Algorithm is a pharmaceutical plant operating in the Middle East, having existed under this name since 1989. The firm's business line is manufacturing pharmaceutical products and sending them to its distributors and exporters (it does not handle any distribution activities itself). Algorithm belongs to a group of three sister companies employing a total of 320 employees, 170 of whom are employed by Algorithm. It manufactures products under licence, as well as its own generic products. It has a development laboratory - the Product Development Lab but this mainly copies generic products and designs new products without creating molecules. The organisation does not outsource any technical or production activities as it has all the necessary departments and assets. This means that it manufactures, analyses and registers all its products. The plant's production includes overthe-counter (OTC) and prescription drugs, but no cosmetic products.

An interview was conducted with Mrs Nicole Bakhache, the HR and administration manager at Algorithm Lebanon and a member of Algorithm's strategy-setting team. The human resources function at Algorithm has been given much greater importance over the past five years, and no major decision related to people or structure is taken without human resources input. Mrs Bakhache explained that some personnel activities involve a more reactive role (for example, benefits and payroll), whereas other activities, such as recruitment, training, and career planning, involve a more proactive and strategic role.

At Algorithm, the human resources department also plays a substantial role in ensuring the success of general business strategies and helping to accomplish business goals. It is expected to translate business strategy into action and to focus on aligning human resources strategies and practices with business strategies. The department has forged a partnership with line managers, and together they formulate and manage processes to help meet business objectives. Furthermore, line managers now view human resources as a partner and are themselves involved in the management of human resources - working along with the human resources function on activities such as recruitment, people development, and personnel-related issues.

The human resources manager explained that the strategies of the human resources function are aligned with the general business strategies and that line management involves human resources in meetings where future strategies are being formulated. They are, for example, involved in strategic meetings discussing company expansion (since they will have to recruit the qualified staff needed for this), budgeting and planning. Mrs Bakhache explained that the technical departments do not have regular meetings with human resources, but hold periodic meetings to discuss budgets, management reviews, expansion plans, recruitment, and a review of training needs. The input of human resources is required when discussing issues related to staff, such as filling internal vacancies and retaining key staff if ever they should consider leaving the company.

Questions

1 How does the human resources department at Algorithm help to accomplish its business goals?

2 Use Figure 2.1 to evaluate the role of the human resources department in terms of its strategic/operational orientation as well as proactive/reactive orientation.

3 Explain why it is important for Algorithm to adopt an outside-in approach to HRM?

Transcribed Image Text:

Low Operationally reactive Operationally proactive Strategically reactive Strategically proactive High TPM Bureaucratic and reactive HRM SHRM Tactical Strategic/managing change Type of Personnel/HR Practices Figure 2.1 From traditional personnel management (TPM) to strategic human resource management (SRHM)