Human Capital Concepts

Human Capital Concept Worksheet

Randy Amos

University of Phoenix

MBA 530

Facilitator: Gale Mazur

Week 1 assignment

July 16, 2007

Human Capital Concepts Worksheet

The Human Capital concepts of this scenario exercise were intended to expand upon and clarify the applications concepts to InterClean, Inc. InterClean, Inc. is part of multi-billion dollar institutional and industrial and sanitation industry. CEO David Spencer of InterClean has decided to improve the performance of sales, service, and the proposed acquisition of EnviroTech Inc. CEO Spencer has implemented a new HRM and Business Strategy to his management staff and proposes a new training development program for new hires and current sales staff. The Human Capital concepts are as follows in the worksheet below.

Human Capital Concepts Worksheet

Concept Application of Concept in the Scenario Reference to Concept in Reading

Direct Business Strategy

In the $8 billion dollar institutional and industrial cleaning and sanitation industry business clients are demanding more and more services to meet the strict requirements for environmental safety. President and CEO David Spencer has proposed an ambitious and highly publized business strategy aimed at increasing InterClean's sales force and marketing efforts. Mr. Spencer has also proposed an intensive training effort for the next several months and he will coordinate each department's plans for this proposed change and transition.

"Business strategy is the development and utilization of specific qualities and characteristics that set your business apart from the other businesses within your industry. Your business strategy defines your position in the marketplace and distinguishes you from your competition. It determines your market identity, reflects the core values of your business, and drives what actions you must take to maintain and support your competitive advantage. A viable and compelling business strategy is the result of a comprehensive decision-making process. Though it is also referred to as strategic planning, we prefer to call it strategic decision-making to emphasize the importance of making the tough decisions that make a difference in how you run your business." (Ratoff, P. 2003)

HRM Leading Strategy

In response to David's memo regarding InterClean's move to solutions-based selling, the HR department has been tasked with a new challenge in implementing these proposed changes. The new strategic direction for InterClean's HR will be headed by Janet Durham, Vice President of Human Resources and will involve screening new hires for the appropriate background and skill sets that will be necessary for this transition. Janet has tasked her HR department in keeping this strategy very discreet to prevent any misconceptions to the existing sales staff.

"HRM can play a role in strategy formulation by adding value to the firm and serve as a source of sustained competitive advantage". "HR executives and consultants frequently agree that the HR function needs to be aligned with business strategy and that HR professionals need to become business partners at the strategic level". (Dreher & Dougherty, 2001, p.180)

Managing the Restructuring Process

In order to remain competitive in the sanitation cleaning industry change is necessary for sustained growth and improved production and service. David has announced that InterClean will officially acquire EnvironTech in the coming months and must prepare InterClean to meet the challenge in merging the two companies for a new strategic direction. Terry Garcia, Senior Sales Specialist at EnvironTech, Inc. will be setting a role model for InterClean for guidance in customer service and taking the lead roles in sales and marketing.

"A company may have many reasons to restructure and downsize, but the merger and acquisition process drives much of this activity." "As companies restructure and become more and more efficient, there is a clear tendency for each employee to carry far more responsibility for the sales, assets, and ultimately, the value of the company than before the restructuring." (Dreher & Dougherty, 2001, p.116-117)

Employee Motivation

Employees