OBHR-E100 Human Resource Management

1. OBHR-E100Human Resource Management Before we begin: Chat room available during class tonight: http://mychat.dce.harvard.edu Choose any login name On the drop down menu, choose OBHRE100 and login The Real format has a 30 second delay Flash has a shorter delay – so it is recommended

2. OBHR-E100Human Resource Management Before we begin: People Express Case Analysis due next Tuesday, February 19, by 5:00 Eastern Standard Time. Asahi Breweries is due tonight – if you are reading this and haven’t turned it in yet, it is too late!

3. OBHR-E100Human Resource Management Leadership and Organizational Development

4. Human Resource Development Career Development Programs designed to assist employees in advancing work lives and professional growth Training Programs designed to assist employees acquire better job skills Employee Development Programs designed to optimize utilization of talent Organizational Development Process of facilitating unit or system-wide changes in organizations to improve attitudes, values and productivity

5. HRD: Organizational Development Definition: • Maximizing organizational effectiveness through the best use of its resources HR Responsibilities involve: • Develop, implement, and assess change management programs and activities. • Develop and run programs to meet specific needs of employee groups. Possible drivers of organizational redesign and change: • Productivity (efficiency/effectiveness) • Employee satisfaction • Organizational processes and outputs • Legal compliance • The ability of the organization to revitalize and renew itself over time

6. HRD: Leadership • Leadership = ability of one individual to influence a group or other person toward the achievement of a goal. • Stephen Covey (The 7 Habits of Highly Effective People) • Providing vision and direction, values and purposes • Inspiring and motivating people to work together with a common vision and purpose • Management = Oversight and direction regarding day-to-day operations.

7. HRD: Leadership • Effective Leadership • Trust your subordinates – the only way to maximize their efforts • Develop a vision – know where you are going, show other the benefits • Keep your cool – strong character under fire • Encourage risk – failure cannot threaten subordinates careers • Be an expert – leader must be a source of knowledge and model the way • Encourage the heart – celebrate success • Simplify – communicate in simple, direct, honest language • Style of Leadership • Situational leadership - adjust style to match the job and psychological maturity of employees • Transactional leadership – have promise of reward or punishment • Transformational leadership – charismatic, inspirational

8. HRD: Leadership Management Leadership Planning and Budgeting Creating an agenda Detailed steps and deadlines Creating a direction by deed Organizing and Staffing Develops a long term view of Creates structure & assigns roles the future Controlling and Problem solving Motivating and Inspiring Produces predictability and order Produces change, new products Consistently produces key expected results Has potential to make useful change

9. HRD: Organizational Culture Organizational Culture: defined • The shared attitudes and perceptions of an organization. • Made up of values and behaviors as well as environment and organizational realities • An informal and shared way of perceiving membership in an organization, binding members together • Influences how members think about themselves, colleagues and work Organizational Culture: Fulfills 4 basic functions • Gives members an organizational identity • Facilitates collective commitment • Promotes stability in processes and systems • Shapes behavior by helping members create sense about their environment (establishes norms)

10. HRD: Organizational Development • Strategy – envisioning, designing and implementing plans of action that bring together all functions to achieve the organization’s goals • Vision Statement – guiding image of success. A vivid verbal picture of what success would mean for the entire organization. Ex: Tom's of Maine will become the trusted partner in natural care among consumers with whom we share common values. (Tom’s calls this their Destiny) • Mission Statement – Specifies how an organization will achieve the vision. Ex: Vanguard's mission is to help clients reach their financial goals by being the world's highest-value provider of investment products and services. • Values – what is important to the organization. Guides decision making. Ex: Fidelity – Employee Respect; Quality & Excellence; Individual Responsibility & Teamwork; Private Ownership; Honesty & Integrity; Customer Focus; Change, Innovation, & Commitment to Technology; Civic Responsibility

11. HRD: Organizational Culture G. Johnson (1988) described a cultural web, identifying a number of elements that can be used to describe or influence Organizational Culture: • The Paradigm: What the organization is about; what it does; its mission; its values. • Control Systems: The processes in place to monitor what is going on. • Organizational Structures: Reporting lines, hierarchies, and the way that work flows through the business. • Power Structures: Who makes the decisions, how widely spread is power, and on what is power based? • Symbols: These include organizational logos and designs, but also extend to symbols of power such as parking spaces and executive washrooms. • Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary. • Stories and Myths: build up about people and events, and convey a message about what is valued within the organization.

12. HRD: Organizational Culture Edgar Shein from MIT’s Sloan School of Management: Organizational Culture and Leadership (2005) Defined organizational culture as the residue of success. Most difficult organizational attribute to change, outlasts changes to products, services, leadership, etc. Suggests three cognitive levels of organizational culture from the standpoint of the observer: • Level 1: . What is seen felt and heard by someone new. Buildings, furnishings, awards, dress code, how people interact with each other and with outsiders. • Level 2: What is professed by the company. Slogans, missions statements, creeds, and local and personal values that are widely expressed within the organization. • Level 3: Tacit Assumptions, which are the deepest and most fondly held, and hardest to discern or uncover. Unspoken rules often without the conscious knowledge of the membership. Those who are in the know, often won’t speak about it.

13. Change Management • Transforming Organizations: Why Firms Fail • Error #1: Allowing too much complacency • Error #2: Failing to build a sufficiently powerful guiding coalition • Error #3: Underestimating the power of vision • Error #4: Failing to communicate the vision by a factor of 10, 100, 1,000 • Error #5: Permitting obstacles to block the new vision • Error #6: Failing to create short-term wins • Error #7: Declaring victory too soon • Error #8: Neglecting to anchor changes firmly in the organization John Kotter, Leading Change

14. HRD: Organizational Development Goals of Organizational Development • To improve the functioning of individuals, teams, and the total organization, and • To impart the necessary skills and knowledge that will enable organization members to continuously improve functioning on their own. • Examples: • Strategic business re-design • A new plant manager – change initiatives • Productivity improvements through group problem solving • Competitive advantage through self-directed teams

15. HRD: Organizational Development Resistance to Change • Human nature • Fear of the unknown • Resist if it is imposed rather than collaborative • May lose something in the shift • Disrupts stable working relationships

16. HRD: Organizational Development Examples of OD Interventions • Team building • Group intervention engaging team in activities to examine how they function • Diversity programs • Creating respect for a diverse culture • Work/family balance programs • acknowledging pressures that can affect an individual’s ability to cope with change • Quality standards • Quantitative methods for determining quality. Ex: Malcolm Baldridge Award est by the US Commerce Dept. • Total quality initiatives • Integrated system for achieving customer satisfaction that uses quantitative methods to continuously improve an org’s performance

17. HRD: Organizational Development Total Quality Management (TQM) Defined by the International Organization for Standardization (ISO): • "TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society." In Japan, TQM comprises four process steps, namely: • Kaizen– Focuses on Continuous Process Improvement, to make processes visible, repeatable and measurable. • Atarimae Hinshitsu – The idea that things will work as they are supposed to (e.g. a pen will write.). • Kansei – Examining the way the user applies the product leads to improvement in the product itself. • Miryokuteki Hinshitsu – The idea that things should have an aesthetic quality (e.g. a pen will write in a way that is pleasing to the writer.)

18. Case Discussion Asahi Breweries, LTD Case Discussion

19. Case Discussion 1997Asahi Kirin Market Share 39.1% 41.5% Operating Profit (BY) 76.5 40.5 2001 Asahi has higher market share than Kirin – HOW?

20. Case Discussion Time Line 1949 Split of Sapparo and Asahi – Kirin (Sapparo product) advances in the market 1970’s Downward spiral Asahi 1980 McKinsey report (not read by anyone, apparently!) 1981 Early retirement program 1982 Murai steps in as CEO and President 1984 TQC and Corporate Identity teams formed 1985 Fall – Asahi Draft introduced – share slides downward again 1986 Spring – Higuchi arrives – recall on non-compliant (old labels) draft beer 1987 Introduce SuperDry – invest $70B to expand production capacity by 50% 1988 Dry wars begin – Ashahi oversold (could only fill 70% of orders) 1988 Fall – Sapparo’s Winter Tale introduced – Asahi predicts personnel shortage of 3,200 to 4,00 over next 3 years

22. Human Performance “What ignites the passion of our people?” Operating Performance “At what can we be ‘the best in the world’?” Market Performance “What delights our customers?” Financial Performance “How do we make money?”