Affordable cost in the industry concerned-hrm programs
CASE STUDY:
You are the newly appointed Operations Director for a multinational clothing company, replacing an operations manager who left to start a new firm. You have an extensive background in the industry, having held operational management roles in three international clothing firms, and having worked in three different countries. You are the first operations executive in the company to have a seat on the board.
The company you have now joined is not a household name but is a major supplier of international retail chains, making vast quantities of women’s fashion items (outer-wear) for house-label ranges. The design function is located in Italy while the company manufactures in a diversified range of low-cost countries, including Mexico, Morocco, China, Bangladesh, Sri Lanka, Indonesia and the Philippines. It does not manufacture in any high-wage countries. The company has prospered from the escalating trend to offshoring in the last 10 years but its price margins are under constant pressure from its powerful retail customers. The factories the company owns, or jointly owns, are managed by trusted, experienced expatriate and local management staff.The company is a lean kind of operation in corporate terms. There are no headoffice HR staff in the company. Up till now, the company’s CEO has taken personal responsibility for recruiting and managing plant managers. As the new Operations Director in this company, you will now be responsible for performance management of the plantmanagers and this will include any people management issues that come up in the process. The board you are joining is small, consisting of the chairman (who has extensive industry experience and a major shareholding), the CEO (who also has a major shareholding), the head of the design function, a finance director and the company’s longstanding lawyer.
They are very experienced in the industry, know its work practices well, and are not attracted to modern ‘HR’ jargon. Unions are not really a big factor andthey maintain a pragmatic attitude towards them. This means they do not actively seek to negotiate with unions but, where they are a strong industry feature in a particular country, they expect plant managers to conclude a collective agreement that is cost effective (i.e. that meets company operating margins) and maintains uninterrupted production. Peak-level demand now outstrips what the company’s own plants can deliver and, prior to your arrival, the company set up arrangements with several contractors to supply merchandise made to your specifications. Like the company’s own plants, these contractors operate in low-cost countries. The company has good control over production lead times through electronic ordering and an excellent logistics management system developed by your predecessor. The contracting process is helping you keep up with demand. The company has only chosen contractors who meet good quality standards. Using the contractors has enhanced your company’s reputation for being able to deliver variable styles and quantities against tough deadlines. The future looks good but a problem has arisen within two weeks of you starting on the job.
A human-rights watchdog group, linked to an emerging trade union movement in a Far East country, has writtento you complaining of human rights’ abuses at one of your contractors’ plants. Using information from employees and the internet, they have researched the links between the contracting company and your firm and the prominent Western retailers that you supply. They are threatening to publicise the breaches, which they allege include suppression of union activity through sacking of union activists, declining to meet to discuss a process for collective bargaining, and instances of child labour. If possible, however, they wish to work cooperatively with your company and are giving you the opportunity to respond. You fly out to meet them, listen to their evidence, and then meet with your contractor’s management team. The company’s management are not entirely straight with you about their attitude to unions and their procedures for recruitment and dismissals. You feel the complaint about abuses is most likely accurate. You then fly home and prepare to meet with your fellow directors on the board to discuss the issue. You wonder if you might meet with a fairly hard-nosed response there if you suggest any changes and, being new to the company, feel you must play your cards carefully.
Answer this question: Usethe principal goals that can be discerned in management’s HRM activities as a framework to analyse the case study scenario. (anylyse the case study and write analysis only about three goals shown below. Relate these three goals to this case study)
Principal goals that can be discerned in management’s HRM activities:
Economic goals:
To make labour productive at an affordable cost in the industry concerned -HRM programmes must be cost effective. To develop HR practices designed to enhance the organisation’s capacity to change; this includes short run responsiveness and long run agility. To strive for sustained competitive advantage through HRM.
Social legitimacy goals:
Compliance with legal requirements (i.e. workplace laws) and adaptation to important social norms.
Political goals:
Management has an underpinning motive to enhance its autonomy or power to act.
