Year Industry Sonoco HR

1899 Sonoco Products Company

founded by Major James Coker.
First product was a cone-shaped
paper yarn carrier used for
winding and transporting yarn for
the textile industry.
1923 With sales nearing $1 million, the
company changed its name to
Sonoco.
1970s Introduction of the
aluminium can in the early
1970s, the packaging
business experienced a
surge in growth.
1970s and HR functioned largely
Early at the corporate level -
1980s administrative in its
focus, and provided
little field support for
Sonocos divisions.
1980s Industry further benefited
from the increasing
popularity of plastics in the
1980s.
Late HR structure started to
1980s move to
decentralization and
the function coincided
with a companywide
move to a more
divisional structure.
 HR managers began
reporting solid line to
general managers of
the businesses and
dotted line to
corporate HR.
Througho The company expanded its
ut 20th product line and its operations
Century globally. Growth came mainly by
and in acquisitions.
1990s During the 1990s, the company
completed over 60 acquisitions
worldwide.
Througho Sonoco enjoyed years of
ut 1980s uninterrupted growth and financial
and 1990s success.
There was not a pressing need to
take action against poor
performers.
Between Research indicated that
early packaging manufacturers
1980s and ratio of U.S. to non-U.S.
Late investment (measured as
1990s dollars of assets) fell from
2:1 to 1:1.
Those plants that remained
in the United States, soon
found themselves
competing in a crowded
market. Overcapacity
brought on consolidation
and dozens of plant
 closings.
1995 Hartley hired as VP HR
Found an HR function
that was highly
decentralized, siloed,
inconsistent in its
processes, and
unequal in the
services that existed
among the various
businesses.
Hartley and her team
faced a new challenge,
namely, being able to
maintain and further
develop HR
fundamentals with
fewer resources and a
changing company
strategy.
Rick Maloney, as the
companys first
director of
organizational
development
Mid 1990s Decentralization of the
HR function became
so entrenched that
each of the big
divisions, specifically
paper, industrial, and
consumer, had its own
HR function with
separate HR systems,
budgets, performance
management
processes (used
largely to determine
compensation),
development, and
leadership and
training programs. The
smaller divisions often
shared HR services
with the bigger
divisions.
 Late Over 5 million people in Sonoco was highly leveraged due Sonocos merit-
1990s roughly 100,000 companies to the number of plants it increase process was
worldwide worked in the operated and their fixed costs. highly structured and
packaging industry. Any slight swing in volume, such mechanistic. As a
Worldwide sales reached as the drop in U.S. manufacturing result, the numbers
$400 billion annually with exports that occurred during the often obscured an
the United States 19971998 Asian financial crisis or employees true
accounting for $115 billion a slowdown in the economy, had a performance.
of that total, followed by major impact.
Asia with $111 billion and With a falling stock price and new
Western Europe with $110 challenges facing the industry, by
billion. Consumer packaging the late 1990s, it was apparent
represented 70% of industry that certain aspects of Sonocos
production revenues and culture and structure were going
industrial, 30%. Paper and to have to change.
board (e.g., cereal boxes) In response to the societal trends,
accounted for 34% of Sonocos strategy was evolving
industry revenue; plastics, from one that had traditionally
29%; metal, 25%; glass, 6%; been product driven to one that
and other (wood, cotton), was more solutions oriented.
5%. Simultaneously, Sonoco was
Packaging companies were placing more attention on the
facing new challenges needs and desires of the end
brought on by new consumer.
competition and potential It was at this time that the
growth opportunities company was in the midst of
resulting from globalization. developing a more coordinated
The one-stop shop concept marketing approach by which
was proving to be appealing larger customers such as Procter
to manufacturing firms, & Gamble and Nestle had a single
many of which were point of contact coordinating all of
consolidating their supplier their business needs within the
base. company.
 March A new performance
1996 management system
was introduced. The
new system was
designed as a cycle
that began with
overall company goal
setting and earnings
targets and worked its
way down.
Mid 1997 A common system,
training, and
performance
management form for
salaried employees
had been
implemented
throughout the
company.
Shortly after, changes
were made to the
compensation system
to enable close linkage
with how performance
was now being
measured. Sonocos
18 salary grades were
replaced with five
wider-range salary
bands.
Efforts were under
way to significantly
 change the way
Sonoco approached
leadership
development and
succession planning.
Hartley formed a team
composed of division
general managers to
provide feedback on
the processes she was
recommending.
1998 Study carried by the
Packaging Machinery
Manufacturers Institute,
45% of respondents
indicated that they would be
spending $500,000 or more
on new equipment in 1998,
compared with 33% in
1997. At the same time,
many companies were
closing down old plants with
outdated equipment, few of
which were running at
capacity.
Between Market share for the five
1998 and biggest packaging
Early 2000 companies in North America
increased from 40% to 60%
Early 2000 Over 60% of the executive
committee had been with the
company at least 20 years.
 Early The companys stock price had
Summer fallen to an eight-year low.
2000
July 2000 Controlling costs to support the
shift in the business model was
one of the main objectives of
Sonocos CEO, Harris DeLoach,
who was named to the position.
Late Cindy Hartley, senior
August vice president of
2000 human resources (HR)
at Sonoco,
a 100-year-old global
provider of industrial
and consumer
packaging and related
services, was meeting
with five members of
her reorganization
task force comprising
the heads of employee
relations and
organizational
development, the
companys chief labor
attorney, and two key
divisional HR directors.
Looking to cut costs
across the company,
the companys newly
appointed CEO had
asked Hartley to come
 up with at least two
potential new HR
structures that would
reduce the functions
costs by 20%, or $2.8
million.
2000 Revenue reached $2.6 billion
through the manufacture and
sales of consumer and industrial
packaging. The companys 17,300
employees were scattered across
285 operations in 32 countries,
serving customers in 85 nations.
North America accounted for
approximately 80% of the
companys sales.
Late By the time Hartley
summer and her HR
2000 reorganization task
force met in late
summer 2000, most of
the fundamentals
were in place. In just
five years, Hartley had
overseen the
development and
Implementation of
numerous initiatives