining strategic business initiatives
M. S. S.VARADAN http://www.thehindu.com/thehindu/br/2008/12/23/stories/2008122350011300.htm
ORGANIZATION REDESIGN AND INNOVATIVE HRM: Ashok Som; Oxford University Press, YMCA Library Building, Jai Singh Road, New Delhi-110001. Rs. 545.

This book is an analysis of five large firms, French and Indian, which are market leaders — Lafarge a global leader in cement and construction materials; Renault-Nissan and Maruti Suzuki, two leaders in the automobile industry; Mahut Group, an Indian multinational company in cements; and Bharat Petroleum (BPCL).

Case studies
An earnest attempt has been made by the author in the first part of the book to provide an interesting organisation redesign model, including differentiation, integration and uncertainty avoidance mechanisms, coupled with human resource management (HRM) strategies. The author has indeed exhaustively quoted all the leading researchers very meticulously throughout the book, which is also interspersed with the earthy observations of practising managers.
The case of BPCL illustrates organisational change from a functional to a divisional enterprise with strategic business units. As a director of the firm pointed out “BPCL has undergone a very interesting HRD-powered transformation process… Some 2500 managers participated in the envisioning exercise. It was facilitated by trained individuals, many of them volunteers from functions other than HRM.” After the redesign, each strategic business unit had an empowered “embedded HRM”.

In the case of Maruti, having adopted a Japanese work culture with Suzuki’s joint ownership, it struggled with cross-cultural, political and social issues. There was also a change in leadership. The organisation ran smoothly as long as it was a market leader. When competitive pressures mounted, internal communication being historically weak, union unrest was brewing and the organisation turned to the inadequate HR department for support. The case is all about having the HRM itself redesigned.

The case of Lafarge which had as its origin humble French roots and which is now a world leader in the building construction materials industry is a very interesting one. It took over Tata Steel’s cement division and Raymond’s cement plant as well. Lafarge is a storehouse of best practices and best specialists among the industry. But, the style had to change: “The style is a very traditional, technology-minded one. It is based on repeated evaluations. French people have rules for everything, accurately and methodically documented, but no one follows the rules.” To be global leaders, they have even two official languages – French and English. Lafarge had institutionalised special recruitment processes for various categories. The retraining and redeployment cycle was critical for effectively managing local business units. They did not believe in downsizing.

Redesign
Priorities for organisational redesign at Renault were clearly laid out – flexibility, reducing cost and management of competencies. With the Renault -Nissan alliance, the objectives of the HR department were to improve the performance of its management, reduce the costs, adapt the management of HR to the changing qualifications of the personnel, reduce dysfunction between different levels of HR management and to master the challenges of the redesign programme. In other words, they believed that “charity begins at home.” How it coped with French legislation to cut the work week from 39 to 35 hours makes an interesting story. Renault has a joint venture with Mahindra and Mahindra in India for manufacturing the Logan model.

Even the failed case of Mahut Group finds mention. In the concluding parts of the book, the author has analysed the cases and anchored them to the redesign model. Pradip N. Khandwalla’s foreword to the book is a good curtain raiser.

It may be apt to add that when changes in organisation are made without attention to HR issues, problems snowball into the national scene like what happened to the airlines industry recently. Thus the importance of proper HRM going hand in hand with any organisational redesign becomes paramount. The author must be commended for this publication, coming as it does in troubled times, attempting to provide a redesign approach for effecting organisational changes without pain.

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Book Review: Education Times, Times of India (22nd December 2008)

Publication: Times Of India Delhi; Date:2008 Dec 22; Section:Education Times; Page # 40

http://epaper.timesofindia.com/Daily/Skins/EDU/navigator.asp?Action=view/issue&section=Education%20Times&Daily=CAP&BaseHref=CAP/2008/12/22&Issue=CAP/2008/12/22&Page=40

TURK TALK
New strategies to keep up with the times
Ashok Som, director, India Research Centre at ESSEC Business School, Paris, in his recent book Organization Re-design and Innovative HRM, says that firms need to re-design and align themselves with the environment in which they operate
Surbhi Bhatia/TNN

The current economic downturn has brought about significant changes in the way organisations work. In fact, most of them are thinking of new strategies of operating in the market. But according to Ashok Som, professor at the ESSEC Business School, Paris, it is not the economy alone that affects the manner in which organisations function. “Organisations get affected by the environment they operate in. There are four types of environment — political, economic, technological and social. Any change in any one of the elements can affect the way in which organisations operate. So, it is imperative that organisations re-design their strategies in order to align with the environment. Hence, designing is an ongoing activity and all designs are merely transient states in this activity with respect to the environment in which the firm operates,” Som elaborates. Som adds that the Mumbai attack is reason enough for the luxury or retail organisations to think about the way they operate. “It is a change in social environment. Many international organisations will henceforth find it risky to do business in the city or send people to Mumbai. Those who expanded earlier will now have to think of ways to survive. It is the same with technological changes. For instance, the launch of Nokia Iphone will change the way mobile phones operate and many organisations will have to re-design their strategies with the Iphone in mind,” he says. When it comes to changes in the economic environment, it is all the more important for organisations to re-think or redesign. “Each act of designing produces routines that generate systems about how the organisation in the designing process perceived and interpreted the system they were trying to influence. Therefore, with the economic downturn that has resulted from the systems that are today “misunderstood and misperceived,” it is very important for the firms to re-design themselves in keeping with the change,” he says. In the present scenario, an increasing number of companies will have to confront the essential question: given the changing business environment, how do we redesign the organisation for superior performance? “It has been observed from the case narratives that the role of innovative human resource management (HRM) practices and its alignment with re-design mechanisms is probably the key to enhanced performance. Identification of these innovative HRM and re-design mechanisms is a critical factor for improving organisational performance,” Som says. However, there are three main strategies to keep in mind while redesigning — uncertainty or risk avoidance, differentiation in terms of recruiting people and spending money, and integration of various company processes so that the control is more centralised. While listing some of the innovative HR practices, Som mentions that with the economic downturn, the HR has to be even more prudent because employees either leave organisations or, even if they stay on, are not confident. “In either of the case it is the role of the HR to instil confidence. It can do it by sharing information from top management to the employees. But then, it has to be extremely wise. The HR of an organisation can think of recruiting more professionals than spending more money on making people professional. The managerial personnel can be given choices in terms of working hours, workplace or parttime service, rather than being sacked altogether.”

New Book: Organization Redesign and Innovative HRM

Description: This book documents an empirical, longitudinal study of the process of organizational redesign during changing environments brought about by globalization, liberalization and deregulation. It portrays through detailed description the challenges organizations face responding to these changing environments and how those organizations respond by integrative mechanisms to cement redesign changes within themselves. One of the processes identified is the role of innovative human resource management during organizational redesign.The book, while describing key processes of design and the subsequent innovative human resource management initiatives undertaken by five firms, draws on the rich data set of two environments, India and France, which are emerging into more liberalized and international regimes. It discusses an emergent HR model in a hyper-competitive market in the global system. While describing the organizational redesign process from an organization theory perspective, the book presents a contingency framework based upon both specific policies and actual practices as perceived by top management from a cross-national point of view. This volume brings together five well researched case studies of globally active multinationals that integrate theory and practise—Lafarge, world leader in cement and construction material; Renault–Nissan and Maruti Suzuki, two automobile giants; Bharat Petroleum Corporation Ltd (BPCL), one of the largest petroleum companies in India with global interests; and the Mahut Group, an Indian multi-national corporation.The book provides a theoretical framework for a better understanding of the link between organizational redesign, the role of HRM, and organizational performance. This is followed by discussions on human resource management in emerging economies like India as well as professionalized HR practices and redesign mechanisms. The study leads the author to support the belief that a proactive role of human resource management is a necessity for superior performance during an organizational redesign process.

Readership: This book will interest students and teachers of management, professional managers and entrepreneurs, as well as HR professionals and consultants.

Review Comments: ‘...a novel account of the key role of HRM in driving effective change and ultimately superior performance for global firms. This book will be of interest to both academics and practitioners.’ —Ranjay Gulati, Harvard Business School‘...five interesting case studies of business firms that undertook significant changes in organizational structures [that] demanded concomitant changes in human resources practices.’ —William H. Starbuck, Lundquist College of Business, University of Oregon‘...a much needed refreshing perspective on innovative approaches to HRM during organizational redesigns... highly recommended for researchers, practitioners and students in the field.’ —Pawan Budhwar Aston Business School, Aston University, Birmingham

Author Details: Ashok Som is Associate Professor and Chair in Management Area at ESSEC Business School located in Paris & Singapore. He is the founder of the India Research Centre at ESSEC, Director of the Global Management Programs on Luxury and Retail Management (in partnership with Indian Institute of Management (IIM Ahmedabad) and co-ordinator of the module Managing International Business. He received his Ph.D from the Indian Institute of Management (IIM), Ahmedabad, M.Sc and M.Tech from the Indian Institute of Technology, Kharagpur, and bachelors degree from Presidency College, Calcutta, India. Ashok’s three main research areas are in organization re-design, innovative HRM and innovation in Asia. His research has been extensively published in international journals. He has been featured in Who’s Who of the World (2008, 2009). He is a regular Visiting Professor at GSB, Keio University (Tokyo), IIM Ahmedabad (India) and Tamkang University (Taiwan). He was nominated as one of the 2000 Outstanding Intellectuals of the 21st Century in 2008-2009. He is the author of the books “Organization-Redesign and Innovative HRM”, Oxford University Press (2008) and “International Management: Managing the Global Corporation” McGrawHill (forthcoming in 2009).

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Europe: http://www.oup.com/uk/catalogue/?ci=9780195696493
India: http://www.oup.co.in/search_detail.php?id=144739

Featured on Luxury Sector in India, CB News, No.994, 8 Dec 2008: 26

Centenary celebrations of ESSEC & 25th anniversary of ESSEC-IIM Ahmedabad partnership during the visit of Mr. Nicolas Sarkozy 26th January 2008

Celebrating with M. Nicolas Sarakozy, President of France and Ms. Valérie Pecresse, Minister for Higher Education, Government of France

Speaker: Mr. Narayana Murthy, Chairman Board and Chief Mentor Infosys (From R to L)

Dr. Ashok Som (MoC and Moderator)
Dr. Vijay Kapur, Prof. FMS/Delhi University
Dr. Pascal Morand, Managing Director ESCP-EAP
Mr. Arun Maira, Chairman of Boston Consulting group (India)
Dr. Samir Barua, Director, Indian Institute of Management of Ahmedabad (IIM A)
Dr. Pierre Tapie, Dean & President of ESSEC
Mr. Richard Descoings, Director, Sciences Po Paris
Mr. Prshant Lahoti, Curator of Krishnakriti Foundation
Mr. Jean-Luc Placet, Chairman of ESSEC Alumni Association
Mr. Jerry Rao, VP-EDS, ex- CEO, MphasiS & past Chairman, Nasscom and Chairman of IIM A Alumni Trust

Key Note Speech and Main Speaker at AMP, GSB, Keio University held at Osaka, 29th July - 4th Aug, 2006

With Kenji Wada (left), Associate Professor and Kazuhiro Asakawa, Professor and Associate Dean of Executive Programs, GSB Keio at Imperial Hotel, Osaka. The AMP was titled "Mnaging Business in India" and delivered to 73 senior-managers of Japanese corporations. Other than the main topic, the AMP discussed European firms and their experiences in Chinese and Indian markets.

Third India Seminar Series with Mr. P. Chidambaram, Minister of Finance on "India: Looking to the Future" at CNIT, ESSEC La Defense Campus, 13.06.06

Kapil Sibal, Cabinet Minister, Science and Technology, Ocean Studies at Maison des ESSEC, 2nd May 2006

Fresh from the successful launch of the India Seminar Series in mid-March, Dr. Ashok Som was also to the fore in helping organize a frank intervention by Mr. Kapil Sibal, Minister of Science & Technology for the Indian Government, at the Maison des ESSEC on Tuesday May 2nd. Accompanied by H.E.M. T.C.A Rangachari (Ambassador of India), Mr. Sibal offered a broad and challenging view of modern-day India in a speech entitled “India in the 21st Century: Contrasts, Achievements and Opportunities”. This formed a part of ESSEC International’s “Cercle Diplomatique” program and was chaired by Pierre Daban, President of ESSEC International.

Launch of India Seminar Series at ESSEC

The Management Department, ESSEC Business School offered its Inaugural India Seminar Series with Saumitra Chaudhuri, Member of the Economic Advisory Council to the Prime Minister of India, on March 15, 2006. An economist by training, Chaudhuri spoke about India’s Growth Experience and Constraints, giving a forthright assessment of developments over the past 20 years, discerning trends as well as explaining the Indian government’s plans for the near future.

Feature in a French Business Magazine: Challenges 22 Feb 2006