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Foundations of Human Resource Management (BUSS 2043) Case Study – Part 1 750 words Key Assignment criteria Comment Introduction – 10% A brief introduction (no more than 200 words) that summarises the human resource issues relevant to the case Indepth comprehensive answers to each question – 25% An accurate and inclusive response to each question is provided Answers supported by arguments and examples - 35% Draws on relevant HR concepts and academic literature to support arguments And Provides examples from work/other experiences to illustrate the points made Clear structure – 10% There is a clear structure to the response (e.g., all information relevant to one response is provided before moving to the next question) References – 10% References provided as required (see the Course Outline for details related to minimum requirements) Reference style – 10% Uses appropriate referencing style (i.e., Harvard-UniSA) in-text and reference list Overall Summary Comment Grade Notation Notational % Grade description Assignment grade High Distinction HD 85–100 Outstanding performance on all learning outcomes. Distinction D 75–84 Excellent performance on all learning outcomes. Credit C 65–74 High performance on all learning outcomes, OR excellent performance on the majority of learning outcomes. Pass Level 1 P1 55–64 Satisfactory performance on all learning outcomes, OR high performance on some learning outcomes which compensates for unsatisfactory performance on others, resulting in overall satisfactory performance. Pass Level 2 P2 50–54 Satisfactory performance on the majority of learning outcomes. Fail Level 1 F1 40–49 Unsatisfactory performance on a number of learning outcomes, OR failure to meet specified assessment requirements. Fail Level 2 F2 below 40 Unsatisfactory performance on the majority of learning outcomes. During the course you will be given access to a case study. You are required to review the case and respond to the questions included in the case. You are expected to demonstrate an in-depth understanding of relevant HRM concepts in your response. In order to develop student knowledge and skills, this course employs a ‘fourfold’ approach to learning: concrete situations, reflection, analysis and action. The aim of this assessment is to help you develop your critical thinking skills. Case study analysis provides you the opportunity to enhance your understanding of HRM concepts by applying them to realistic contexts. Assignment objectives: · Demonstrate knowledge of the variety of techniques available to HR practitioners in carrying out operational HRM activities · Identify appropriate techniques for use in specific operational HRM situations Page 1 of 7 Case study written by S Perera Winning the European Market: Strategic Change at Arup Packaging Limited Arup Packaging Limited is a large manufacturer of packaging solutions. Arup’s products include glass, aluminium, plastic and paper based packaging solutions. Arup mainly operates in Australia and comprises of four business units. The business units are organised based on the material used in packaging solutions: glass packaging, aluminium packaging, plastic packaging and paper packaging. Arup is an unlisted public company; this means it is a company that has issued shares to the public but is not listed on the Australian Securities Exchange. In 2016, Arup celebrated 50 years. The company employs around 800 people across its four manufacturing plants, distribution centres, sales offices and corporate office. The sales offices and distribution centres are located in Sydney, Melbourne, Brisbane and Perth. Arup recently opened a sales office in Paris. The four manufacturing plants and the corporate office are all located in close proximity to each other in Newcastle in New South Wales (NSW). Newcastle is located in the Hunter region of NSW, about 160 kilometres north of Sydney. Arup is proud to be one the few manufacturers that continues to exclusively manufacture in Australia. Arup believes that its investments in advanced technology have resulted in consistently high quality packaging solutions. The management team and the Board of Directors see product quality as Arup’s competitive advantage, insulating it against competition from cheaper production options overseas. Arup’s core values are teamwork, integrity, excellence and innovation. Out of Arup’s 800 employees, about 700 are located in its manufacturing plants and corporate office in Newcastle. Manufacturing employees are represented by the Australian Manufacturing Workers' Union. This union has generally had a harmonious relationship with Arup management. Since it started as a plant with just 100 employees, Arup has been a strong part of the Newcastle community. It is one of the largest employers in the region and continues to attract local employees. Since its inception, Arup has concentrated on high quality packaging produced in large quantities. Arup’s customers are some of the largest food and beverage manufacturers in Australia. Arup has found that these customers have stable product lines and their packaging solution requirements remain mostly stable. Often the biggest changes requested by these customers are modification to existing packaging (e.g., larger size aluminium can, different coloured beverage bottle). Only needing to make minor product changes has meant Arup has been able to maintain high levels of productivity. While orders from these customers initially grew rapidly, in the last 5 years the growth has plateaued. In response, Arup’s Board of Directors initiated a strategic review and a risk analysis of Arup in 2015. After this exercise, the Board of Directors and the top management team identified their dependence on a few large customers in Australia as a significant risk to Arup’s future. The Board members and the top management team decided to look at expanding Arup’s customer base while maintaining the company’s existing clients. In 2015, Annie Lee, CEO since 1999, retired and Franco Weller joined as the new CEO of Arup. Franco was given a mandate to take the expansion initiative forward. The Board of Directors encouraged the hiring of a senior manager to handle strategy and business development. This position reports directly to the CEO. Brenda Petersen started as Head of Strategy and Business Development in April 2016. Page 2 of 7 Case study written by S Perera Since joining Arup, Brenda has been working tirelessly to attract new customers outside Australia. Brenda’s most promising leads have come from Europe. Most potential clients were impressed by Arup’s high quality products. After months of hard work, Brenda has been able to secure packaging orders from a group of clients in France and Belgium. Orders will start in September 2017. Brenda is confident that this is the beginning of a new market for Arup’s products. At Arup’s Board meeting in February 2017, the CEO, Franco Weller, reported these new developments to the Board of Directors. The Chairman and the Board were pleased with this outcome and asked the top management team to develop plans as to how this initiative will be taken forward. The top management team (see figure 1 below) met early this week to discuss the implications of these new customers to Arup’s business strategy. At the management meeting, Brenda presented the new strategic initiative. She emphasised the following factors in relation to the new customers: • The new customers require mostly paper and plastic packaging products at this stage. • Unlike the customers in Australia, these European organisations are medium sized and offer a wide variety of products. This means the orders for packaging products are likely to be smaller and more varied. • These customers usually change their packaging designs at least once a year, so stable product designs that Arup is used to will need to change. • The European customers are offering a higher price than Australian customers. Even when freight costs are taken into consideration, Arup’s profit margins are likely to be higher from these European customers compared to those in Australia. Brenda ended her presentation, emphasising that it was critical to ensure that the first orders in September 2017 are completed on time and to high standards. She said that the first orders should be seen as a first step towards attracting more orders and potentially more European companies willing to buy Arup’s products. The following is a transcript of the conversation that took place after Brenda’s presentation. Franco: I agree with Brenda. We need make sure that those first orders are perfect. In my discussions with the Board of Directors, I requested permission to recruit a General Manager to be in charge of these European customers. This manager will report directly to me and will work closely with Brenda. The Board approved it. Franco showed the proposed organisational chart (see figure 2) to the top management team. Jeremy: This might look like we are just adding another manager to the top management team (refers to the proposed organisational chart), but this is a more significant change. For the last 50 years, we have worked with large organisations, our orders are large and design changes are very minor. Do you think we have the capability to handle the design requirements of these customers from Europe? Franco: I agree that expanding our customer base into Europe is a significant strategic change for us. But it reduces our reliance on a few customers in this region. To answer your question, I don’t think we have the design capability at the moment. We need to develop that quickly in order to get to production in September. Page 3 of 7 Case study written by S Perera Gabrielle: From an HR perspective, this is a huge change. Our employees and managers are used to working on large orders and long production cycles. We have always praised and rewarded productivity. This kind of change requires a complete mindset transformation. Basically we need to rethink how we approach work. Brenda: Yes, but it will make us a more versatile producer of packaging solutions. Remember, innovation is one of our core values, but our innovations have been small and incremental. It is time we really lived that value. Jose: You know that we are all committed to the expansion strategy. It is just that this is all happening quite fast and we don’t have a lot of time to get our act together. I suggest that we work in smaller groups to work out what this means for each of our functions. That way we can have a more concrete discussion when we