SONOCO

Sonoco Products Company: Building a World-Class HR Organization

[Name of the Institute]

Sonoco Products Company: Building a World-Class HR Organization

Sonoco's Profile

Sonoco Products Company, a global packaging company, began in 1899, in Hartsville, South Carolina. Founded by Major James Coker with $6,000 of initial capital, Sonoco's original name until 1923 was the Southern Novelty Company, and the new name of Sonoco uses the first two letters from each word of its original name. Growth occurred mainly via acquisitions; in the 1990S alone, the company made over 60 acquisitions worldwide. Though North America accounted for approximately 80% of sales, Sonoco's 17,300 employees operated 285 facilities in 32 countries. Sonoco's 10 businesses occupied two segments: industrial packaging and consumer packaging (Clarke, 2004, pp. 72-186). The industrial segment, which served the textile, paper, and film industries, generated 55% of company revenue and employed 11000 people. The consumer- packaging segment's 6000 employees produced packaging for food and consumer products and high-density film. Customers included Gillette, Kraft, Nestle, and Procter & Gamble. Sonoco's culture was family-friendly, paternalistic, collaborative, ethical, and team oriented. In 2000 over 60°/o of the executive committee had been with the company at least 20 years.

Roughly 2,000 Sonoco employees were based in Hartsville, a town of approximately 31,000. However, Sonoco was not a sleepy small, town company when it came to business practices, but its tight-knit culture generated reluctance to hold underperformers accountable. As long as the company performed well, financially, changing this feature of the culture was not a pressing need (Robbins, Judge, 2008, pp. 21-27). By the late 1990s, however, a falling stock price and new competitive challenges made it clear that certain aspects of Sonoco's culture and structure would have to change. In this case analysis, we will review the state of Sonoco in years approaching the new millennium, utilize organizational alignment as appropriate to examine Sonoco's need for effective Human Resource, examine proposed options, and propose a plan of action.

The Packaging Industry

At the end of 1990 approximately, 100,000 companies global packaging generated annual sales of approximately $ 400 billion. The United States accounted for $ 115 million of this total, closely followed by Asia and Western Europe. Consumers Packaging accounts for 70% of the revenue-producing industry-wide, and 30% industrial waste. Paper and cardboard is still 34% of sales, but cost-resistant plastic and metal and glass were replaced in the food and cosmetics. At the end, of 1990 the new challenges of globalization, competitiveness and growth potential: heavy industry was moving to the United States to countries like China and India, where labor was cheap, and many American companies are investing heavily abroad. Meanwhile, the U.S. led to much consolidation (Werner, 2006, pp. 12-17).

Between 1998 and 2000 the share of packaging businesses, more than five years in North America increased from 40% to 60%. Consumers are increasingly segmented markets, and products are tailored to the needs of different consumer groups, especially in the food and beverage industry. Instead of one or two versions of a product, seven or eight were becoming the ...