Case study House Smart
... also made a big impact on production and delivery time. Organization’s capabilities and competencies: The company lacked business strategy from the beginning, with no clear objectives and planning. The lack of strategy, business planning and HRM caused the company to react slowly to problems as they appeared, affecting staff productiveness and morale. Due to lack of proper HRM, the head office’s HRIS proved unable to cope with Hong Kong’s taxation system, pension funds and payment cycles, because their computer systems were not adjusted to the legal requirements of Hong Kong. There was no forecasting and proper marketing research done beforehand, which made it difficult to establish a business in a culturally different environment, with different laws and values. Also, Jane’s heavy workload and pressure cause her to lose her temper, affecting the whole team. External: Cultural: Even though Hong Kong has its own culture, it still has residues of Chinese culture and influence. Therefore, in order to penetrate the market, one must have the understanding of both cultures. ‘Since Hong Kong was ruled under British before 1997, people in Hong Kong start to learn to speak English in their early ages. Hong Kong is an international metropolis’ (1) Respect is a very strong value in their culture, which is probably what caused employees to quit after Jane’s outburst Demographic: Hong Kong is a small place, but very busy. Unlike China, people usually live in small apartments with not a lot of furniture. They are after quality, but prefer small and multi-use furniture. It is pro-business climate. “The Closer Economic Partnership Agreement (CEPA)” was setup in 2003; in order to encourage people to invest in H.K Hong Kong attracts many companies to set up in there because of its prevailing location, as it is the gateway to China and other countries. It also has low tax regime; high transparent in common law legal system and impartial judiciary. (1) Political: ‘The common laws, especially the business law, are well developed. It is because Hong Kong relies on the laws to maintain the best free port in Asia’ (1) Hong Kong has well developed environmental protection policy. House Smart needed to be aware that problems regarding environment and resources would reflect negatively on their business there. ‘As Hong Kong is under China protection, the transport of goods is under Chinese agreement and law’ (1) Economic: Hong Kong has been the most famous free port in the world for years, and the tax rate remains low. The Hong Kong government was facing domestic budget deficit, with the economic downturn and deflation, but the economy is now recovering and getting better. (1) House Smart should maintain the Hong Kong Office open. A lot of money was invested to start off the business and people believed in it. If they decided to close the office, they would lose all that money and also have legal issues to deal with, such as breach of employment contract. Steps for House Smart HRM Recovery: Set up an HRM department. Even though Colin never did care about HR, he must now admit that the lack of an HR department played an important role on his company’s breakdown. By setting an HR department, they will be able to use the staff more productively, achieving both business’ objectives and employee needs. As part of an organization, HRM must be prepared to deal with the effects of the changing world of work. For them, this means understanding the implications of globalization, work-force diversity, changing skill requirements, corporate downsizing, total quality management, reengineering, the contingent work force, decentralized work sites, and employee involvement. (2) Write down company policies, with clear statements of what is and what is not allowed, and communicate them to all employees. They typically serve three purposes: - To reassure employees that they will be treated fairly and objectively - To help managers make quick and consistent decisions - To give managers the confidence to resolve problems and to defend their decisions. (3) Company policies can avoid a lot of unnecessary problems and protect the company before the law, as well as give security to employees. Create job descriptions, so all staff is aware of their individual responsibilities. All employees like to know what is expected of them and how they will be evaluated. Job descriptions can also be a great value to employers. Creating a job description often results in a thought process that helps to determine how critical the job is, how this particular job relates to others, and identifies the characteristics needed by a new employee filling the role. (4) Components of a job description: - A Summary statement: general statement of duties which also mentions who the employee would report to. - Functions of the position: The lengthiest. It should detail all functions and be as specific as possible about the tasks the employee is going to face every day. It is best to place priorities on the activities. - Attributes needed for the position: Details of any technical or educational requirements that may be critical or desired. - Reporting: Provides details on the organizational structure. This will help employees understand how their role fits into the organization. - Evaluation criteria: Defines what is most important for the organization and the employee and also provide details on when evaluations will take place. - Compensation: It is usually better to have a specific dollar amount, especially if you are giving the job description to the employee - Physical location and surroundings (4) Even though their staff is not so experienced, dismissing them would be a bad idea. Although there was no written contract, there was still a verbal one and Hong Kong has strong laws protecting employees, therefore they would face legal issues from breach of contract as well as more money spent on new staff selection. The best thing would be keeping the current staff and focus on their development and training. That will motivate the employees, morale will go up and busin...