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Whirlpool Case Study

Strategic human resource management links human resources to strategic goals and objectives to improve business performance and foster an innovative organizational culture. Whirlpool Corporation implemented an innovative HR strategy in the 2000s to make innovation a core competency. This included inviting employee ideas, developing innovators, and the "I-box" strategy. As a result, revenues from innovative products increased from $10 million in 2001 to $800 million in 2005, share prices doubled, and Whirlpool's revenues grew 9% annually from 2003-2005. The HR strategy alignment successfully turned Whirlpool around. Strategic HRM and business strategy should be mutually informative, with people management shaping business strategy.

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2K views

Whirlpool Case Study

Strategic human resource management links human resources to strategic goals and objectives to improve business performance and foster an innovative organizational culture. Whirlpool Corporation implemented an innovative HR strategy in the 2000s to make innovation a core competency. This included inviting employee ideas, developing innovators, and the "I-box" strategy. As a result, revenues from innovative products increased from $10 million in 2001 to $800 million in 2005, share prices doubled, and Whirlpool's revenues grew 9% annually from 2003-2005. The HR strategy alignment successfully turned Whirlpool around. Strategic HRM and business strategy should be mutually informative, with people management shaping business strategy.

Uploaded by

jayant2420
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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STRATEGIC HRM

SUBMITTED BY
Rajveer
Khushboo
Anshuman
Pankaj
Priyanka
Vinit Bansal
Pragati
WHAT IS SHRM?
 Strategic human resource management
has been defined as ‘the linking of
human resources with strategic goals
and objectives in order to improve
business performance and develop
innovative organizational culture that
foster innovation and flexibility.
HR STRATEGY
OPTED BY
“WHIRLPOOL”
 April 25, 2006 ,Whirlpool Corporation
net sales = US$3.5 billion
 net earnings during that period =
US$118 million
 Analysts attributed this increase to the
company's innovative products.
 Whirlpool had come a long way from where
it had been in the late 1990s .

 According to analysts, this was a direct


result of the stagnation in its product line
caused by very little attention being paid to
innovation.
 Top management’s conclusion by late
1999 - cut 10% of its international
workforce and initiate restructuring of its
global operations.
HR Strategy used by “Whirlpool”
 Efforts by “David R. Whitwam”, chairman
and CEO of Whirlpool, in 2000.

 change in the company's corporate culture


and embed innovation as a core
competency.
 Mr. Whitwam’s organizational goal -
Increase sales and customer loyality within
2 years.

 HR strategy : to make “innovation” a “core


competency” at Whirlpool.
Steps taken to align the organizational
goal with human resource:
 In late 1999, HR dept started the innovation
initiative by inviting ideas from all the
employees.

 25 best employees from the company's


European arm sent to the headquarter at
Italy.
 Their assignment - brainstorm and come
out with ideas regarding new products or
services.

 "I-box" strategy.
RESULT
 revenues from innovative products were
almost US$800 million in 2005 as
compared to just US$10 million in 2001.
 The share price had also doubled.
 Between 2003 and 2005, Whirlpool's
revenues had grown at an average of 9%
per annum
 As of April 2006, Whirlpool's innovation
pipeline had 568 projects under
development of which 195 were being
scaled up for commercial launch.
 The company expected these new
appliances to rake in another US$ 3.3
billion in annual sales once they were
launched
CONCLUSION
 HR strategies when aligned with the
business goals of the organization, at
whirlpool, worked as a turnaround strategy
and changed the face of the company
completely.
 Every organization can thus, rely on the HR
strategies partially, if not completely, and
create the magic of success.
Thank You.
Strategic Hrm Business Strategy
 A good strategy succeed Strategic HRM and Business Strategy
business strategy, one which is likely to succeed, is informed by
people factors.
 One of the driving factors behind the evaluation and reporting of human
capital data is the need for better information to feed into the business
strategy formulation process.
 In the majority of organizations people are now the biggest asset. The
knowledge, skills and abilities have to be deployed and used to the
maximum effect if the organization is to create value.
 The intangible value of an organization which lies in the people it employs is
gaining recognition by accountants and investors, and it is generally now
accepted that this has implications for long term sustained performance.
 It is therefore too simplistic to say that strategic human resource management
stems from the business strategy.
Strategic Strategic HRM and Business
Strategy

 HRM and Business Strategy must be mutually


informative. The way in which people are managed, motivated
and deployed, and the availability of skills and knowledge will
all shape the business strategy.
 It is now more common to find business strategies which are
inextricably linked with and incorporated into strategic HRM,
defining the management of all resources within the
organization.

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