HR restructuring at Lucent Technologies
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Lucent Technologies underwent an HR restructuring in 1999-2001 due to failures to evolve with changing market dynamics and integrate acquired companies. The restructuring involved centralizing HR functions, standardizing global policies, simplifying operations into four key businesses, and implementing a new organizational structure and service delivery model to enable faster decision-making and develop a global culture. Resistance to change was addressed by communicating changes and encouraging online training. The new structure aimed to streamline processes, reduce workforce costs, and better align HR with business strategy.
HR restructuring at Lucent Technologies
- 1. HR RESTRUCTURING AT LUCENT TECHNOLOGIES -SHOUMIK ROY - RISHABH KHANNA - NIKET MOHAN - HARSHPREET SINGH - ANIMA BAJPAI
- 2. BACKGROUND • 1996 – Spun off from AT&T • 1997 – Lucent major Telecom equipment maker • Focus on Telecom equipment and voice-based technologies • Failure to evolve towards convergence of data, voice and internet • 1999 – Decision to restructure operations
- 3. • Restructuring into four key businesses – a. Service provider networks b. NetCare Professional Services c. Enterprise Networks d. Communications Technologies • Late 1999 – Unable to integrate operations of acquired companies • 2000 – Severe financial crunch • 2001 – Seven-point restructuring plan
- 4. MAJOR ISSUES • Mismatch between Lucent’s organizational culture and the culture of companies it had acquired • Standardization of HR policies and processes difficult due to autonomy in business units • Failure to evolve with changing market • Major exodus of talent from acquired companies
- 5. Modern Organization Designs 1. Project design 2. Matrix design 3. Horizontal organizations 4. Network design 5. Virtual organizations
- 6. President Engineering Marketing Design Purchasing Project Manager 1 Project Manager 2 Project Manager 3
- 7. MATRIX DESIGN Advantages – • High degree of specialization • Functional departmentation helps gather specialized resourses • Facilitates coordination among various specialists •On-time completion of tasks
- 8. Disadvantages - •Employees report to two or more bosses • Role-conflict and ambiguity among employees • High stress • Weak superior-subordinate relationships • Duplication of activities • Increase in costs
- 9. Lucent’s “GROWS” Initiative – 1997 •GLOBAL – Strengthen Lucent’s International operations and to ensure 70% of the company’s future growth comes from outside U.S. •RESULTS – Improve flexibility and productivity and to meet the rapidly challenging preferences and diversified needs of customers. •OBSESSED – Put excessive, matched focus on customers and new competitors. •WORKPLACE – Create and promote an open, supportive and diverse workplace. •SPEED – Replace existing culture with a new corporate culture driven by technology and innovations.
- 10. GOALS FOR RESTRUCTURING • Develop global culture • Enable speedy decision-making • Simplify and standardize global HR policies • Evolve with changing market dynamics • Effective downsizing of workforce • Reduce employee dissatisfaction and unrest
- 11. HR ORGANIZATION HR OPERATION CENTRES HR CENTRES OF EXCELLENCE HR BUSINESS PARTNER ORGANIZATION SERVICE DELIVERY MODEL
- 12. RESISTANCE TO CHANGE A. Individual Resistance to Change B. Organizational Resistance to Change • Structural inertia • Limited focus of change • Group inertia • Threat to expertise • Threat to established power relationships • Threat to established resource allocation
- 13. Benefits of New Organizational Structure • In accordance with diverse regional operations • Implemented after communicating changes to workforce • Easy and quick decision-making • Global IT platform reduced workforce costs • Efficient management of HR functions with reduced workforce • Streamlined processing via self-service
- 14. • Drastic reduction in manual interfaces • Employees encouraged to take online training programmes •Work closely aligned with senior managers • Focus on investing in ongoing development of talent
- 15. CONTINGENCIES OF ORGANIZATIONAL DESIGN • Organizational Size •Organizational Strategy
- 16. BENEFITS OF HR CENTRALIZATION • The HR function must not only be focused on the workplace but also the marketplace and linked directly to the core business strategy. • If HR is becoming a profit center, costs need to be reduced and processes optimized - this can only be achieved by having all key players work at the same centralized location. • Operating centrally is necessary for all parties to be fully aware of the overall strategy and to pull into the same direction.
- 17. ROLE OF INFORMATION TECHNOLOGY • To Save cost and time consumed in transactional and repetitive HR activities • Reduced administrative & training cost effectively • Promoted self service and web enabling to employees and managers • Helped in quick and effective decision making
- 18. THANK YOU