SABMiller's Human Capital Proposition - Institutionalizing a Performance Culture

            
 
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Case Details:

Case Code : HROB085
Case Length : 15 Pages
Period : 2001-2006
Pub Date : 2006
Teaching Note : Available
Organization : SABMiller Plc.
Industry : Beverage
Countries : South Africa, USA, Europe

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"Today, SABMiller competes successfully in the global beer industry and is proud to acknowledge that one of our key points of differentiation is our Human Resource Proposition. Whilst virtually all our competitors leverage a brand-led or capital resource-led expansion strategy, our international expansion is driven by our unique people proposition."1

- SABMiller Plc's website, in 2006.

"At Miller, we approach the shaping of a performance culture in two ways. Firstly, we use a performance management process to help translate strategic priorities into goals for all teams and individuals. Secondly, we ensure that the structures, processes, roles and skill profiles are in place to ensure that we are able to deliver our strategic priorities."2

- Denise Smith (Smith), Senior Vice President, Human Resources at Miller Brewing Co., in 2006.

Banking on its People

For the fiscal year 2005, SABMiller Plc. (SABMiller), the second largest brewery company in the world by volume, announced revenues of US$14.54 billion, up 15 percent from the US$12.65 billion it recorded in 2004. Its profit for the year was US$1.14 billion, up 77 percent compared to US$0.65 billion in the fiscal year 2004. These figures signified a clear improvement in the company's financials since the early 2000s. (Refer to Exhibit I for SABMiller's key financials from 1999 to 2005) Announcing the results, Meyer Kahn, Chairman of SABMiller, said, "Thanks to sustained and careful investment [in its portfolio of businesses, productive assets, brands and people] over many years, we've enjoyed a third successive year of outstanding results... Most of all, we've benefited from our investment in people.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

We devote considerable effort to training and developing our employees, building the skills we need for the future, meeting our responsibilities as an employer and making sure our structures and management reflect the societies in which we operate."3

Analysts opined that SABMiller seemed to have transformed itself from a South African company into a successful global beer company. The company said its growth was led by its Human Capital Proposition (HCP), which created a unique performance culture at SABMiller. It had also successfully reshaped the organizational culture of Miller Brewing Company (MBC), a major brewery in the US, which it had acquired in 2002 (Refer to Exhibit II for Financial summary of MBC). The company was banking on its people to deliver the goods in the future as well, by institutionalizing best operating practices and "SAB Ways" in all its global operations.

The "SAB Ways" was a proven approach to performance management and reward at South African Brewing Company (SAB) and had been very successful in maintaining the unique performance culture at SAB.

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1] "Celebrating Culture and Diversity," www.sabmiller.com, 2006.

2] "SABMiller - 2005 Annual Report," www.sabmiller.com, 2006.

3] "SABMiller - 2005 Annual Report," www.sabmiller.com, 2006.

 

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