Walden University Barriers

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Walden University Barriers to Success of Funding Partnership Questions

The organization that I chose is Amazon. I have attached the required templates for this assignment.

To complete this Assignment, write a 3- to 4-page paper addressing the following:

First, using the required template, conduct a SWOT analysis for your organization’s HR, identifying their internal strengths and weaknesses, along with the external opportunities and threats (Note: Assumptions may need to be made based on company background available).

  • Next, identify your organization’s top 3-5 business strategies (assumptions and critical thinking will need to be used).
  • Conduct an HR Gap Analysis and identify what HR strategies are in place to support the key 3-5 strategies of your chosen organization. In contrasting current HR strategies against the key strategies of that organization, gaps will likely be identified.
  • Since strategies are rarely made public, since competitors would find that very helpful to them, you will need to make assumptions about what they are, and you can do this based on the company’s website and their 10-k Form (https://www.sec.gov/edgar/searchedgar/companysearch.html).
    Note: To find a particular company’s Form 10-K filings, use the Company Search for the SEC’s EDGAR database. On the returned listing of filings for the company, enter “10-K” in the Filing Type box near the top of the page to filter for only Forms 10-K that have been filed.
  • These gaps in HR strategies are needed to support the company’s planned direction as depicted in their key strategies, and will, together with the findings of the SWOT analysis, become the new HR strategies in the next HR Operating Plan.
  • Discuss the HR SWOT and Gap analyses and present each as a Matrix in the Appendix:
    • Appendix A: 1-page Gap Analysis Matrix as a Table with 3 columns (Organizational Strategies written as strategies, HR Strategies also written as strategies, and HR Gaps). within that discussion which you refer to. *A strategy is written as a single sentence with an action verb showing movement (e.g., to improve, to increase, to implement, etc.). Discussion occurs only in the paper, not in the Matrix.
    • Appendix B: 1-page 4-Quadrant HR SWOT Analysis using the provided Template addressing Internal HR strengths and weaknesses, and external opportunities and threats. * Discussion occurs only in the paper, not in the Matrix. This Gap Analysis Matrix will become an Appendix (Appendix A) in your final Human Resources Operating Plan.HR GAP ANALYSIS Here is what is required for the HR Gap Analysis, specifically to be used as a graphic in your Week 2 Paper and your Annual HR Operating Plan (AHROP). The HR Gap analysis needs to include 3 columns only, exactly as written below: HR Gap Analysis for Amazon Key Organization Strategies Key HR Strategies Gaps Between HR & Org Strategies Directions to complete HR Gap Analysis: 1. Key Organization Strategies (2 – 5) – (big) organization-wide strategies for the company that are part of the organizational strategic plan (you can make assumptions about this based on your knowledge of the company you chose). 2. Key HR Strategies (2 – 5) – These are the strategies that HR currently has in place to support the organization’s strategic plan. 3. Gaps Between HR & Organizational Strategies – Identify gaps that currently exist in HR and that need to be addressed by the Human Resources Department in the year ahead to help the company achieve their organizational strategies and general business objectives. 4. The gaps, when coupled with the HR SWOT analysis, will serve as the basis for the HR strategies that need to be developed in your Annual HR Operating Plan (AHROP). 5. Notes: • Write these strategies as strategies, i.e., as one sentence showing movement one way or another (e.g., improve or decrease, grow or decrease, etc.) and that are specific and measurable (see the Haines text for help writing them, because they must contain verb, be in the form of a forward moving statement, and be measureable). You may need to assume what these are from information you have read about your company. Very few organizations publish any planning documents, so make assumptions – but they must be informed and intelligent. • Include this table or matrix as either a figure in the body of the paper or as an Appendix, making proper reference to it in your plan. For the AHROP, it must be in the Appendix, as directed. Managing complexity: systems thinking as a catalyst of the organization performance Aelita Skaržauskienė Aelita Skaržauskienė is Vice-Dean at the Mykolas Romeris University, Kaunas, Lithuania. Summary Purpose – The paper aims to analyse new management practices for addressing complexity, uncertainty and changes of today’s business landscape. In this context it is critical to understand the role of intellectual capital and particularly what are the key competencies to be developed in order to deal with the fluidity of business. Effective decision making and learning in a world of growing dynamic complexity requires leaders to become systems thinkers – to develop tools to understand the structures of complex systems. The paper aims to clarify the relationship between systems thinking and organization performance. Design/methodology/approach – The methodology of systems thinking is inseparable from the philosophy of systems thinking, thus, the first part of the paper presents the common theory of systems and the systems approach to the organization. The paper follows a quantitative research approach. Firstly, exploratory factor analysis was employed to assess dimensionality of scales. Secondly, relationships between variables were explored using Spearman’s correlation. Thirdly, multiple linear regression was run to test the hypothesized model of relationships. Finally, one-way ANOVA was employed to test the influence of intelligence competence level on mean of organization performance. Findings – Based on the analysis and synthesis of the scientific literature a conceptual model of the relationship between cognitive intelligence competencies (such as systems thinking) and organization performance was developed. The theoretical model was supported by empirical evidence. Correlational and regression analyses revealed that systems thinking was associated with higher organization performance. Research limitations/implications – Because of the chosen research approach, the research results may lack generalizability. The sample of this research was limited only to national level therefore it is not possible to compare results across different countries. In order to generalize the research findings, further research should include more companies from different industries. Secondly, the traditional self assessment method has been used for evaluation of competencies in this paper, but the results could be supplemented by adding 360-degree feedback or multisource assessment results. Practical implications – A systems thinking approach allows the realization of various interrelations and working schemes in the organization and helps to identify regularities of the organizational development. The application of systems thinking principles cannot guarantee success but may be a useful means or a permanent form of activity when solving conceptual problems. Originality/value – Rich insight to the systems thinking approach was provided at the conceptual level and meaning of systems thinking was developed. The paper discloses the effects of systems thinking on organization performance and includes implications for the development of systems thinking and other leadership competencies. Keywords Intellectual capital, Human capital, Intelligence, Organizational performance, Complexity theory Paper type Research paper Introduction Nowadays private and public organizations have to face crisis, change, turbulence, and high competitive pressure. In this context it is critical to understand the role of intellectual capital and particularly what are the key intangible and knowledge assets to be developed DOI 10.1108/13683041011093758 VOL. 14 NO. 4 2010, pp. 49-64, Q Emerald Group Publishing Limited, ISSN 1368-3047 j MEASURING BUSINESS EXCELLENCE j PAGE 49 and managed in order to deal with the fluidity of business. The circumstances in which most businesses today find themselves are complex, dynamic and uncertain (Stacey, 1993). The complex systems – organizations, markets, etc. – are difficult (sometimes even impossible) to forecast. The environment in organizations is becoming more complex and changes more often and suddenly (Tvede, 1997; Stacey, 1993; Goswami, 1993; Tetenbaum, 1998; Laszlo, 2002). The all those processes contribute to formation of new philosophical trends and initiate attempts to understand complexity of the world. An effect of systems thinking is relevant in the modern world which generates more information than it is possible to control and creates interrelations that are difficult to forecast. An the organization is a complicated ‘‘open system’’ it is necessary to consider the environmental influence to the system and the system influence the environment while planning changes, making decisions and solving problems inside the organization. Today’s businessmen, managers and leaders need not only skills to act in an unstable and unpredictable environment but also to understand the reasons of this. In the twenty-first century management science faces a dual shift of a paradigm. Due to the first shift the organization is perceived as a multiple sociocultural unit (different from mechanistic and biological view), which influences the environment and is influenced by the environment (the systems conception of the organization). Not only a conception towards the organization has changed but also an attitude to the method has shifted from analytical thinking (science, which operated independent variables) to systems or holistic thinking (science, which operates interrelated variables) (Gharajedaghi, 2006). The second shift, the method one, helps to better understand the intricacy and complexity of reality. The understanding of interrelations requires systems thinking as opposed to analytical thinking. The analytical thinking seeks to simplify complex phenomena while the language of systems thinking is based on the holism principle, i.e. a perception of the world as a whole (Ackoff, 1999). Recent theories of management stress the significance of holism, intuition and creativeness and systems conception of the world. Therefore into this conception we should look as into the way of thinking not just as the discipline or problem-solving methodology. The management of the organization is an object and space of human creative work. Managing organization is closely related to the conception: reflection, expertise and thinking. Thinking includes manipulation of information, formation of concepts and ways of problem solving, searching for reasons and making decisions. Thinking is necessary for every manager in his daily activity, therefore, with a sight to the future it is worth considering whether more efforts should be put to a study of thinking rather than of a substance or matter. One of the ways to improve the quality of results of an activity is to enhance the quality of thinking: how you think, is how you act, is how you are (Haines, 1998). The creators of systems thinking methodology Bertalanffy (1969), Beer (1975), Forrester (1961, 1975), Capra (2002), Senge (1990, 2007), Ackoff (1999), Haines (1998), Warren (2000), Sterman (2000), James (2003), Gharajedaghi (2006) apply widely systems thinking principles in management praxis. The paper aims to clarify the relationship between systems thinking and organization performance. The relevance of systems thinking as a competence was disclosed in the complex world. This paper aims to answer the question of how the principles of systems thinking help to find new productive forms and tools for improving organization performance. In the first part of the paper, rich insight to the systems thinking approach was provided at the conceptual level and meaning of systems thinking was developed theoretical insight to the systems approach towards organization was provided at the conceptual level and meaning of systems thinking as intelligence competence was developed. In the second part, based on the analysis and synthesis of the scientific literature a conceptual model of relationship between intelligence competencies and organization performance was developed. In the third part, the results of empirical research are presented, which confirm the statements of theoretical analysis. The theoretical model was supported by empirical evidence: the impact of systems thinking on organization performance in Lithuanian enterprises. j j PAGE 50 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 The conception of systems thinking Systems thinking is a concept that contains scientific discoveries and instruments of the past 50 years that enable easier understanding of integrity of phenomena and achievement of the desired changes. Spruill et al. (2003) on reviewing the theories of the systems thinking draws conclusions that the major part of the systems thinking theories arise from mathematics, however, the application of the systems thinking and the related progress can be noticed in a variety of disciplines starting from medicine to engineering and psychology, political studies and even art as well. Thus, the systems thinking in the very roots of its historical birth can be called an integrated science, which enables the perception of reality from many different points instead of one: the concept of a ‘‘closed circle’’ thinking originates from mathematics, the principle of homeostasis (a tendency of biologic systems to resist changes and to maintain a balance) originates from biology while control and communication theories come from cybernetics. The main tools of a ‘‘machine age’’ were reductionism, analysis and mechanization, ‘‘system age’’ requires systems thinking and a holistic perception of the world (Sterman, 2000). From the classical viewpoint a system is a combination of two or more elements, when every element of the whole influences a behavior of other elements and the behavior of each element influences the behavior of the whole (Bertalanffy, 1969; Forrester, 1975). Traditional analysis focuses on separating the individual pieces of what is being studied; in fact, the word ‘‘analysis’ actually comes from the root meaning ‘‘to break into constituent parts’’. Systems thinking, in contrast, focuses on how the thing being studied interacts with the other constituents of the system – a set of elements that interact to produce behavior – of which it is a part. A thorough comparison between the traditional and systems thinking is provided by Richmond (2001) who identified seven critical thinking skills, which play an important role in improving the quality of our thinking (Table I). Each of these critical thinking skills serves a different purpose and brings something unique to a systems thinking analysis. Effective systems methodology lies at the intersection of the following four foundations of systems thinking (Ackoff, 1999; Gharajedaghi, 2006) (Figure 1): 1. Holistic thinking: focus on the whole, systems logic, process orientation. Seeing the whole requires understanding structure, function, process and context at the same time. The Table I Comparison between the traditional and systems thinking Systems thinking skills Traditional thinking skills Dynamic thinking: framing a problem in terms of pattern of behavior over time System-as-cause thinking: placing responsibility for a behavior on internal actors who manage the policies and plumbing of the system Forest thinking: believing that, to know something, one must understand the context of relationships Operational thinking: concentrating on getting at causality and understanding how a behavior is actually generated Closed-loop thinking: viewing causality as an ongoing process with the ‘‘effect’’ feeding back to influence the causes, and the causes affecting one another Quantitative thinking: accepting that one can always quantify, but not always measure Scientific thinking: recognizing that all models are working hypotheses that always have limited applicability Static thinking: focusing on particular events System-as-effect thinking: viewing behavior generated by a system as driven by external forces Tree-by-tree thinking: believing that really knowing something means focusing on the details Factors thinking: listing factors that influence or are correlated with some result Straight-line thinking: viewing causality as running one way, with each cause independent from all other causes Measurement thinking: searching for perfectly measured data Proving-truth thinking: seeking to prove models to be true by validating with historical data Source: Richmond (2001) j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 51 Figure 1 Four foundations of systems methodology Holistic Thinking System Logic Process Orientation Structure, function, process and context Operational Operational Thinking Thinking Self-Organisation Dynamics Dynamics of of multi-loop multi-loop feedback feedback systems systems Purposeful socio-cultural systems Chaos Chaos and and complexity complexity Interactive Design Redefining the future, critical assessment, continuous learning, mental models Source: Gharajedaghi (2006) systems approach enables the linking of objects of various types to a single whole, to organize different forms of activity into one whole. The basis of every successful system is a successful communication among separate parts. The effective development of the organization can be achieved when various strategies, strategic planning, team work and principles of organizational changes are applied. Technical aspects are combined with the aspects of behavior, personal (personal mastery and intellectual models) with conceptual ones. 2. Operational thinking (dynamic thinking) refers to the conception of the principles of systems dynamics, that is, evaluation of the multi-loop feedback systems, identification of the delay effect and barriers of growth, mapping stock and flow, etc. The conception of these principles creates an additional value for managing organization: business systems are seen as interdependent, reasons are searched both inside and outside the organization, the fact that an effect in one place of the system may cause an effect in another place causes neither fear nor surprise. 3. Interactivity is a design of the desirable future and a search for its implementation ways (Ackoff’s ‘‘interactive design’’). Interactive design is both the art of finding differences among things that seem similar and the science of finding similarities among things that seem different. To distinct outputs of interactive design are defining problems (Formulation the Mess), identifying the leverage point and designing solutions (Idealization). Interactivists, as opposed to those acting reactively or proactively, mainly pay attention to the problem, its formulation and the search for a solution. Interactive design is based on the principle of a critical thinking that is defined by these steps: defining a problem, gathering of information for problem solution, formulation of hypotheses, checking presumptions and correctness of findings, making a solution. Interactive design means a necessity of a constant critical assessment, continuous learning and understanding of mental models. This dimension of systems thinking is based in intuitive thinking, stimulates creativity and provides an organization with a conceptual foundation to create a unique competitive advantage: broadens the thinking area and develops the openness of mind which leads j j PAGE 52 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 to an opportunity to use the freedom of experimenting. Basically, this creative process can produce neither right nor wrong decisions, since the decision-making process becomes a unique one. The original seeing of the world creates preconditions for original decisions. 4. Self-organization: movement toward predefined order. ‘‘Biological systems self-organize through genetic codes, and social systems self-organize through cultural codes. The DNA of social systems is their culture’’ (Gharajedaghi, 2006). Self-organizing, purposeful, socio-cultural systems must be self-evolving in order to be viable. They cannot passively adapt to their environments but should co-evolve with them and be able to change the rules of interaction as they evolve over time. ‘‘Capitalism is by nature a form or method of economic change and not only never is but never can be stationary . . . It is not price competition within a static set of production methods and organizational forms which counts but the competition from the new technology, the new type of organization – competition . . . which strikes not at the margin of the profits and the outputs of the existing firms but at their foundations and their very lives‘‘ (Schumpeter, 1947). Success comes from a self-renewing capability to spontaneously create structures and functions that fit this moment. The ability to continuously match the portfolio of internal competencies with the portfolio of emerging market opportunities is a foundation of a concept of new business architecture. Generally the usage of systems thinking in practice can be defined by Senge: ‘‘it simplifies life by helping us see the deeper patterns lying behind the events and the details’’ (Senge, 1990). The essence of systems thinking is to: B understand interrelations but not linear cause-effect relations; B see processes of changes but not static states; and B see and understand context. Any problem must be solved starting from the whole, one component can not be affected separately from other components. Systems thinking may appear more complex and multilevel than analytic or reductionist thinking, it helps to detect the order in the complexity and is more accommodating to human understanding of reality. ‘‘Systems thinking is a discipline for seeing the ‘structure’ that underlie complex situations, and for discerning high from low leverage change’’ (Senge, 2007). Systems thinking approach in the organization science Contemporary supporters of the conception of systems thinking in organization science (Sterman, 2000; Haines, 1998; Richmond, 2001; Gharajedaghi, 2006) created a row of methods and means to develop the systems thinking principles in management. Three aspects are important for implementation of systems thinking approach in the organization: 1. ‘‘Awareness of systems‘‘. It should be noted that systems thinking theories are widely spread but they are not universally known and applied in management, since they require a deeper understanding of systems philosophy. How is it possible to learn thinking systemic? Ossimitz (2000) answers this question and states that one needs to start from ‘‘awareness of systems’’ – a conscious perception and philosophy of systems. Learning the systems methodology is very much like learning to play chess. The rules are relatively simple, but proficiency comes only with practice’’ (Gharajedaghi, 2006). 2. An attitude towards the organization as an open socio-cultural system. Creators of the systems methodology (Forrester, 1975; Ackoff, 1999; Senge, 1990, 2007) treat organizations as open socio-cultural systems that are capable of self-organization. Why is it important to treat the organization as a system in this age of changes (Palaima, 2010)?. The socio-cultural systems are characterized by dynamic complexity that ‘‘arises from the interactions of the agents over time‘‘(Sterman, 2000). Increasing complexity of the world requires new tools to interpret patterns and events in the organizations. Systems j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 53 thinking is a tool which helps to understand complexity and to see an order in chaos, to coordinate interrelations and understand choice possibilities. 3. The new role of leader as a constructor of the organization. The systems approach towards the organization conceptually changes the leader’s role in the organization. Theorist of systems thinking stress a new role of the leader as the architect, constructor or business designer in the organization (Vickers, 1970). Gharajedaghi (2006) gives a new philosophical sense to leadership by managing complexity: ‘‘The best way to understand the system is to construct it, to get a handle on emergent properties, . . . we need to understand the processes that produce them, . . . controlling, influencing, and appreciating the parameters affecting the system’’s existence’’. Kets de Vries (2001, 2004) claims that the leader performs two roles in the organization: charismatic and architectural. An efficient work requires both roles. When a charismatic leader inspires his followers to seek a vision, a leader-architect plans the whole politics, strategy and structure of the organization. ‘‘A manager needs multi systematic insight . . . a position of a manager-meta theorist or methodologist, only then a managed system can be consciously restructured by transforming the old order to the new one’’ (Kvedaravičius, 2006). Senge (2007) also accentuates the leader’s role as a constructor of the organization. In his recent article Senge (2007) describes new roles, skills for developing high-performing organization: ‘‘seeing interrelationships’’, ‘‘moving beyond blame’’, ‘‘distinguishing detail complexity from dynamic complexity’’, ‘‘focusing on areas of high leverage’’, ‘‘avoiding symptomatic solutions’’. Haines (1998) and Nadler et al. (1992) call systems thinking a platform for organization performance. ‘‘Every organization is ideally created to achieve certain results. If results are worse than expected then the design must be changed. This means changing structures, operational processes, information flow, interrelations in a way to meet the new needs’’ (Boland et al., 2006). Forrester (1975) emphasizes a fundamental difference between an enterprise operator and an enterprise designer . . . one is the airplane designer and the other is the airplane pilot. The designer creates an airplane that the ordinary pilot can fly successfully. Management education has tended to train operators of corporations, but . . . in the future will successful corporations rely on enterprise designers’’. If we want to artificially influence the system rather than to let it develop naturally, then we need to see and understand it systematically: separate processes, structure and material (Kvedaravicius, 2006). Many managers orient themselves to a maintenance of the system functioning and let the system live naturally, their task is to maintain the existing order. Specialization, lack of time, inability to develop a holistic perspective and traditional ways of thinking are reasons of this fragmentation. Current status of the theoretical and empirical investigation Literature linking organization performance and systems thinking is thematically widely developed but usually limits itself to a pragmatic or a model level (Ellis et al., 1995; Senge, 1990, 2007; Srinivas, 1995). Many authors emphasize the importance and relevance of Systems thinking in the organization management, however, theories are difficult to be summarized, since they are based on different attitudes to both systems thinking and meaning of organization performance. Although the attitudes of the authors of systems thinking are conceptually similar, they are difficult to compare because there is no unanimous methodological basis for comparing these attitudes. Different authors emphasize the importance of different factors, highlight different aspects, and use different terms for defining the role of the leader in the organization as a system (‘‘architect’’, ‘‘designer’’, ‘‘methodologist’’, ‘‘constructor’’). Despite a substantial amount of research (Kets de Vries, 2001, 2004; Mintzberg, 2001; Drucker, 2004; Finkelstein, 2004; Rosete and Ciarrochi, 2005), there is still much uncertainty about which competencies are required to be an effective leader and how is systems thinking related to organization performance. Boyatzis and Goleman (2007) defined system thinking as a cognitive intelligence competence – an ability to think or analyze information and situations that leads to or j j PAGE 54 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 causes effective or superior performance. Different authors or studies (Rosete and Ciarrochi, 2005; Spencer and Spencer, 1993; Kotter and John, 1999; Goleman, 1998, 2000) tend to include abilities from three clusters in a set of competencies that could cause or predict outstanding leader performance: 1. Cognitive competencies, such as systems thinking, pattern recognition. 2. Emotional intelligence competencies, including self-awareness and self-management competencies. 3. Social intelligence competencies, including social awareness and relationship management. Although systems thinking is treated as a very valuable managerial competence, it has not been investigated enough in the context of organization performance. Much has been written about the relationship between emotional and social intelligence and leadership/organization performance (Kets de Vries, 2004), however the role of systems thinking in management is not empirically disclosed (Ellis et al., 1995). There are few empirical studies of systems thinking while ‘‘theoretical and didactic reflections to develop systems thinking are on the whole difficult to find’’ (Ossmitz, 1996). German scholars Dörner (1989), Ossimitz (1990, 1996) contributed most significantly to the research of this phenomena. The research of Palaima (2010) evaluated competence of systems thinking in the context of leadership. A conceptual model of relationships between intelligence competencies and leadership performance was developed in order to explore how the latter construct is influenced by the former construct. By modeling the intelligence competences effect on leadership performance all hypotheses about impact of systems thinking competencies (dynamic thinking, interactivity, systems logic, process orientation, continuous learning and understanding of mental models) on all three levels (personal, relationship, organizational/strategic) of leadership were accepted. However, systems thinking is most important and valuable in organizational/strategic dimension of leadership. This dimension of leadership performance is explained exceptionally by competencies of systems thinking. The model was tested empirically in two industries. Both in retail trade and manufacturing industries systems thinking has effect on leadership performance. However, in manufacturing industry the model has more explanatory power and effect of systems thinking on leadership performance is stronger (Palaima, 2010). The model of relationships between intelligence competencies and leadership performance (see Figure 2) shows how the intelligence competencies impact organization performance indirectly through construct of leadership performance, for example, the better quality of interaction between a leader and follower influences the leadership performance, the leadership performance has impact of positive organization climate, which affects organization performance. The contribution of this research paper is to design a conceptual framework directly integrating systems thinking competencies and organization performance as a catalyst of organization performance by managing complexity. Systems thinking as a catalyst of organization performance: empirical evidence This part of the paper focuses on research methodology and the hypothesized model of relationships between cognitive intelligence competencies and organization performance. The research methodology section includes the following: development of survey instrument, description of data collection methods, sampling procedure and characteristics of respondents. Finally, research conclusions, limitations and discussion are presented. This part ends with a summary of both the theoretical and practical value of this dissertation. This paper follows a quantitative research approach and the predetermined questionnaire rests on the two research instruments: emotional and social competency inventory, self assessment questionnaire (ESCI-U SAQ) (Boyatzis and Goleman, 2007), and organization j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 55 Figure 2 The impact of intelligence competencies on leadership/organization performance Emotional Intelligence Competencies Personal Leadership Social Intelligence Competencies Relationship Leadership Cognitive Intelligence Competencies Organizational/Strategic Leadership Organization Performance Leadership dimensions Leadership Performance Intelligence competencies Systems Thinking Source: Palaima and Skaržauskienė (2010) performance instrument (OPI) (Haines, 1998). Intelligence competencies were measured using five-point Likert scales, while leadership performance were assessed using ten-point Likert scales. The questionnaire ends with demographic questions. The total sample of 210 respondents consists of two subsamples. The sample was selected randomly using the list of respondents formed by Lithuanian Department of Statistics. The two-stage procedure, recommended by Bartlett et al. (2001) was employed to determine sample size of every subsample. Firstly, sample size of 100 was determined using sample size table and having in mind that the population size is over 10,000 and data is continuous. Secondly, having collected 100 responses, the worst variances were identified in every subsample. Finally, the size of every subsample was calculated using formula recommended by Bartlett et al. (2001). In this survey respondents mainly from middle-size and large Lithuanian enterprises were surveyed using web-based questionnaire. Large enterprises (number of employees more than 250) account for 18.4 percent of total sample. Data were analyzed using statistical software package SPSS. Firstly, exploratory factor analysis was employed to assess dimensionality of scales (Table II). Scales of cognitive intelligence competencies organization performance were factor-analyzed separately (Table III). Secondly, Table II Factor-analysis scores of cognitive intelligence competencies j Clusters Scales Systems thinking as cognitive intelligence competencies Interactivity Systems logic Process orientation Understanding of mental models Continuous learning Dynamic thinking j PAGE 56 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 % A 6.19 5.45 3.99 3.94 3.67 3.25 0.683 0.633 0.545 0.605 0.506 0.353 Table III Factor-analysis scores of organization performance Organization performance International effectiveness Mastering strategic communications Positioning the organization Collaboration Organizing and designing Reinventing strategic planning Scanning the global environment Leading change Managing alliances Managing people processes Integrating business processes Networking Building effective teams L % a 0.818 0.813 0.777 0.758 0.749 0.707 0.619 0.662 0.602 0.624 0.620 0.609 0.530 17.75 0.84 Notes: L – factor loading; % – percentage of variance explained; a – Cronbach a; KMO (Kaiser-Meyer-Olkin measure of sampling adequacy) ¼ 0.68 relationships between variables were explored using Spearman’s correlation. Thirdly, multiple linear regression was run to test the hypothesized model of relationships. Finally, one-way ANOVA was employed to test the influence of intelligence competence level on mean of organization performance. The impact of systems thinking competencies on organization performance The research found out that systems thinking competencies have effect on organization performance. Multiple linear regression demonstrated that cognitive intelligence competencies explain 32 percent of organization results (adjusted R 2¼0.32). Process orientation (b ¼ 0.37, p ¼ 0.00; see Figure 3) and systems logic(b ¼ 0.22, p ¼ 0.00; see Figure 3) have the strongest effect on organization performance, while understanding of mental models (b ¼ 0.20, p ¼ 0.00; see Figure 3) and dynamic thinking (b ¼ 0.19, p ¼ 0.00; see Figure 3) are less strong antecedents (see Figure 4). The lowermost effect on organization performance have continuous learning (b ¼ 0.16, p ¼ 0.00; see Figure 3) and interactivity (b ¼ 0.16, p ¼ 0.00; see Figure 3). One-way ANOVA was employed to test the influence of organization performance level on mean of Systems thinking competencies. The results demonstrated that systems thinking competencies increase when level of organization performance increases and therefore there exists linear trend relationship (F ¼ 8.23, df ¼ 1, p ¼ 0.00). Multiple comparisons of means using Hochberg GT2 method (see Table IV) revealed that there exist statistically significant differences of systems thinking competencies between the following levels of organization performance: first and third, second and third. Correlation analysis demonstrated that the strongest relationship exists between systems thinking competencies and influence and change initiation. It can be concluded that the ability to initiate and realize changes are positively associated with the ability to see processes, understand systems logic and to overcome traditional limits of thinking. There exist positive correlations between competencies of systems thinking and the following competencies of emotional and social intelligence: empathy, emotional self-understanding and self-control, stress management, flexibility and tolerance. Development of these emotional and social competencies will result in improvement of cognitive intelligence competence. Conclusions This paper evaluated competence of systems thinking in the context of organization performance. A conceptual model of relationships between intelligence competencies and j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 57 Figure 3 Relationship between different intelligence comptencies Emotional intelligence competencies 0.265 Emotional selfawareness and selfcontrol Empathy 0.155 Systems thinking competencies Cognitive intelligence competencies 0.270 Optimism 0.172 Stress management Flexibility and tolerance Dynamic thinking 0.211 Interactivity Social intelligence competencies 0.233 0.290 System logic Conflict management Process orientation Continuous learning Understanding of mental models 0.267 Communication 0.184 Influence and change management 0.260 Trust Figure 4 The impact of systems thinking competencies on organization performance Understanding of mental models 0.20 H6 Competencies of Systems thinking 0.16 Continuous learning H5 0.37 Process orientation H4 0.22 Systems logic H3 0.16 Interactivity H2 0.19 Dynamic thinking j j PAGE 58 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 H1 Organization performance Table IV The increase of systems thinking competencies by different levels of organization performance Levels of organizational performance n 1 group 1. (OLR # 7) 2. (7 , OLR # 8) 3. (OLR . 8) p 6 44 48 3.5397 3.6834 0.393 2 group 3.6834 3.8720 0.176 Note: Hochberg GT2 method organization performance was developed in order to explore how the latter construct is influenced by the former construct. Objective criteria are absent to measure organization performance. Organization performance assessment can be shown as a chain of various determinant variables. It depends on the subject of research and values of the researcher. The assessment instrument measures the outcome, current performance of organization, i.e. the degree of achievement of particular organizational performance indicators. The research has demonstrated that organization performance could be explained by competencies of systems thinking such as process orientation, interactivity, systems logic, dynamic thinking etc. Theoretical insights that systems thinking is important dealing with performance and effectiveness of an organization were confirmed empirically. One-way ANOVA was employed to test the influence of organization performance level on mean of cognitive intelligence competence. It was found that mean of cognitive intelligence competence significantly differs across the levels of organization performance. When level of organization performance increases, mean of cognitive intelligence competence also increases. It is possible to maintain that Lithuanian executives insufficiently uses the potential of systems thinking because more than half of respondents belong to a lower average group. It is possible to make an assumption that demand of competence of systems thinking is influenced by peculiarities of management in Lithuania. Possibly systems thinking competence development is impacted by work experience or nature of managerial activity. However, these assumptions require further empirical research. Following the result of empirical research, it can be concluded that development of systems thinking competence and retention of cognitive abilities can significantly improve both efficiency of leadership and efficiency of organization. In the first part of the research paper it was argued that competencies of a leader should be revised continuously therefore it is important not only to make list of competencies, but also to identify mix and schema of competencies and to orient towards ‘‘ideal leader’’. According to the insights of theory analysis and the results of empirical research, it can be concluded that it is possible to develop systems thinking in the following ways: B learning and improving knowledge of systems philosophy; B through work experience and influence of work specific; B formally and informally during learning process; and B developing other social and emotional competencies, which have positive relationship with systems thinking. The results of empirical research revealed the importance of systems thinking as a competence that is based on the causal relationship between systems thinking and leadership/organization performance. The formulation of relevant leadership conception was based on the assumption that intelligence competence helps to divide on paradigms of leadership and management. The research proved that systems thinking as a competence is as important as are social and emotional intelligence competencies. Moreover, systems thinking is at utmost determinant importance when dealing with solution of conceptual strategic problems in organization, managing processes and people, networking, j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 59 organizing and designing. Systems thinking could be valued as a competence which allows to identify more apparently differences between a leader and a manager. Practical implications/recommendations The ability to manage the organization as a system discloses the practical value of systems thinking. Two dimensions are essential in applying systems thinking approach in organization management: 1. Conceptual level means to understand the essence of systems thinking. 2. Operational level means to become a practitioner of systems thinking: to start treating problems in the organization as the problems of the system and start looking for system-integrated solutions. Systems thinking principles can become a valuable foundation for managing a high-performing organization. The possibilities provided by systems thinking include seeing interrelations, understanding system forces that form changes, identify sources of resistance, creating a perspective, influencing and changing. The systems theory provides the possibility of having a look at the organization from a wider perspective. Such an attitude allows generating totally different results. The typical action in traditional management is first to analyze one object and then move on to the other. Usually one department solves its internal problems without integrating a solution with other departments. The principles of systems thinking emphasize the interrelations and the effect of the feedback loop. ‘‘An effective management orients to a structure-determined behavior and events rather than mechanically reacting to past events. The structure determines the behavior that determines events’’ (Forrester, 1975). The structure of business systems determines the performance of its activity, a control of the system requires understanding that system. Summing up the results of empirical research it can be concluded that systems thinking has a number of far-reaching benefits in the following areas: j B Scanning the global environment, managing alliances. Taking an organization-wide, proactive approach to a changing global world. An the organization is a complicated ‘‘open system’’ it is necessary to consider the environmental influence to the system and the system influence the environment while planning changes, making decisions and solving problems inside the organization. Process orientation and systems logic develop ability to see, differentiate, manage, optimize and classify processes and to identify barriers of growth. B Positioning the organization. A better framework for diagramming, mapping, diagnosing, and analyzing any system – department, unit, organization, or otherwise. It improves problem solving and decision making for that system. B Organizing and designing. A new and better way to create strategies, and find leverage points – keeping the outcome/vision/goal in mind at all times. B Reinventing strategic planning. Treatment of an organization as a system gives possibility to decide on priorities and to concentrate attention to strategic aims and resources of utmost importance. Holistic understanding of system behavior instead of observation of separate events may result in radical change of attitude towards decision making. B Leading change. System approach towards the organization helps to understand systematic forces, which contributes to organizational changes. The possibilities provided by understanding of systems logic include seeing interrelations, understanding system forces that form changes, identify sources of resistance, creating a perspective, influencing and changing. B Integrating business processes. The essence of systems thinking is to see interrelations but not linear cause-effect relations, to see processes of changes but not static states (Senge, 2007). Process orientation and systems logic develop ability to see, differentiate, manage, optimize and classify processes and to identify barriers of growth. Holistic approach helps to integrate new ideas to a working system. j PAGE 60 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 B Networking. This frame work allows to detect patterns and relationships between systems and their levels, leading to better networking and problem solving. B Managing people processes, building effective teams. Focusing everyone in the organization on the same overall framework. Systems thinking is a way to engage teams and people in a deeper thought process, analysis, and definition of root causes, thus leading to longer-lasting results (Haines, 1998) and focusing everyone in the organization on the same overall framework. The model can be used practically and therefore it has practical value. Models of competencies are not prescription to warranted efficiency of leadership. However, they help to represent experience, knowledge and learned lessons, which can be useful milestones of organizational development. The model along with the conception of competence development can be used practically in the following ways: B as a tool which helps to evaluate and develop intelligence competencies relating them to organization performance; B as a tool of analysis which helps to identify ‘‘schemes’’, ‘‘combination’’ of competencies and orientation towards ‘‘ideal leader’’; B as a tool in leadership assessment center to identify level or leadership and to build an individual competence development plan; B as a key conception for creating managerial competencies development programs oriented towards organizational efficiency improvement; and B as a self-analysis tool of a leader for better self-knowledge. References Ackoff, R.L. (1999), Ackoff’s Best: His Classic Writings on Management, Jonn Wiley & Sons, New York, NY. Bartlett, J.E., Kotrlik, J.W. and Higgins, Ch.C. (2001), ‘‘Organizational research: determining appropriate sample size in survey research’’, Information Technology, Learning and Performance Journal, Vol. 19 No. 1, pp. 43-50. Beer, S. (1975), Brain of the Firm, Penguin Press, Harmondsworth. Bertalanffy, L.V. (1969), General System Theory, Braziller, New York, NY. Boland, R., Jelinek, M. and Romme, G. (2006), ‘‘Organization studies as a science of design’’, Organization Studies, Vol. 28, pp. 1269-71. Boyatzis, R.E. and Goleman, D. (2007), Emotional and Social Competency Inventory, Hay Group Transforming Learning, Boston, MA. Capra, F. (2002), The Hidden Connections, Doubleday, New York, NY. Dörner, D. (1989), Die Logik des Misslingens. Strategisches Denken in komplexen Situationen, Reinbek, Rowohlt. Drucker, P. (2004), ‘‘What makes an effective executive’’, Harvard Business Review, June. Ellis, K., Gregory, A., Mears-Young, B.R. and Ragsdell, G. (1995), Critical Issues in Systems Theory and Practise, Plenum Press, New York, NY. Finkelstein, S. (2004), Why Smart Executives Fail, Penguin Books, New York, NY. Forrester, J.W. (1961), Industrial Dynamics, MIT Press, Cambridge, MA. Forrester, J.W. (1975), Collected Papers of Jay W. Forrester, Productivity Press, Norwalk, CT. Gharajedaghi, J. (2006), Systems Thinking: Managing Chaos and Complexity, Elsevier, San Diego, CA. Goleman, D. (1998), Working with Emotional Intelligence, Bantam, New York, NY. Goleman, D. (2000), ‘‘Leadership that gets results’’, Harvard Business Review, Vol. 78. j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 61 Goswami, A. (1993), The Self-aware Universe: How Consciousness Creates the Material World, Penguin Putnam, New York, NY. Haines, S.G. (1998), Systems Thinking and Learning, HRD Press, Amherst, MA. James, C.R. (2003), ‘‘Designing the learning organizations’’, Organizational Dynamics, Vol. 32, pp. 46-62. Kets de Vries, M.F.R. (2001), The Leadership Mystique, Pearson Education, London. Kets de Vries, M.F.R. (2004), ‘‘What makes the leader great?’’, Strategic Directions, Vol. 8, pp. 4-9. Kotter, J. and John, P. (1999), Kotter on what Leaders Really Do, Harward Business School Press, Boston, MA. Kvedaravičius, J. (2006), Organizaciju˛ vystimosi vadyba, Vytauto Didžiojo universitetas, Kaunas. Laszlo, E. (2002), The Systems View of the World, Hempton Press, Broadway. Mintzberg, H. (2001), ‘‘The yin and the yang of managing’’, Organizational Dynamics, Vol. 29, pp. 306-12. Nadler, D.A., Gerstein, M.S. and Shaw, R.B. (1992), Organizational Architecture: Designs for Changing Organizations, Jossey-Bass Publishers, San Francisco, CA. Ossimitz, G. (1990), Materialien zur Systemdynamik, HPT, Wien. Ossmitz, G. (1996), Stand und Perspektiven der Forschung zum systemischen Denken, Holder-Pichler, Tempsky, Wien. Ossimitz, G. (2000), Entwicklung systemischen Denkens, Profil, München. Palaima, S. (2010), ‘‘Systems thinking as a platform for leadership performance in a complex world’’, Baltic Journal of Management, MMRC2009. Richmond, B. (2001), ‘‘An introduction to systems thinking’’, The Systems Thinker, Vol. 8 No. 2. Rosete, D. and Ciarrochi, J. (2005), ‘‘Emotional intelligence and its relationship to workplace performance outcomes of leadership effectiveness’’, Leadership & Organization Development Journal, Vol. 26 No. 5, pp. 388-99. Schumpeter, J.A. (1947), ‘‘The creative response in economic history’’, Journal of Economic History, Vol. 7 No. 2, pp. 149-59. Senge, P. (1990), The Fifth Discipline, Currency Doubleday, New York, NY. Senge, P. (2007), ‘‘Collaborating for systemic change’’, MIT Sloan Management Review, Vol. 48 No. 2, pp. 44-53. Spencer, L.M. and Spencer, S.J. (1993), Competencies at Work: Models of Superior Performance, John Wiley & Sons, New York, NY. Spruill, N., Kenney, C. and Kaplan, L. (2003), ‘‘Community development and systems thinking: theory and practice’’, National Civic Review, Vol. 90, pp. 105-16. Srinivas, K.M. (1995), ‘‘Globalization of business and the third world’’, Journal of Management Development, Vol. 14 No. 3, pp. 26-49. Stacey, R. (1993), The Chaos Frontier, Redwood Press Limited, London. Sterman, J.D. (2000), Business Dynamics: Systems Thinking and Modelling for a Complex World, Irwin McGraw-Hill, Boston, MA. Stout, L. (2001), Leadership: From Mistery to Mastery, Dobraja Kniga, Ryga. Tetenbaum, T.J. (1998), ‘‘Shifting paradigms: from Newton to chaos’’, Organizational Dynamics, Spring, pp. 21-34. Tvede, L. (1997), Business Cycles, Harwood Academic Publishers, Amsterdam. Warren, K. (2000), ‘‘The softer side of strategy dynamics’’, Business Strategy Review, Vol. 11 No. 1, pp. 45-58. Vickers, G. (1970), A Classification of Systems, Yearbook of the Society, Washington, DC. j j PAGE 62 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 Further reading Argyris, C. and Schon, D. (1996), Organizational Learning, Addison-Wesley, Reading, MA. Boyatzis, R.E. (2007), ‘‘Competencies in the 21st century’’, Journal of Management Development, Vol. 27 No. 1, pp. 7-11. Cherniss, C. (2000), ‘‘Emotional intelligence: what it is and why it matters’’, paper presented at the Annual Meeting of the Society for Industrial and Organizational Psychology, New Orleans, LA. Checkland, P. (1981), Systems Thinking, Systems Practise, Chichester, Wiley. Churchmann, C.W. (1979), The System Approach and its Enemies, Basic Books, New York, NY. Csikszentmihalyi, M. (2003), Good Business. Leadership, Flow, and The Making Meaning, Penguin Books, New York, NY. Daum, J. (2001), ‘‘How systems thinking/systems dynamics helps to identify limits to growth to boost innovation value’’, available at: www.juergendaum.com/news Delahoussaye, M. (1999), ‘‘Interview with Richard Boyatzis’’, Journal of Operations Management, Vol. 23 No. 2, pp. 371-88. Depree, M. (2004), Leadership Is an Art, Dell Publishing, Portland, OR. Fesit, G.J. and Barron, F. (1996), ‘‘Emotional intelligence and academic intelligence in career and life success’’, paper presented at the Annual Convention of the American Psychological Society, San Francisco, CA. Field, A. (2006), Discovering Statistics Using SPSS, Sage Publications, London, p. 779. Fry, L.W. (2003), ‘‘Toward a theory of spiritual leadership’’, The Leadership Quarterly, Vol. 14 No. 6, pp. 693-727. Funke, J. (1989), Komplexes Problemlösen, Springer, Berlin. Glass, L. and Mackey, M.C. (1988), From Clocks to Chaos, Princeton University Press, Princeton, NJ. Gomez, P. and Probst, G.B.J. (1987), Vernetztes Denken im Management, Die Orientierung, Bern. Jokinen, T. (2005), ‘‘Global leadership competencies: a review and discussion’’, European Industrial Training, Vol. 29 No. 3. Makridakis, S., Hogarth, R. and Gaba, A. (2009), Dance with Chance, One World Publications, Oxford. Midgley, G. (2000), Systemic Intervention: Philosophy, Methodology, and Practise, Plenum Publishers, New York, NY. Netemeyer, R.G., Williams, O.B. and Subhash, S. (2003), Scaling Procedures: Issues and Applications, Sage Publications, Thousand Oaks, CA, p. 206. Nickols, F. (2000), ‘‘Don’t design your company’s performance appraisal system, scrap it!’’, People Today, October. Prati, L.M. (2004), ‘‘Emotional intelligence as a fascilitator of the emotional labor process’’, Doctoral dissertation, Florida State University, Tallahassee, FL. Prewitt, V. (2004), ‘‘Leadership development’’, Leadership & Organization Development Journal, Vol. 24 No. 1, pp. 50-5. Rapoport, A. (1986), General System Theory: Essential Concepts and Applications, Abacus Press, Tunbridge Wells. Schumpeter, J.A. (1950), ‘‘The creative response in economic history’’, Journal of Economic History, Vol. 7 No. 2, pp. 149-59. Skaržauskiene˛, A. (2009), ‘‘Sisteminis me˛stymas kaip kompetencija lyderyste˛s paradigmoje’’, doctoral dissertation, ISM, Vilnius. Sokol, J. (2001), ‘‘Idealaus vadybininko portretas’’, Vadovo pasaulis, Vol. 9, pp. 4-10. Warren, K. (2002), Competitive Strategy Dynamics, John Wiley & Sons, Chichester. Zohar, D. and Marshall, I. (2004), Spiritual Capital, Clays, London. j j VOL. 14 NO. 4 2010 MEASURING BUSINESS EXCELLENCE PAGE 63 About the author Aelita Skaržauskienė provides services in organizational needs assessment/evaluation and training of employees in mid to large size Lithuanian and international companies as an independent leadership development consultant. In her work Aelita Skaržauskienė applies both knowledge of management and modern leadership-correlated disciplines such as psychology and philosophy. She received a doctoral degree at ISM, University of Management and Economics in Kaunas, Lithuania. Her research field is systems thinking as a competence in the leadership paradigm. Aelita Skaržauskienė can be contacted at: aelita@mruni.lt To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints j j PAGE 64 MEASURING BUSINESS EXCELLENCE VOL. 14 NO. 4 2010 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. HR SWOT Matrix Weaknesses Opportunities Threats External Internal Strengths A NEW MODEL HUMAN RESOURCES The Strategic and Operational Roles of Human Resources An Emerging Model Human-resources management may be most effective when decisions are made as close as possible to the point where the decision will be implemented. BY J. BRUCE TRACEY AND ARTHUR E. NATHAN E ffective human-resources management is one of the most important considerations in creating and maintaining a competitive advantage for a hotel (or, for that matter, any hospitality organization). Indeed, humancapital considerations top the list of current managerial concerns in the hospitality industry.1 Despite the industry’s concern with human resources, however, the HR function is oddly disconnected from the line function. That disconnect is evident on two primary levels. First, we argue that many business leaders fail to fully consider HR influences when making long-term plans. While most executives acknowledge the importance of HR for implementing strategic plans— “making it happen”—we have seen few who formally incor1 Cathy A. Enz, “What Keeps You Up at Night? Key Issues of Concern for Lodging Managers,” Cornell Hotel and Restaurant Administration Quarterly, Vol. 42, No. 2 (April 2001), pp. 38–45. AUGUST 2002 porate HR concerns when developing a strategic direction. While the predominant framework requires consideration of HR strengths and weaknesses during the strategy-formulation process, HR is primarily viewed as an “enabling” function, responsible for implementing “the plan,” and thus largely ignored during the initial planning stages. Second, we argue that many HR departments fail to execute even the most basic functions effectively. Many firms’ policies and practices are archaic, inflexible, and do not directly benefit those who are most keenly affected by HR actions. Based on those concerns, we advocate the need for a new model of HR—one that should be used as a guide for developing vision, values, and goals, and one that creates a more effective and efficient function for attracting, developing, and retaining quality employees. © 2002, CORNELL UNIVERSITY Cornell Hotel and Restaurant Administration Quarterly 17 HUMAN RESOURCES A NEW MODEL To explain our model, we will first discuss the manner in which HR can contribute to the strategic-planning process. We then present data that demonstrate the link between HR practices and systems on important business objectives. Finally, we offer some ideas that may change the prevailing paradigm and the operational role of HR in hospitality organizations. HR and Strategic Planning Our observations are that HR suffers from a negative image in many hospitality organizations and that, sadly, it has earned that negative image. The following views of HR may be familiar: HR is Sadly, human resources has largely earned the negative image that many hospitality organizations hold. basically an employee-advocate function and represents the “soft” side of the business; HR is a cost center since it does not generate revenue; HR serves as an administrative-support office and organizes the company picnic; and HR is responsible for implementing strategy, not developing strategy. We could go on, but the point is made: human resources gets much lip service but no respect. One of the reasons for this negative image may be the narrow application of the strategicplanning process taken by many business leaders. Too often, the human-resources function is left out of key planning steps. The following comment illustrates our point. A successful hospitality executive and colleague of ours maintains that his primary function is to determine the vision and direction of the firm, and then it’s up to HR and other departments to “make it happen.” This statement summarizes his views: HR as a function does not per se have a dedicated role in the strategic-planning process. Corporate strategic planning begins with an external assessment of opportunities and threats and an internal assessment of firm strengths and weak- 18 Cornell Hotel and Restaurant Administration Quarterly nesses. This process is not driven by a function or discipline formula, but rather by an evaluation designed to determine the relative importance and veracity of assumptions management has made about the industry and the firm. Management combines its fact-based knowledge with its assumptions and beliefs about the business it is evaluating. Strategic planning, at its core, is the process by which the veracity of these assumptions and the relative importance each has to the overall outcome are revealed. Functional executives confound and corrupt the initial stages of the planning process by becoming caught up in interdisciplinary issues that should be subservient to the strategy process they aspire to influence. As such, the CEO is forced to pull the process of formulating strategy away from these executives and rely more heavily on his or her own judgment or a formal strategy group of executives without discipline responsibilities.2 In this leader’s view, HR plays a subservient and reactionary role in the business-planning process. While this is only one individual’s perspective, we’ve encountered many who share similar views. We contend that HR considerations must be taken into account not only during strategy implementation, but also during the process of developing that strategy. Indeed, the prevailing models of business planning support this contention. Several approaches can be used to predict a firm’s competitive position and develop strategic plans. The traditional SWOT model (i.e., strength, weakness, opportunity, and threat) is based on a matching process such that a firm’s strategic direction is based on the fit between external conditions (i.e., opportunities and threats) and internal capabilities (i.e., strengths and weaknesses). Based on this assessment of fit, leaders can then take actions intended to achieve a sustained level of competitiveness—for instance, by using internal strengths to exploit external opportunities and taking advantage of op2 Statement made by the CEO and chairman of a mediumsize management company of mid-price hotels. AUGUST 2002 A NEW MODEL portunities to motivate change and fix internal weaknesses. Another popular framework, VRIO analysis, extends the SWOT model and maintains that competitive advantage is gained by identifying and exploiting the rare, distinctive competencies of the firm.3 The VRIO explanation considers a firm’s resources—understood in terms of value, rarity, imitability, and organization—as keys to long-term effectiveness. In simplified terms, value is characterized by the firm’s internal resources that can be used to respond to external threats; rarity is associated with the scarcity of such resources in the external environment; imitability is based on the ability of competitors to acquire, duplicate, or substitute valued resources; and organization is associated with the firm’s structure and systems that are used to extract the greatest degree of value from a given resource. These and other models (e.g., portfolio assessments, competitor ranking) that can be used to analyze strategic position and develop plans have at least one thing in common: the human element is central to an analysis of internal strengths, resources, and capabilities. Technology, in contrast, is quite imitable and thus should not be considered as a source of competitive advantage. Human capabilities, and the social context in which such capabilities are applied, are difficult and perhaps impossible to copy or transfer to settings outside the focal context. While access to capital, relative market share, brand image, and service quality are all essential to a hospitality business, such concerns would be largely irrelevant if the appropriate human resources were unavailable. Therefore, while HR may not be the most important consideration during the strategic-planning process, this factor cannot be ignored when developing long-range plans. Evidence for the Strategic Importance of HR HUMAN RESOURCES operational success indicators.4 Indeed, there is some rather compelling evidence that the proper alignment between HR systems and business strategy will enhance a firm’s performance.5 We will complement this literature by presenting two hospitality-specific examples that support the strategic importance of HR for not only implementing long-range plans, but also developing such plans. Example 1: Compensation and turnover. The 2000 Lodging Compensation and Benefits Survey, conducted by Realtime Hotel Reports (now part of Smith Travel Research) and sponsored by the American Hotel Foundation, provides direct evidence for the need to consider HR factors throughout the strategic-planning process. In addition to compensation levels and benefits offered by over 2000 hotels, the survey also gathered information about employee turnover. Turnover is a key concern to many hospitality employers. It can be quite costly,6 and has been shown to be related to many important outcomes, including profitability.7 As such, understanding 4 For example, Paauwe and Richardson reviewed nine studies that yielded 22 significant empirical relationships between various HR policies, practices, and procedures, and several measures of firm performance. See: J. Paauwe and R. Richardson, “Strategic Human Resource Management and Performance,” International Journal of Human Resource Management, Introduction to the Special Issue, Vol. 8, No. 3, pp. 257–262. 5 Youndt, Snell, Dean, and Lepak, for instance, found that different types of organizational strategy moderated the relationship between two types of HR systems and firm performance. Specifically, Youndt et al. found that a “human capital enhancing” HR system (e.g., selectivity in hiring) was most effective in organizations that incorporated a quality-based strategy (versus other strategies). They also found that an “administrative” HR system (e.g., policies and procedures training) was most effective in organizations that employed a cost-based strategy. Thus, this study provided convincing evidence that organizational effectiveness is contingent on the proper alignment of HR systems and overall business strategy. See: M.A. Youndt, S.A. Snell, J.W. Dean, and D.P. Lepak, “Human-resources Management, Manufacturing Strategy, and Firm Performance,” Academy of Management Journal, Vol. 39, No. 4, pp. 836–866. Despite HR’s apparent image problem, it remains an essential function. Much has been written about the critical role of HR for achieving busi- 6 See: T.R. Hinkin and J.B. Tracey, “The Cost of Turnover: ness goals and objectives, and there is a growing Putting a Price on the Learning Curve,” Cornell Hotel and literature that shows HR policies, practices, and Restaurant Administration Quarterly, Vol. 41, No. 3 (June 2000), pp. 14–21. systems are related to a variety of financial and 7 3 J.B. Barney, Gaining and Sustaining Competitive Advantage (Reading, MA: Addison-Wesley, 1997). AUGUST 2002 See: T. Simons and T.R. Hinkin, “The Effects of Employee Turnover on Hotel Profits,” Cornell Hotel and Restaurant Administration Quarterly, Vol. 42, No. 4 (August 2001), pp. 65–69. Cornell Hotel and Restaurant Administration Quarterly 19 HUMAN RESOURCES A NEW MODEL HR policies and practices that can contribute to turnover can lead to more insightful strategic and operational decision-making. An analysis of the relationship between compensation level and total annual employee turnover yielded statistically significant results for the following positions.8 Position General manager Director of sales and marketing Sales manager Reservations manager Controller Front-office manager Restaurant manager Chief engineer Executive housekeeper N r 363 172 145 94 125 220 109 252 311 -0.24 -0.20 -0.19 -0.19 -0.19 -0.17 -0.17 -0.11 -0.10 While the magnitude of the correlations demonstrates that a great deal of variance in the compensation–turnover relationship remains unexplained, the data suggest that compensation does have an effect on intentions to stay or leave—a finding supported by related research.9 Example 2: Training, turnover, and sales. The second example is based on an analysis of training, employee turnover, and sales data gathered from a privately held restaurant company that currently owns and operates approximately 115 restaurants and franchises an additional 70 throughout the United States. Complete data for 96 corporate-owned stores were gathered over a 12-month period beginning in January 2001. The primary proposition was that investments in training and employee turnover would be significant predictors of net sales. The training variable was expressed as the number of hours per month dedicated to skill-based programs (e.g., new employee training) and development-based programs (e.g., interpersonal customer service) for line staff. Employee turnover was also measured on a monthly basis (i.e., number of new hires divided by the total number of employees at the end of the month), as was net sales. After accounting for store-specific effects (e.g., location, size) and time effects, the results from 8 All significant at p < .05. 9 T. Simons and C.A. Enz, “Motivating Hotel Employees: Beyond the Carrot and the Stick,” Cornell Hotel and Restaurant Administration Quarterly, Vol. 36, No. 1 (1995), pp. 20–27. 20 Cornell Hotel and Restaurant Administration Quarterly regression analyses of the panel data showed that both training and turnover accounted for significant variance in store sales.10 These results suggest that if sales are influenced by training and employee turnover, then long-range plans for growth must consider the consequences of HR decisions regarding employee development and retention. These two examples demonstrate the effects that HR can have on strategic and operational goals. Although researchers and practitioners have yet to fully understand the process by which the various HR policies, practices, and systems might influence long-range effectiveness, the data presented here reinforce the need to consider HR throughout the planning process. However, it’s not enough simply to incorporate HR influences more broadly—the HR function must also be reconsidered. We contend that a holistic and collaborative approach to HR is required, one in which the HR function is closely integrated within the strategic and operational elements of the firm. Thus, HR plays a critical role in designing structures, facilitating change, and evaluating progress. This objective requires that firms embrace a new model of HR to achieve and sustain a competitive advantage. A New Model for Human Resources The traditional role of HR is more appropriately termed “personnel.” In this role, personnel professionals were responsible for recruiting and hiring, compensation- and benefit-program design, negotiating and administering collectivebargaining agreements, policy development, personnel record keeping, and serving as a conduit for employee views and concerns. Over the years, personnel was renamed human resources, and its role in the organization (in addition to its existing functions) became one of integrating people, policies, and cultures. To meet the needs of this role, HR practitioners’ responsibilities were expanded to include communications, training, safety, employee relations, and recognition and 10 Overall F = 44.32, df1 = 123, df2 = 1085; R2 = 0.82, p < .01; standardized beta weights for training and turnover were 0.031 and 0.032, respectively, p < .01. These and related results were presented by J. Bruce Tracey and Michael J. Tews at the 2002 Meeting of the Society for Industrial and Organizational Psychology, Toronto, Canada. AUGUST 2002 A NEW MODEL reward programs. Along with those additional responsibilities the HR department became responsible for the organization’s legal compliance in the ever-expanding area of employment law. The expansion of the HR function resulted from changes in the way businesses were managed. One such change was the explosion of mergers and acquisitions in the hotel and restaurant industry. In the past 20 years mergers and acquisitions have tested HR practitioners’ ability to be flexible, detail oriented, and expeditious in both their support of other business functions and in the decisions they make related to HR issues. These increases in responsibility, occurring alongside changes in the business, transformed HR professionals from generalists to specialists. This metamorphosis also fostered the perception—often promoted by HR—that only “specialists” could handle such complicated issues. The HR model that emerged was one based on the centralization of knowledge, responsibility, authority, accountability, and control within the HR department. Even as all this was taking place, however, business practices were changing. As a colleague of ours succinctly put it: As organizations began to realize that different businesses needed and could afford different types of HR programs and benefits, even within the same corporation, HR began to decentralize, replicating the centralized HR structure at division and even business-unit levels. This had the advantage of supporting differentiated HR for each business, but its redundancies cost a lot of money and the specialist jobs got smaller (i.e., they supported smaller groups of employees) and thus attracted less capable or experienced people.11 Added to the complexity of this decentralized approach is the fact that business leaders are under extreme pressure to reduce expenses, increase productivity and revenues, and realign their organizations to become focused on core issues. In 11 As related by: Andrew Geller, principal, organizational development, Unifi Network, a former subsidiary of PricewaterhouseCoopers LLP, Teaneck, New Jersey, April 26, 2001. AUGUST 2002 HUMAN RESOURCES the last five years, these changes have led to enormous pressures being placed on businesses to reevaluate the HR function, its role and responsibilities, and how these integrate with the rest of the organization. High-performing organizations today are looking for ways to transfer authority, responsibility, and accountability for HR-related transactions and decisions to line managers and, in some instances, employees. The ramifications of this are enormous. Ironically, we see the most resistance to this change often coming from HR itself. A Decentralized Foundation The underlying premise of our model is that all decision-making authority, responsibility, and accountability should be vested in the person who supervises the employee. Thus, decisions related to hiring, promotion or demotion, training, work actions,12 pay, and scheduling can and should be made by the immediate supervisor of the affected employee. In many cases actions of this kind do require additional approvals from the company’s upper echelons. However, the farther away from The new model calls for decision-making authority and accountability to be vested in the person who supervises the employee. the source that these decisions are actually made, the less likely it is that real-time and relevant information about the decision and its outcome will be available for the decision maker. It is also important to note that the time it takes to complete the decision-making process is extended in direct proportion to the distance it has to travel through an organization’s bureaucracy. One key construct in our proposed HR model is that HR practitioners will no longer make operational decisions, but rather act as consultants to other business functions by designing, developing, and delivering programs that give line managers the tools and training they need to effectively perform their responsibilities. The following scenarios represent common decisions made by HR practitioners. 12 These are defined as disciplinary actions, commendations, granting of leaves, and the completion of related paperwork. Cornell Hotel and Restaurant Administration Quarterly 21 HUMAN RESOURCES A NEW MODEL Examples of the New HR Model in Operation Traditional Practice Suggested Practice under the New Model Recruitment HR departments have become gatekeepers for whom and how many to hire. As part of the strategic-planning and budgeting process, departments should be responsible for determining and justifying staffing levels. Once identified, decisions on whether to fill positions, and with whom, should be left to the department. The role of HR should be to establish suggested sources for obtaining applicants (both internal and external), designing methods for communicating with applicants using those sources, and developing an applicant-tracking system. HR should also assist line managers in developing appropriate interviewing methods and materials, train the managers to use them, and monitor the process for legal and policy compliance. Information technology now exists to provide managers with self-service capabilities to find and track applicants. At Bellagio, for example, HR designed a self-service system for applicants, which eliminated the need for data input by HR staff and allowed applicants (both internal and external) to update and monitor their application information and status. These systems are always available and can help reduce the workload of the HR staff. Compensation HR departments control both the design and administration of the compensation program. Salary administration can be managed by line departments through technology, such as the web-based models developed by Melon’s HR Solutions group, that provides managers with the data and analytical tools that they need. This gives the responsibility and accountability for these decisions to the departments; HR’s role is to provide advice and establish proper control mechanisms to prevent the inexpert (non-specialist) manager from making inappropriate decisions. In this role, HR facilitates the gathering of competitive data and then provides it directly to line managers so they can do their own payroll modeling. Job Training New hires attend an orientation conducted by HR, and then they are given some form of on-the-job training. All new employees attend a general company orientation that is designed by HR and presented by fellow employees. This will give the new hires a peer perspective and help them to develop relationships with other employees. Department and job training should be conducted by a trained trainer from the new employee’s department or job. This trainer should have the added responsibility of evaluating the new employee’s performance and conducting any retraining that may be required. HR’s role should be helping to create the training materials, training the trainers, and implementing a tracking system to allow managers to monitor course attendance and related performance. Park Place Entertainment, for instance, has developed this type of employee-development system. The HR department has developed scripts and protocols that serve as templates for all training and development efforts. Line managers are primarily responsible for content, giving them more control over the job- and department-specific training needs. An example of this decentralized approach to development is PricewaterhouseCoopers, which has developed on-line knowledge-management systems that give consultants access to problem solutions that have been identified from prior projects and that may have relevance for current client needs. This type of real-time learning enhances the quality and efficiency of project work. (Note: Examples continued overleaf) 22 Cornell Hotel and Restaurant Administration Quarterly AUGUST 2002 A NEW MODEL Scenario 1: An employee resigns and the manager needs to fill the vacancy. The process will probably include deciding whether the open position can and should be filled, locating and interviewing applicants, determining whom to hire and how much to pay that person, assigning a start date, conducting training, and determining whether to retain the new employee. In the real world the immediate supervisor will know the most about everything relating to those issues and be in the best position to make the most appropriate and timely decisions. The need for direct HR intervention should be minimal. Scenario 2: A service employee is not performing up to expectations in spite of being trained and supervised. The organization has documented policies and practices relating to progressive discipline and the issuance of notification to the employee. The supervisor should have full authority to determine the need, timing, wording, and level of notice to be given. While it’s practical to assume that this type of decision might require some additional approvals, the managers directly related to the employee’s performance are best suited to understanding the issues and nuances involved. In these situations, usually there are policies and processes that require the involvement of the HR department. Yet in most organizations these decisions are best made in a timely manner by the individuals who know the most about the issues. HR specialists should be involved in this decision-making process, but final decisions would ultimately be made by individuals outside of the HR function. Our model has drawbacks, perhaps, but some of that relates to the fact that HR information is not always shared with line managers. One drawback is line managers’ potential ignorance of the fine points of HR practice and law. The centralization of the HR function occurred in part because there was a belief that the legal and organizational issues involved in making HR decisions were so complicated that it would not be prudent to trust non-HR supervisors to make them. Moreover, the decentralized model’s redundancies could be costly. Under the new HR model the power to make decisions is entrusted to line managers. In this model it is the role of the HR practitioners to assist companies in training man- AUGUST 2002 HUMAN RESOURCES agers how to make and implement business decisions and then entrust them with the authority to do so. If such decision-making power is not distributed to line managers, they will not gain the necessary skills to be able to effectively perform their duties. In contrast, if line managers are supported in the HR function, the necessary information will be spread throughout the organization. The examples at left and on the next page illustrate how HR practitioners can use the constructs of this new model. In the real world the immediate supervisor will know the most about hiring issues and be in the best position to make the most appropriate and timely decisions. The responsibilities identified in the tables follow the functions that are traditionally found in HR departments. Organizations with centralized HR functions adopt these “traditional practices” on the theory that they are specialized and should only be conducted by those who are trained and skilled. That approach presupposes that being in HR is the only way to gain that expertise, and further, that this expertise is more important than understanding the operational nuances that exist at the line level. We suggest that HR expertise can be gained by those at the line level more easily than can the nuances of departmental activity be understood by those in HR. The key to transferring these responsibilities to the line level is training the supervisors in how best to perform these duties, providing them with the tools and technology to effectively and efficiently carry out these responsibilities, supporting them with advice, and monitoring their performance. This means that the role of HR changes from gatekeeper and decision maker to trainer and supporter. Additionally, management should put in place strategies that reinforce the performance of managers who adopt and successfully handle these duties. Indeed, that should be tied to their reviews and total compensation. This is consistent with the goals of (a) the organization to have Cornell Hotel and Restaurant Administration Quarterly 23 HUMAN RESOURCES A NEW MODEL The New HR Model in Operation (continued) Traditional Practice Suggested Practice under the New Model Record Maintenance Managers fill out work-action documents (e.g., wage and job changes, disciplinary notices, and performance reviews) and submit them to HR. These are then checked for accuracy and keyed into a database, and the originals are placed in file folders. Employees also submit information that initiates actions such as vacation requests, address changes, and other general requests. These are routed through HR in a similar manner as the management documents. Using self-service technology managers and employees fill out and submit transaction data directly to HR or the database, where they are ultimately stored and used. Starwood’s on-line “executive dashboard,” for example, provides the corporate office with continuous information about a wide range of property-level data that are directly related to strategic goals—from employee- and guest-satisfaction data to occupancy and rate information. In addition, operations managers have direct access to the the data, thus freeing HR from the responsibility of facilitating access requests and generating reports. HR should learn about technology and actively participate in the development of these self-service tools, and then train managers how to use them. Many organizations today are outsourcing HR, payroll, and benefits administration, and are using internet connectivity to facilitate transactions and maintain access to their data. Many are also adopting shared-service approaches that are designed to bring more functionality and service capabilities to line managers and employees. Management Policies Most companies have handbooks and policy manuals that strictly define legal concerns and consistent policies and processes. These materials are often printed and distributed in hopes that employees will keep them in an accessible place and read them when needed. They seek to cover every conceivable circumstance with carefully written rules, policies, and practices. Replace company-wide rules with concepts that are consistent with local and departmental concerns. Involve line managers in the process of determining these concepts to ensure that they are applicable to the department’s needs and concerns. Base the concepts on values and principles rather than rules. Policies and practices should focus on being fair rather than merely consistent. Workers in the 21st century expect to be treated as individuals, and when presented properly these practices have greater acceptance than those that treat everyone identically in every circumstance. Practices of this kind will be easiest for managers to understand, use, defend, and enforce. For example, Le Parker Meridien in New York City has a long history of focusing on values—from “frank and fearless feedback” to “happy but never satisfied”—which are the primary drivers for individual behavior and set standards for accountability and performance. HR should also monitor competitive practices and provide this information to managers. In some cases, this benchmarking information is also available online. Organizational Structure Most companies have a hierarchical design in which decisions are made at the top and then implemented at the bottom of the supervisory structure. While empowerment as a practice has been widely debated, most organizations still maintain practices where authority is vested at the highest levels of this hierarchy. Companies such as Winegardner & Hammons are flattening their organizational structures and giving line managers the flexibility and authority to make decisions. In other organizations, such as The Boulders in Carefree, Arizona, self-managed work teams are obviating the need for supervisory interventions and allowing trained employees to set the tone and monitor the behavior of their teams. Within both structures, decisions are made in context, with a focus on what is most relevant and important to those involved. 24 Cornell Hotel and Restaurant Administration Quarterly AUGUST 2002 A NEW MODEL better-trained and -performing managers, and (b) most HR professionals to be more of an internal consultant and strategic partner than mere arbiters of proper practice. This new construct allows the line managers to achieve new competencies and control, while giving HR professionals the chance to become more of what they want to be—and should be. The organization benefits from using this new model, because decisions are made more quickly and appropriately, allowing the business to be more focused on its core responsibilities of production and service. Enabling Technology Public and private companies alike are driven to make effective decisions and to improve performance through expense control and revenue improvement. Over the past 20 years, tools have been developed to help organizations achieve these goals. This trend began when financial departments discovered online analytical processing (OLAP) tools that allowed them to collate and query information from all of the disparate files in their databases and develop queries therefrom. This ad hoc interactive querying capability allowed them to conduct complex multidimensional analyses and more rapidly discern issues that needed to be addressed. This practice provided a means for organizations to control expenses more effectively and thus improve their bottom lines. The next challenge involved improving revenues beyond the normal realm of sales and marketing. Those same OLAP tools, when applied to complex and disparate customer databases, allowed companies to target their efforts and dollars in ways that maximized revenue opportunities. Today, customer-relationship-management (CRM) systems are helping these companies to better use their resources to satisfy their customers and increase revenues. Much has been written about these practices. For example: The new cross-departmental imperative for companies in virtually all industries is to empower decision makers to obtain quick answers to their business questions by immediately acquiring the information they need. The effective sharing, distillation, and analysis of information among such an array of departments—customer AUGUST 2002 HUMAN RESOURCES relationship, sales, product planning, marketing, and finance, for example— coalesces into an enterprise-wide intelligence that is greater than the sum of its informational parts.13 As these practices become perfected, organizations will look for additional ways to improve performance, and we suggest that HR is the next area to which these might be applied. Adding employee-activity data to the practice of interactive and multidimensional analyses will help organizations to truly get the most out of their human resources. To gain this capability, humanresources departments in highly successful organizations “will understand how to use systems and software to solve business problems and will exploit technologies to achieve their business goals.”14 The decision makers in this instance are the line managers, and the decisions are related to the management of their employees; giving line managers the use of a system like this will increase their access to data and give them the ability to make better decisions. This technology Under the new model, HR professionals will become internal consultants and strategic partners rather than mere arbiters of proper practice. will assist them in converting those data into intelligence. It is expensive to store and maintain all of these data, and “until it is put in the hands of business users and brings real value to these business users, the value obtained from that information does not compensate for the cost of maintaining that data.”15 While the initial capital investments required to develop and imple13 B. Liautaud, with M. Hammond, e-Business Intelligence, Turning Information into Knowledge into Profit (New York: McGraw-Hill, 2001), p. 5. 14 Joseph H. Boyett, Jimmie T. Boyett, Row Henson, Heidi Spirgi-Hebert, HR in the New Economy: Trends and Leading Practices in Human Resources Management (Pleasanton, CA: PeopleSoft, 2001), p. 28. 15 Liautaud and Hammond, p. 38. Cornell Hotel and Restaurant Administration Quarterly 25 HUMAN RESOURCES A NEW MODEL ment decision-support technology may be high, the operational savings16 and improved decision quality more than justify the investment. The appropriate use of technology is critical to the successful transfer of responsibility from HR to the line managers and departments. The use of business-intelligence technology and tools will enhance line managers’ skills and decisionmaking capabilities by giving them the same view that was once reserved for HR staff. Again, the key to this will be the training and support provided by the HR staff. J. Bruce Tracey, Ph.D. (pictured top), is an associate professor of management at the Cornell University School of Hotel Administration (jbt6@cornell.edu). Arthur E. Nathan (pictured above) is a new product thought leader at Mellon HR Solutions. © 2002, Cornell University; an invited paper. It seems to us that the best part of a line manager’s job is having the ability to make decisions that are most critical for a department’s success. Conversely, the things that managers dislike have to do with the HR department’s always telling them what to do. In truth, there are probably times when it would be convenient to pass certain responsibilities to HR, so that line managers don’t have to make those decisions or would at least have someone to point to as the culprits. In the end, however, the role of a manager is about responsibility and accountability, and the adage that “the buck stops here” seems Some Additional Thoughts to have been written with that in mind. The folWe would be remiss if we didn’t offer some lowing requirements will help line managers feel thoughts related to the tragic events of Septem- most comfortable in this role: ber 11, 2001, which occurred during the (a) They have some say in the development of conceptualization and writing of early drafts of a company’s policies and practices; this manuscript. The pressure on management (b) The company provides them with the tools to react to the terrorist acts and their effect on and training to perform at this level; the hospitality industry has been intense. The (c) There is a clear definition of HR’s and line range of responses to the plunge in business levmanagers’ responsibilities; els was varied and is not germane to our discus- (d) They are recognized and rewarded for sion. What is important to note is that swift, ingood performance relative to these issues; telligent, and decisive actions were required in and the wake of the attack. That supports the need (e) There are programs in place to help when to adopt new roles for HR and line managers. mistakes are made. A company’s ability to adapt to changing conIf it is true that our future success both at the ditions depends not only on its policies, but also business level and as HR practitioners lies in the on the tools that it provides to those responsible adoption of new ideas and technologies, and that for deciding and implementing its strategies. HR leaner, more-focused organizations are the ones departments worked with their management that succeed, it is imperative that this transition teams to define the strategies to address issues to a new HR model occur. To assure that the relevant to the attacks and then helped to imple- transition is smooth, we will need to learn from ment them. Line managers needed accurate in- others’ errors as well as our own mistakes, and formation about business and staffing levels, staff we will need the steadfast support of the organiskills and abilities, and financial-modeling capa- zation in maintaining this new set of roles and bilities. Having HR and line managers in pos- responsibilities. ■ session of and trained to use the most-effective tools available will ensure the organization’s capacity to meet its needs. This enlightened division of responsibilities will result in the most orderly and informed execution of each group’s tasks, and promote teamwork. 16 Alanna Klaussen, senior analyst with Radiant Systems, Inc., has demonstrated that a 2-percent to 10-percent savings in payroll expenses can be realized by adopting decision-support technology. 26 Cornell Hotel and Restaurant Administration Quarterly AUGUST 2002

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