'Study Case\r'

'CHAPTER 2I HUI4AN imaginativeness MANAGEMENT 903 Case Office Equipment Company (OEC) managing theater director (a U. S. national) of the attitude Equipment Company (oEc) in Lima, Peru (see Map 2l . l), inform suddenly that he would leave within whizz month. The company had to find a supersedement. OEC manufactures a wide-cut variety of sm completely mogul 1997, the managing ln equipment ( much(prenominal) as copy machines, recording machines, mail scales, and paper shredders) in eighter from Decatur different countries and distri providedes and sells products worldwide. lt has no manufacturing facilities in Peru further has been selling and servicing there since the proterozoic 1970s.OEC first move selling in Peru through independent importers but quickly became convinced that in order to bring forth sufficient gross revenue it needed to have its receive staffthere. Despite Perus political turmoil, which at times has touch on being a full-scale accomplished war, O ECS operation there (with about 100 employees) has enjoyed close and improving sales and profitability. OEC is constructing its first factory in Peru that is scheduled to begin operations in early 1999. This factory will import components for personal computing device printers and assemble them locally.Peru offers an abundant supply of cheap labor, and the manufacture oPeration will employ approximately one hundred fifty people. The government will allow up to I0 take time off of the output to be sold locally. By tack locally and then exporting, oEC expects to be able to ward off trade restrictions on the other office equipment it imports for sale within Peru. This plant! construction is being supervised by a U. S. rechnical ream, and a U. S. expel will be assigned to direct the production. This director will report directly to OECs U. S. eadquarters on all production and quality-control matrers but will rePort to the managing director in Peru on all other matters, such as accounting, finance, and labor relations. OEC, by policy, will replace the exiting managing director with an internal shadowerdidate. The company employs a crew of home-, host-, and third-country nationals in top military postures in foreign countries, and managers commonly rotate among foreign and U. S. locations. ln fact, it has been increasingly evident to OEC that foreign experience is an important factor in decision making who will be appointed to top incorporate positions.The sales and service facility in Peru reports to a Latin the Statesn regional office locate in Coral Gables, Florida. A committee at this office, wake upd with selecting the new-sprung(prenominal) managing direc- tor, quickly narrowed its filling to quintette scenes. Tom A thirty-year OEC veteran, Zimmerman is well poetise in all the technical and sales aspects compulsory in the job. He has never imparted abroad for OEC but has visited various of the companys foreign facilities as part of sal es teams. He is consid- Zimmerman ered competent and will retire in about quaternity and a half years.Neither he nor his wife let looses Spanish. Their children are gr admit and living with their own children in the United States. Zimmerman currently is in charge of an operation that is aboutthe size of that in Peru after the new factory begins operating. However, Zimmermans subject position will run low redundant because the operation he heads is being merged with another. Brett Harrison Harrison, 40, has spent fifteen years at OEC. Considered extremely compehas tent and capable of moving into upper-level perplexity within the next few years, he 904 stir up 7 FUNCTIONAL I. ANAGEI1 ENT, OPERATIONS. AND CONCERNS PERU Population 22. 3 one million million Monetary unit New sol major languages Span ish Quech ua Aymara Largest city Lima Major industrial areas Arequipa Chimbote Cuzco lquitos Lima Talara Map 2l. l Peru never been found abroad but has worked for the last three y ears in the Latin American regional office and frequently travels to Latin America. Both he and his wife speak Spanish adequately, and their two children, ages I 4 and I 5, are just beginning to see the His wife holds a responsible marketing position with a pharmaceuticals company.Carolyn language. Moyer Moyer joined OEC twelve years ago after getting her MBA from a pres- tigious university. 4t37, she has already go between staffand line positions of growing responsibility. For two years, she was hour in command of a product classify that was aboutthe size of the newly expanded one in Peru. Her performance in that. postwas considered excellent. Currently, she works on a planning staffteam. When she joined OEC, she indicated her interest in ultimate transnational responsibilities because of her undergraduate major in global affairs.She has recently expressed interest in international duties because of a belief it will help her advancement. She speaks Spanish well and is unmar ried. Francisco Cabrera Cabrera, 35, currently is an assistant managing director in the larger Mexican operation, which produces and sells for the Mexican market. A Mexican cit- for OEC in Mexico for all his twelve years with the company. He holds an MBA from a Mexican university and is considered to be a plausibly prospect to head the Mexican operation when the endow managing diiector retires in seven years. He is married with four children (ages 2 to 7) and speaks English adequately.His wife does not work izen, he has worked outside the home or speak English. CHAPTER 2I HUMAN RESOURCE MANAGEMENT 905 Juan Moreno At27, Moreno is assistant to the present managing director in Peru. He has held that position since connexion OEC upon his U. S. college graduation four years ago. Unmarried, he is considered competent, specially in employee relations, but lacking in experience. He had been successful in increasing OECs sales, in part because he is well connected with local families wh o can afford to buy new office equipment for their businesses. Questions l.Which candidate should ihe committee choose for the assignment, and whyl 2. What problems might each candidate encounter in the position? 3. 4. How might OEC go about minimizing the problems that each candidate would have in managing the Peruvian operations? Calculate an estimated compensation big money for each candidate based on the hobby additional inf6rmation: Present annual salaries: Zimmerman, U5$70,000; Harrison, US$75,000; Moyer, US$65,000; Cabrera, M$ I 24,000; Moreno, 557,000 a Exchange rank: $ I: M$3. 1 (Mexican pesos);$ I: S 1. 9 (Peruvian new sols) o f income for a family of one, 40 pct for a family of two, 45 percentage for a family of four, and 50 percent for a family of five or more: Washington, D. C. : 100; Lima : 86;Mexico City :77 U. S. Department, of State foreign-service premiums for Peru: hardship : l5 percent; danger: l5 percent U. S. Department of State cost-of-living indicant ba sed on items covering 35 percent a a o Schooling earnings: age 6-12 : US$5000;age 3-18 : US$9000 second-rate tax rates: Mexico : 20 percenq United States : 25 percent; Peru : I Housing allowance (nontaxable): bingle : US$ 12,100;family : US$ 15,000 0 percent Chapter Notes l. The entropy for the case were taken from Edwin McDowell, â€Å"Making lt in America: The Foreign-Born Executive,” New York Times, June I, 1980, Section 3, p. l+; fall apart Whitehead, The Dow Story (New York McGraw-Hill, I968); â€Å"Lundeen Urges More Aid for Universities,” Chemrcal Marlceting Reporter, Yol. 224, No. 19, November 7, 1983, p. 3+;Paul L. Blocklyn, â€Å"Developing the lnternational Executive,” Personnel, Vol. 66, March 1989, pp. September 14,1992, p. 5; â€Å"Popoffon Challenges for Dow and for the lndusvy| Chemical Wee( May 18, 1994, pp. 26-28; and Susan J.Sinsworth, â€Å"lssues Management ls Central to candid Popoffs Globalization Strategy,” Chemlcol Engineer ing News, Vol. 72, No. 21, May 23, 1994, pp. 25â€29. 2. Gary R. Oddou and Mark E. Mendenhall, â€Å"Succession Planning for the 2 l st Cen- European Management lournol, Yol. I 4, No. 4, alarming 1996, pp. 365-373. 4. â€Å"Globesmanship,” crossways the Board, Yol. 27, Nos. l, 2, January-February 1990, p. 26, quoting Michael Angus. 5. Daniel Ondrack, â€Å"lnternational Transfers of Managers in North American and European MNEs,” Journol of lnternailonol personal credit line Studies, Vol. 16, No. 3, Fall 1985, pp. l-19;andJohn M.Hannon, lngChung Huang, and Bih-Shiaw Jaw, â€Å"lnternational Human election Strategy and Its Determinants: The Case of Subsidiaries in Taiwan,”Journal of lnternotionol condescension Studies, Vol. 26, No. 3, Third Quarter 1995, pp. 53 l-554. 4447; â€Å"Globesmanship,” Across the Boor4 Vol. 27, Nos. l,2,January-February 1990, pp. 24-34;William Storck, â€Å"Dow Chemical Changes Executive Lineup,” Chemical ond Engine ering News, tury: How headspring Are We Grooming Our Future Business Leadersl” Business Horizons, January-February I 99 I, pp. 26-34. 3. Gordon Petrash, â€Å"Dows Journey to a association Value Management Culture,”\r\n'