Sonoco Products Company:

Building a World Class

Organization

Presented By : Group 3

A Brief Introduction
Founded in 1899 in Hartsville South Carolina.
17300 Employees, 285 facilities, 32 Countries.
Culture : Family-Friendly, Paternalistic, collaborative,
Ethical, Team oriented.

Made over 60 acquisitions worldwide.

Packaging Industry
Packaging

Industry sales $400 billion.

Outsourcing to China and India for cheap Labor.
Highly competitive, Globally.
Highly Customized Products.

Internal Environment
Need

for rapid changes in packaging

Decline in Revenue from $2.7 m to $2.5 m.
Falling Stock prices.

Objectives for new Organisational

Structure
To

increase GMs accountability for talent

management
to distribute HR talent and support more
evenly across the companys divisions

to optimize HRs ability to provide

Customized support to GMs business

CENTRALIZED MODEL
Most HR Services to be handled by four centers of expertise
would handle the majority of services
Field HR rep are on call; covers 10-15 plants and one to one
interaction with line managers
$3.1 million cost saving; well above the requested $2.8 million

Hybrid Structure
Divisions would have some direct involvement with staffing,
succession planning, personnel programs, compensation, and
benefits.
Each sector has a VP-HR, director of employee relations, director
of compensation and organizational development.
New group HR managers would be able to provide the strategic
link between corporate HR functions and the businesses

Which option would best suit a changing

industry in which only the flexible survive?

HYBRID STRUCTURE
Specialized

divisions for different packaging

material to achieve core competency
enough to respond quickly to environmental
changes and able to take part in decision making
Coordination and integration

Which option would better ensure that

the right people were in the right
positions?
HYBRID

STRUCTURE

Clear defined roles

Each sector had an assigned VP of HR

Which option would better help the company meet its

financial target of providing annual double digit returns for
its shareholders?

Option 1 ( Centralized )

Option 2 ( Hybrid )

Cost

Cost

cutting is 3.1 m
Centralized
Decreasing cost
Inflexible and lack of
coordination
Less ready for change
Reduction of conflict
Reduction of
administrative and process
improvement costs

cutting is 2.7 m
Divisions would have some
direct involvement with
staffing, succession
planning, personnel
programs, compensation,
and benefits.
Corporate (the specialists thinkers and designers)
while the field staff
(the doers)

Recommendation- option 2
Cost

cutting is 2.7 m
Improve productivity
Increase employee satisfaction
Reduce waste

Which option best embodied Sonocos timehonored principle that people build
business?
HYBRID

STRUCTURE

GMs role and responsibility is clearly defined

Help people understand organization goals
Better role for divisional HRs (Center of
excellence)

THANK
YOU