The document discusses restructuring the HR function of Sonoco, a packaging company with 17,300 employees across 32 countries. It evaluates two alternatives: a centralized model with HR services handled by four centers of expertise, and a hybrid structure with divisions having direct involvement in key HR areas and corporate handling other functions. The hybrid structure is recommended because it would allow HR to be more flexible and aligned to the dynamic business environment, mirror Sonoco's organizational structure of two sectors, and ensure the right people are in place to support the business while upholding Sonoco's principle that "people build businesses".

1. Building a World-Class HR
Organization

2. To suggest which model to use out of the
two alternatives for restructuring the HR
function such that :
Best
embodies
The right Sonoco’s
It cuts cost Only the
people are time ordered
of HR best flexible
in the right principle that
function survive
position “ people
build
businesses”

3. • 17300 employees in 32 countries
• Packaging Industry is moving to India and China with
cheaper labor force
• 10 businesses occupied two segments: industrial
packaging and consumer packaging.
• The industrial segment generated 55% of company
revenue and employed 11,000 people.
• The consumer-packaging segment’s 6,000 employees
produced packaging for food and consumer products and
high-density film.
• Explosion in the variety of consumer packaging
• Industrial packaging suppliers are consolidated

4. To evaluate Sonoto’s current situation, we evaluated its degree of fit or alignment
among all the seven Ss.

5. • Structure -
 Highly decentralized and non-uniform HR before
 HR has no strategic role in the organization
 Centralized HR Administration aligned to the company goals
• Strategy -
 Adaptive to end customer needs
 Solution-orientation strategy than a mere physical goods
manufacturing
 Key Account Management
 Reach to changes in environment and minimize potential
damage

6. • Systems – Society is becoming technological and
systems driven.
Prior to Hartley,
 Divisions with separate systems and no uniformity in HR
practices
 Benefits and compensation not used to drive performance
but as entitlement
 No succession planning
After Hartley was hired,
 Advisory HR council from all divisions and corporate
 Performance was measured and linked to pay
 Annual succession planning

7. • Skills -
 Skills refer to what a company and its personnel do best.
 Sonoco’s core strengths are its market share, brand
value, diversity in products, adaptability and culture
 Performance management system and the compensation
system based on the measured performance are the
initiatives to develop skills
 Six core competencies: excellence, communication,
teamwork, technical/professional skills and knowledge,
strategic integration, and coaching/mentoring

8. • Staff -
 Reluctance to hold underperformers accountable
 New focus on succession planning
 Global diverse workforce
• Style –
 Management style is not very participative
 Leadership is not completely effective as managers are
reluctant to take unpopular decisions
 Teams preferred over individual performers

9. • Shared Values -
 Collaborative and team-oriented
 Company loyal employees
 Ethical and paternalistic
 Diminished sense of responsibility

10. • Centralized Model
–
 Most HR services
would be handled by
four centers of
expertise.
 Divisions to be served
by a pared-down field
staff
 Advantages –
Decrease in cost of
driving administrative
and other process
improvements.
 Disadvantages –
Restricted
Source : HBS Sonoto case , Exhibit 4 opportunities to align
directly with individual

11. • Hybrid Structure –
• Divisions will have
direct involvement in
staffing, succession
planning, personnel
programs,
compensation and
benefits.
• Advantages – Left
intact a divisional HR
presence on which
GMs could rely.
• Disadvantages –
 Concern
whether
changes
could be
easily driven
across the
company
with this new
structure.
 Ownership
of Functions
– Which
would be
owned by
Source : HBS Sonoto case , Exhibit 4 corporate
and which
would by the

12. Based on alternatives available our
recommendation would be to go for a
Hybrid Structure because of the following
reasons –
• Survival of the Flexible – This structure
would be more aligned to the flexible
strategy of the organization and it would
be more equipped to cater to the dynamic
environment.
• Mirroring of HR Organization with that of
Company’s Organization – HR will be
organized into two sectors – Consumer &
Industrial.

13. • Appropriate systems in place to get the right people in place –
Ex Presence of field HR reps, who can provide proactive
business-related support, including talent management,
succession planning and formal coaching.
• “People build businesses” – By having the right people with
the right skills in such a way that they are most beneficial to
the organization, Sonoco’s time-honored principle that people
build businesses is also being retained.
• Financial Target – As people will get the right development and
attention required, their performance will go up and in the long
run organizations financial target will be met.

14. THE END