The chosen case studies are those of Pfizer and Intel. The two case studies are much similar because they are founded on the basis of organizational capability being improved through better HR practices. They show that HR practices are important in ensuring success in organizations and ensuring better performance. As stated by Ulrich et al. (2009)
, the case studies show that it is important to think about organizational capability and HR practices and how they impact performance and not the other way around. Organizational capability as a source of competitive advantage is also highlighted in the case studies which show that by looking at the organization from an inside-out perspective, rather than an outside-in perspective is important in ensuring sustainability of change and that the change is based on effective reasoning Zhang, 2010()
In the case of Pfizer, the organization's capabilities are seen in how it organizes its business for the best delivery of its products and services and how the different outputs of the various business units in the company in order to achieve improved results. The HR strategy that was adopted by Pfizer is not one that enables business success but it drives success in the business. This is seen in how the company places emphasis on its business performance achievements being related to their achievement of the mission, vision and values set by the management. The company also has a strong dedication to attract and retain the best talent through offering growth opportunities as detailed in their commitment to talent development and competitive remuneration Ulrich et al., 2009()
Intel's case study portrays an image of fast innovation being matched to attracting and retaining the best talent and fostering proactive collaboration towards greater innovation. In the company's HR strategy, the most important elements that stand out was the reduction in complexity of tactical delivery and to develop a HR competency strategy. These were made to complement the company's culture to support employees to make the best of their opportunity with Intel Ulrich et al., 2009()
The two case studies are success stories for the two organizations but in order to find the missing link between the two ways in which the organizations focused on their transformation, it is important to revisit the problems that the organizations were facing at the beginning. The two companies were facing different challenges in the beginning which can be thought to be the major reason behind the different transformation strategies adopted. But this is just the surface value of the case studies. By looking at the case studies from a more in depth view, we see that the challenges were very similar. The two companies had issues in managing their human resources. They both had challenges in documentation, attracting and retaining their workforce. Cost was also a major concern since both companies were spending a lot on their employees and thus cost reduction was a major aspect of both transformation strategies.
The way the two companies decided to handle these similar challenges is different. However, this can be attributed to a need for contextualization of problems. The contexts of the two companies are different though with several similarities. The differences come in the two companies operating in different industries. Pfizer is a pharmaceutical company while Intel is a chip manufacturing company. Pfizer was dealing with issues relating to changing its hiring requirements, leadership development, employee development, promotion and knowledge sharing strategies while Intel was handling issues broadly related to HR strategy implementation. The similarities include the companies having experienced huge growth in the 2000s and this came with huge increases in their workforce. This unexpected growth is thought to be the major source of the HR challenges.
Pfizer's challenges stemmed largely from the company's strategy which involved mergers and acquisitions. This meant that the company acquired others that had different payroll practices, pension and benefit schemes, performance and talent related practices and points-of-view in general. This meant that each business unit had different HR functions and practices. Trying to incorporate these into the overall strategy of the organization meant that it was a challenge to make sure that the company could deliver quality service competitively. In addition, promotion of talent and acquisition of talent also suffered greatly Ulrich et al., 2009()
These challenges that the organization faced is why their HR transformation is defined as being inside-out. This is because the company had to make their HR strategies efficient on the inside in order to be able to drive performance of the whole business and ensure the business maintained competitiveness Ulrich et al., 2009()
Intel also had similar challenges with its human resources. The company also had acquisition as its growth strategy which meant that the expectations of employees were very high. Additionally, the company was trying to succeed in a highly innovative environment. Meaning all other aspects of the organization, except HR, were able to keep up with the fast pace of innovation. The company was also struggling with huge costs of human resource management which meant that expenditure was high Ulrich et al., 2009()
Internal and external influences impacting the organizations
Both companies struggled with internal pressures to improve their processes to make them efficient. The companies were striving to achieve competitive advantage that comes as a result of efficient and effective HR practices. They were also looking to reduce their cost considerably in order to ensure that they could make better profits. These were the internal influences that were similar to these organizations.
In addition to these, the organizations had different influences on their own. Intel discovered that there was need for restructuring the organization in order to make HR processes more efficient. This came from the realization that other sections of the company had grown to become faster and more efficient than their HR department had. In the case of Pfizer, the other internal factors included the need to make HR a driver of business success. The company came from the realization that HR formed a part of each of Pfizer's top five priorities Ulrich et al., 2009()
The companies also faced external factors. For the two organizations, pressure from shareholders and investors was a major external factor. This is because they demanded higher profits which meant that the organization had to better their systems in order to have efficiencies that create competitive advantage towards cost savings, increased revenue and profits. The other external factor that was common to both organizations was increased competition. Both organizations operate in a highly competitive environment meaning that increased competition meant that the companies had to look at their strategies in order to devise ways to create competitive advantage Ulrich et al., 2009()
Phase that was most critical for the organizations
For Pfizer, phase 3 was most crucial for the organization. This is because this was where work was classified in order to realize the needed efficiencies. This phase was divided into three since Pfizer realized that it was a crucial phase. During phase 3a, the organization created several cross-divisional teams which analyzed the situation and created areas of focus for the transformation process. This was most important in order for the company to realize the competitive advantage that was desired. In phase 3b, the organization was involved in structuring its business units favorably in order to embed the HR practices into the business units. This was most important since it is the strategy that would ensure the transformation was sustainable. Phase 3c was the one regarding the talent equation. This was where a strong leadership role was established which ensured that the influence of the HR transformation could be extended externally. This was done by ensuring that the strongest talent in the organization was given key roles which they could perform effectively Ulrich et al., 2009()
In the case study of Intel, phase 3 was also most important. It was titled the HR design phase. In this strategy, the company was involved with the HR organization, HR practices, and HR people. In HR organization, the resource allocation and structure of the organization had to be changed in order to ensure the desired outcomes were met. This meant the organization had to develop strategic programs and design groups which would be involved with designing programs to make Intel achieve competitive advantage. The second group was the business-facing channel which was involved in organizational development, employee relations, strategic partnering, analytics and program rollout. The last group was the operations group which was responsible of delivering all essential HR services. In HR practices, the operations group was involved in ensuring that the HR practices were changed to place increased focus on innovation, talent, and collaboration. These improvements facilitated better hiring practices and leveraging of technology. In HR people, the organization ensured that the HR team included professionals from different backgrounds. The rationale for this was to ensure that the HR team was multi-disciplinary and thus could provide better and all-rounded solutions Ulrich et al., 2009()