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Sunoco Products Company (A): Building a World-Class HR Organization (Abridged)

1.Which option would best suit a changing industry in which only the flexible
survive?

2.Which option would better ensure that the right people were in the right
positions?

3. Which option would better help the company meet its financial target of
providing annual double-digit returns for its shareholders?

4. Which option best embodied Sunocos time-honored principle that people build
businesses?


Sunoco Products Company (A): Building a World-Cass HR Organization Sunoco
Products Company is a global packaging company where its grass roots began in
1899 in Hartsville, South Carolina. During the 90s, revenues peaked to $2.6 billion
in the manufacture and sales of consumer and industrial packaging. Their 17,300
employees touch 32 countries and serve up to 85 nations. During late 90s and early
part of the turn of the millennium, they enjoyed economic growth. Sunoco began to
adapt more to their environment with less effort. With the enormous surge of
technology, speed allowed for more improvements along with saving in labor.
Production for diversified product types and implementation of policies and action
programs were meeting consumer need more quickly. In addition, new and
innovative packaging containers and techniques were swiftly apprehended. Sonoco
came to the realization that it needs to reinvent itself in order to remain competitive
in their market. Hartley has to answer several questions from Sonocos CEO, Mr.
DeLoach. Hartleys solutions were twofold. Part of her solution is proving which
structure, horizontal or hybrid, would be best to accomplish the companys goals.
Sunoco is a part of an ever changing, fast paced market reacting to changes not only
necessary but also crucial to the future existence. A hybrid structure where
divisions would have some direct involvement with planning, personnel programs,
compensation, and benefits would be ideal. The key advantage of this particular
structure is that it would leave a form of divisional Human Resources management
in tact where general management would call be provided with necessary
information. The Human Resources key personnel can, also, postulate the strategic
interface between corporate Human Resource functions and Sonocos business
objectives. The flexibility of the hybrid structure would be swift to respond to
environmental changes and be able to partake in divisional level strategies. The
hybrid structure tailors to an organization with complexity like that of Sonoco, with
the industries ever changing advances in technology, along with the vibrant
environment that incorporates fluctuating products favorites, and the strict
unpredictable government regulations. It is crucial for Sunocos associates to select
proper personnel for each area. Therefore, the adaptable strategy that Sonoco
encompasses is perfectly suited with this hybrid structure because of the changing
demands of its industry and consumers.

It is evident that Sunocos beliefs circle around the people, their culture, and their
principles. The respect, integrity and well being of their employees have been the
core of their philosophy. Since the 1980s, however, there was a faded sense of
personal responsibility and accountability that supplemented each position.
Financial goals were below par. DE Loachs andHartleys new strategies brought
new light to this situation. The fragmented structure became ineffective and
contributed to the potential demise of the company. The accountability factor was
overlooked. Therefore, a development plan with firmer control of all levels of
personnel, including leadership, was needed. It was essential to implement the new
performance management and compensation systems. Increased focus on the
leadership development process and the succession planning process was
important. Hiring key personnel with the precise knowledge and skill set needed to
be addressed. This was necessary to sustain the companys position into the future.
A forward-thinking process is required, i.e., a developed talent pool of future
leaders. As a result, a hybrid structure where divisions would have direct
involvement with recruitment, succession planning, workforce programs,
compensation, and other benefits.

In the hybrid structure, the strategy focus on Human Resources Department to
planning, and its implementation responsibilities would primarily rely on the top
HR Corporate level while the field staff would handle divisional level issues by
assisting in rolling out initiatives, performing consulting services.

Focusing on the hybrid structure, Corporate level would be responsible for the
implementation of strategy within the Human Resources Department and extending
to the planning department. Ground staff would handle divisional level issues. Their
assistance would extend to developing key initiatives and performing consulting
services. As a profitable corporation, the bottom line is a driving goal. Sonoco wants
shareholders to experience the most profit from their chosen strategy. Diversity and
inclusion affect not only the businesses people and operations internally but also
their customers, suppliers, and other external stakeholders.

Between both structures, the centralized and the hybrid options, the most feasible
choice would be the hybrid selection. Cost saving appears have a slight edge in
profit in the centralized structure as compared to the hybrid structure; $2.7 million
paralleled to $3.1 million respectively. However, the latter would consolidate the
functions at administration levels adding economies of scale to increase long-term
profit for the company. In addition, a system to incorporate the most skilled
personnel in their appropriate positions will increase employee satisfaction, i.e.,
decrease turnover. Costs would indirectly be saved on diminished inbound training
programs and profit should increase due to a proud foundation. The most essential
element to this equation, however, is the continuity of Sunocos principle; People
Build Businesses. A fluent organization with individuals properly placed in their
exact positions while communicating is a winning strategy. The Human Resource
department is the glue that brings the companys sections together. It is relevant
that a corporation's strategy, structure, and system are well defined. However,
details that encourage employees to integrate socially, develop through training,
motivate, and manage the careers of its human capital, are what hold everything in
place.

All being said, the hybrid structure would best fit Sonocos principle People Build
Businesses. Sonoco came to the realization that this fragmentation of company led
to ineffective succession planning and inept leadership development. This would do
extensive harm the organization. Having the right people with the right skills at this
time is not only crucial, but also mandatory. The right people are needed in the
right positions in order to have a sound working business. A hybrid structure would
have some direct impact on the divisions and how people are motivated within the
organization. This results in higher performance from each department and the
company as a whole. Sonoco took advantage of the concept of incorporating
diversity into its business allowing for brighter, fresher, more assorted ideas for the
business. Workforce diversity would bring a competitive advantage against
competitors as well. The Human Resource team can observe and communicate
about compensation plans with first hand knowledge of operation and staff.
Commanding companies know it is fundamental to regularly uphold diversity as a
principal business essential over a period of, at minimum, five years before diversity
can gain adhesion and become part of the way those corporations do business. True
diversity is not just about the mixture that composes the workforce; it is also about
a companys customers and business associates.

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