Rijksuniversiteit Groningen
Faculty of Management & Organization
Proof of Change
HRM/HRIS development at Heineken’s African subsidiary Bralima s.a.r.l.
Artist impression of Kinshasa (Tambwe, 2005)
Thijs J. Weber
Amsterdam / Kinshasa, August, 2005
The author is responsible for the content of this thesis.
All Rights Reserved (2005). No part of this thesis may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, photocopying, recording or otherwise without the permission of the author.
Proof of Change
HRM/HRIS development at Heineken’s African subsidiary Bralima s.a.r.l.
By
Thijs J. Weber
Kinshasa / Amsterdam
August 25, 2005
Author
Thijs J. Weber / Weber@hh33.nl (s1075144)
Amstelveenseweg 79-I 1075 VW Amsterdam The Netherlands
Heineken International N.V. / Bralima s.a.r.l.
www.heinekeninternational.com / www.primus.cd Contact: Mme. Y. Ikolo
1, Avenue du Drapeau B.P. 7246 Kinshasa
Democratic Republic of Congo
University of Groningen – Faculty of Management & Organization www.rug.nl/bdk
1st Principal: Prof. Dr. Ir. J.L. Simons / j.l.simons@tbk.rug.nl 2nd Principal: Dr. T.W. de Boer / t.w.de.boer@bdk.rug.nl Landleven 5
9747 AD Groningen The Netherlands
‘Faced with the choice between changing one's mind and proving that there is no need to do so, almost everybody
gets busy on the proof.’
- John Kenneth Galbraith,
American Economist
Preface
In the next one hundred and thirty pages you will find a report of the things that have kept me occupied during the better part of last year. The finalization of my graduate degree by means of this thesis has truly been a journey. I have explored things unknown to me before (human resource management, Africa, and the intercultural workspace) and experienced how academic theory relates to everyday reality.
Throughout my internship I have experienced the tension between academic and business requirements. Finding a good balance between both has more than once felt like walking a tight rope. In the end, I feel the scientific basis and the practical insight are as proportionate as the African environment allowed it to be.
I would like to use this preface to thank all the people that have in some way contributed to this thesis. First of all I would like to thank Hans van Mameren for the unique opportunity that he has given me in working and living in Kinshasa. I treasure the extraordinary personal and professional experience it has left me on a daily basis.
On helping me with the actual execution of the research and making sense of the Congolese environment I would like to thank Yvette Ikolo, Annerieke Lulofs, and Marc Ortolo. Thirdly, my thanks go out to Ton Jonkman, Marc Moll and Jorik Nieuwburg for all the Mützig, the games of golf, and for being my sparring partners on the whole experience of being an intern at Bralima. I believe the time spent in the DRC would not have been the same without you.
Back in the Netherlands I found myself in the able hands of John Simons and Thomas de Boer. Therefore I would like to thank them here for the guidance and feedback they have presented me over the past period. Last but certainly not least I would like to use this space to thank my dad, Dick Weber, for helping me trough the many ups and downs of thesis-writing. More than once he has helped me find new insights and break through seeming deadlocks. Thank you all for the past year.
Thijs J. Weber Amsterdam, February 16, 2006
Management Summary
Historic underdevelopment of the HRM activities at Heineken’s African subsidiary Bralima s.a.r.l. have led to the desire to improve the HR department’s performance and thus it’s added value. It is believed at Bralima that such improvements can be attained by the implementation of a new computerized Human Resource Information System (HRIS). Using an extensive diagnosis this thesis has uncovered that the issues limiting the department’s performance should actually be attributed to the faulty organizational design, the gaps in the HRIS (not only the computer system), and the problems experienced with the transformation of the HR organization. Therefore the research addressed these problems rather than the computer system.
The main research question this thesis has answered is:
‘How should the human resource department improve their organization and it’s human resource information system in order to enable the department to evolve into
an internal HR service provider while assuring organizational validity?’
It has been concluded that delivering added HR value requires three distinct types of work (HR management, HR services, HR administrative tasks) that are to be separated within the organizational design. Adding soft HR activities to the current organizational structure will therefore not suffice. A new three layered company wide organizational HR structure should be implemented to assure performance. In order to assure the validity between the HRIS and this new organization the HIS should also be developed at company level rather than manufacturing site level.
During examination of the required information system it has been shown that in most cases the available personal productivity tools provide a sufficient alternative to an integrated computerized information system. Although an transaction processing system (TPS) would improve the efficiency of the HR organization and an
management information system (MIS) would allow for better insight on the human capital, it is mostly the agreements, rules and guidelines on the creation, alteration, and use of information that assure performance of the HR organization.
Lastly, the thesis provides recommendation on the transformation of the HR department towards the proposed designs. In order to break the dysfunctional static equilibrium, the HR department should be unfrozen by benchmarking its performance and stating clear rules on the transformation. The administrative layer should be transformed using a predefined plan, while the service layer should be directed at a state of continuous learning and growth. This state can be attained by implementing a short cycle financial group reward scheme to motivate the service layer into initiative and change.
Content
Preface
………....………..……...………E rror! Reference source not found.7
Management Summary
..……….…...………...…
Error! Reference source not found.9
1. Introducing Bralima s.a.r.l...15
1.1. Organization ...15
1.2. Environment...16
1.3. Primary Process ...17
1.4. Problem Indication ...17
2. Diagnosis...19
2.1. Introduction...19
2.2. Diagnostic Framework ...19
2.3. Perspectives on the Problem Area ...20
2.3.1. Strategy ...20
2.3.2. Structure...23
2.3.3. Systems...26
2.3.4. Style ...27
2.3.5. Staff ...30
2.3.6. Skills ...30
2.3.7. Superordinate Goals ...32
2.4. Coherence within the problem area...33
2.5. Conclusion ...37
3. Research Questions & Conceptual Model ...39
3.1. Introduction...39
3.2. Business Objective ...39
3.3. Delineation of Research Area ...40
3.3.1. Research Contraints ...40
3.3.2. Delineation ...40
3.4. Research Question...41
3.4.1. Main Research Question ...41
3.4.2. Sub questions...42
3.5. Conceptual Model & Research Concepts ...42
3.5.1. Conceptual Model ...42
3.5.2. Human Resource Service Provider...43
3.5.3. Human Resource Organization ...44
3.5.4. Human Resource Information System (HRIS) ...44
3.5.5. Organizational Invalidity...44
3.5.6. Transformation ...45
3.5.7. HR Performance & Added Value...46
3.6. Research methodology ...46
3.6.1. Characterization of the Change Process...46
3.6.2. Change Analysis ...47
3.6.3. Organizational Development methodology ...47
3.6.4. Information System development methodology...47
3.6.5. Transformation methodology ...48
3.6.6. Research Steps ...48
4. Organizational Design ...51
4.1. Introduction...51
4.2. Organizational Design Defined ...51
4.3. Strategy & Objectives ...52
4.3.1. HR Strategy ...52
4.4. Structure ...53
4.4.1. Human Resource Roles ...53
4.4.2. HR Activities...54
4.4.3. Changes in Responsibility...55
4.4.4. Contingency Factors ...57
4.4.5. Proposed Organizational Structure ...61
4.5. Processes and Lateral Capabilities ...64
4.5.1. HR rules & Procedures...66
4.5.2. Budgetting & HR Performance ...66
4.5.3. HR Workflow Control...67
4.5.4. Organizational Learning ...67
4.5.5. Summary...68
4.6. Reward Systems...69
4.7. People Practices ...70
4.8. Conclusion ...71
5. HR Information System Development...75
5.1. Introduction...75
5.2. IS development Methodology...76
5.3. Change Analysis ...78
5.3.1. Reported HRIS Issues ...79
5.3.2. Change Requirements ...82
5.3.3. Summary...83
5.4. Activity Study...84
5.4.1. New HRIS Design...84
5.4.2. IS partitioning...85
5.4.3. IS Subsystem prioritizing...86
5.5. Conclusion ...91
6. Transformation Design ...93
6.1. Introduction...93
6.2. Change Defined ...93
6.3. Subjects of Change...94
6.4. Contingency Factors...95
6.4.1. Cultural Characteristics ...96
6.4.2. Organizational Characteristics ...96
6.4.3. Project Characteristics ...97
6.5. Mode of transformation...97
6.5.1. Unfreezing...98
6.5.2. Changing...98
6.5.3. Refreezing ...99
6.6. Conclusion ... 100
7. Conclusion ... 103
7.1. Introduction... 103
7.2. Conclusions ... 103
7.2.1. New organizational structure ... 103
7.2.2. Improvement of HRIS... 105
7.2.3. Assuring organizational validity of the HRIS ... 106
7.2.4. Evolving into HR service provider ... 106
7.2.5. Summary... 107
7.3. Recommendations ... 107
7.4. Discussion ... 108
8. Bibliography ... 111 Appendices
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Appendix A – Abbreviations and
Terms...Error! Bookmark not defined.
Appendix B – Historical
Perspective……….………...Error! Bookmark not defined.
Appendix C – Framework of HRM
activities………..……..Error! Bookmark not defined.
Appendix D – RASCI
Charts………..……….Error! Bookmark not defined.
Appendix E – Interview
Transcription………..…...Error! Bookmark not defined.
Appendix F – A-
Graphs………..……Error! Bookmark not defined.
Appendix G – Summary of relevant data
types………..Error! Bookmark not defined.
1. Introducing Bralima s.a.r.l
This Chapter will introduce the company of Bralima s.a.r.l.. Apart from the organization, its environment, and the market it will also incorporate a brief description of the primary process of the firm. This perspective is important because it allows the central problem to be viewed in the root-definition of the company (De Leeuw, 1996, p. 183). The introduction of the organization will lead to an indication of the problems that are being perceived.
1.1. Organization
Heineken International N.V is a multinational organization with its roots in the Netherlands. Apart from brewing and selling its own Dutch brands (Heineken, Amstel and Brand) all over the world, it owns a great deal of local breweries situated in a number of different countries worldwide. Over 61,000 people are employed by Heineken and its subsidiaries.
One of the Heineken subsidiaries (also known as operational company or OpCo) is Bralima s.a.r.l., a company situated in the Democratic Republic of Congo (DRC). The Bralima Company produces and bottles its own brands of beer (e.g. Primus, Mutzig, Turbo King and Maltina) as well as a collection of soda’s (e.g. Coca-Cola, Fanta, Schweppes and Vital’O). Employing over a fifteen hundred people, the company owns six different brewing- and bottling facilities spread over the country (Kinshasa, Boma, Lubumbashi, Mbandaka, Bukavu and Kinsangi).
Bralima is grouped with other African breweries into a cluster called multi market operations of sub-Saharan Africa (MMO SSA). This cluster is active in Angola, Burundi, Cameroon, Chad, D. Congo, D.R Congo, Ghana, Nigeria, Rwanda and Sierra Leone. The MMO SSA is one of the most profitable clusters within the Heineken Corporation. The goal of Heineken has been formulated; “At all times
defend and strengthen its leading global market position and preserve its independence”. In addition of this Bralima has formulated its goal: “To be the most profitable brewery within the MMO SSA”.
1.2. Environment
The Democratic Republic of Congo has had a turbulent past (see also: Appendix B – Historical Perspective) and because of this, economic and industrial developments have been slow over the last decades. At present the country is one of the poorest countries in the world with a GNI1 per capita of $98.65. The lack of development within the country is also clearly visible at the facilities of Bralima. A long period of educational neglect on the part of the government has resulted in a poorly educated workforce. The unemployment rate is estimated to be 82%2.
Exhibit 1-1 Geographical map of D.R. Congo
The inability of the government to resolve issues between different rebel groups in the east of the country have led to an unstable economic climate. Occasionally the sporadic fighting in the east, results in violent demonstrations in the rest of the country. Because of this ever changing economic climate the Congolese currency3 is fluctuating violently. As can be seen in the image above the DRC is a vast country4.
1 Gross National Income calculated using the Atlas method (Source: Bureau of African affairs, U.S Department of State).
2 This number is a rough estimate and also skewed by the fact that there are little official employers.
3 The Congolese Franc is worth approximately 0.0022 Dollar (Source: Rawbank, December 12, 2004).
4 Measuring 2,345,410 sq km it is roughly 56 times bigger than the Netherlands (41,526 sq km).
Unfortunately there is little to no infrastructure linking the main cities which house approximately 32% (2002 est.) of the country’s inhabitants.
1.3. Primary Process
The primary process of Bralima consists of the production, bottling and distribution of beer and soft drinks (see: Exhibit 1-2 Value chain of beer & soft drinks market). The raw materials (e.g. water, malt, rice, yeast, etc) are bought from various suppliers which deliver them to the various sites of Bralima.
Exhibit 1-2 Value chain of beer & soft drinks market
The production of beer and soft drinks is done at the six breweries within Congo.
Afterwards they are bottled on-site in glass bottles which have been returned by the customers. In order to replenish and renew the bottles a factory5 for producing glass is also owned.
The distribution of beer and soft drinks is done by independent chauffeurs using Bralima owned trucks. All sales are ad hoc. The chauffeurs all have a certain predetermined route past a number of selling points; they follow this route six days a week. Payment occurs on the basis of the sales the chauffeurs make to the distribution centres or to points of sale (e.g. bars, street vendors, restaurants, etc) directly.
1.4. Problem Indication
Over the last three decades Heineken’s investments in the DRC were primarily targeted at the development of Bralima`s production facilities. Because of this historic focus on primary activities, support activities6 like those conducted by the Human Resource Department have been developed in a lesser degree; limiting the value added by the organizational HR function. At Bralima, the HR function mainly consists of keeping records, resourcing the organization with employees, and execution of the payroll. While at Heineken ventures in more developed countries the
5 Boukin glass factory in Kinshasa, D.R. Congo.
6 As defined by Porter’s Value Chain Model (1980).
HRM function is characterized by the addition of more soft HR activities like organizational development, health & safety campaigns, etc.
The HR manager has pointed out that recent efforts of improvement have not been successful. There is a demand for correct information about the company’s human capital from several sides (e.g. the line organization, the management, and Heineken Corporate). Furthermore the HR department has proclaimed the necessity of the execution of more contemporary HRM activities. The HR manager regrets the fact that her department cannot realise the aforementioned output. In the opinion of the HR department the lack of output can be attributed to two clusters of problems; first of all there are huge problems with the execution of the administrative tasks.
Secondly, there are no resources available to perform soft HR functions. It is believed by Heineken Corporate, Bralima`s management, and Bralima’s HR department that both problem clusters are to be resolved by the implementation of a new Computerized Human Resource Information System (CHRIS); administrative activities could be improved and the added efficiency would free resources for the execution of soft HR activities. Unfortunately, disagreement about the specific requirements, the attribution of the costs involved, and the expected benefit of this CHRIS project have led to reluctance towards the investment.
The disagreement about both requirements and benefits indicate that the parties involved do not agree on the gravitational centre of the experienced problems. The assumption that the implementation of a computerized HRIS would resolve all (or most) problems is therefore a dangerous one. There are several indications that the issues limiting the HR department’s added value are not all caused by the lack of such a system.
Because the experienced problems cannot be convincingly attributed solely to the lack of a proper computerized information system a refined search for the underlying problems is in place. The next chapter will perform an extensive diagnosis to uncover all problems experienced at Bralima’s HR department. Only thereafter it is possible to formulate a viable research direction.
2. Diagnosis
2.1. Introduction
As has been explained by the problem indication in the preceding chapter it is expected that not all problems at the HR department can solely be led back to the absence of a proper (computerized) information system. For this reason an extensive diagnosis will be performed in this chapter to identify the various issues in the problem area and the relationship between them. The diagnosis will be directed by the following diagnostic research question;
Diagnostic Research Question:
‘What are the problems at Bralima’s human resource department? ‘
2.2. Diagnostic Framework
The diagnostic research question will be answered using a diagnostic framework.
Firstly this framework will assure a pluralistic view on the problem area and secondly it will make sure the set of views taken is complete.
Basically three methods can be used to assure a pluralistic view; the use of traditional functional perspectives, stakeholder analysis, and a diagnostic model perspective.
Because the problem area in focus covers only one functional area (human resources) and most stakeholders in the area seem to adopt the view that all problems stem from the current computerized information system7, using one of the first two methods would seriously limit the span of the diagnosis. Therefore the third method, a diagnostic model, will be adopted to answer the diagnostic research question.
The perceived problems stem from the issues that prevent the transformation of the organizational HR function. This indicates that the concept of organizational change
7 This view is actually questioned in this chapter, thus it would be unwise to base the diagnosis on it.
is rooted at the core of the problem area. A model that is explicitly related with this concept is the 7S model of Waterman and Peters (1980). This framework assumes that by describing an organization using seven dimensions (superordinate goals8, strategy, structure, systems, skills, staff and style) the attainment of a complete image of the organization will be assured (see: Exhibit 2-1 7S Model of organizations (Waterman and Peters, 1980)).
Exhibit 2-1 7S Model of organizations (Waterman and Peters, 1980)
2.3. Perspectives on the Problem Area
The next section will describe Bralima’s human resource organization from the dimensions as dictated by the 7S model. Following diagnostic phase of the DDC9 methodology of De Leeuw (1996) the properties of the organization will be described and judged accordingly. In the last paragraphs there will be an overview of the coherence between the issues10 that are identified during this diagnostic phase.
2.3.1. Strategy
Bralima formulates strategies both on business level and on a functional (department) level. At the company level Bralima has formulated its business strategy as follows11:
8 In later references to the 7s model superordinate goals are also referred to as shared values.
9 Diagnose, Design and Change.
10 Each issue will be accentuated by a number surrounded by brackets; [x].
11 Source: Bralima 3-year-plan 2005-2007
’To be the most profitable brewery in the MMO SSA’
The human resources department has translated this business strategy into a functional HR strategy, which reads:
‘People are the most important asset of Bralima. HR enables its employees to accomplish high performance, in a motivating environment.’
This functional strategy is translated into 3 key objectives for the three year plan;
1) Create a Talent Development Program for Congolese management potentials 2) Improve internal communication
3) Professionalize HR services and competencies
The third key objective shown above clearly indicates that the HR department is currently in a state of flux and transformation. The aspiration of the department is to become a serious internal service provider to management and employees. This transformation could also allow the HR department to eventually grow into a partner at business level. However, the department’s strategy does not reveal any clue to this extend. It could even be said that the strategy is hardly a strategy at all. Bratton and Gold (2003, p38) define strategy as ‘[…] a specific pattern of decisions and actions undertaken […] in order to accomplish performance goals.’ In the light of this definition it can be seen that the strategy as it is communicated by the HR department does not consist of a plan to achieve specific goals [1]. In stead it seems more of a statement to re-establish the need for HR.
The silent derivative of the need for professionalization of services and competences is the need to increase the value that is delivered by the HR department to the rest of the company. In order to increase the delivered value it is, according to Ulrich (1997) necessary to start by defining the deliverables of the HR work in stead of focusing on the activities of HR. Bralima’s long term HR plan however, seems to focus mostly on the HR activities that are to be undertaken in stead of the goals that are to be reached.
In order to become a HR service provider the department is changing its focus from administrative tasks to activities which focus on employee wellbeing and performance
in the long run. However, being an effective HR professional does not mean simply moving from operational to strategic work (Ulrich, 1997). In the figure below it can be seen that the HR department should focus on both processes and people (hard and soft HR), as well as on both the short and long term (operational and strategic focus).
From the combination of these two dimensions four roles can be defined (see Exhibit 2-2 Four roles of a HR business partner (Ulrich, 1997)); management of strategic HR, management of transformation and change, management of firm infrastructure, and the management of employee contribution. Ulrich (1997) uses four metaphors to clarify these four roles; Strategic Partner, Administrative Expert, Employee Champion, and Change Agent.
Exhibit 2-2 Four roles of a HR business partner (Ulrich, 1997)
When the long term HR plan12 is analyzed it can be seen that the focus of the recent (proposed) HR initiatives are mostly directed at the people-end of the figure above.
On the short term it focuses mainly on increasing the employee contribution by improving job motivation through empowerment, and improving the overall skill level by installing talent development programs. On the long term the focus is on installing transparency and improving the company’s way of communicating in order to change the company culture. The initiatives on the process side of the figure are less extensive. Although the HR plan mentions the improvement of its own HR systems, the proposed improvements mainly focus on the organizational structure, HR employees, and HR skill level; rather than on the design of actual processes. From the
12 Source: Bralima three-year-plan 2005-2007
metaphor of the strategic partner it can be concluded that the current HR strategy possesses at most loose ties with the strategy at business level, leaving a gap in the alignment between the HR goals and the business goals. In summary; unlike the business strategy, the HR strategy does not focus on effectiveness and efficiency [2a].
2.3.2. Structure
When the structure of Bralima’s human resource organization is analyzed it can be observed that it is designed following a hybrid principle (Daft, p.112). Both functional and geographic considerations are at the source of the structure. The department structure at the headquarters is characterized by a functional layout (See organizational chart); however each manufacturing site has a HR department of its own. This is necessary due to the geographical layout of the sites throughout the D.R Congo.
At the headquarters, five HR officers are each responsible for a specific functional area (Payroll, Personnel Administration, Training & Development, Protocol, and Security). These HR officers report directly to the company’s HR manager. The HR employees at the headquarters are directly responsible for the execution of HR activities at both the headquarters and the Kinshasa brewery. This bilateral responsibility has been devised because these two facilities are housed at the same location. Formally speaking however, the headquarters and the Kinshasa brewery are independent entities (in terms of accountancy). At the other production sites a (small) HR department is established to provide basic on-site human resource facilities like Personnel Administration, Payroll Administration, and Time & Attendance.
Exhibit 2-3 Organizational Chart of Bralima's HR organization
The different HR activities are organized either centralized or decentralized, depending on the nature of the activity. In general it can be said that the HR activities on an operational level (e.g. Time & Attendance, Personnel Administration, etc) are performed at the production sites themselves and that the HR activities on a tactical or strategic level (e.g. Health & Safety Planning, HR reporting, etc) are performed at the headquarter level. However there is some form of duality present within the current structure [3a]. For instance payroll administration is decentralized, but the actual payroll calculation is done centrally. Another example is the personnel administration;
information about employees, labor hours, and accidents is collected and stored decentralized but the HR reports that are based on this information are created centrally.
The structure as described above has been formalized in both organizational charts and job descriptions. The current HR structure has historically been focused on the department’s administrative role; which resulted in job profiles with a predominantly operational view on HR tasks and an organizational structure which is mostly functionally orientated. Following an analysis of both the job profiles and organizational charts, it can be concluded that the actual structure seems to fit reasonable well with the way it is formalized. In terms of De Leeuw (see Exhibit 2-4
Formal, Actual and Desired Organization); the actual organizational appearance (in blue) is very similar to the organization’s formalized structure (in green). However, the organization as it is desired by the HR manager (in red) is not in line with both the formal and actual organization. A significant quantity of the functionality that is, in the opinion of the HR manager, to be delivered by the HR department is currently not supported by the present organizational structure [4] (e.g. Career Development, Extended Health & Safety Plans, etc).
Exhibit 2-4 Formal, Actual and Desired Organization
The fact that the actual organization does resemble the formal organization for the greater part, is a confirmation of the ideas of Jackson (2004). Jackson states that in a post colonial (African) community people are likely to be very obedient to rules and formalization within an organization.
In general the structure of an organization combines three separate organizational components (Daft, P.86); It designates formal reporting13 relationships, identifies the grouping together of individuals into (sub) parts, and it includes the design of systems to ensure communication, coordination and integration across the structure. In the light of this trinity it can be said that because of the geographical necessity to split the HR activities over different locations and the somewhat ambiguous relationships of accountability and communication between actors inside a HR (sub) process there is an increased need for systems of communication, coordination and integration across the HR organization at Bralima. In other words; the relationships of accountability do not coincide with the necessary interaction between actors within one process. This in
13 Reporting in terms of accountability
combination with the fact that the multiple actors within processes are often geographically placed far apart, results in an increased need for means of communication and coordination [3b]; a need which the current systems cannot answer.
In summary; the duality in the organizational structure caused by geographical and functional considerations has resulted in the need for extra coordination mechanisms.
Unfortunately, those mechanisms do not exist. Furthermore, the current formal organizational structure seems to miss certain functionality the HR manager regards as necessary.
2.3.3. Systems
With the term ‘systems’ Waterman and Peters (1980) refer to all the formal and informal procedures that make the organization go. Historically the HR department at Bralima has been mostly preoccupied with the administration of employee data and the execution of the payroll. As stated earlier, the concept of human resource management has however grown into a profession which exceeds these basic administrative processes (Armstrong, 2004, p.21). Until recently these ‘new’ HR functions have been the responsibility of the line organization and HR department has not been equipped with the resources (and systems) to execute them properly.
The administrative processes that are currently in use are already more than two decades old. When these processes where designed they were supported by both paper forms and a computerized information system. This information system was built in 1989 with technology14 that was already outdated at the time. Ever since the information system came into use it has not been changed or upgraded. Changes to HR processes and expansion of HR activities have created a large gap between what the system supports and what is currently required by the HR department [5]. These holes in the integrated IT system have been filled by the use of personal productivity tools15. However, this has come with a cost. The current HR information system supports HR activities at a brewery level; all breweries have their own computerized HR information system, which are not linked to any other. Since the system was put into use the expansion of HR activities that are undertaken has increased the need for
14 The information system has been written in COBOL and runs on a SCO Unix server.
15 Personal Productivity Tools; e.g. Microsoft Excel, Microsoft Word, Microsoft Access, etc.
the transfer of information between sites, systems and (HR) employees. However, because of arising gaps both the transfer and storage of data have been increasingly dependent on the use of personal productivity tools. The consequence of this is that the process of HR data handling has become increasingly more complex [6].
Currently most HR activities incorporate extensive and repetitive manual data transfers between paper forms, the information system, and digital files used by personal productivity tools. Obviously these manual data transfers have a negative effect on the quality of the HR information; availability, correctness, and timeliness cannot be assured.
Laudon and Laudon (2000, p39) differentiate between 4 levels of systems; operational level, knowledge level, management level, and strategic level systems. The current system does only support functionality at an operational (transaction) level, but the new human resource activities increasingly demand management level functionality (management information systems). Because however even the support on an operational level is inadequate most of the HR personnel is preoccupied with overly complex operational activities. This seems like a very inefficient allocation of human labour.
In summary; the two main problems with the systems in use at the HR department are that they do not cover the necessary functionality and their ageing designs have led to inefficient and ineffective procedures.
2.3.4. Style
According to Waterman and Peters (1980) the style of an organization is the reflection of its culture. Organizational culture is a set of shared implicit assumptions of a group (Kreitner et al, 1999). It determines how the group perceives, thinks about and reacts to its environment. When the organizational culture at Bralima in general and the HR department in particular is assessed, two specific issues stand out. Firstly, there seems to be an ongoing vertical conflict between the employees at management level and those that are below management level. Incompatible expectations towards one another and a substantial amount of distrust16 seem to be a common component of vertical relationships [7]. Secondly, the horizontal relations seem to be characterized
16 Occurrences of misbehavior and fraud in the past have shown that this mistrust is not always unjustified.
by the tendency to preserve and protect one’s power and authority [8]. These properties manifest themselves into an organizational culture in which cross functional (departmental) consultation is considered meddling and asking for assistance is considered a breach of power. Even in the relationship with parent company Heineken, interaction is often seen as an interruption on local authority.
From a perspective of the post colonial African environment (Jackson, 2004) it can easily be explained that (Congolese) employees tend to be risk averse and are therefore not likely to show much initiative in their work [9]; the focus has historically been on control rather than on reward and motivation. The powerful authoritarian streak further amplifies the differences between management and employees. Being focused on specific (generic) tasks and having a short term perspective it can be said that the HR employees have an employment mode with the company that is characterized as contractual by Liu et al (2003, p. 130). A contractual employment mode is created when human capital is not considered to be unique and of low value (see Exhibit 2-5 An integrated typology of employment modes and leadership style fit (Liu et al, 2003)).
The HR department is affected in several ways by the organizational culture. Firstly it has proven very difficult for the HR department to take on a role of responsibility when it comes to human resource activities (e.g. resourcing, organizational development, performance appraisals, etc.). Apart from the discussion if the HR department does have a valuable contribution to make, the department has a hard time getting the approval of managers to ‘meddle’ in other departments than its own . Being a staff department, this obviously limits the value the HR department is able to deliver.
Exhibit 2-5 An integrated typology of employment modes and leadership style fit (Liu et al, 2003)
Secondly, the transformation of the HR department is hindered by the organizational culture as well. Because there is a focus on control and compliance with existing guidelines there is no real motivation for initiative and thus change. Change is mostly initiated on a top-down basis. The distrust and incompatible expectations between the high and low end of the organization impede the transformation towards a service providing department even further.
The transformational phase in which the HR department finds itself causes an ambiguous need for leadership. Liu et al (2003) distinguish four distinctive styles of leadership; directive, transactional, transformational and empowering. Situational factors such as the characteristics of the task, the leader, the subordinates, and the environment determine which of these styles should be adopted to be an effective manager. Effectiveness is measured by determining the successfulness of the group and the degree in which the leader is able to satisfy the needs and expectations of its followers. From the perspective of the current low level clerical work a directive leadership style would be the most effective (Lui et al, p.134); the leader should provide specific instructions and ensure compliance to rules and requirements.
However, the new role in which the HR department sees itself requires another form of leadership. HR professionals are to exchange valuable skills and knowledge with
the company and should be motivated to deliver high quality in return for appropriate (market-based) rewards; better matched by a transactional form of leadership.
Currently the HR manager seems to have a mostly directive style of leadership, which answers to the contractual employment mode of the HR employees quite well.
However, by adopting this type of leadership the HR department is even more motivated in sustaining its current (clerical) role, refraining from initiative and resisting change [10].
2.3.5. Staff
Another part of the 7S model is made up by the staff dimension of organizations. This dimension comprises the systems (both hard and soft) that are in place to influence the behaviour and attitude of a firm’s employees (Waterman, 1980). The transformation that is upon the HR department at Bralima would be helped significantly if the employees would adopt a mindset that allowed for change. Socio-economic factors like the high unemployment and the cultural induced attitude have made the employees extremely risk averse17. Showing initiative and thinking ‘out of the box’ is perceived by the employees as risky action which could result in a dismissal. Bralima currently does not have any system in place that would reward initiative among the HR employees [11]. The current mindset has resulted in a situation in which employees follow only direct instructions from above (top-down) and avoid diverting of the ‘normal’ procedures. Illogical steps or procedures within the current processes are not questioned (publicly) and there is virtually no improvement of repetitive tasks over time, even if significant improvements could be made easily.
2.3.6. Skills
When an organization is faced with change, for instance by a structural or strategic swift it is often important to add new capabilities and dismantle others (Waterman &
Peters, 1980). Being faced with a transformation that is to change the whole idea of what their ‘business’ entails, the HR department is to be aware of its current capabilities and also the void that exists within its current capability. Such capabilities can refer organizational or individual employee capabilities.
17 Falling out of employment in the DRC could literally be a case of life and death.
When the current processes are analyzed in the light of the organizational capability maturity model (CMM, see Exhibit 2-6 Capability Maturity Model) it can be seen that the HR department at Bralima finds itself in the first stage of the model. At maturity level 1, processes are performed which are often ad hoc and occasionally chaotic.
Because the organization posses little control, planning, or monitoring capabilities, the outcome of a process is often unpredictable and deliverables are anything but stable [12]. Because of the flux in performance, given objectives (e.g. quality, cost, and schedule) may not be met. With a similar maturity level the performance is solely attributed to the competence and heroics of the people doing the work.
On the level of individual skills it can be said that the HR employees at Bralima are naturally skilled in social contact. They seem to have a talent and interest for storing vast amounts of information about the people in their surrounding. With respect to their clerical activities this could lead to non-productive communication18, but it is certainly a skill that a HR professional could put to work in a productive manner.
Exhibit 2-6 Capability Maturity Model
Considering other HR skills of the department it can be said that there is a significant capability gap between the manager and the lower ranks. The absence of HR skills at the lower levels is presumably caused by the lack of education and experience in the HR arena. Although Heineken offers HR tools on a regular basis, using these tools in
18 An example of such non productive communication is spending the time ‘gossiping’.
the Bralima context needs expertise which is not easily found at the level of the HR officers [13].
Due to the significant gaps in the HR information system the efficiency and effectiveness of the HR clerical work has become reliant on the skills of the HR employees. Unfortunately the capability of these employees to operate the available information technology is limited. Theoretically speaking the available personal productivity tools could be used to create and support efficient administrative processes, but this would require an even higher IT skill level than the use of an integrated (user friendly) HR information system would. The lack of IT knowledge &
skills amongst the HR personnel even further deteriorates the efficiency in which the (administrative) processes are carried out [13].
2.3.7. Superordinate Goals
Superordinate goals (or shared values) are a set of values and aspirations that goes beyond the conventional formal corporate objectives. They are like the starting point on which the system (or organization) is build (Waterman and Peters, 1980), but are in themselves not logically derived. Possible starting points or shared values that lie at the base of organizational goals can be separated using two dimensions (Daft, p.71).
The first dimension pertains the value of the focus of an organization; either external or internal. The second value dimension ties the goals to the value the organization holds on structure; flexibility or control (see Exhibit 2-7 Four Models of effectiveness values (Daft, p. 71)). From the combination four models of effectiveness values can be derived; the Internal Process Model, the Rational Goal Model, the Human Relations Model, and the Open Systems Model.
Exhibit 2-7 Four Models of effectiveness values (Daft, p. 71)
When the superordinate goals of Bralima are assessed it is important to make a distinction between the overall company values and the specific HR values. The overall company values emphasize the importance of keeping an external outlook.
The HR department seems to focus mostly on the flexible side of the structural dimension. These sets of values seem both to agree on the importance of growth and resource acquisition. But with HR focusing (logically) on the internal side of flexibility and the overall company values focusing on the external side of control there seems to be insufficient attention to the control of internal processes [2b]. This has led to a lack of attention on the creation of stable processes; processes currently do not suffice and there is no structural initiative to correct this.
2.4. Coherence within the problem area
In the preceding paragraph a number of issues have been described. In this paragraph the relation between these issues will be clarified. Firstly a short summary of the issues is given below. Following this summary, a diagram will be given to depict the interactions between the found problems.
Summary of issues perceived in the problem area;
1) Within the HR strategy the goals of the department are not specified resulting in unclear organizational HR objectives. [Strategy]
2) There is no focus on the (improvement of) actual administrative processes from the HR strategy, and process efficiency or effectiveness is neither part of the organizational HR goals. [Strategy / Superordinate goals]
3) The organizational structure has a duality between a centralized functional oriented design and a decentralized design, which requires extra mechanisms of coordination. [Structure]
4) The current formal structure does not incorporate all the functions that a HR service provider should be executing. [Structure]
5) The Current CHRIS does not support the HR functionality that is needed for the role as HR service provider. [Systems]
6) Processes have evolved into inefficient procedures due to the lack of data storage and transfer capabilities of the current computerized human resource information system (CHRIS). [Systems]
7) Distrust and incompatible expectations within the vertical relationships result in communicative difficulties. [Style]
8) Communication across functional (departmental) areas within horizontal organizational relationships is made difficult by a defensive culture of power conservation. [Style]
9) The (African) organizational culture causes a strict obedience towards the formal structure, limits initiative, and incurs properties that are incompatible with the task required from a HR service provider. [Style]
10) There are no systems in place that motivate the employees to develop (unnatural) behaviour like displaying initiative and willingness to change. [Staff]
11) The current leadership style does not motivate change and the new role of the department would require a different approach on leadership. [Style]
12) There is no monitoring, planning or control over the processes, resulting in uncontrolled and unpredictable results. [Skills]
13) The overall skills of the HR employees are low due to a lack of education and experience with HR (and IT) tools. [Skills]
In the figure below (see: Exhibit 2-8 Coherence between issues found during diagnosis) the aforementioned issues are depicted with their mutual relations. The problems that were found during the diagnosis (numbered 1 till 13) are shown in
beige squares, intermediate consequences (numbered A till E) are depicted using blue (rounded) squares and the resulting functional problem is illustrated by a yellow circle. Arrows pointing from X to Y should be interpreted as X resulting in Y.
Four clusters of problems can be identified inside the problem area; administrative problems, the inability to deliver HR services, external resistance to change, and internal resistance to change.
The first cluster of problems prevent the HR department from proper execution of the administrative tasks it was assigned. There is no focus from the (new) HR management on the (improvement of) administrative processes [2], while the processes are actually significantly hampered by obsolete design [12], the low available skills [13], and lack of CHRIS support [6]. In a organizational structure that specifically requires proper systems of coordination and communication this negligence seems misplaced.
The Second cluster of problems results in the inability to provide HR services [C].
The information system [5] and organizational design [4] both lack the incorporation of support for delivery of the HR services the HR manager wishes to deliver. This void amplifies the problems experienced in the third cluster.
Exhibit 2-8 Coherence between issues found during diagnosis
The third cluster of problems point to the internal issues that persist with the organizational change that seems inevitable. The African culture of obedience to formal structures [9] and the vertical distrust [7] that characterize Bralima’s organizational culture result in significant internal resistance to the organizational transformation towards a HR service provider [E]. Unfortunately, the opportunities to relief some of this resistance have not been taken; the strategy and objectives do not provide proper direction [1], the leadership style does not motivate change [11], and
there are no systems installed that promote a culture of initiative and transformation [10].
Together with the organizational culture of horizontal power struggle the aforementioned clusters of problems lead to a fourth cluster; external resistance [B].
Because the HR department lacks the ability to perform both administrative tasks [A]
or provide proper HR services [C], the line organization does not permit the HR department to take on a responsibility in the organizational HR function. This has led to demise of each initiative to transform the HR department [D], and resulted in the inability of the HR department to add sufficient value to the organization.
2.5. Conclusion
The fact that the HR department is not able to deliver sufficient value to the rest of the company is assumed to limit the productivity of the rest of the firm; obviously a functional problem. The diagnosis in the preceding paragraphs has pointed out that the inability of the HR department to deliver HR services stems from more than problems with the CHRIS alone. It is certainly true that the current IT systems limits the current administrative capabilities and that in its current form is certainly not able to provide support for the functionality that the management is eager to add to the HR department. However various organizational and cultural issues are also sources of the problem in focus. If the problems at the HR department are to be resolved it would be necessary to incorporate at least these organizational factors in the research as well, and put the proposed solution in the relevant cultural context.
3. Research Questions &
Conceptual Model
3.1. Introduction
In the previous chapter a diagnosis was used to get a better insight into the problems that were indicated in the introducing chapter. In order to assure the research to be relevant, achievable and functional (De Leeuw, 1996, p.83) a clear delineated research objective will be stated in this chapter.
To guide the research in a relevant direction the underlying business objective will first be extracted. From the viewpoint of this business objective a demarcation of the problem area will be derived that leads to a researchable main research question.
Splitting the main research question into sub research questions will allow the research to maintain clear structure. In the last section of this chapter a diagram with the research steps will be given. This diagram will be used in the subsequent chapters to answer the sub research questions. These answered sub question will then allow the main research question to be answered.
3.2. Business Objective
In the diagnostic chapter it was founded that the concerns expressed by the stakeholders surrounding the procurement of a new computerized information system were actually caused by the desire to improve the operational performance of the HR department and thus increase it’s added value. Because at this point the actual executor of these HR activities is not clearly appointed, the added value should be delivered from Human Resource Management activities in general. The objective from a business viewpoint is therefore defined as stated below;
Business Objective:
‘Increase the added value of Human Resource Management to the organization.’
3.3. Delineation of Research Area
Several issues concerning the HR organization prevent the aforementioned added value to be delivered. This paragraph will explore the solutions available.
3.3.1. Research Contraints
The time and resources available to the research are limited. The Congolese hostile circumstances impose the time limit of 6 months on the research and make it impossible to visit manufacturing sites outside of Kinshasa due to security issues.
Obviously the aforementioned constraints make it impossible to solve all problems found in the previous chapter. Therefore a narrow demarcation of the addressed problem area will be presented below to assure the achievability of the research.
3.3.2. Delineation
A problem that will not be considered during the research is the external resistance to change [8] (see Exhibit 2 8 - Coherence between issues found during diagnosis).
Attaining a complete view on this resistance would imply expanding the scope of the research to include the entire company; the available time (and manpower) simply does not allow for such a broad scope.
One of the core problems that prevent the HR department from improving itself is the lack of focus on the administrative processes [2]. This characteristic of organizational culture and leadership will not be addressed directly. Rather than trying to alter the focus (or lack thereof) on processes and structures, this research will actually take such a focus itself. This leads to addressing the problems that were found concerning the strategy & objectives [1], organizational structure and systems [3,12,1,4], and the information system(s) [6,9].
In the preceding chapter it has been explained that the problems experienced with the computer systems available to the HR department originate not only from the
information system, but also from various organizational elements (see paragraph 2.5). Because the information system and organizational design are linked together and can therefore not be considered separately, they will be both incorporated inside the scope of the research. This will allow a solution for the problems with current (administrative) HR tasks [A] and the issues concerning the (future) HR service delivery [C]. From the viewpoint of the recent troubled transformation initiatives [D], it is also necessary to add the trajectory of change towards a new IS and organization inside the scope.
It has been shown that the cultural characteristics of the (Congolese) employees [7,9]
and the conflict this has with the current leadership [11] have resulted in internal resistance to change. Rather than addressing these social cultural problems by attempting to change the cultural aspects; the organization, information system, and the transformation will be designed to cope with such factors. The cultural characteristics of the (HR department’s) employees will be considered fixed on the short term, and will therefore be left outside of the redesign scope.
3.4. Research Question
The demarcation of the problem area founded in the preceding paragraph will now be transformed into a main research question.
3.4.1. Main Research Question
It has been derived in the diagnosis (see paragraph 2.3.1) that if the HR department is to conquer a role as HR service provider it should first develop the capabilities to execute the HR task it has been given. Therefore this research will take the HR objectives embedded in the organization as a starting point, and develop both an organization and an information system that allow these objectives to be met. Rather than seeing the organization and the information system as being to separate entities, special attention will be given to the relation (validity) these two designs have with each other. This leads to the following main research question:
Main Research Question:
‘How should the human resource department improve their organization and it’s human resource information system in order to enable the department to evolve into
an internal HR service provider while assuring organizational validity?’
