Central Steel Door Corporation Unit
CentralSteel Door Corporation
1.How would you have gone about hiring a European sales manager? (10marks)
The decision to hire a localsales manager, as Central Steel Door Corporation planned, is wellinformed. Why? A number of scholars indicate that it is better fororganizations to rely on local hires to run overseas subsidiaries andoperations as they have a better understanding of the market, have abetter understanding of the local culture, have lower expenses(salary and selling) compared to expatriates and are betterpositioned to handle local problems that may arise in the course oftheir jobs (Ghemawat, 2014).Nonetheless, local hires might require extensive training on productsand services, organizational culture and communication and may havecultural mismatch with the organization culture. On the other hand,expatriates are better trained, are more informed on the organizationculture and are better positioned to explain product and services tothe market (Fenton-O`Creevy, Gooderham & Nordhaug, 2008).Based on this, I would have gone for a local sales manager to run theEuropean operations. Although Fisher recognized such benefits andchose to recruit a local sales manager, his way of going about it wasnot professional.
I would have outsourced therecruitment exercise from an international talent managementorganization such as PriceWaterHouseCoopers to hire a competent salesmanager from Europe. The choice to advertise the position in a localmagazine, the InternationalHerald Tribune, was ill informed. This is because the advert wouldonly reach a specific target market that does not necessarily includequalified individuals looking for work. It is likely that Mr. Fisherdoes not understand the local market well to identify the mostcompetitive media channels or types in which to run the adverts.Access to a job market in any recruitment efforts is limited by thechannels that the recruiting entity uses in recruiting talent. Byusing only one magazine to advertise for the position of Europeansales manager, Mr. Fisher and Central Steel Door Corporation as awhole was limiting its talent pool from which to recruit (Edwards,2008). This limitation in thetalent pool is very clear from the responses that that Mr. Fishergot.
There are other majorresources for outsourcing of the recruitment process. One of them isthe need to adhere to local labor regulations. Organizations that arestrategically offer talent identification and recruitment also offerconsultation services on remuneration and employee-employercontracts. This way, Central Steel Door Corporation would have gainedknowledge on the employment laws in Germany and other countries andput in place necessary measures to avert the current situation. Inthe current cases, Mr. Fisher faces a serious problem in Germanybecause he cannot fire the sales representatives hired by theexpatriates sent to Europe. Any attempts to fire them will be inbreach of local labor laws which can lead to costly court fines forthe firm (Sims, 2007).As it is the firm is stuck with the European sales representatives orthe firm can choose to go for amicable out of court settlement withthe employees. In essence, outsourcing recruitment services wouldhave also informed Central Steel Door Corporation on the bestemployment agreements with the sales representatives to avoid thecurrent situation. I have in mind contract agreements let’s say forsix months if the local laws allows such. Such short term employmentagreement can enable the firm to test the market first beforeembarking on long term strategies (De Cieri, et al. 2007).
2.What would you do now if you were Mr. Fisher? (10 marks)
The firm has to pursue out-of-court settlement with the employees.However, different countries have different laws on alternativedispute resolution. Therefore, the firm has to consult on the bestway to address the current situation. If I were Mr. Fisher, I wouldoutsource labor dispute resolution services from a reputable firm inEurope that is well accustomed to the labor laws in the EuropeanUnion. The reason for choosing an alternative dispute resolutionoption as opposed for the court system is to eliminate the costs interms of money and time that can be consumed by the court system(Edwards, 2008). Additionally, the ADR process ensures that thefirm’s public image remains intact. Such labor disputes are likelyto portray the firm negatively in the labor market making it hard forthe firm to attract and retain talent in the future. Therefore, themove to scale down operations of the firm without causing publicrelations disaster can be addressed through out of the courtssettlement with the employees (Sims, 2007).
With the issue of scaling down addressed, the next move would be tore-launch the approach into the European market. This would entailcreating a regional office in Europe headed by expatriates. Theexpatriates would then oversee the outsourcing of recruitmentservices from a third party as suggested above. With identificationof suitable candidates for the positions of local sales manager, Iwould retain probably two or three expatriates to work as advisersand oversee all operation in Europe and harmonize operation in thevarious countries from the regional head office (Zahra, 2001). Thiswould be necessary in maintaining a healthy link between the parentcompany and its foreign operations. Retaining expatriates in Europewould also be necessary to communicate and acclimatize the localsales managers to the firm’s organization culture. The regionaloffice would also be responsible for assessing market response toadvise the parent company on future strategies such as expandingoperations in Europe.
Furthermore, the regional office should be responsible for marketresearch in the region to advise any possibilities of changing themarketing strategies to increase penetration in the market.Currently, the firm is performing poorly in the market. This can beas a result of many issues. One of them is the product might not besuited for the European market. As such, the regional office shouldbe tasked on identifying the best ways that the firm can modify theirproduct to fit the European market (Fenton-O`Creevy,Gooderham & Nordhaug, 2008). This is based on the assumption thatculture in building and construction in Europe and North America arevery different implying that one-size-fits-all approach may beproblematic. Another function that I would task with the regionalhead office would be to plan and organize training and exchangeprogram for the local sales manager to move them to the parentcompany for further training and integration into the firm’sculture and way of doing things.
The recruiting organization will also offer consultation services onlabor laws in the European Union and laws specific to individualcountries. This will be important for the firm in case of futureexpansion in Europe and other markets. Another way such knowledge onlabor laws will enable the firm to create a connection with the localcommunity and learning institutions. For instance, the firm will bebetter placed to recruit local top talent from local universities byorganizing internship opportunities to fresh graduates. Byimplementing these strategic options, CentralSteel Door Corporation would have a better chance of making it inEurope.
De Cieri, H.,Cox, J. & Fenwick, M. (2007). A review of international humanresource
management: Integration, interrogation, imitation. InternationalJournal of Management Reviews. 9(4): 281-302.
Edwards, W.(2008). International expansion: do opportunities outweighchallenges?
Franchising world. 40(2) 37-38.
Fenton-O`Creevy,M., Gooderham P. & Nordhaug, O. (2008). Human resource managementin
us subsidiariesin Europe and Australia: centralization or autonomy? Journal of
InternationalBusiness Management. 39(1):151-166
Ghemawat, P.(2014). Distance Still Matters: The Hard Reality of GlobalExpansion. Harvard
Business Review. Retrieved online on 13.04.14 fromhttp://hbr.org/2001/09/distance-still-matters-the-hard-reality-of-global-expansion/ar/1
Sims, R. (2007).Human resource management: contemporary issues, challenges, and
opportunities.New York: IAP.
Zahra, S., Hayto,J., Marcels, J. & O’Neill, H. (2001). Fosteringentrepreneurship during
international expansion:: Managing key challenges. EuropeanManagement Journal 19(4) 359–369