1.
Internal- existing or occurring inside or within, while recruitment is
the action of finding new people to join/support an
organization. Internal recruitment is the picking of existing people/employees
for a role.
Companies with a look to the future, that is, organization's leadership,
put significant effort towards selection. Those with a view on continuity lean
in the direction of internal selection of successor.
The internal recruitment of executives is a sound policy and it has had
noteworthy successes in the past,both within and outside Intel.
For one, it brings into the role someone who has established their
loyalty to the organization. Two. the employee has most likely imbibed the
organizational culture since he/she is already in the system. Three. Though
companies have varying disclosure rates, the early/advance choice of C.E.O. is possibly stems from an effort to strengthen a culture of risk oversight
(Conference board, 2017 July). Four. A chance at understudying the current
C.E.O. before entering the role that is an apprenticeship for example. Five
this method is cheaper than external recruitment and as the driving down of
cost is always welcome within and organization, this makes the policy more
attractive and viable. Six the use of institutional knowledge which the
employee being internally recruited already possesses. Seven, it spikes the
morale of staff hopeful to get selected. Eight it revitalizes the employees and
fuels competition. Nine Internal recruitment of C.E.O. may lead to promotion of
another employee to replace the new C.E.O.’s former role and promoting from
within allows almost all of external hiring at the “entry level.” (in the case
of organizations with commitment to internal hiring) Also, entry-level is cheaper to fill, has a larger
candidate pool, and gives more time to train and assess those that aspire to
reach higher level positions.
There are different disadvantages to internal recruitment, that is, when
a soon to be "hired" employee is unable to disengage from current
role, this may delay his/her filling of the new role. in the instance of an
organization with strong internal recruitment policy, and no suitable internal
candidate, hiring process may be delayed. Though is not the case with Intel CEO
recruitment as this is started a decade in advance.
2.
Paul Otellini was different, even in cases of organizations vying away
from the norm. He had been in the organization for thirty-one years before
taking the CEO position, he was far from new to the industry, as a sales and
marketing executive for decades, he had product knowledge and familiarity with
clients taste, preference and cultivated relationships with those who would
become strong/main clients for example IBM, Apple. Also led the production of
Intel Pentium Chip in 1993, has experience as the Chief Operational Officer for
a short while.
Also he apprenticed under Craig Barnett, the outgoing CEO, this
tradition " Moore set the example in the mid-1980s, when he allowed Andy
Grove, then his second in command, to gradually assume CEO chores; likewise, in
the mid-1990s, Grove steadily ceded his authority to Barrett" (Gibson,
2012). Though he resorted to a laying off of 10% of its staff towards saving 3$
billion dollars in two years, he brought the annual revenue from 34$ billion to
57$ billion in the space of 7 years.
3
“The fact that two-thirds of non-financial S&P 500 companies did not
survive 1988-2007 attests to rapidly changing nature of long term successes”
(Steingraber, 2011). A study of 36 companies in 25 different industries that
outperformed the rest in the 20year period understudy, had consistent leaders,
for example Microsoft, Best buy, Johnson, Honda, Nike, Caterpillar,
Colgate-Palmolive, McDonalds et cetra Chief among these being intel. Study
showed none of the other non-financial S&P 500 companies did as well nor
surpassed them, based on metrics like rise in Revenue, ROA, ROE, Share value
and so on.
Still there are organizations who plan their executive succession and
but fail in execution, due to poor management.
Some organizations believe executive succession begins and ends with a
good headhunter, the process is much more painstaking and personal becauuse
this is your face to the world, that is your core value as an organization.
Organization's top executives may have ulterior plans for certain
executive positions, though it is the role of the board, things may be put in
play to frustrate plans/efforts or the board itself may be used to remove
certain executives for example Eckard Pfiffer; Rod Canion, Apple; Steve Jobs et
cetra. Also if an organization is unstable, there will not be a good enough
environment for planning.
S.E.C. has increased its over-watch on boards, as they are in charge of
succession selection in a need for more transparency in the process. Despite
its success, many organizations do not practice it, some organizations apply
the fire-brigade approach for picking executives, even C.E.O.s
References
Steingraber F.G. &
Kelley School of Business, Indiana University. 2011 Home Grown
C.E.O. ATKearney Inc Pp 1-17
Freeman K. Retrieved
from https://www.helioshr.com/2015/04/5-benefits-of-recruiting-internally-vs-externally/
Gibson, J.L, Ivancevich J.N. et al
Organization’s Behavior, Structure, Process. 14th edition Pp
364-367. McGraw-Hill International Edition.
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