ADDIS ABABA UNIVERISTY

COLLAGE OF BUSINESS AND ECONOMICS

SCHOOL OF COMMERCE

Strategic Human Resource Management II

1. Consider a strategic plan of an organization in which you are familiar with. Outline their
strategic themes. Show how the human resource functions are vertically and horizontally
linked with the strategy of the organization.

Organizational facts

The company's origins go back to 1943 when an Italian investor first established the
vineyard. The company was nationalized following the 1974 revolution and stayed
under state ownership until 2012. The company was then sold to a private company for
459.9 million Br. It is now owned by Blue Nile Investment Plc; a company established
by Mulugeta Tesfakiros, owner of Muller Real Estate, and 8 Mile, an equity-firm
chaired by Bob Geldof, an Irish rock star known for his humanitarian contribution to
Ethiopia in the 1980's. Awash currently has over 622 employees and produces six core
brands - Axumit, Kamila, Awash, Gebeta Red, Gebeta White and Gouder. Awash Wine
has seen an increase in sales over the years. Last year, it reached more than 15pc as a
consequence of the company's improved capacity to respond to the market dynamics.

At present, the Company’s organizational structure comprises the following two plants
and a vineyard. The first plant is located at Addis Ababa, Lideta; which is the hub of
Awash’s administration and wine production. Lideta winery produces about 70% of
wine, including Axumit red and Kemila white wines. The second plant is located at
Addis Ababa, Mekanissa; which is the older of the two wineries enabling it to produce
about 30% of the wine.
Vision, Mission and Values of the company
Vision
Awash Wine aspires to be” Drive the Ethiopian wine market growth through excellence
and innovation.
Mission
The Mission of Awash Wine is “To create, promote and sustain a service oriented and
daring leadership culture by having a competent, happy and satisfied workforce’’.
Core Values
The core values and operational philosophies in carrying out its activities are Unity,
Impassioned, Esteem, Nobility, Trust, and Daring.

Strategic plan of the company: Core priorities

• EXPAND:
• Grow – 25 % growth for the year 2019/2020
• Diversify (Lucy) – New Product development project
• Export - Commence premium product exports
• BE A GREAT PLACE TO BE
• Engage and recognize team members
• Be exemplary in Health and Safety practices
• BE A GOOD CORPORATE CITIZEN
• Be eco-Friendly
• Support and Enhance the Community
HR took its part as follows
 Create conducive work environment – a great place to work
 Review company structure and salary scale
 Establish viable performance management
 Introduction of Human Resource Information Systems.
a. Create conducive work environment – a great place to work
Objective: -
o Equip/Maintain attractive Working environment

Strategy/Focus

o Employee engagement- Idle Employee (reduction of under utilized employee)

o Employee Wellbeing Program
o Staff retreats
o Training and Development
o Proper onboarding
o Employee’s Branding - Succession planning
 o Employee Relations
b. Review company structure and salary scale
Objective: -
o To identify and group the work to be performed
o To define and delegate responsibility and authority
o To establish relationship for the purpose of enabling people to work most
effectively together for the attainment of common purpose.

Strategy/Focus

o Putting in place an organogram that is aligned with the strategy, mission & vision
of the Company
c. Establish Viable Performance Management system
Objective: -
o To increase Labor production & Productivity
Strategy/Focus
o Establish "Performance measurement System for Performance enhancement -
<HOW?> and rewarding system"
d. Introduce HRIS
Objective: -
o To establish new software or online solution for effective & efficient utilization
Strategy/Focus
o A software or online solution for the data entry, data tracking, and data information
needs.

Vertical and Horizontal Integration

Vertical or external fit refers to the alignment of human resources practices with the
specific organizational context and horizontal or internal fit refers to the alignment of
human resources practices into a coherent system of practices that support one another.

In the case of Awash Wine S.C, vertical fit is viewed as a critical step toward attaining the
organizational goals through initiating some human resources activities that are aligned with firm
objectives. The strategic plan of human resource indicates that the plan is prepared to attain the
organization objective. It is directly cascaded down from the objectives of the organization.

The HR Strategic plan of the company focus from individual human resources practices to the
entire human resources management system. If all of the practices fit into a coherent system, the
effect of that system on performance should be greater than the sum of the individual effects from
each practice alone.

2. Explain the strategic role of human resource departments. Show its relationship with the
external environment (five forces).
 Developing and implementing HR strategies that are integrated with the business
strategy and are coherent and mutually supportive and
 Ensuring that a strategic approach is adopted by the HR function that supports the
business and adds value
 Having the right people in the right places.
 Understands and anticipates organization’s talent needs to balance the workforce by
matching employees with the right positions according to their qualifications.
 Design the workforce and culture that best suits the company.
 Supervise and monitor changes, as well as foresee how it may impact the processes that
are already in place.
 Reducing turnovers while keeping employees motivated and well-trained is just one of
the most challenging duties of the HR. Rewards and recognition are proven to be
effective ways of encouraging employees to improve performance.
 Develops and thinks of new and innovative ways of rewards program to make sure
employees are recognized and rewarded accordingly to keep them happy in the
company.
 Create cooperation between the employees and management is important in achieving
company’s success.
 Keeping employees’ focus on achieving the company’s goals while providing
opportunities for employee growth and advancement.
  Develop HR strategies that will help address demands of the change management and
integration, as well as the measurement of performances in line with the strategy
implementation.
2.1.Socio-Cultural Forces
Natural culture and traditions may affect human resource management activities in terms of
transferring related national characteristics to the business life. Behavioral types or attitudes of
top managers and human resource managers are under the influence of local culture therefore
it has direct or indirect impacts on human resources activities
Local culture and traditions also affect HRM activities by changing ways of response of
management for local sensitivities. Cultural values were taken into consideration by Awash
Wine S.C so that, not to confront public reaction for their actions. Specially the wine farm
located 168km from A.A is influenced by the culture of the community.
2.2. Economical Forces
Changes in the national economy directly or indirectly affects human resource activities of
Awash Wine Share Company, in terms of recruitment, employment, redundancy implications,
compensation and rewards/salaries.
2.3.Technological Forces
Changes in technology can make it possible to have improved human resource functions such
as selection, recruitment, educating, training, performance appraisal or observing, determining
wages and salaries. New HRIS system /Mansoft/ Helped Awash Wine S.C to make its internal
service very effective.
2.4. Political/legal Forces
Legal contract law, employment law, health and safety, consumer protection law, company
law, codes of practice, regulatory bodies, the legal system and the courts are examples of the
legal forces of SHRM in practical experience of Awash Wine S.C.
With the introduction of new workplace compliance standards Awash Wine human resources
department is constantly under pressure to stay within the law. These types of regulations
influence every process of the HR department, including hiring, training, compensation,
termination, and much more.
2.5. Demographic Factors
The existing Ethiopian workforce is changing. Because of economic shifts and their effects in
different industries, some types of workers are scarce but in high demand, while others are
available in excessive numbers. The rapid growth in technology is creating a need for more
workers with special technical capabilities. These and other factors make it likely that the
workforce composition will continue to change. Currently 75% of Awash Wine S.C employees
are between 22 and 29.