INTERNATIONAL HRM
Case Assignment
This case examines the roles, perspectives and strategies for staffing unit leadership talent in an organization that is examining an international expansion. It also examines cross-cultural preparation and experience of managers in the firm.
Note: This is a fictitious case. Any resemblance to any actual organization or individual is purely coincidental.
CALIDAD COCHES: MOVING AHEAD
As the chair of the board for Calidad Coches brought the gavel down, Adelia Adolfo was struck by the excitement of the decision just made. As she looked about the table to the rest of her executive team, who were all looking toward her with smiles beaming, she knew it was a moment to celebrate their hard work, a major company milestone and her first major achievement as President and CEO for Calidad Coches. They would have that well-earned celebration.
However, the enormity of the task was not lost on President Adolfo. Making the decision to take the company international would be easy compared to the task of being successful in that endeavor. While she was familiar with international operations from her previous experience as VP of operations for a regional hotel chain, she knew her team was not. She could rely on the 30-year history of her company in the car rental business but would need to augment this industry experience with international expertise to inform a cross-border expansion of company operations.
And she would need to move fast! The board had just approved her recommendation to acquire Belizean Auto Rentals in a timely leveraged buy-out. Getting up to speed with operations and generating positive cash flow would be critical to maintaining the company’s financial stability. President Adolfo knew that not all members of the board welcomed being put in this vulnerable position.
Company Background
Calidad Coches, Inc. (Quality Cars) operates 14 car rental sites throughout the Yucatan Peninsula of Mexico. Juan Carlos Mendez, a local political leader and businessman, started the company in 1981 and sold it in 1996 to an investment group. Holdings included an inventory of 58 vehicles, company operations and valuable rental sites located in tourist centers. The growth of his entrepreneurial venture coincided with a coordinated move by the federal government of Mexico and regional governments within the Yucatan to establish a tourist destination. Infrastructure was developed to draw tourists toward the pristine beaches of the Gulf of Mexico as well as the nearby historical ruins of Mayan civilization – a match perfect for a car rental business where road travel between sites is required.
Since the sale, Calidad has expanded along with tourism throughout the region under the leadership of two different CEOs. Until 2005, Mendez’s successor was aggressive with expansion, sometimes at the detriment of company financial stability, establishing a corporate headquarters, adding five sites (some owned and some rented property), creating a call center nurturing repeat business and growing the fleet to 180 vehicles. However, he had difficult relations with the board due to poor cash flow planning. The next CEO halted expansion and restored fiscal stability during his short tenure, regaining trust of the board but losing faith with his staff before having to step aside. A fiscally driven hard-nose, he did not recognize human capital value or the subsequent impact that lack of appreciation would have on customer relations and sales.
Calidad’s current CEO, Adelia Adolfo, was brought onboard in 2007 to move the company to its next level of operation. She formerly served as a vice president of operations for a mid-size hotel chain operating in Mexico and is quite familiar with the tourism industry generally. Since joining Calidad, she has successfully added another four rental sites to the 10 she inherited and increased Calidad’s brand recognition and profit margin through a strategy-driven, team-based corporate culture focused on quality customer service. Adolfo enjoys the support of her executive team and was featured on the June 2010 cover of the Yucatan’s leading tourism industry publication, Yucatan Today. She spent much of her article interview lauding the accomplishments of her leadership team with statements like, “No one of us can create the success that together we generate every day. That’s the secret of Calidad, a unified focus on quality customer service – while cars are what we rent, our customers return because of experiences with our people.” Calidad enjoys a high rate of repeat rentals and referrals now, key benchmarks in the industry.
Last month Adolfo announced her decision to take the company international with the purchase of a car rental agency operating in the neighboring country of Belize. Belize, like the Yucatan, is rich with great beach recreation and Mayan history but currently lacks the recognition enjoyed by the Yucatan from U.S. travelers, a primary market. Belizean Auto Rentals (BAR) operates seven properties with a similar market focus and placement as Calidad. It seemed a well matched acquisition for Calidad and may position the company for entry into the steadily growing Belizean travel market.
Adolfo’s announcement of the BAR acquisition foreshadowed her long-term vision. When making the announcement of the acquisition she was clear on her intent for Calidad to become a regional player in the car rental business. “Expanding our service area is not only a strategic move for Calidad, it is what our clients demand,” Adolfo stated, “and with more service territory we can offer our clients the exceptional service they’ve come to expect, a frequent user program to retain their business and a market position to increase our bargain power with respect to growing our fleet.” While Adolfo did not specify future acquisition or expansion targets, she has directed her leadership team to include the potential for growth in the Central American and Caribbean regions in their strategic planning process.
The Situation
Following the board meeting, you have been contracted by Adolfo’s office to provide tactical direction and support for this initial international move for blending the cultures and company practices of the acquired Belizean company. Adolfo knows that success for the long-range vision for the company is contingent on success with this initial venture. A lot is at stake! Moreover, investors are watching this move closely since they are concerned with maintenance of Calidad’s brand value and financial stability. Adolfo also understands that an international expansion is not simply replicating current operations in a new country; international expansion involves careful planning and appropriate investment, but she is not quite clear on how to balance the demands of a differing national and cultural setting with the preservation of organizational values and practices. Fortunately, this is the expertise of your firm!
First Task
Calidad’s expansion into Belize has excited the site management team, especially with the recognition that Adolfo has built considerable good will and trust through promotional opportunities and careful succession planning. Site managers oversee operations at various Calidad locations where customers pick-up and return vehicles. Because of advancement opportunities, a majority of the site managers indicate a desire to play a role in the international expansion, but all confess to knowing little about the diverse cultures and languages of Belize. Adolfo has a short turn-around period of four weeks for the management staffing, rebranding and operational retooling of the former BAR sites before the tourist season kicks into high gear. Further, it is critical that a positive cash flow is generated quickly to offset the debt service on the newly acquired fleet. She wants Calidad to be ready with a management presence in Belize soon!
Based on what you know at this point, you are being asked to recommend a strategy for filling the Belize site management positions with internal employees now working in Mexico (parent country nationals). As company loyalty at BAR was not high and the impending sale of the company was leaked well in advance, over 75% of the staff and five site managers left for employment elsewhere. The remaining two managers desired to leave but were simply unable to secure other employment.
Given the need to act quickly to fill the seven positions, the recruitment and selection of candidates has been outsourced by Calidad to your firm.
First — Prepare a one-page recruiting advertisement for the site manager position that echoes the company ethos and reflects the main and location specific tasks, duties and responsibilities (TDRs) as well as the knowledge skills and abilities (KSAs) for the job. Your advertisement should be constructed so that it can be sent to current managers at the varying sites through email distribution.
Second—Assume your advertisement was effective and generated 10 current site managers at Calidad submitting letters of interest for the 7 vacancies. [The two current Belize managers are among the 10 applicants submitting interest.] The Calidad management team knows the five candidates from Mexico quite well but it is important to Adolfo that the process be viewed as fair and objective so that rejected candidates maintain a commitment to the company. Design a selection process through which all 10 candidates are to be considered for placement at the Belizean sites. While Calidad has no constraints on selection costs other than they be reasonable, time remains a key issue so the selection time frame is kept to a minimum when bringing managers in from varying sites.
President Adolfo reminds you that people have always been the key to her organization, for which linking of the human capital contributions to firm success is very much a part of the organizational culture she cultivates. On this she makes clear there can be no mistake; she expects excellence from you.
Bring in at least 5 library sources to help strengthen and support your discussion.
Submit your paper by the Module due date. Paper length: 4-5 pages, not counting the cover and reference pages.
Assignment Expectations
Your paper should demonstrate critical thinking and analysis of the relevant issues and HRM actions, drawing upon all of the required background readings and relevant sources from your prior courses and your own TUI library search. Use website information sparingly (reputable websites only).
Prepare a paper that is professionally presented (including a cover page, a “List of References,” and a strong introduction and conclusion).
Proofread your paper carefully for grammar, spelling and word-usage errors.
Address all aspects of the assignment as stated.
Provide private-sector employer examples of HRM programs, systems, processes and/or procedures as you address the above assignment requirements. Provide names of the employers. Use different employer examples in your case paper than those used in your SLP paper.
Limit your web search and focus instead on your library search. Bring in information from the background readings as well to help add depth and validity to your discussion.
Give authors credit for their work. Cite sources of borrowed information in the body of your paper as footnotes, numbered end notes or APA style of referencing.
For instruction on writing papers, citing sources, proper referencing, and so forth, check Trident’s Student Guide to Writing a High-Quality Academic Paper.
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