Organizational Development at Human Resources Department of

Export-oriented Semiconductor Manufacturing Company

Wanda Abubakar

and Yudo Anggoro

Human Resource Department, PT. Infineon Technologies Batam, Indonesia

School of Business and Management, Institut Teknologi Bandung, Indonesia

Keywords: Organizational development, Sustainable performing organization, Human Resources, Decision making,

Alternative Solutions.

Abstract: 2020 was a challenging business year. Pandemic was unprecedented situations required speedy and well-

thought actions in managing business with upholding health and safety of the employees as company’s utmost

priority. The Human Resources (HR) Department plays critical role to sustain employees’ safety and health

as well as their motivation. Despite many achievements, to stay relevant in the future, HR must continuously

evolve. This paper will firstly identify categories of high-performing HR organization which enable

organization to achieve sustainable performance. In addition, this paper will also propose and select best-fit

solutions from identified organizational alternatives. The author elaborates conceptual framework of 5-Star

model from Jay Galbraith as reference in Organizational Development (OD) initiatives. The author combines

the framework with the 7-steps approach to systematically develop the framework. The author initiates OD

with business analysis conducted during the departmental review. The result of workshop is presented in the

SWOT analysis format. To confirm the SWOT, author conducts quantitative and qualitative survey to internal

and external organizational stakeholders. Once the focus category is clarified, the organization alternatives

are developed and selected. Lastly, after confirming the best-fit solution, work-packages on how to improve

each category are developed and prioritized as executable actions.

1 INTRODUCTION

The semiconductor manufacturing company in

Batam Island produces outputs with export-oriented

market. The operation is subjected to global supply

and demand curves. When world economy slow-

down due to trade-war between USA and China

followed by COVID-19 pandemic in the late 2019 to

2020, the company experienced significant

contraction which hindering its further growth.

Challenges were multiplied when prolonged

pandemic created new-ways of doing things, then

followed by emergence of regulatory restrictions

which impacted everyone personally and

professionally. However, things were rapidly

changing in 2021 as endorsed by Semiconductor

Industry Association (SIA) on World Semiconductor

Trade Statistics (WSTS) in Spring 2021 global

semiconductor sales forecast, which projects the

industry’s worldwide sales will be $527.2 billion in

2021, a 19.7% increase from the 2020 sales total of

$440.4 billion (Dan, R., 2021).

It is important to note that high performing

companies are putting their people first as the key

success factors to strive in the business competition.

While the business leaders are working feverishly to

manage companies’ profitability, however, pandemic

situation creates critical needs for leaders to invest in

protection of their employees as prerequisite of

organization's long-term survival (Gabsa, R., &

Rastogi, S., 2020). It is also found that an

organization whose mission combines revenue

growth with the need to respect and support its

environment and stakeholder network including its

employees will be successful (Deloitte, 2020).

Therefore, Human Resource (HR) organization

played pivotal role in the company during such

challenging and unprecedented period. The tasks

include enabling company to adapt with situations

through proactively policies review on safe

workplace and ensuring both operations and

employees’ services platforms updated to meet latest

requirements. The platform adjustment was expected

to contribute to company’s performance and

Abubakar, W. and Anggoro, Y.

Organizational Development at Human Resources Department of Export-oriented Semiconductor Manufacturing Company.

DOI: 10.5220/0010935900003255

In Proceedings of the 3rd International Conference on Applied Economics and Social Science (ICAESS 2021), pages 213-221

ISBN: 978-989-758-605-7

213

operational sustainability by fostering more flexible

and agile workforce during and post-pandemic period.

The digitalization was also introduced in many areas

including performance management and learning.

These were clear example of achievements of HR

Department in this tough period.

Despite many achievements, there were still

business expectations unable to fulfil by HR

organization. Reflection was made on those gaps

revealed 3 (three) main area of concerns from the

business leaders which were mainly deduced from the

following areas: availability of right-fit product

needed by business, effective & efficient functions

and transparent processes & structures. All those

dimensions are typical topics to be addressed in

Organizational Development.

With strong mandate to sustain and enable

employees for company’s further growth, HR

Department in the semiconductor manufacturing

company in Batam, has critical role to shape the

future of the company. The Organizational

Development at HR Department will ensure

sustainable performing organization in both present

and future especially when business is ramping up.

This paper has 2 (two) objectives. Firstly, it aims

to analyse which category of organizational model

need further intervention to make HR Department as

high-performing organization. This analysis is

important so that the author could make further

refinement in the existing setup to achieve sustainable

performing organization. Secondly, the paper aims to

identify best possible organizational alternatives for

HR Department to continuously deliver results.

2 THEORETICAL

FRAMEWORKS

Organization Development (OD) approaches

developed continuously with many theories behind

contributed to this field since 1950s when Kurt Lewin

came with the ideas of group dynamics and action

research which underpin the basic of OD process.

Several theories have been identified to explain the

basis on which the OD was developed. These theories

have been presented in three major categories: the

individual approach, T-group approach and the total

system approach (Gallos, 2006). In principle, OD

involves ongoing, systematic process of

implementing effective organizational change. In

other word, the changes through OD are properly

planned, incremental and participative where

outcomes are focused on the improved effectiveness

of the organization.

Organizational Development’s focus is within the

workplace where primary implementation of

humanistic ideals at work emphasizing values

including personal development, interpersonal

competency, participation, commitment, satisfaction,

and work democracy (Austin & Bartunek, 2003). The

improvement is designed based on action research,

long-term focus and emphasis on changing the

attitudes and behaviour of the people. In OD, change

should benefit not just only the organization but the

people who are in the organization. It is clear that OD

is aligning organization with its business objectives

striving to improve overall organizational

effectiveness.

Star model is adopted in this paper as

methodological basis for conducting standardized

OD initiative in the company. The model which is

referred as structured mental model on key

dimensions of OD, interlinked all elements in

organizational building blocks and form a star-like

formation. Originally developed in the 1960s, the

“Star Model” from Galbraith has been regularly

updated with latest findings from academic research

and lessons learned from practical use at various

organizations.

Star model includes five categories, each

representing one point of the star: strategy, structure,

people, rewards, and processes. Culture is not

included amongst the factors of the Star Model since

the managers usually are not in direct control to the

culture. However, managers could change culture

through the other categories (Galbraith, 2014). In

Galbraith’s model, strategy refers to the mission or

overall goals of the organization, while structure

pertains to placement of people, authority and

functions within the organization. Processes address

the way in which information flows across the

organization and the formal and informal means of

decision-making and interaction. Rewards or

incentives deal with reward structures, and people

include the policies and cultural aspects of the

organization that stimulates the way in which people

within the organization perform. Galbraith asserted

that depending on the specific goals of an

organization, the five points of the star could be

manipulated to minimize the shortcomings and

maximize the strengths of any one organizational

design.

The Galbraith’s Star Model was adopted as

methodological basis for OD in the company with

addition on culture category. The company believes

ICAESS 2021 - The International Conference on Applied Economics and Social Science

214

that the Culture forms the centre of the supporting

building categories. The culture concerns on the

common values and behaviour acceptable to the

organization for example the quality mindset,

compliance or agile culture. As such, OD framework

in the company offers both “hard” and “soft”

categories of an organization. As depicted in the

following Figure 1, Organizational Development

requires a strategy which is already defined and needs

to be deployed in the organization.

Figure 1: Company’s adaptation to Star Model with their

Interdependencies

3 METHOD

In order for OD initiatives are properly executed,

structured approach would be adopted. The Figure 2

describes 7-steps process which give guidance along

the full OD initiatives’ lifecycle. The strategy to be

deployed should be defined and clarified. Next, the

specific context and situation (“As-is”) including

certain boundary conditions need to be recognized

thoroughly. Using an analogy of designing a house,

the first step is to decide what the purpose of the

house is (e.g. to have single or multi-storey house,

how much is the budget, will there be any specific

requirement such as earth-quake resistance etc.); then

the architect can design and the builders and

carpenters can deliver it which fit to the specific

purpose. Therefore, iterative refinement between

defining objective and understanding “As-Is”

analysis are important steps. Once finalized, design

criteria will be selected as in step 3. It is important to

note that each organizational design includes certain

trade-offs which need to be considered and decided

during designing criteria phase.

Figure 2: 7-steps approaches in OD

Step 4 and 5 are developing and detailing future

organization concept based on the elements of the

“Star Model”. In the step 6 explains details required

to implement the future organization including sizing

estimating how many staffs and particular

competencies required (sizing) and recruiting

activities (filling) to close potential gaps and

reconfigure the essential elements accordingly. Long

term implementation of future organization concept

in a sustainable way is at the core of Organizational

Development and would be achieved after

completion of step 7. In the company, change

management as well as project management are

essential throughout the whole OD process.

3.1 SWOT Analysis

The author conducted departmental review through

virtual workshop in October 2020 involving all HR

leaders to review organizational performances,

contributions and areas for improvement. The team

assessed internal and external challenges compared to

today baseline. Through author’s facilitation and

dialogues, the team summarized factors of Strengths,

Weaknesses, Opportunities and Threats as described

in Figure 3.

Figure 3: SWOT matrix of HR Department

3.2 Organizational Design Criteria

Alignment on what are the required criteria to shape

future of HR Department organizational set-up was

made. In principle, design criteria are established

based on contribution to the strategy-driven change

needs. Design criteria are statements that simplify the

process on how the target model will be shaped and

provide sufficient clarity to shape the design.

However, they are not an attempt to articulate the

solution. These represent the principles applied when

considering design decisions where once choice has

been made there is no possibility of resorting to any

other option.

Organizational Development at Human Resources Department of Export-oriented Semiconductor Manufacturing Company

215

The identified criteria were derived from SWOT

analysis mainly from “Weaknesses” quadrant of the

SWOT. The “Strengths” were purposely not included

as team assessed that “Strengths” are inherent value

of the organization now. The criteria are then group

into three OD pillars.

Table 1: Design criteria of future organization.

3.3 Assessment to Design Criteria

In February 2021, in order to gauge perception of HR

Department members and company’s business

leaders towards HR organizations, to obtain pulse

check for any HR initiatives and to identify areas of

improvements linked to Organization Development

initiatives, a survey was conducted.

In this survey, the author used quantitative and

qualitative methodologies to assess condition of

future organizational Design Criteria and define the

basis of Organizational Development efforts in

Department. The quantitative method questionnaires

to both internal and external respondents consisted of

24 multiple-answer statements with 5 rating-scales:

“Strongly disagree”, “Disagree”, “Neutral”, “Agree”,

“Strongly agree”. Those statements were derived

from OD pillars of Design criteria.

The survey’s target groups were external

(represented by Head of Departments with total 14

respondents) and internal (all HR employees with

also 14 respondents) stakeholders with target

minimum 70% participation rate from each party. The

survey was conducted between 21st to 25th February

2021. Participation rate for both internal and external

stakeholders were 90% and 72% respectively, hence,

the author concluded the survey results were valid.

The quantitative method’s rating utilized share of

positive evaluations in percentage to determine level

of acceptance from respondents. The survey was only

accepting respondents’ selection “Agree” and

“Strongly-agree” when respondents were evaluating

certain statement. For example, if 8 out of 10

respondents checked the selection “Agree” or

“Strongly-agree”, the ratio of positive evaluations is

80%. This is to ensure the feedbacks received is free

of inherent noises generated from “neutral” answers.

The list of statements asked to all target participants

are listed in the following Table.

Table 2: List of indexed statements during HR Surve

In addition, through qualitative method, 3 open-

ended questions to both internal and external

respondents on what HR Department should start

doing, stop doing and continue doing were asked.

3.3.1 External Assessment

Overall approval rating reflected from overarching

statement, “Overall I am satisfied with the HR

services and support” was 68% sharing positive

evaluation. There was no strong disagreement while

about 32% of respondents were giving strong

agreement to that statement.

Figure 3: HoD’s over-arching statement.

In general, the overall satisfaction result from the

external assessors were positive towards HR

organizational performance.

Deeper analysis to HoD’s responses distribution

revealed that 3 statements were rated 100% positive

evaluation. That means all respondents agreed or

strongly agreed that HR organization delivered these

statements. Those statements are HR continuously

improves its services (2.3), HR has well defined roles

and responsibilities (3.7) and HR follows clear

ICAESS 2021 - The International Conference on Applied Economics and Social Science

216

policies and processes (3.8). However, the author

captured 3 bottom statements rating which indicated

that effort should be focused in that area, namely HR

has a fast decision-making (3.2), HR actively

addresses megatrends (e.g. demography or

digitalization) (1.3) and different HR functions (e.g.

BP, POE, TAS, CB, ER) are well aligned (3.1).

When author did a closer look into those low

ratings responses, about 40% of respondents of each

low-rated statement selected “neutral” answers as

their perspective to statements about HR. This

uncertain population might have experienced

different level of satisfaction on those specific

statements from what HR delivered in the past. Thus,

one of the topics to be reviewed would be how to have

consistency in the organizational performance.

Figure 4: HoD’s responses distribution

3.3.2 Internal Assessment

The internal group assessment for over-arching

statement, “Overall I believe HR provides satisfying

services and support” was rated 69%. It is in the same

level of external view to overall satisfaction level.

Figure 5: HR members’ over-arching statement

HR members’ response distribution revealed

interesting facts. Firstly, HR members were proud of

statements: we translate the business strategy of

company into our HR topics (1.2) and we are a trusted

partner (1.8). These 2 statements displayed high

confident level that the organization were listening to

customers’ voices, thus, becoming trusted partner.

Secondly, the following statements: We have enough

time for all customer requests (2.2), We are

competent in its respective area of responsibility (2.5)

and the different HR functions (e.g. BP, POE, TAS,

CB, ER) are well aligned (3.1) were among the lowest

rating statements. Lastly, compared to external

respondents, internals were more critical to each

statement as there were numbers of disagreement and

strong disagreements to certain statements.

Figure 6: HR members’ responses distribution

3.3.3 Differential Analysis

In order to make sound decision on which statements

need to be focused, differential analysis was

conducted. In investment term, the differential

analysis is focusing on the future costs and benefits

that differ between the alternatives. In this OD

context, differential analysis was performed to see

what are differing views from both internal and

external perspectives. From each dimension, the

author derived 3 groups of opinions identified,

namely: significant gaps, strongest links and weakest

links.

The significant gaps contrasted statements from

external and internal perspectives with more than

30% gaps. These gaps might be created due to

different understanding and expectations from of

statements, expectation on statements. Next,

strongest links were identified when both external and

internal perspectives agreed the statements with

rating more than 80%. Lastly, the weakest link

Organizational Development at Human Resources Department of Export-oriented Semiconductor Manufacturing Company

217

occurred when both perspectives gave statements

rating below 50%.

Using share of positive evaluation, data was

plotted into spider-web charts according to respective

OD pillars identified in the design criteria. From the

first dimension, author identified 3 significant gaps

and 2 strongest links. The following statements: HR

translates the business strategy of company and our

department into HR topics (1.2), HR actively

addresses megatrends (e.g. demography or

digitalization) (1.3) and HR actively shapes the

company culture (1.7) were rated high by HR

members, however, rated low with gaps more than

50% by HoDs. In addition, both parties have similar

positive views on statements HR provides user-

friendly IT solutions (e.g. STEPS, ATS, Career

Projections, eLeave, DHS, eKiosks, LinkedIn

Learning, PAF etc) (1.6) and HR is a trusted partner

(1.8).

Figure 7: 1st dimension’s differential analysis, Customer

centric and business need driven.

Figure 8: 2nd dimension’s differential analysis, Effective

and Efficient IFBT HR functions.

From the second dimension, the author deduced 2

strongest links and 2 weakest links. The strongest

links were HR processing times are reasonable

compared to the complexity of the issues (2.1) and

HR continuously improves its services (2.3).

However, the weakest links were HR has enough time

for all customer requests (2.2) and HR is competent

in its respective area of responsibility (2.5).

Figure 9: 3rd dimension’s differential analysis, Simple,

clear and transparent process and structures

From the third dimension, the author deduced 2

significant gaps, 1 weakest link and 3 strength links.

The identified gaps were HR has a fast decision-

making (3.2) and HR follows clear policies and

processes (3.8). The external was more critical on

speed of HR team making the decisions and it had

perception gap with internal respondents. Most likely,

it was due to the impact of speedy decision to the

external’s own processes. On the contrary, internal

was more critical on the clarity of policies and

processes compared to the external as most probably

the internal was the one who lived with those policies

and processes every day. The weakest link identified

was different HR functions (e.g. BP, POE, TAS, CB,

ER) are well aligned (3.1). This statement was

particularly highlighted as lowest in approval rating

statement in both internal and external assessment

results section. Finally, the strongest links identified

were The organizational structure of HR is clear and

understandable (3.4), HR acts globally consistent

(3.5) and HR has well defined roles and

responsibilities (3.7).

3.3.4 Commentary Analysis

To complement quantitative analysis made from

section 3.3.1 to 3.3.3, the commentaries of

respondents were obtained from 3 open-ended

questions as qualitative inputs.

The external respondents’ commentaries to HR

organization were crystalized into 3 areas of concerns

ICAESS 2021 - The International Conference on Applied Economics and Social Science

218

namely: requirement to be more fast and agile in the

responses, costumer centric solutions and request to

continue clear and transparent processes. On the other

hand, the internal respondents’ commentaries were

mainly on the competency building and improvement

collaboration within HR.

3.3.5 OD Category for Further Intervention

The author with HR leadership team mapped

substance of both quantitative and qualitative analysis

into the Star model in order to understand which area

of organization would be the main concerns in OD

initiatives. The mapping was done and presented in

the following figure.

Figure 10: Mapping of analysis results to blocks of Star

model for OD initiatives.

Therefore, from Star model perspectives, there

were 5 categories contributed as root-causes which

hindering Organizational Development i.e.

“Strategy”, “Structure”, “Process”, “People” and

“Culture”. These categories in HR organization

would be further fine-tuned and intervened to enable

HR Department to sustainably performing with more

dynamics and challenging requirements in the future.

3.4 Solution Alternatives

Having concluded the assessment, first action to do

was to ensure re-alignment of Strategy. The author

discussed the relevance of the Corporate HR Strategy

with local management and found it is still acceptable.

In addition, local management explicitly demanded

deliverables as indicators if HR organization has

achieved its desired maturity level. These

expectations shall be converted into executable action

items during OD implementation.

3.4.1 Define Parameters for Alternatives

To develop new alternatives of organizational setup,

the author established distinct options based on

categories highlighted during the Survey, namely:

“Structure”, “People”, “Process” and “Culture”.

Based on discussion and brainstorming within the

team, there were parameters identified that could be

used as indicators to determine success

implementation of new organization. Index (from -3

to 3) were assigned for each possible scenario from

unfavourable, neutral and favourable outcomes.

Table 3: Parameters for Organizational success.

3.4.2 Develop Alternative Solutions

Alternatives solutions are compared to existing

organization (status-quo) with its brief characteristics

illustrated in the table 4.

Table 4: Characteristics of New organization alternatives.

Subsequently, the author and HR leadership team

continued to do selection of organizational design

alternatives which enable it to meet challenging

requirements in the upcoming future. The team

examined each alternative and arbitrarily assign

numbers based on projected favourability levels of

each alternatives to any parameters. All results from

all parameters from the same categories were made

average. The exercise was documented as follow.

Table 5: Favourability impacts of each Organizational

alternative.

Organizational Development at Human Resources Department of Export-oriented Semiconductor Manufacturing Company

219

3.4.2 Selection of Alternative

Prior selection of most feasible alternative, the author

and the team decided on the level of importance of

each OD category. The company put emphasize on

correct “Structure” and “Process” as most important,

followed by “People” and “Culture”. The weightage

distribution for “Structure”, “People”, “Process” and

“Culture” were assigned 30, 25, 30 and 15

respectively.

Multiplying results of favourability assessment

into weightage of each OD category, the author

obtained the following selection table.

Table 6: Selection matrix of alternative.

4 RESULTS

It is now important for the author and team to link

back the new organization with the local

management’s expectations. Work-packages were

derived in consideration of short and long-term

expectations; thus, they are distributed and assigned

to 2 Phases accordingly. The Phase 1 has shorter

duration of time with concrete deliverables while

Phase 2 has longer duration with more intangible

aspects. The following table describes the identified

work-packages to show-case new organization.

Table 7: Work-packages list.

Upon selection of organizational alternative, the

next step would be Detailing of future concept

followed by Sizing and Filing. In detailing of future

concept, any structural implications for

organizational levels, job descriptions, grading, new

or changing interfaces will be reflected and defined.

In addition, the need for associated processes

adaptations, workflows and working relations will

also be considered. Scenario thinking will be drafted

to get precise picture of the future concept through

constructing the future state as close as possible with

all affected aspects and trying to see things from that

new perspective.

In sizing and filling, the number of required staffs

will be finalized. The number could be either the

same, more or less. In addition, filling refers to the

actual filling of vacancies / jobs to implement the

future organization. Therefore, implication towards

workforce planning (quantitative and qualitative)

have to be considered as well. For example,

requirement to hire new employees or start people

development measures to acquire necessary

competencies for crucial position.

5 CONCLUSIONS

This paper had deliberately explained the

organizational development process in HR

Department of export-oriented semiconductor

manufacturing company and successfully identify

categories for further interventions. The first step was

crystalizing sustainable performing HR organization

as the objective of the organization development

(OD) initiative. It was then followed by workshops,

discussions and alignment for SWOT analysis.

The selection design criteria were summarized

into 3 OD pillars, namely: Costumer centric &

business need driven (Right fit products), Effective

and efficient HR functions (fast and agile) and Simple

clear and transparent processes and structures.

The Star model comes very useful which finally

helps the author through strategy re-alignment and

found that intervention to “Structure”, “Process”,

“People” and “Culture” categories were required. The

level of intervention was designed in future concept

where all parameters and alternatives were examined

carefully. In the last stage before implementation, the

organization detailing, followed by sizing and filling

were included into the overall process and step five

and six accordingly.

The author also identified best option from

organizational alternatives to deliver sustainable

results. The alternative selected was organization

which incorporates certain level of centralization,

continues strengthening processes, enhances

efficiency and clarity, upgrades employees’

competency through development measures and

creates supporting culture. These are the elements of

high-performing organization which author and team

believe will be able to achieve achievements in both

short and long term.

ICAESS 2021 - The International Conference on Applied Economics and Social Science

220

The implementation of the change where step-by-

step change management process required is not

scope of this paper.

REFERENCES

Austin, J., & Bartunek, J.M., 2003. Handbook of

Psychology, Volume 12 Industrial & Organizational

Psychology: Theories and Practices of Organizational

Development. John Wiley & Sons, Inc.

Dan, R., “Global Semiconductor Sales Increase 1.9%

Month-to-Month in April; Annual Sales Projected to

Increase 19.7% in 2021, 8.8% in 2022.” Semiconductor

Industry Association, 9 June 2021.

https://www.semiconductors.org/global-

semiconductor-sales-increase-1-9-month-to-month-in-

april-annual-sales-projected-to-increase-19-7-in-2021-

8-8-in-2021/

Deloitte Global Human Capital Trends, 2020, “The social

enterprise at work: Paradox as a path forward.”

https://www2.deloitte.com/cn/en/pages/human-

capital/articles/global-human-capital-trends-2020.html

Gallos, J., 2006. Organization Development: A Jossey Bass

Reader. San Francisco, CA: Jossey Bass.

Galbraith, J., 2014. Designing Organizations - Strategy,

Structure, and Process ate Business Unit and Enterprise

Levels. Third edition. Published by Jossey-Bass

Gabsa, R., & Rastog, S., “Take Care of Your People, and

They'll Take Care of Business.” Gallup, 23 June 2020.

https://www.gallup.com/workplace/312824/care-

people-care-business.aspx

Organizational Development at Human Resources Department of Export-oriented Semiconductor Manufacturing Company

221