Human Resource Management: Application of Ideas and Concepts to a Specific Organization
Introduction
Every business organization or company has different internal organizations, having a variety of functions, and these internal organizations that comprise the whole business or company are interrelated and are working together to ensure the company’s success in profiting from the market. The more functions each of the organization perform, the better is the performance of the company as a whole. This gives each of the companies their corresponding advantages and benefits from the market and their consumers.
One of the company’s basic internal organizations is the Human Resource Management team, which is highly responsible with the maintenance of the company’s employees. The Human Resource Management team does a variety of tasks and functions, and is crucial in its objective concerning the work and interests of the employees in the company. Oftentimes, they are being encountered during job interviews or job openings, and the people behind this team are performing various activities, including recruitment, training, rewards, performance appraisal, and other concerns, such as the health and safety of the employees of a certain business firm or company. In addition, the team is also responsible for the training and development of its staffs, and promoting effective interrelationships within the company. Being a crucial team in the company, it is essential that they promote the development of their employees, not only in relation to job performance, but in relation to effective communication and interrelations as well.
This report intends to create an opportunity to apply the ideas and concepts regarding Human Resource Management in the analysis of a real organizational situation. In this report, the case of PricewaterhouseCoopers will be discussed. The paper will be stating the profile of the organization in reference with, and will be discussing its current problems in the company. From the discussion of the problems, the concepts and ideas regarding Human Resource Management will be demonstrated. Form this, the analysis will be attained.
Company Profile of PricewaterhouseCoopers
PricewaterhouseCoopers or PwC is the world’s largest professional services firm that was formed in 1998 from a merger between Price Waterhouse and Coopers & Lybrand. Its earning aggregated worldwide revenues of billion for 2006, employing over 140,000 people in 149 countries (2006).
History and Services
An accountant named Samuel Price started his practice in London in 1849, and went into partnership with William Holyland and Edwin Waterhouse in 1865 in Southwark Towers in London. In 1874, the company was known as Price, Waterhouse & Co, soon after Holyland left from the partnership. By the late nineteenth century, Price Waterhouse had gained significant recognition as an accounting firm, even in the Americas. As a result of this, the firm opened an office in New York in 1890, being a consequence of the trade between the United Kingdom and the United States of America. The original British firm also opened more offices in the main countries in the British Empire, each time establishing a separate partnership in each country that gave each partner a strong incentive to expand their local practices (2006).
Similarly, Coopers & Lybrand had also originated in the nineteenth century, for in 1854, William Cooper established his own practice in London, which became Cooper Brothers seven years later when his three brothers joined him. In the United States, Robert Montgomery, William Lybrand, Adam Ross Jr. and Edward Ross formed Lybrand, Ross Brothers and Montgomery in 1898. Coopers and Lybrand is the result of a merger in 1957 between Cooper Brothers & Co; Lybrand, Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co., and in 1990 Coopers and Lybrand merged with Deloitte Haskins & Sells in the United Kingdom (‘2006).
On July 1, 1998, Price Waterhouse and Coopers & Lybrand merged to form PricewaterhouseCoopers or PwC, creating one of the world’s largest full-service professional organizations, and this move was an attempt to meet the increasing client needs for scale and global presence (2003). As a result, PwC engage in six lines of business across 24 industries in over 152 countries worldwide, with over 150,000 representatives (2003). According to (2003), the merger announcement was spurred by this growing need for global scale and presence. The larger size of the new company gave both the firm and its clients the advantage of scope and economies of scale, and in the light of increasing competition, achieving global presence in terms of scale and scope was one way to gain an advantage over competitors. Achieving organizational economies of scale became important, especially as business became more technology-oriented, because in a business environment where speed was one of the important elements for success, companies required new technologies that would enable them to provide better ways to conduct business. Keeping the firm updated in terms of technology required vast capital investments, and consolidation was a solution to boost capital as well as utilizing it efficiently (2003). Moreover, scale also enabled the firm to respond to requests from certain market segments that were not fully covered prior to consolidation, and expanding its scope was important as it enabled clients to be provided with more comprehensive services and solutions. It also differentiated the company from its competitors (2003). The use of technology such as Intranets, and the ability to share information fundamentally improved communication between PwC clients, and its workforce and business clients, organizationally and globally. In addition, the focus of PwC on the knowledge management system would bring value to its clients, by ensuring success to greater resources, with faster deployment of specialists and of new products and services through more efficient management of a larger investment pool (2003).
It has been reported that PwC provided unprecedented service to global, national and local companies in markets worldwide; offering a comprehensive range of business assurance, business advisory, tax, management, information technology, and human resource consulting services and a commitment to helping clients formulate and implement strategic solutions that drive growth and improve business performance (2003). The Price Waterhouse and Coopers & Lybrand companies were similar in terms of business lines and geographical coverage; however, they were not similar in terms of industry coverage, and the uniting of the various practices offered by the two firms was expected to bring significant benefits to clients, particularly to industries that were rapidly converging and in which sector distinctions were becoming less pronounced and competition more intense ( 2003). Furthermore, PricewaterhouseCoopers provides a wide variety of industry-focused services for public and private clients in order to build public trust and enhance value through the application of the company’s concept and approach of “connected thinking” (2006). Services include Audit and Assurance, Crisis Management, Performance Improvement, Tax, and Transactions. From these services, the company is committed to serving as a force of integrity, good sense and wise solutions to the problems facing businesses and the capital markets today. Transparency and good standards of corporate governance in both clients and employees are central to the company’s ability to achieve their objectives. In addition, the company also aims to continue to achieve their objectives from a position of strength as the undisputed leader in the industry ( 2006).
Current Organization and Problems
It has been reported that knowledge management plays an important role in the merger process of PwC, as the ability to share knowledge and intellectual capital across the firms was to become the key for successfully achieving rapid integration with continued client service ( 2003). Technical evolution has enabled cost-effective methods of capturing, updating and distributing knowledge throughout by company through the Intranet, and this becomes the entry-point to capture and distribute firm-wide knowledge. It serves to be the foundation for stored knowledge, the core asset of a knowledge-intensive organization (2003).
The Intranet of PwC is named Knowledge Curve or KC, where the knowledge management system of the company is incorporated, including the company’s assets, such as its knowledge and people skills to be utilized by the entire firm. Its use enabled the company its profiling from three dimensions, namely its geography, industry and line of business. Furthermore, PwC also has a global database named ‘The Bridge’, which is a merger product and the first internal communications product. In line with developing the knowledge economy of the firm is the company’s Knowledge Team, a group of consultants, information professionals, and technical experts, who are responsible for conducting research, harvesting knowledge, managing contents, and ensuring an open communication channel between knowledge headquarters. In line with the company’s focus on making the firm a global entity, and since the merger the Knowledge Curve team had been moving towards global repositories rather than small databases, the industry group knowledge workers managed the content that belonged to their industry group within the global repositories (2003).
Although the strength of the function was the involvement of all the different industry and service groups, it was still difficult to coordinate the entire system. Difficulty in coordinating the system lies on the fact that due to its large scale, it is hard to inform and educate every employee on the use of the database and on the available information in the KC, to understand its capabilities and applications. The limitations of the function were mainly related to the team’s ability to create awareness about KC, having a big challenge of going after thousands of staffs, communicate with each one of them, and change over to using the global KC. Moreover, problems also include the limited access of staffs to the knowledge base within the entire system, the difference in IT systems and organizational structure, and integration of databases and servers. Pragmatism was driving the essential forward planning and business culture, the coordination process was streamlined, and there were fewer bureaucratic procedures. In addition, senior people or employees in age and experience, propelled the business, whereas people in support functions would do what they are told to do. Senior people are less involved in decision-making in the day-to-day business, being less in touched with the processes in the company, while younger partners and directors make most of the decisions. With this, a lot of conflicts happen between the two groups ( 2003).
Application of Theories and Concepts of HRM
It has been reported that the idea of a knowledge-based economy, which advances the notion that knowledge creation is the most important source of economic growth, has been around since the 1980s, and the core of this theory was that sustained economic wealth was most effectively created by focusing on knowledge and knowledge-based products (2005). Moreover, knowledge could be applied an infinite number of times with no decline in value, was relatively durable through time and space, and could be stored at very little cost using digital media ( 2005). This is why, PricewaterhouseCoopers has been using a knowledge-based economy to improve and develop their services. An important point to recognize is that enormous emphasis has been placed on the emergence of knowledge networks that facilitate the kinds of interactions between people and ideas, and the diffusion of tacit knowledge is thought to be facilitated in such networks, access to such networks becoming critical for knowledge workers and knowledge transfer (‘2005). From this, it is evident that PricewaterhouseCoopers has been implementing a knowledge-based economy for utilizing knowledge in the company’s advantage. However, problems have been presented, in relation to the management of the company. The first problem or challenged being experienced by PricewaterhouseCoopers is the fact that because of large scale or size, they are not able to effectively communicate with one another. Team leaders are having difficulties in coordinating their subordinates due to their size, in the company’s aim to implement and educate its employees regarding their database. With this problem, the Human Resource Management team has a role of coming up with ways in terms of implementing an effective communication and coordination by building the company’s hierarchy. Being a large company, the issue of control is essential. Because of this, the company must be able to implement and apply effective leadership strategies. The complexities generated by the larger size often lead managers to implement more bureaucratic controls to manage the combined firm’s operations, and bureaucratic controls are formalized supervisory and behavioral rules and policies designed to ensure consistency of decisions and actions across different units of the firm ( 2003). Bureaucratic leadership style has several characteristics, including imposing a strict and systematic discipline on the followers and demand business-like conduct in the workplace, empowering the workplace via and office or position power that they hold, promoting based on their ability to conform to the rules of the office, and obliging employees to obey because authority is bestowed upon the leader as part of their position in the company (2006). This type of leadership will be suitable for a large firm because it entails the immediate compliance from its employees. This is also appropriate when it comes to implementing change, especially when it comes to implementing new technologies. However, it must be taken note of that as time passes; bureaucratic leadership style must not be used for long, as it entails a rigid and standardized managerial behavior. With this, the company must be able to adopt different leadership styles and use them in their advantage for the internal success of the company. In relation to this is the problem of the company regarding its difficulty in creating awareness and educating its employees. This problem is also related to implementing effective communication among the company’s employees. Due to this problem, the company implemented an open database, so anybody will be able to access the data of the company. Moreover, to effectively coordinate with the company’s employees, it would be essential if the company will be able to develop its leadership style appropriate for its team. In this way, team leaders will be able to easily coordinate and educate their teams regarding the new knowledge system of the company.
The third problem presented was the company’s difference in IT structure and organizational structure. It has been reported that the company’s organizational structure depends on the products to be developed, with functional and project organizations are its types ( 2006). Functional organizations are organized according to technological disciplines, where coordination occurs through rules and procedures, detailed specifications, and shared traditions (2006). In addition, the structure of an organization is concerned with the distribution of power and authority in organizations, having dimensions, such as specialization, or the number of jobs and job specialists found in an organization; the span of control, or the number of people reporting to any specialist manager; its distribution of power, which can be both vertical, or the levels of hierarchy and horizontal, referring to how close a particular department or manager is to the core, mission-critical decisions; and its departmentalization, or the basis on which departments are developed (20054). Theoretically speaking, PricewaterhouseCoopers must be regarded as a functional organization, however, due to its difference in organizational structure and IT structure, it attains difficulty in functioning properly. Due to this, the company will be implementing the development of its different teams to develop the technical infrastructure of the company. The focus of this individual team’s development is to develop its internal policies and procedures, and to communicate better with their clients (2003). Given the fact that PwC is a service-oriented organization, which serves a variety of clients and offers different services, it can be taken note of that this difference may be the cause of difficulty in strengthening its internal organizations. However, through the development of the teams, its members can have the chance to coordinate with one another with the use of the company’s new IT systems. In response to this, what the Human Resource Management team can do is to promote employee and organization awareness, through activities such as team-building and employee development. In addition, the resource management team can sponsor leadership-training seminars that will tackle ways on motivating their employees on working effectively. Moreover, the company must be able to enhance the motivation of its employees through job or work redesign. This can be done occasionally to somehow divert the attention of employees to its current work, and give them a chance to entertain change and accumulate new knowledge, information and work experience. Work redesign include a set of principles and practices designed to increase the performance of individual workers by stressing job simplification and job specialization, where job simplification is the breaking up of the work needs to be performed in an organization into the smallest identifiable tasks, while job specialization is the assignment of workers to perform small, simple tasks (). Moreover, the concept of Job Redesign entails ways on enriching the job of employees.
- Enriching an employee’s job is by combining tasks, which increases their skill variety and task identity, reduces alienation and increases satisfaction.
- Creating natural work units or teams, which increase employee ownership of the work, making it more meaningful and increase skill variety
- Establishing client relationships, which increase skill variety, task significance and feedback for the employee
- Increasing responsibility and reward for good performance within a specific responsibility
- Aggressive socialization and the creation of a strong corporate culture, which improves task identity and job significance
- Open feedback channels, which include self-set goals negotiated with employees
().
Another problem to be addressed is the problem with pragmatism, or the collection of many different ways of thinking (2006). Having different ways of thinking in an organization can affect its production and communication entirely because their thoughts and views are not towards a specific goal only. If pragmatism were being observed then, it would be difficult for the organization to adopt with organizational change. An organization must create a shared vision or values framework to direct the culture change effort (). Having several ways of thinking would hinder the company or the organization to arrive at a specific goal, and hinders effective communication due to conflicts. However, it could also invite healthy conversations and debates among employees. This could also be used to brainstorm on certain ideas in coming up with providing solutions to company problems. With this problem, PwC can utilize some of the images of knowledge in their company, namely, embrained knowledge, embodied knowledge, encultured knowledge, and embedded knowledge. Embrained knowledge is knowledge that relies on conceptual and cognitive skills, and is usually abstract and involves higher levels of reasoning and understanding to make connections, and this can be used in relation to embodied knowledge, which is usually acquired in action, and depends on face-to-face interaction and discussion, emotional and sensory information, and many others. By applying this knowledge, the company will be able to develop encultured knowledge, or the process by which a company arrives at shared understandings of the group, organization, or even national, cultures. This involves the concept of socialization, which involves conversation conducted by individuals, and involves learning from experience and from experienced people by sharing such knowledge. These concepts build up embedded knowledge, a knowledge located in organizational routines or capabilities or, in the social and institutional arrangements, and it is found in systems in relations between technologies, the roles of people perform, the formal procedures of the organization, and the emergent routines (2005). This knowledge can be utilized and maximized to lessen pragmatism and promote the unity and harmony of the internal organizations in the company. In relation to this is the problem between the young and the old employees of the company, which triggers conflicts, for the senior employees in PwC are not informed or asked regarding the decisions of young directors and staffs. This presents discrimination among the employees, as each belongs to specific groups, and creates gaps among them. This must not be so, for in relation to the concepts of Human Resource Management, a workplace must be promoting equality and justice among its employees. With this problem, the company must be able to implement a Talent Management Strategy, for with disciplined talent management, through rigorous and continuous assessment, the company can develop the skills of their managers and match them with their jobs. Moreover, the company can retain creative recruitment and retention through refined and meaningful employee value propositions, and attain thoughtful executive development, through coaching, mentoring, and on-the-job experiences at key points in managers’ development (3). In addition, the company must be able to promote effective communication among its employees, including allowing its employees to participate it the decision-making of the company. In this way, every member of the company will be able to have a chance to state his or her opinion regarding problems, and even raise suggestions for solving the problems in the company.
Conclusion
PricewaterhouseCoopers is one of the largest international organizations, which offers a variety of services such as in Audit and Assurance, Crisis Management, Performance Improvement, Tax, and Transactions. Like many organizations, Human Resource Management is also important for this company for this concept encompasses a wide range of ideas that are applicable in assessing the performance and policies of an existing organization.
This paper has presented a variety of problems being experienced by PricewaterhouseCoopers in their organization, and several concepts and ideas regarding Human Resource Management have been used to evaluate the problems and present possible solutions. The main problem of the company is on implementing effective communication among its internal organizations, which was given solution through implementation and development of an effective and efficient information system. Another major problem is in terms of knowledge, which was given solution through providing training and employee development. In addition, through work or job redesign, employees will be given the chance to improve, increase work identification and increase productivity. With the problems presented, it is essential that a company must not only be aware of it and its effects, but its solutions and the concepts that can be used to solve them.
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