Académique Documents
Professionnel Documents
Culture Documents
Francesca Andreescu
School of Management
University of Southampton
Highfield, Southampton
SO17 1BJ, UK
Phone: 44 (0)23 8059 7995
Fax: 44 (0)23 8059 3844
E-mail: afa@soton.ac.uk
A paper prepared for the Fourth Conference on HRD Research and Practice across
Europe 2003, May 23-24, 2003, Toulouse
Stream: Boundaries of HRD: interface with HRM, changing roles and social partnership
has operated as a Trading Fund since April 1999. This provides a greater degree of
commercial flexibility and increased responsibility for its business planning and finances.
As a Trading Fund the business has to make a profit but does not receive a subsidy from
the taxpayer;
a potential change in status towards a Government-Owned Plc. status was proposed in
2002 and rejected because it did not deliver the necessary benefits to the organisation.
However, enhanced financial freedoms and flexibilities has been granted by the
Government.
External context
The New Labour Modernising Government agenda has provided Ordnance Survey with the
opportunity to operate and compete commercially while allowing government to retain
ownership.
Ordnance Survey was one of a number of ex-Executive Agencies to be given Trading
Fund status in 1999. A key aspect of becoming a Trading Fund was to move towards
performance targets and a culture of measuring, and rewarding achievement linked to the
business vision. Likewise, the E-government Strategic Framework (April 2001) set out a
series of guiding principles built around a common framework and requiring public
organisations to innovate by buiding services around citizens choices, making government
and its services more accessible electronically, managing information and knowledge in more
efficient ways to ensure easier on-line access and more effective use of all services.
The environment in which the organisation operated is characterised by emerging
opportunities for the rapid expansion of the digital market and, in particular, location-based
services offered via the Internet. That sits alongside its activities in the mature market for
traditional paper-based mapping. The severe market competition and threat of product
substitution through the mass expansion of digital information and the new status of Trading
Fund acted as drivers for revenue maximisation and placing greater emphasis on increasing
the utilisation of geographical data.
Internal context
With the appointment of a new Chief Executive Officer (CEO) in September 2000, Ordnance
Survey began the first phase of the commercialisation process, by changing its organisational
and reporting structures. The CEO immediately set about transforming the organisation with
a new vision: Ordnance Survey and its partners will be the content provider of choice for
location based information in the new information economy.
This mission statement was developed into a new e-business strategy by a dedicated
project team. Seven implied critical success factors were identified:
Ensuring that our business strategy is clearly understood by our staff, customers, partners
and the wider community;
processes and a range of projects were identified that would exploit e-business technology
and approaches to improve performance. A vast programme of structural and cultural
change was designed, having as key milestones:
The development of a more flatter and more flexible structure marked by adaptability and
customer orientation; and
The rethinking of business processes, and the commercial, technological and cultural
transformation of the business.
The organisation had a long history of public service culture and organisational systems
and processes. Similar to other public sector entities undergoing public sector reform in the
form of commercialisation, the efficiency and effectiveness of management processes were
major challenges. The change programme set up from 2000 onwards was designed to
transform a strongly introspective technology-oriented organisation into a customer-oriented
one. One of the most significant reviews undertaken in 2001 by the top-management team
identified that the problem of achieving Ordnance Surveys corporate goals resided within its
structures and work practices. While traditional organisational structures and practices have
emphasised size, role clarity and formalisation, greater emphasis was now being placed on
organisational practices that emphasise speed, flexibility, innovation and boundaryless
integration. A key strategic objective of the new arrangement was the reduction of structural
and process complexity and the rethinking of how the organisation provides value to its
customers. There was thus a strong need to move the organisation from a highly centralised
and bureaucratic model to a decentralised structure, with cross-functional and cross-boundary
teams, characterised by a dynamic management style.
Impact on HR
Not unexpectedly, the internal transformation of the business had a significant effect on the
HR function. Senior managers and managers from the other business groups began to
recognise that traditional models used in the organisation were fast becoming inadequate.
This discomfort accelerated when the business re-organisation planned by the topmanagement team began to be put into practice and there was an urgent need to rethink HR
roles. As new standards of organisational performance were established, the HR function felt
pressure to justify its existence and demonstrate added value.
The traditional model of personnel in Ordnance Survey had focused on the
administration of personnel processes and practices, and employee advocacy. Personnel
function was regarded as the police of the organisation, with personnel policies being
vigorously enforced. Business groups managers were used to be told by HR officers which
policies work and which dont, and most of these policies were not linked with what the
business was actually doing. There was a neglect of people management issues by line
management and the personnel function was perceived to be ineffective.
As the organisation started to pursue its turbulent journey, management expectations
began to change. Business managers wanted their Business Groups to compete on a level
playing field, which meant rethinking the notions of uniformity that permeated personnel
activities organisation-wide. Impatience grew with the old administrative model of the HR
function and with its tendency to say no to innovation and differentiation.
The HR function was expected to make a contribution in the following two areas:
The introduction of a new vision and values What kind of values, behaviours and
culture do we need to make this business a success?;
new Pay system (move from pay bands to seven job roles);
Management development.
The following sub-projects were considered in this context:
Create a new digital business stream with new skills and new working practices;
Create a networked organisational culture learning the skills needed to transform the
organisation by working with the leaders who will drive change from the top; and
effort was being made to ensure that these functions are linked with the business needs of the
different business groups.
With the implementation of all these initiatives, the HR function needed to extend its
power and influence in order to run the launching of the vision and values initiative and to
implement the designed changes in HR policies. The function faced a major task as, in order
to embed the cultural change required, they needed to shift the mindsets of the employees
away from an obsession with procedures towards a culture fostering continuous improvement
in achieving the business targets. It was also starting to move away from providing what was
essentially a support role to one which stressed business partnerships with the other business
groups within the organisation. However, in this first stage, the function kept its image of
service to the business, as there has been little involvement of HR in the actual planning of
change. The changes have been mainly top-driven, and the interaction between HR and the
top management team could be described more as facilitative, with little involvement of the
function in the development of change strategies.
In the second stage, starting with summer 2002, a major programme of structural change
was implemented, coupled with a voluntary early retirement and severance scheme which
affected 300 staff. The main objective was to change the highly centralised and bureaucratic
organisation with a decentralised structure, with semi-autonomous teams and a dynamic
management style. A consequence of this restructuring was that a number of old divisions and
functions were either eliminated or merged, in order to obtain a leaner, flatter structure and
increase overall efficiency of the business.
The newly appointed HR Director (June 2002), recruited from the commercial sector,
recognised the need for further changes within the HR department beyond the HR policy
domain. She came in with a new vision of re-conceptualising the HR role, exploring the
ideas of strategic partnership and human resources as a competitive advantage. She was also
seeing the structuring of the department around the business and its needs as vital. HR roles
in her view had to be described with words such as visionary, strategist, integrator, and
change agent.
The function has been reorganised around key themes: business/customer focus,
decentralisation, effectiveness (priorities and resources), role clarification, new ways to do
work, and the emergence of new principles of organisation.
The structure of the HR function was split into teams organised around the following key
areas:
Business Management three business partners to work directly with the senior and line
managers from the Business Groups;
Corporate Communications.
The creation of the new structure was one element within a range of interventions
designed by the HR director to build up the credibility of the department in the eyes of the
staff:
We want to demonstrate quickly that we are making a contribution we need to
demonstrate that we are making some impact on quality and the bottom line through a host of
initiatives. (HR Director, 2002)
This reflects an awareness on the part of the director of the importance of the views of
other business groups within the organisation and a desire to achieve reputational
effectiveness (Tsui, 1984).
Among the initiatives to which the HR Director decided to devote her attention were
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establishing the key personnel processes, management information systems and developing
an HR business plan that identified a set of core priorities for the function, linked in with the
strategic objectives of the organisation. In addition, Business Partners were introduced in
order to further improve the links between HR and the rest of the business.
Business partners were a key point of contact for each business group within the
organisation on HR matters. They had an understanding of the business deliverables of the
group and related HR issues, and worked closely with managers in that group in the
application of HR policies and good practice to help achieve the business objectives. They
also provided feedback to people in HR, and worked with the whole HR team to evolve HR
policies to ensure they are right for the business.
One interesting point to emerge was the view of the HR Director that having a wellwritten HR strategy was not equivalent with developing a strategic approach to HRM. She
also pointed out that there is no sense of having an overarching HR strategy, if HR does not
really serve the business needs. Furthermore, she emphasised that the lack of an HR strategy
did actually showed that HR activity was driven by the business needs rather than following
their own HR agenda. As a result, she considered that the main priorities for HR were
introducing organisational change in HR policy and practice, and adopting a strategy of
involving senior and line managers, working groups and the unions with the aim of ensuring
strategic fit and achieving buy-in from employees. The HR Strategy document emerged later
in the change process, when the organisational development needs could be clearly
established and linked with the future needs of the newly restructured business.
Lessons learned from the case study
What lessons can be learned from these findings for efficient implementation of the change
management processes in commercialising public sector organisations?
Firstly, managing the transition from Government Monopoly to commercial organisation
involves aligning the structure, systems, competencies and culture to the new business model
and developing new managerial attitudes, skills and behaviours. The traditional bread-andbutter activities of the HR department (such as recruitment and selection, performance
management systems, training and development) are important change levers because of their
ability to create organisational settings which are supportive to change. Too little attention is
paid in public organisations undergoing change to considering the necessary employees
behaviours and attitudes that are necessary to create an enabling environment for change.
Therefore, the organisation has to understand which HR activities touch staffs motivation
and behaviour immediately. In the case of Britains national mapping agency, the redesign of
the performance management system sent a strong signal to employees that only behaviours
supporting the new business strategies are rewarded. In addition, the new training and
development system and the reward system were designed to develop behaviours that are in
line with the strategy.
Secondly, the case study demonstrates the efficiency of centralised rather than
decentralised HRM systems in achieving organisational change. Given the emphasis in the
prescriptive literature on decentralising responsibility for HRM, this is a conflicting finding.
However, with more transformational agendas within business strategies, certain advantages
may be gained from the function regaining a more central role, especially in relation to
building up the credibility of the department in the eyes of the staff from other business
groups.
Thirdly, the findings confirm the necessity of achieving horizontal congruence between
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different HRM systems. In other words, any HR system must be aligned with the others, for
example, reward systems with leadership development. This is important in addition to the
necessity of vertical integration of HR systems with HR and business strategy.
Fourthly, the HR function has been found to play an important role throughout change
implementation, as key enabler in implementing the reorganisation, changing the culture and
managing communication. The human resource management interventions (the introduction
of a new vision and values, the implementation of a new performance management system,
the redesign of the organisational structure) and the structure of the HR function itself have
been used as change levers to support the overall organisational transformation. The HR
function was refocused towards playing a more strategic role in the organisation and the
actions initiated by the newly appointed HR Director have been designed to change the role
of the HR function: the creation of a new structure for the department, as well as the different
HR interventions were designed to build up the credibility of the department, make the
function more proactive than hitherto and change Business Groups managers perceptions
that HR was not visible enough in the organisation.
Fifthly, an important issue emerging was the complexity of the roles enacted by the HR
function. It was found that the increased demand for corporate strategic consistency and
flexibility redefined the contribution of the HR function towards achieving the strategic goals
of the business (strategic role) and towards implementing and managing change (change
agent role).
Sixthly, the views of the managers elsewhere in the business (senior managers and line
managers from other business groups) were in general positive. Some of them did not yet
have a very clear idea of the kind of role they expected the HR department to play and the
perception lingered that the HR function is reactive, playing a traditional, administrative role
within the organisation. Throughout change implementation, however, there was an
increasing recognition of the scope for a greater contribution to the business by HR, although
there was a lack of clarity among managers of precisely how the HR function could help to
solve specific problems that some areas of the organisation were facing.
Seventhly, it was shown that the HR function could deliver value within different areas,
ranging from administration to strategy formulation and change management and that the
perceived value of the HR function depended not only on the roles it fulfilled but also on the
way in which the function was involved in the whole organisation. The case study also shown
that effectiveness of the function especially in terms of adopting a future focus, supporting
the business strategic objectives, focusing on change management and being proactive rather
than reactive- has increased throughout change implementation.
Eighthly, several factors emerged as important enablers or constraints to the increased
strategic involvement of the HR function within the case study organisation. As enablers, the
study identified: the governments change agenda; the attitude of the senior management
team; the ability of the HR function to deliver efficient services and to build credibility
through the expertise and business knowledge of its members; the degree of power wielded
by key department members; the will of HR department members; the personality, approach
and focus of the HR director; the senior and line managers expectations of the HR function.
The research identified the following constraints: the senior and line managers perceptions of
the HR function of being purely administrative and lacking the necessary business knowledge
for understanding what the business actually needs, the skills of the HR members, the
resource limitations and the structure of the HR department itself which was generating
inefficiencies and bureaucracy.
Finally, the culture change model of message, role-models, skills and rewards has
considerable success in starting the necessary culture shift and moving it along rather rapidly.
The most important move in the culture was to bring in a new top management team from
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outside with commercial background. While there were many problems of credibility and
acceptance of the new top managers, this step seemed to be necessary to send a fundamental
signal to the rest of the organisation that a major shift in culture is taking place. The
implementation of a new organisation structure and operating systems acted as a powerful
force to unfreeze people from the old culture, while the re-designed HRM systems provided
an influential reward system to motivate and support people to adopt the new culture.
Conclusions
The literature appears to have not focused on the issue of how the transition from a
Government Department to a commercially driven, customer responsive and self-financing
organisation can affect the change in roles of the corporate HR function. This case study has
shown that significant pressure is exerted on the HR function to elevate its corporate
relevance for the top management teams strategic leadership, increase its effectiveness as a
change agent in corporate transformation and better relate its output to the firm
performance.
The implementation of change in public organisations is not a simple process, based
on rationality, which may be carried through without major consequences for the corporate
HR function and its roles. The new roles of the HR function are different from its traditional
organisational roles in administrating HRM programmes and processes involving the
implementation of HR policies Specifically, the continuous, transformational change in
public organisations has given rise to the importance of corporate role in the organisational
context and its influence on strategic staffing and leadership development policies and
practices. There is also an opportunity for the HR function to gain more influence within the
organisation. This increased influence stems from a new set of the HRs roles, characterised
by blended political and strategic dimensions, which includes: the change agent of corporate
culture; the top management teams symbolic communicator to other levels of the
organisation; senior managers mediator in development/ career planning opportunities; and
corporate top management teams and particularly the CEOs reliable internal informal
adviser.
With the increasing demands for strategic flexibility and leadership development in the
changing public sector, human resource development and human resource management
becomes embedded in the policy and strategy of commercialising public organisations.
Therefore, rather than trying to draw distinctions between the two domains, we should better
try to bring them together in a more coherent way.
Implications for Practice
The findings of this case study of reorganisation, carried out over the course of a year, reveal
a number of implications for HR practitioners within public sector entities. In response to the
challenges facing public organisations, new roles and skills are necessary to make the
transition a successful one. These new skills include business acumen, financial management,
a focus on the bottom line, and technical and functional HRM skills. To add value to
business, HR practitioners have to reposition their organisational roles, and move towards
becoming strategic partners and change agents. Furthermore, as public organisations are
facing reform that is transformational and continuous rather than simply incremental, the
opportunity is clearly present for the internal HR department to move into the field of long
term change agency and provide guidance in the management of change. The future of the
internal HR department will lie in the areas of assisting the development of high performance
work systems and in facilitating long-term continuous organisational change. The only
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question is how many current HR professionals are capable of fulfilling such challenging
roles.
Contribution of the Research
In keeping with a number of recent calls to make organisational research and management
theory more relevant to the world of practice, this paper presents a reflective account of the
attempt of a public organisation to renew its business and its configuration. Its contribution
lies in reflecting on the dilemmas in understanding and managing the complexity of change in
the context of the changing public sector.
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