Boss, I Think We Have a Problem
Central steel door corporation has been in business for about 20 years,
successfully selling a line of steel industrial-grade doors, as well as
the hardware and fittings required for them. Focusing mainly in the
United States and Canada, the company had gradually increased its
presence from the New York City area, first into New England and then
down the Atlantic coast, then through the mid west and west, and finally
into Canada. The company's basic expansion strategy was always the
same: choose an area, choose a distribution center, hire a regional
sales manager, and then let that regional sales manager help staff the
distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help
has not extended to its overseas operations. With the introduction of
the new European currency, Mel Fisher, president of central steel door,
decided to expand its company abroad, into Europe. However, the
expansion has not gone smoothly at all. He tried for two weeks to find a
sales manager by advertising in the International Herald Tribune, which
is read by businesspeople in Europe and by American expatriates living
and working in Europe. Although the ads placed in the tribune also run
for about a month in the tribune's internet web site, Mr. Fisher so
far has received only five applications. One came from a possible viable
candidate, whereas, four came from candidates whom Mr. Fisher refer as
"lost souls"- people who seem to have spent most of their time
traveling restlessly from country to country sipping espresso in
sidewalk cafes. When asked what he had done for the last 3years, one
told Mr. Fisher he had been on a "walk about"
Other aspects of his international HR activities have been equally
problematic. Fisher alienated two of his US sales managers by sending
them to Europe to temporarily run the European operations, but
neglecting to work out a compensation package that would cover their
relatively high living expenses in Germany and Belgium. One ended up
spending the better part of the year, and Mr. Fisher was rudely
surprised to be informed by the Belgian government that his sales
manager owed thousands of dollars in local taxes. The managers had hired
about 10 local people to staff each of the two distribution centers.
However without full-time local European sales managers, the level of
sales was disappointing, so fisher decided to fire about half the
distribution center employees. That's when he got an emergency phone
call from his temporary sales manager in Germany: "I've just been
told that all these employees should have had written employment
agreements and that in any case we can't fire anyone without at
least1year's notice, and the local authorities here are really up in
arms. Boss, I think we have a problem."
Case Study
Read the case incident "Boss, I Think We Have a Problem". Then, answer following questions:
What are some international HR mistakes that Mr. Fisher has made?
How would you have gone about hiring a European sales manager? Why?
What would you do now if you were Mr. Fisher?