Assess the fit of Cadbury's approach to managing its human resources and its business strategies with reference to relevant models of SHRM. Cadbury's approach to manage the human resource and business strategy in regards to the case study given can be categorized in two models: Resource based models and best fit models. According to the case study, it is assumed that resource based model was used before the acquisition of the confectionaries and best fit approach were used after the acquisition done.
Most traditional HRM approaches use organizational external factors to determine HR policy, resource based, instead focus on company's internal factors (e.g. strength) and develop further using the available resources. In Cadbury case, it can be seen that, using Managing for Value was launched in 1977 which focused on company's internal ability (employee understanding) to decide how the company could be more profitable. Managing for Value itself has been categorized in three parts: Accountable (individual responsibility), Adaptable (get adjust with recent trends) and Aggressive (result oriented and goal driven). And then, Result Focused is also implemented for the sake of employee development let the employee understands the business goals and the environment where Cadbury operates the business during training session. The outcome was about 90% of employees returned with a better understanding and values of Cadbury and was proud to be in a team.
As such, resource based model was used based on company's abilities and resources to determine the appropriate strategic actions. Cadbury's approach to resource based approach can be summarized in the following 5 steps:
Cadbury's is ranked 26th in FTSE and had a profit of 6% amounting £1115 million and had appointed a HR manager in main board. But then the major weakness was to identify the potential employees and promote and motivate them to perform better. This strength-weakness analysis is used in very first step of resource based model against the competitors.
Next, Cadbury identified that the employees skill must be analyzed to motivate each employee through some goals so that they can perform better (known as capability analysis). Employee motivation has been seen fruitful after the training session.
The Cadbury assess their unique set of resources to stay ahead of competitors. To be a competitive leader, Cadbury brought the employees closer to the company by offering them share in 1974. Employees had invested their own money and for that reason each employee has a good reason to be motivated towards a common goal - to perform better than yesterday.
By offering the part of the company business, 90% of employee said they liked the share investment which has proven big returns for the company itself. This strategy fitted with the Cadbury's then competitive step as no such company had offered this opportunity before.
And then, to formulate the strategy into realty and to be a market leader, Cadbury took aggressive step toward acquisition of Trebor Bassett and Adams. This acquisition followed by a decentralized command of the company split into five regions which demands that Cadbury can no longer stick on old concept. As the business trends had changed, to be competitive and earn above-average returns after big acquisitions, HR has to play its roles.
There came the Best-Fit model which derived from the business strategy. Cadbury's step forward to best fit was hugely changed trough the acquisitions. The following are the valuation how 'best fit' approaches fitted with Cadburys Human resource management.
Recruitment and selection process had been adapted with extreme care. Both businesses had been given equal priority as both had two different cultures. Some employees had been shifted over the businesses on demand.
Communications has played its role and made things easier. The managements of two different businesses had been asked what culture the company should adopt to be a market leader. This communication let the employee had their flexibility on job rather than having job imposed on them. Direct discussions with employees had been made and few standards of behaviors had been set.
Cadbury identified that, rather than focusing on individual employee it could form a team for specific goals for a certain time and replace them for some other purpose at a later time. This strategy did make diversification among employees and known as Working Better Together in the case study.
And then Cadbury introduced extensive training program with more than 50 online tools for employee to let employee work more collaboratively in a decentralized business structure. However, despite these steps, Cadbury wasn't able to bring out the best of the workforce. A more growing approach - more likely a joint problem solving approach was necessary.
As a result, Growing Our People had been initiated so let employee be involved in decision making process with responsibility. Employees went through side by side with managers in assessment process of company's various stages and gain their performance.
Performance appraisal was essential at this stage. Cadbury had to assess what were the outcomes of the training, communication etc to determine the next possible steps towards the HRM (e.g. pay increase, promotion). It has found that, poor performed employees were not given fair chances and opportunities.
Since Cadbury placed its first priority to stakeholders and only fifth priority to built reputation with staff, it took serious actions towards the poor performed employee; noted as Passion for People. Well performed employees had been give pay rise while low performed employees had been disqualified. AS a global business leader, it had no chance to retain poor performed employees.
Conclusively, optimal employee commitment has been established. To let the HR strategies more employee friendly, HR professionals was appointed in every regional decision making board. Cadbury initiated sense the employee considerations in different cultures.
Best fit model proved to bring success in Cadbury's HR strategies up to date. While other elements have been considered over time as business grows, Cadbury is proven to be stable in human resource managements with more than 50,000 workforces globally and one of the top confectionary company around the world.
