King Company- The Relationship Between Organizational Strategy and HR Activities

King Company- The Relationship Between Organizational Strategy and HR Activities

Introduction

The King Company, founded in 1994, is a small manufacturer of high-quality specialty components for the computer industry located in a mid-sized city in the upper Midwest. It employs more than 835 full-time employees serving its market niche of high-quality specialty equipment that continues to be produced within the United States. The company generates a small proportion of its revenue by selling its products to a small customer base both in the United States and Asia. A significant proportion of its revenue is generated by manufacturing original specialty components for a single customer. However, sales for finished products for this customer have been declining, resulting in significant worry among the management and necessitating cutbacks.

Consequently, the company seeks to transform its organizational strategy from expansion to that of generating higher revenues through staff reduction and various cost cuttings. This essay explores the current relationship between King’s organizational strategy and HR activities. It also highlights different recommendations that could be adopted to enhance the overall relationship between the organizational strategy and HR activities at the company.

The Current Relationship between Organizational Strategy and HR Activities at The King Company

Currently, the King Company’s organizational strategy focuses on continuing to manufacture high-quality, specialized components for the computer industry in the United States, and instituting a hiring freeze and staff reduction measures to reduce costs (SHRM Education Documents, 2014). The management believes that these steps would be critical in improving the company’s revenues. As a result, Madison, the company’s senior vice president, has directed all departmental managers to reduce waste and enhance organizational productivity (SHRM Education Documents, 2014). Additionally, he is focused on improving King’s sales figures, as evidenced by his initiative to hold a meeting with all departmental heads to explore specific plans and goals to pursue in the future to ensure the company’s costs are reduced (SHRM Education Documents, 2014). Evidently, these examples show that King’s main organizational strategy is cutting costs. Consequently, to align with this specific organizational strategy for the company, its Human Resources (HR) department has embarked on a variety of activities to support the attainment of the cost reduction organizational strategy. For example, first, a hiring freeze has been instituted (SHRM Education Documents, 2014).

Second, the HR department is making plans to scrap off the management training programs. Alan Grant, the company’s HR director, observes that the undertaken management training sessions have not been beneficial to a significant number of managers, including Lyle Jones (SHRM Education Documents, 2014). Third, the HR department is aiming at freezing hourly and salaried employees’ compensation at the current level, ending accrual to the merit bonuses at the current quarter’s close, and eliminating the bonus system by the end of the current fiscal year (SHRM Education Documents, 2014). Additionally, reimbursement for tuition expenses is discontinued with immediate effect, while Madison, senior vice president, will be approving all travel and equipment purchases’ expenditures (SHRM Education Documents, 2014).

Recommendations to Improve HRM’s Strategic Role at King Company

There are several recommendations that could be adopted to improve HRM’s strategic role at the King company. First, adopting strategic human resource management practices such as recruitment, training, planning, reward systems, employee performance appraisal, and continuous feedback, would be significant in improving organizational productivity, competitive advantage, and profitability. According to Eneh and Awara (2016), strategic human resource management practices positively and significantly impact organizational growth and profitability, considering that they facilitate organizations to minimize wastage by using human resources effectively. For example, Facebook has adopted strategic human resource management practices such as continuous feedback, training, open office, and performance appraisal to improve the relationship between organizational goals and HRM activities (Pratap, 2018).

Second, increasing employee participation in decision-making could be significant in improving HRM’s strategic role at King’s company. Enhancing employee participation in decision-making processes is critical in helping to create a sense of belongingness among the workforce, resulting in an excellent working environment and contributing towards establishing excellent employee-employer relationships (Hosain, 2015). An example of a private sector that has improved its organizational performance through enhanced employee engagement is Zoom Video Communications Inc., which ranks first for employee engagement in the annual Management Top 250 ranking (The Wall Street Journal, 2021).

Lastly, the HRM’s strategic role at the King company can be improved by establishing and improving effective communication skills and channels. Chukwuka (2015) posits that establishing effective communication skills is critical in allowing managers and employees to explore and solve problems leading to improved organizational growth and performance. Effective communication is also critical in avoiding interpersonal conflicts, low morale, excessive turnover, and poor productivity, all of which are associated with poor communication skills and channels. For example, Credit Karma’s founder and CEO, Kenneth Lin, has adopted an open-door policy whereby employees are encouraged to share their feelings about how the company is fairing (Schwantes, 2016). As a result, he gets to know what the employees are concerned about, increasing morale and letting the employees know that their CEO is a part of the team.

References

Chukwuka, E. (2015). Communication as a Veritable Tool for Effective Human Resource Management in Organisation. Review of Public Administration and Management, 63-75.

Eneh, S. I., & Awara, N. F. (2016). Strategic Human Resource Management Practices and Organizational Growth: A Theoretical Perspective. Global Journal of Social Sciences, 27-37.

Hosain, S. (2015). Adoption of proper HRM practices: A technique for retaining employees and increasing firm performance? Scholar Journal of Business and Social Science, 1-15.

Pratap, A. (2018, January 9). HR Management at Facebook: Amazing Benefits for Amazing Talents. Retrieved from notesmatic: https://notesmatic.com/hr-management-facebook-amazing-benefits-amazing-talents/

Schwantes, M. (2016, December 28). 6 Companies That Teach Us What It Takes to Communicate Exceptionally Well. Retrieved from Inc.: https://www.inc.com/marcel-schwantes/6-companies-that-teach-us-what-it-takes-to-communicate-exceptionally-well.html

SHRM Education Documents. (2014). The King Case . SHRM 2014 Education Documents.

The Wall Street Journal. (2021, March 2). op Companies for Employee Engagement and Development. Retrieved from The Wall Street Journal: https://www.wsj.com/articles/top-companies-for-employee-engagement-and-development-11614709767

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Module 1 – Case
INTRO TO HUMAN RESOURCE MANAGEMENT; HRM’S ROLE; STRATEGIC HRM
Assignment Overview
This Case Assignment focuses on recognizing the link between organizational strategy and HR activities.

You are the new director of human resources at The King Company. As director, you must play a large role in resolving the organizational issues confronting the company and develop solutions for the functional and managerial issues facing the HR department.

Click The King Company Background to review information on the company.

[Note: You may want to download/print the company background information provided in this module so that you have it handy as you work on subsequent module assignments.]

Case Assignment
After reading the fictional King Company case, address the following questions in an essay format which includes an introduction and conclusion (not a Q&A format):

Describe the current relationship between organizational strategy and HR activities at The King Company. Give three examples and analyze the relationships.
What improvements are needed to HRM’s strategic role at King? Discuss.
For the Case Assignment, utilize information from at least two sources from the Trident Online Library to help strengthen and validate your discussion.

Provide private-sector employer examples of HRM programs, systems, processes, and/or procedures as you address the assignment requirements. Provide names of the employers. Use different employer examples than what has been used previously in your other papers and courses.

Make reasonable, cost-effective assumptions in your paper. It is not an option, however, for you to hire additional help (temporary or otherwise). State your assumptions at the beginning of your discussion.