Rationalization: Strategies to HR Managers


Prof. Dileep Kumar M.


A surface level, understanding on globalization and technology is required before we get into the topic of Rationalization and Changing Business Scenario. Technology refers to use of mechanics and applied sciences. Technology changes the way business operates by changing relationships between suppliers, producers, retailers, and customers. To globalize means to make worldwide in scope or application. Technology helps to make globalization possible. It is assumed in this article that the technology improves the advancement of the organisation and better human resource development.

Perceptual conflict on Rationalization

The perception of the organisation and that of organisational members related to rationalization varied considerably. Many, especially employees of the organisations, perceive rationalization process as a threat, since they are concerned about their incomes and security in their workplaces. Members in the organisation perceive rationalization process as a threat to their present skill and expertise in the field. Because of lack of cooperation from employee part, coupled by large negative reactions against globalization policy makers have expressed skepticism on the benefits of globalization especially as this relates to the labor market. While the management consider it as inevitable for the organisational existence. The perceptual conflict thus affects that of the future course of organisational planning and the human resource performance excellence.

Studies on Impact of Rationalization 

The experience of bringing in new technology has been mixed in emerging economics like India. The studies on rationalization are giving us a mixed impression to rationalization process in this article. Many researchers reported that change in technology has observable and immediate side effects on organizational processes like organizational structure  (Joan Woodward, 1965; Rastogi, 1995), knowledge and skills required (Adler, 1986), and values attitude and behaviour of employees (Huczynski & Buchannan, 1991; Mcloughlin & Clark, 1988). Substantive change in one or more of the above factors leads to perceived or actual psychological threat of job displacement, reduction in economic security disruption of social arrangement, and redefining of authority relationship (Dawson, 1994; Aldag et. al., 1994).  These threaten psychological and social status of an employee, triggering off resistance to change.

Dutta, (1990) indicates that technologies like computer-controlled machines (CNC) and Advanced Manufacturing Technology (AMT) have added to the post of administration in certain organizations rather than streamlining the system or improving productivity.

Dayal and Aggarwal, (1995) pointed out that the success of new technology depends on the extent to which the work force is ready to accept and adapt to the technological as well as organizational changes.

Woodward, (1958); Daniel and Millard, (1993); Evenson and Westphal, (1994), stated that, "any perceived threat to worker's employment, job status or skills and expertise is met with resistance".

Thurmond and Kunak (1987), proposed a model of transition that highlights 'people' as a critical organizational factor.  Their model identifies, attitude, knowledge and skills of employees as an important attribute for successful implementation of change.

Pasmore et.al., (1982) collected a data of 134 studies on technology change reveals that productivity increased in only 60% of the cases, signifying the importance of non-technical feature of 'end-user' in the improvement of organizational productivity.

Abita, (1985); indicate that, several researchers have proposed that it may not be change per se which influences attitude and motivation.  Rather it will be the inter-play of organizational variable and their perception by the individual that would lead to development of a certain attitude.

Ajzen & Fishbein, (1967) developed a model called Theory of Reasoned Action; they interpret Dulany's Theory of prepositional control as applied to social behaviour.  The theory assumes that actions are best predicted by intentions and that intentions are in turn determined by a person's attitude towards that object and his perception of the social situation.  Therefore there are two major factors influencing behaviour:  a personal or attitudinal influence and a social or environmental influence.  Thus in order to understand worker's reaction to the technological changes besides the organizational contexts, it is equally imperative to study their attitudes towards technological changes.

Dayal I. (1998), in his concluding remarks indicate that one generalisable experience is that organizations which have attempted to harmonize the social system or the human processes and new technology, have derived the benefit of technology and those which have failed to develop the two together have at best met with partial success.

Husain (1999) indicates that Organizations that integrate technology related decisions into business strategies have improved chances of reaping benefits from technological innovations.  There is always risk associated with adoption of new technology.

Hammer and Champi, (1993), pointed out that the experiences all over the world shows that successful change strategies must include all aspects of working, i.e. systematic changes and must include top levels of management as the employees down the line.  The strategies and the changes have to be planned carefully.

In the changing business scenario, every organisation has to face the challenges created by the new global economic order and to cope with the new demands. Technological improvement is one of the strategies, majority organisation adopted to improve their product and maintain their position in the market.  Dayal I, (1998) indicate that in India the entire perspective on technology has been governed by the control economy and emphasis on self-reliance.  These considerations governed industrial and economic policies of the country.  The new technologies require knowledge, retraining and new attitude towards work.  In many cases multiple skills are encouraged to improve work efficiency.  The process requires inter-dependence and flexibility in operations.  The operatives have to assume responsibility for quality and cost, needing new perspective and work attitudes.  The organization has to develop strategies that encourage change in work habit in managerial and operating positions.

Strategies to Human Resource Management for Effective Socio-Technical Change:

Following suggestions are forwarded to manage technology change situation well in the advent of rationalization.

1 Develop clear vision on what technological improvement is to be made.

2 Write down benefit of the technological improvement.

3 Prepare effective materials to demonstrate it to the organizational members.

4 Communicate openly the need for technological change.

5 Encourage open discussions and conversation on benefits and pitfalls of technological improvements.

6 Understand those who resist the change process.

7 Analyze their fear, anxiety and concerns about the change process.

8 Never go for arguments and conflicts in the demonstration of change process

9 Don't go for technological renovation without arriving at consensus.

10 Guarantee workers protection from reduced earnings when new machines or method implements.

11 Ensure the security of employment of the workers.

12 Ensure that there is enough reward for workers in the change  process.

13 Ensure strategic group to bring change in the resistant employees or group.

14 Strategic use of informal communication at shop floor level to reduce the anxiety and stress of employees.

15 Provide Psychological support to employees to cope up with the change process.

16 Establish readiness of change with employee's willingness.

17 Avoid speedy and hasty implementation of technological renovation process.

18 Introduce change slowly and thoughtfully.

19 Ensure cooperation of employees at all level of technological change.

20 Develop credibility for new technological renovation process.

21 Forecast the training requirement in the advent of new technological implementation.

22 Invite suggestions to get training requirement from employees level.

23 Ensure the safety and stability of employees in the advent of technological renovation.

24 Implement change initially with those who comfortable/ least resistant with technological change process.

25 Let other employees to observe and learn technological operation in the beginning.

26 Make sure that supervisory staffs had already undergone technological training and free from doubts and clarification.

27 Ensure that adequate resources are in correct place to carry out the process.

28 Document the process at each stage of functioning indicating difficulties and effectiveness.

29 Use competent employees who used to with the new technology to motivate others.

30 Ensure the stability of job to employees even under new technological revamp.

31 Communicate effectively with the trade unions to ensure their support in the technological improvement stage.

32 Make use of trade unions to encourage employee's cooperation in the change process.

33 Make use of relationship as a tool to communicate change information and alleviate their anxieties and stress.

34 Use information materials both electronic and non-electronic medias to make employees clear about the technological know-how.

35 Work with total system-simple to complex.

36 Never induce unrealistic expectation among workers to implement the technological change some how.

37 Ensure opportunity for growth and development through skill development and knowledge up gradation.

38 Develops sense of ownership among members to carryout new technological changes.

39 Continuous performance feed back on new technological process to understand the problems and pitfalls.

40  Consider the procedural mistakes on the part of employees as a part of assimilation process with the technological change.

41 Never tries to victimize the employees in the technological change process.


The actual realization of these possibilities will depend on a number of factors, including local acceptance of technological change, levels of technology and infrastructure investments, market drivers and limitations, and technology breakthroughs and advancements. Since these factors vary across the globe, the implementation and effects of technology will also vary, especially in developing countries. While this article give more emphasis to the integration of the socio-technical system and the role of HR managers. Need for rationalization is varied from industry to industry. Technology Development and Innovation are comparatively more frequent in manufacturing sector than in infrastructural industries. In the advent of globalization and industrialization it is imperative to tune our production process and the quality of the product in par with global standards. It has been pointed out by many researches the implications of technological change and its impact on the socio technical systems. It is the role of Human Recourse Department to understand the change process and act as catalyst for effective rationalization process in the industry. The HR managers should act as change agent in the planning implementation process of new technology. They should communicate the positive outcomes of the rationalization process to the employee community and the trade unions and ensure their participation in the change process. The HR managers should understand the global changes and upkeep their knowledge and skill and work for organisational profit and surplus by giving a cooperative and motivated workforce to the management.


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Prof. Dileep Kumar M.

Source: E-mail April 6, 2006


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