Evaluation Of Human Resource Strategies For Fletcher Building

Company Overview

Human resource strategies and approaches of the contemporary business organizations determine their competitiveness in the market. This is due to the fact that human resource strategies help in maintaining the internal competitiveness of the organizations in competing with their competitions. However, it is also important for the business organizations to align their business strategies with that of their human resource approach in order to have the maximum benefit from the coordination of both (Alfes et al., 2013). On the other hand, organizational culture is another major element of the human resource management that also should be managed effectively in order to have internal stakeholders with having right skills and engagement in their workplace. Impacts of the human resource management are more evident in large scale business organizations due to the fact that they have to manage larger workforce in place (Hogan & Coote, 2014).  

This report will discuss about the business level strategy being followed by Fletcher Building. In addition, the current approach of human resource strategy being followed by them will be evaluated along with aligning with their business level strategy. Organizational culture followed by them will be evaluated in terms of different models and will also be linked with human resource strategies of Fletcher Building.

History and background

Fletcher building is largest building material company in the Australian and New Zealand region. They are also one of the largest listed companies in the stock market of both the countries. It is reported that Fletcher building is currently having their operations in more than 40 countries and with having more than 20000 employees in place (Fletcherbuilding.com, 2018). These employees are from different countries with different social and cultural backgrounds. Thus, in accordance to this workforce, they are also maintaining an effective approach of human resource management.

Objectives

The objective of Fletcher Building is to provide sustainable value to their shareholders by delivering the best quality products and services and meet the aspirations of all the stakeholders. Hence, from their objective, it can be concluded that objective of Fletcher Building is not only about profit maximization but also about maintenance of sustainability (Fletcherbuilding.com, 2018). In addition, their objective can be termed as holistic due to the reason that it covered the interests and value for all the shareholders and stakeholders.

Product and services 

Currently, they are their presence in different sectors ranging from construction of large infrastructural projects and manufacturing of construction steel to retail distribution and residential projects. Thus, they can be considered as a conglomerate in the construction industry.

Evaluation of Current Business and Human Resource Strategies

Organizational services 

Being a publicly listed company, Fletcher Building is having a considerably wider organizational structure in place. It is reported that the board of directors is lead by their chairman Bruce Hassall. The board of directors is having some of the most experienced professionals in place. In addition, it is also identified that organizational structure of Fletcher Building is horizontal in nature with having the presence of 14 executives under the board of directors. This is important for them as they are having their business in different sectors across the world.

Evaluation of business strategy 

Identification of the business level strategy can be done with the help of Porter generic strategies. According to this model, cost leadership, product differentiation and market focus are the major three options available to the business organizations as their business level strategy. Porter five forces strategy will also be used. The following table will discuss these three options from the perspective of Fletcher Buildings. According to the information being available through secondary sources, it is identified that cost leadership and product differentiation traits are evident in their strategic intent.

Bargaining power of the buyers	· Bargaining power of buyers is moderate. · Number of options available in the market. · However, brand value of Fletcher building is huge and this is refraining buyers to switch (Beverland & Lindgreen, 2016). · Customer segments are more for them, which are also helping in reducing the dependency over a single segment.
Bargaining power of the suppliers	· Bargaining power of the suppliers is low. · There are number of suppliers available. · Fletcher building is having effective backward integration.
Threat of new entrants	· Threat of new entrants is high. · Number of global firms will pose challenge for Fletcher building in the market of New Zealand. · Entry barriers are also less in doing business in New Zealand.
Threat of substitutes	· Threat of substitute is high for Fletcher building. · Number of companies is offering same products and services. · However, switching cost is high for the customers.
Competitive rivalry	· Competitive rivalry is high in the market. · Majority of the companies operating in this sector are initiating aggressive marketing activities.

Business level strategies
Cost leadership	· Cost leadership strategy refers to the process of offering products and services at lowest price possible (Teeratansirikool et al., 2013). · This helps in attracting the majority of the customers. · Fletcher Building is having different brandings in each of their operating sectors (Higgins, Omar & Phillips, 2015). Each of these brands is catering to the customers at different price levels.
Product differentiation	· Product differentiation strategy refers to the process of offering distinctive products to the customers (Tanwar, 2013). · Fletcher Building initiates product differentiation strategy by means of offering different variants under different brandings (Qiu, 2014).

Business strategy	Characteristics	HR practices	Evidence
Cost leadership	· Price point is being kept lower compared to the pricing of the competitors. · Lower level of the pyramid segments are targeted with the cost effective products.	· High performing organizational culture. · Innovative approach	· Enhanced productivity of the employees ensuring lower cost of operation. · Innovative approach is helping in generating new and sustainable ideas (Anderson, Potocnik & Zhou, 2014).
Product differentiation	· This helps in maintaining the uniqueness in the market with having higher level of substitute in the market.	· Diversity management	· Diversity management is helping in having employees from different backgrounds. · This is helping in garnering diverse and differentiated ideas (Chen et al., 2017).

Justification with literature 

From the information available regarding Fletcher Building, it is identified that they are following cost leadership and product differentiation strategy. These strategies are applicable to the business sector where Fletcher Building is currently operating. This is due to the fact that as per Banker, Mashruwala and Tripathy (2014), both the product differentiation and cost leadership strategy can help the business organizations in gaining sustainable financial performance. With the help of the cost leadership strategy, more number of customers be attracted and Fletcher building being operating in necessity products and service market will require large customer segments for maintaining their sales volume. Construction industry can range from low cost projects to premium projects. Thus, initiating cost leadership strategy is helping them to cater the customers across different price level.

According to Bamiatzi and Kirchmaier (2014), differentiation strategy can also be beneficial for the business organizations in gaining competitive advantages. This is due to the reason that differentiation strategy helps in cutting off the intensity of substitute in the market. Thus, in the case of Fletcher Building, they are having number of substitute products in the market of Austrasia and in the foreign countries. According to the authors, they should have some sort of distinctiveness over their competitors in order to attract customers and in accordance to this, Fletcher building is offering differentiated products. For instance, they are offering pre-painted steel roofing products in New Zealand under the Pacific Coilcoaters branding.

Business Level Strategies

Identification and discussion of existing human resource strategy 

The human resource strategy of Fletcher building is oriented with improving the workplace environment and managing the workforce diversity and retaining the best talents in the industry. It is identified that organizational culture of the workplace is given a major consideration by Fletcher building and high performing and flexible workplace culture is being maintained. The major approach of human resource strategy for them can be considered as High performance management. This is helping them to have more people oriented approach and more involvement from the side of the employees. It should also be noted that high performing management is all about culture and thus the organizational culture of Fletcher building is given more concentration (Kehoe & Wright, 2013). High performance management also ensures that the organizational approach of Fletcher building is maintained as competitive and growth centered even after considering the orientation towards the employees. According to Buschgens, Bausch and Balkin (2013), organizational culture determines the extent of emergence of innovation in place. The more effective and engaging will be the organizational culture, the more will be the extent to which innovative approach can be maintained. Thus, in the case of Fletcher Building, managing their high performing organizational culture is helping them to have the innovative approaches, which will in turn enhancing their competitiveness in the market (Choo, 2013).

Another major element of the human resource approach of Fletcher Building is their diversity management system. It is reported that Fletcher building is having inclusive environment with having equal acceptance for employees irrespective of their caste, creed and sexual orientation. According to Podsiadlowski et al. (2013), diversity management of the organizations can help them in gaining different alternative options along with enhancing their employer branding. In the case of Fletcher Building, initiation of the diversity management system is helping them to gain the alternative options from different employees. On the other hand, employer branding of them is also getting enhanced that is further helping in meeting their objective of retaining the best talents. According to the Edward Lawler’s principles of human resource strategy, Fletcher building mainly practices rewards for their employees. This is helping them in enhancing the performance of the employees and motivating them by providing rewards according to the performance. Recruitment and development of the employees are also considered as their key human resource approach. Furthermore, this approach is also well aligned with their cost leadership (Swider, Zimmerman & Barrick, 2015). This is due to the reason effective process of recruitment of the employees ensures having right employees with right skills and expertise in the first place. On the other hand, development of the employees ensures that attrition rate will be less. Low level of attrition rate will help in having less cost for the company in recruiting and training new employees. Thus, the operation cost will get lowered and cost leadership can be enhanced.

Characteristics

Achievement and issues 

It is reported that Fletcher building is having nationally accredited Maori leadership program in order to uplift the Maori community in the organizational ladder. In addition, they are also recognized by Rainbow Tick regarding their inclusiveness towards LGBTI community. In 2017, they were awarded by Auckland Council Young at Heart Awards for mentoring the young people. These are some of their major achievements; while on the other hand, some issues are also being faced by them including having their major activities limited within the national boundary of New Zealand. In addition, the acceptance of their LGDTI community in the workplace is not same in every host country mainly in the Asian region. This is due to the reason of different social environments in different countries.

Evaluation of the company’s culture  

Organizational culture being followed in Fletcher Building can be evaluated based on different models. One of the major culture models is clan culture. According to Wiewiora et al. (2013), clan culture can be related with the organizational culture being maintained in Fletcher Building. This is due to the reason that from the official website of Fletcher Building, it is identified that collaboration and cooperation among the internal stakeholders are being maintained, which is one of the basic characteristics of clan culture. In addition, clan culture helps in engaging the employees along with enhancing their loyalty in the workplace. This is helping Fletcher Building in gaining competitive advantages from their employees.

It is identified that according to the Trompennar’s cross cultural organizational cultures, family approach is being followed by Fletcher building. This denotes the leadership quality between person orientated and hierarchical. This culture is followed in the organization due to the reason of national cultural factors of New Zealand. According to the Hofstede’s national cultural model, New Zealand is having the lower power distance and relationship is given more preferences between the superiors and subordinates (Mazanec et al., 2015). Hence, with the help of family organizational culture, promoting relationship is given more concentration over others. In addition, Hofstede’ cultural dimensions also identified that New Zealand is more individualistic society and employees are expected to be self reliant and initiate decisions by own. Thus, with the help of the family organizational culture, leaders of Fletcher building are acting only as mentor and do not interfere in the employee activities (Aier, 2014). Thus, it can be concluded that organizational culture of Fletcher Building is well aligned with their national culture.

HR Practices

It is recommended that multiculturalism will be the most ideal approach for the organizational culture for Fletcher building. This is due to the reason that diversified workforce is maintained in the organization and all the employees are not representing the national cultural dimensions of New Zealand (Ng & Metz, 2015). Thus, aligning only with singular approach of the national culture will not be effective enough in enhancing the competencies of the diversified workforce.

Comparison of company’s HR with business strategies and culture

As discussed in the previous section, business level strategy for Fletcher Building includes cost leadership and product differentiation. On the other hand, the existing and current human resource strategies are also being discussed for them. According to Garnero, Kampelmann and Ryxcx (2014), workforce diversity is having direct relationship with that of the product differentiation strategy. This is due to the reason that diversity in the workforce helps in gaining diverse and varied ideas from the employees. The more diverse will be the generation of new ideas, the more will be the probability of initiating differentiated products in the market. This is major alignment between the diversity policy and product differentiation policy of Fletcher Building.

On the other hand, it is also stated that retention of the best talents in the industry is one of the major objectives of the human resource strategy for them and accordingly, Fletcher Building is initiating inclusive organizational culture. This can well related with the cost leadership strategy of them due to the reason that the more skilled will be the employees in place; the low will be the cost of operation. As per Goetsch, David and Stanley (2014), organizational excellence can be achieved by means of skilled employees. This is due to the reason that skilled employees will have more effectiveness in their workplace and their productivity will also be more. Thus, if the average productivity of the employees can get enhanced by means of higher retention ratio, then the average cost of operation will get lowered and cost leadership can be gained. This coordination is also helping Fletcher building in gaining competitiveness in the industry.

Evaluation of existing HR strategy and organizational culture 

It is earlier discussed that human resource approach of Fletcher building is oriented towards the attaining high performing employees with higher level of productivity. This is denoting the presence of market culture in the organization. As per Buschgens, Bausch and Balkin (2013), effective organizational culture can also helps in initiating innovation in the workplace. This is due to the reason that employees will be more motivated with having favorable organizational culture in place and will further come up with innovative ideas. In the case of Fletcher Building, this market culture is helping in generating innovation in the organization (Kramar, 2014).

Evidence

On the other hand, it is also discussed that Fletcher building is having inclusive environment with having the acceptance for different social sections including the LGTBI community. In accordance to this, employees are being given training about the advantages to be gained from diversified workforce. As per Belias and Koustelios (2014), having more inclusive working culture is initiating the clan culture and also enhancing the job satisfaction of the employees. This is due to the fact that if the employees are being given support and assistance and if they can have cooperation from the stakeholders, then their level satisfaction will get increased in the long term (Jackson, Schuler & Jiang, 2014).  

Conclusion

Implications for the managers 

This report concludes that Fletcher building is having an effective and fruitful human resource strategy in place that is helping them in gaining competitive advantages in the market. In this report, it is identified that they are mainly following cost leadership and product differentiation strategies in the market and their human resource approach is designed accordingly. This report concluded that it is difficult for the HR managers to change their approaches in accordance to the change in the business scenario. In addition, in this report, it is also being identified that HR managers will face the challenge of maintaining their universal approach in all the countries of their operation.

Recommendations 

• It is recommended that Fletcher building should have adaptive approach of human resource strategies in their different host countries. This will help them to get adapted with different business environment and pattern in different regions around the world.
• It is also recommended that the HR managers should have the policy of gathering feedback from the side of the employees. This will enable them to have the understanding about the effectiveness of the policies and can be amended accordingly.
• Organizational structure can be made more horizontal in order to reduce the hierarchy level and enhancing the communication flow. This will ensure more effective process of connection among the internal stakeholders and will contribute more in organizational excellence.

References

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