A Case Analysis on “GM and the UAW: A One-Sided Negotiation?”

SYNTHESIS:

The world’s largest and most profitable auto manufacturer, General Motors (GM), is puttering in the slow lane after dominating the automobile industry for 30 years from 1947-1977. Worst, it is rumored to be heading to bankruptcy due not only on for its staggering one billion dollar sales lost during its first quarter after the stock market crashed on October 1987, but more so, for its ever-increasing always improving benefit packages it granted for its employees, its employees’ families and its retired workers. Added to these are the above-the-industry-average regular wages guaranteed even economic hardships and the worker’s efficiency rewards.

The competition from both the domestic and foreign manufacturers is getting tougher, dividing the market into many pieces of share. Unfortunately, as the competition rises, a large number of workers are retiring, increasing the number of retirees GM needs to support with the younger workers it now employs. The situation is, the sales and the market share plummet while the cost of benefit packages and regular salaries continuously increase, leaving GM with enormous liabilities for the years ahead. GM had negotiated itself into stranglehold, indeed, with the United Auto Worker (UAW), the union that had squeezed so much sweeteners from them. GM now needs to know how to re-bargain itself to appropriately balance company’s profitability and employee’s welfare. Otherwise, it may not exist further to provide the benefits it promised.

POINT OF VIEWS:

This paper will be taken under the keen eye of the current CEO of General Motors.

STATEMENT OF THE PROBLEM:

What could General Motors have done in the negotiation process with the UAW that could have prevented the financial crisis?

OBJECTIVES:

  • To determine if GM and UAW have engaged in distributive or integrative bargaining
  • To determine the power UAW hold over GM in the negotiation process
  • To determine courses of action that would appropriately balance employee’s welfare and company’s profitability

AREAS OF CONSIDERATION:

Assumptions

  • Sloan was not able to properly forecast the cumulative impact it had negotiated with UAW, and also did not foresee the power of the foreign entrants; GM felt all invisible and mighty
  • Non-diminution law, which states that “any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or eliminated by theemployer,” is applied by GM, and the UAW took advantage of it.

Frameworks

Definition and types of Power (p485-487, Robbins & Judge)

  • Power refers to a capacity that A has to influence the behavior of B so that B acts in accordance to A’s wishes

Types of Power

  • Formal Power is based on an individual’s position in an organization.
  • Personal Power is power that comes from an individual’s unique characteristics.

Definition and types of Organizational Politics (p495, Robbins & Judge)

  • Political behavior in organizations are activities that are not required as part of a person’s formal role in the organization but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization

Types of political behavior

  • Legitimate political behavior > normal everyday politics
  • Illegitimate political behavior > extreme political behavior that violates the implied rules of the game

Definition and types of conflict (p521, Robbins & Judge)

  • Conflict is a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about

Types of Conflict

  • Functional conflict > conflict that supports the goals of the group and improves its performance
  • Dysfunctional conflict > conflict that hinders group performance
  • Task conflict > conflict over content and goals of work

Definition of the processes of conflict management (chapter 15, Robbins & Judge)

  • Conflict process has five stages: potential opposition or incompatibility, cognition and personalization, intentions, behavior, and outcomes.

Definition of third party negotiation (Robbins & Judge)

  • An arbitrator performs a function similar to a judge or court, such as holding hearings, evaluating the submissions and evidence of the parties, and making a binding decision resolving matters in dispute between the parties

Definition of Negotiation or Bargaining (p529, Robbins & Judge)

  • Negotiation is a process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them

Types of Bargaining

  • Distributive bargaining – negotiation that seeks to divide up a fixed amount of resources; a win/lose situation
  • Integrative bargaining – negotiation that seeks one or more settlements that can create a win/win solution

Analysis

We can generalize based on the frameworks and definitions that the situation happening between GM & UAW union is a distributive type of bargaining since, in terms of hindsight, GM is in the losing side of the win/lose situation with UAW due to the high costs of benefits and the above-the-industry-average regular salaries GM still provides even in their poorest of times. One of the reasons is the organizational politics that UAW has managed to acquire through the personal powers of its union executives over the employees and union members.

As such, given the power and political capability of the union, the UAW has created a functional conflict, which has supported the union’s goal for better employee treatment and compensation but not necessarily for the benefit of the company as a whole in the long-run. Within these negotiations, the power and politics that UAW has acquired managed to lead them to settle a distributive bargaining with GM, leading to the extension of benefits to the retirees and the employees’ families. Another is the political power UAW holds is the closing of a plant where it is no longer under GM’s discretion but of the approval of the UAW. Another is the 95% pay provided to the workers even if there is no production at a plant, even though worker’s pay in the GM is already 60% higher that the industry average.

ALTERNATIVE COURSES OF ACTIONS:

ACA # 1 – shift the bargaining process from distributive to integrative (compromise) by adapting a third party negotiation between GM & the union

PROS:            an arbiter will give unbiased and objective decisions in terms of benefits and compensations & the benefits, and compensations can be accounted by GM in the budget plan in the future for planning purposes and will create a win/win situation

CONS:            the third party may not have the full knowledge or information on the situation inside the working environment of the employees, and the negotiation process may take longer than usual negotiations

ACA # 2 – when GM performance (ie: revenues) goes down, the benefit also goes down; when GM performance goes up, the benefit also goes up.

PROS:            both GM and union of employees will have an equal and distributive justice in terms of performance and benefits and given time and situation.

CONS:            union of employees has no means in checking the true output of GM if it really goes up or down; and will be requiring a third party to decide. Another, there are laws that states that benefits of employees can’t be reduced or decreased from previous years or period.

ACA # 3 – change the period of terms of the contract from 10 years to 3-5 years

PROS:            the shorter period of terms of contract will make GM and the union to adapt and negotiate to relevant issues and grievances

CONS:            the 10 years terms of contract have been used for sometime already and will have to adjust the entire negotiation systems in term of objectives and recommendation. In addition, both parties should approve the change of period terms of contract, if not, a third party must arbitrate in order to define the new period of terms of contract

RECOMMENDATION:

The group recommends (ACA 1) that management shift their bargaining process from distributive to integrative by adapting a third party negotiation between GM and the union. The current approach that the company is utilizing is the distributive method wherein the motivation is more of a win-lose situation. One party is more likely to gain than the other. In this case the one who is in the losing end is the GM Company given the present situation that it is in now.

In shifting the approach to the integrative method it could provide for a win-win situation where both parties (the management and the union) would be able to come up with other creative options that present to be a win/ win situation for both of them. Moreover this is ideal for building long term relationships because it lessens animosities and cultivates openness among the bargaining groups.

If all else fails the bargaining parties can reach a compromise. When the parties settle for a compromise they might not get everything they demand or want but both will get enough of what they need. In this case both parties can be candid about their demands and needs. For example GM could state that they can no longer afford all the benefits that the UAW demands given the current financial situation they are in. They may ask UAW which of the benefits they find most pressing or important and offer to provide those with the elimination of other less valuable ones. In this way GM gets to unburden itself with obligations it cannot afford and the UAW still get to enjoy the benefits they deserve.

ACTION PLAN:

The Negotiation

 

  1. Preparation and planning

After gathering information of the conflict,  use it to develop a strategy. As part of the strategy, CEO should determine GM and UAW’s Best alternative to a Negotiated Agreement (BATNA).

  1. Definition of ground rules

Once planning is done and we have developed a strategy, CEO is now ready to define the ground rules and procedures with AUW.

  1. Clarification and justification

This is the point at which GM and AUW provide documentation the helps support their position. Each party will explain, amplify, clarify, bolster, and justify original demands. It is an opportunity to educate and to inform each other on issues, why they are important, and how each arrived at their intial demands.

  1. Bargaining and Problem Solving

The essence of the negotiation process is the actual give-and-take in trying to hash out an aggreement. It is here where consessions will undoubtedly need to be made by both parties

  1. Closure and Implementation

The final step in the negotiation process is formalizing the agreement that has been worked out and developing any procedures that are necessary for implementation and monitoring.

In GM’s case, an abritator should be a third party andbe present at the negotiation. Abritration is a quasi-judicial process in which a disinteresed third –party hears evidence presented by both the union and the employer on issues in dispute, and hands down a binding decision.

LEARNING POINTS:

Going back to the Corporate’s Social Responibilities, an organization has a responsibility towards itself, its employees, and the society (Abela), as employees, too, have a responsibility towards themselves, their families and the organization they are working with (Zigarelli). And so, working to achieve an appropriate balance between the company’s profitability and the employee’s welfare must be a shared obligation between the company and the employees as they are partners working under the same goals – the company’s vision and mission.

Thinking differently and prioritizing one’s personal objective over the entire organizational goals would lead to a win/lose situation just like the one-sided negotiation between the General Motors and the United Auto Workers. As such, the win/lose situation threatens not just GM, but in the long run the UAW members as well. For the lost of GM would surely affect its employees and its retirees down to its employees’ families.

Fortunately, there is now a win/win option for both parties. No one party really has to be sacrificed in order to achieve a gain. With proper preparation and planning and honestly laying down rules and facts, both parties (the company and the employees) can be educated and informed on what really matters most to them and perceive and understand each others positions. In the end, the company and the employees will be in sync working again under the same obligations and goals although each works under different objectives. The core lesson is that neither the company nor the employees can exist without taking into consideration the importance of each other.

REFERENCES:

Organizational Behavior Book

Robbins/Judge, ESSENTIALS OF ORGANIZATIONAL BEHAVIOR, 13e, (Prentice-Hall, 2009)

Abela, A. V. Profit and More: Catholic Social Teaching and the Purpose of the Firm. In J. o. Ethics. Springer Science and Business Media B.V.

Zigarelli, M. A. Catholic Social Teaching and the Employment Relationship: A Model for Managing HUman Resources in Accordance with Vatican Doctrine. In Journal of Business Ethics. Springer Science and Business Media B.V.

A Case Analysis on “Apple’s Beethoven”

SYNTHESIS:

Steve Jobs is the cofounder and chief executive officer of Apple Computer. Apple Computer was considered a trail blazer in the computer industry during the early 1980’s however it also suffered a rough patch from 1986 to the late 1990’s losing sales and market share to big companies such as IBM and Microsoft during the sales decline Steve Jobs was forced out of Apple. One of the reasons for Apple Computer weakening of sales during the said period is its lack of innovation with regard to its software and hardware technology. To answer this Apple took several moves the first was to buy the computer company Next, which was coincidentally run by Steve Jobs at that time paving the way for Job’s return to the forefront of Apple. Next step that Apple took was to focus on hardware to entice the consumers and buy itself time to work on a software that could compete with the ones that are making it big in the market.

Jobs partnered with Bill Gates who agreed to supply Apple Computers with Microsoft Office and Internet Explorer programs. This risk was well taken as it lessened the competitive tension between Apple and Microsoft. Jobs encouraged his managers to explore their innovative thinking which led to the conception of the iMac in 1998. This line stood out from the rest of the computers because of its quirky styling however issues about compatibility of programs still remained. During this time Apple developed a new operating system MAC OS X that was comparable if not better in several respects to Windows OS. From here on Apple has been in the front of innovation, creating video editing programs and perhaps one of its greatest advancements the creation of the iPod. The iPod has been a huge success and has been especially popular to music lovers the world over. Apple has managed to see a big thing before it happens and capitalize on that with innovation and continuous focus on its consumers.

POINT OF VIEW:

This paper will be taken under the keen eye of the current CEO of Apple through Steve Jobs.

STATEMENT OF THE PROBLEM:

Guided by the synthesis above, this paper answers the question: What could Steve Jobs do in order to ensure that Apple continues to be innovative and market competitive?

OBJECTIVES:

  • To determine which component model of creativity does Jobs seem to posses in the highest degree
  • To determine what type of leadership style Steve Jobs is categorized
  • To determine the development stages Apple has gone through in order to innovate
  • To determine what type of organization Apple’s structure belong to

AREAS OF CONSIDERATION:

Assumptions

  • To take the stand point in year 2003 where Apple is successful in introducing the iPod and iTunes in the market

 

Frameworks & Analysis

 

Three components of creativity

The proposition that individual creativity requires expertise, creative-thinking skills and intrinsic task motivation

Expertise is the foundation for all creative work. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies, and similar expertise in their field of endeavor. Management guru Jim Collins calls Steve Jobs the “Beethoven of business,” Wall Street loves him, and Bill Gates was once his nemesis.

Creative-thinking skills encompass personality characteristics associated with creativity, the ability to use analogies, as well as the talent to see the familiar in a different light. The effective use of analogies allows decision makers to apply an idea from one context to another. Some people have developed their creative skills because they are able to see problems in a new way. Apple has suffered in losing sales and market share to big companies such as IBM and Microsoft. Steve Jobs, in characteristic fashion has once again cornered a market, with big musical power-called the iPod.

Intrinsic task motivation is the desire to work on something because it’s interesting involving, exciting, satisfying, or personally challenging. This motivation component is what turns creativity potential into actual creative ideas. It determines the extent to which individuals fully engage their expertise and creative skills. Steve Jobs love to work, to the point he is seemingly obsessed. Jobs began making moves that at first seemed risky but in the end paid off. One of the first things he did was to partner with his former rival, Bill Gates.

Leadership Style

 

We say Steve Jobs is a charismatic Leader. His vision provides a sense of continuity for followers by linking the present with a better future for the organization. At Apple, Steve Jobs championed the iPod, noting, ‘It’s as Apple as anything Apple has ever done.” The creation of the iPod achieved Apple’s goal of offering groundbreaking and easy-to-use-technology. Apple’s strategy was to create a product that had a user-friendly interface where songs could be quickly uploaded and easily organized. It was the first major-market device to link data storage capabilities with music downloading.

 

Forces of Change

 

Technology is changing jobs and organizations. For instance, computers are now commonplace in almost every organization. Computer networks are also reshaping entire industries. The music business, as a case in point, is now struggling to cope with economic consequences of widespread online music sharing.

 

Lewin’s three step models

 

Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the status quo, movement to a desired end state, and refreezing the new change to make it permanent.

The status quo can be considered to be an equilibrium state. To move from this equilibrium—to overcome the pressures of both individual resistance and group conformity—unfreezing is necessary. It can achieve in one of the three ways. The driving forces, which direct behavior away from the status quo, can be increased. The restraining forces, which can hinder movement from the existing equilibrium, can be decreased. A third alternative is to combine the first two approaches. Companies that have been successful in the past are likely to encounter restraining forces because people question the need for change. Similarly, research shows that companies with strong cultures excel at incremental change but are overcome by restraining forces against radical change.

In the case presented, iPod is in its growing stage, since the iPod and iTunes have just been introduced to the market and are having a huge reactions and appreciation. Part of these Growth Stage and large amount of sales is the Honeymoon Period of the product. The product is selling not only because as a totally new product but also as a curiosity reaction of the market to the new product. And in reaction to the good reviews and recommendations in the market, more products are being sold.

Learning Organization

 

Apple is a learning organization; it is an organization that has developed the continuous capacity to adapt and change. Just as individuals learn, so too the organizations. “All organizations learn, whether they consciously choose to or not—it is a fundamental requirement for their sustained existence.

Learning organization use single-loop learning when errors are detected, the correction process relies on past routines and present policies. In contrast, they use double-loop learning when an error is detected; it’s corrected in ways that involve the modification. When error is detected, it’s corrected in ways that involve the modification of the organization’s objectives, policies, and standard routines. Double-loop learning challenges deeply rooted assumptions and norms within an organization. In this way, it provides opportunities for radically different solutions to problems and dramatic jumps in improvement.

Proponents of the learning organization envision it as a remedy for three fundamental problems inherent in traditional organization.

  1. Fragmentation based on specialization creates “walls” and “chimneys” that separate different functions into independent and often warring fiefdoms.
  2. Overemphasis on competition often undermines collaboration
  3. Reactiveness misdirects management’s attention to problem solving rather than creation.

ALTERNATIVE COURSES OF ACTIONS:

 

ACA # 1 – cultivate the internet music by iTunes and strengthen the iPod product

 

PROS

·         They have the first-mover advantage

And will have a good share of loyal consumer because of this.

·         They currently have a strong market share so it would be good to maintain that

CONS

·         There is a threat of new comers to the market

·          Computer technology degrades rapidly.

ACA # 2 – continue to be innovative and dwell on new market and products

 

PROS

·         This would bring about product development & diversification

·         Will keep the market interested with new technology, options and innovations

·         Possibility to capture new market and earn more profit

·         It would encourage employees to be innovative and creative

CONS

·         Risky on capital investments especially if new ventures do not work out.

·         They might neglect the current product that is bring the company a lot of profit

·         Apple’s resistance to change

RECOMMENDATION:

The group recommends ACA 2. Apple should continue to be innovative and dwell on new market and products. Since Apple is engaged in a very competitive market, it should separate itself from other competitors by continuing to be innovative. It should always be at the top of the competition by introducing ideas and products, which would at least meet the customers’ expectations.

In line with innovation, Apple should introduce more products, which are user friendly in order to attract the market. By doing so, Apple can separate itself from the competition and could attract young and old persons who are having difficulties in operating a computer or gadget.

Moreover, Apple should create product line extensions to capture new markets and take advantage of its established brand. Creating these product line extensions would lead to an improved product variety and a possible increase in profits, thereby, diminishing the competition.

 

ACTION PLAN:

The recommended ACA for Apple is to continue to be innovative. However, Apple has to change constantly in order to be innovative. Kotter’s eight-step plan for implementing change can be used as a guideline in order for Apple to be effective and efficient in its innovative crusade.

  1. Establish a sense of urgency by creating reason for why change is needed.
  2. Form a coalition with enough power to lead the change.
  3. Create a new vision to direct the change and strategies for achieving the vision.
  4. Communicate the vision throughout the organization.
  5. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving.
  6. Plan for, create, and reward short-term “wins” that move the organization toward the new vision.
  7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs.
  8. Reinforce the change by demonstrating the relationship between new behaviors and organizational success.

In addition, the success of the change is dependent on the effective leadership style of the management (as needed in steps1-5) of Apple, in which Steve Jobs proved to be. His return to Apple after the decline of the computer products and introduction of iPod and iTunes are facts and results of his effective leadership in changing Apple as an innovative organization.

LEARNING POINTS:

Nothing is permanent, nothing is constant except change. Apple needs to change in order to survive; it needs to continuously innovate and to seek for further improvement to adapt to the rapidly growing environment. To successful do so, it needs to first, realized that there is always a need to change, a room for improvements from their daily processing or transaction with both their internal and external suppliers up to their organizational structure. Second, that a strategic planning is in order to cope up with change, and to do so they need to consider all the employees and systems that will be involved – How to make its people accept change? How to make its people cope up with change? What systems would be drastically affected? And to what extent should they change to meet their short- and long- term goals.

Changes in the organizational structure, in the technology, and in the people are interconnected, as technology and people build the organizational structure and vice versa. Management should therefore not be contented once their goals have been meet. Management should always search for new aims, new visions to make the organization stronger and more flexible. As Adam Smith shares, “It is not the strongest who survives but those who can adapt to changes”.

REFERENCES:

 

Organizational Behavior Book

Robbins/Judge, ESSENTIALS OF ORGANIZATIONAL BEHAVIOR, 13e, (Prentice-Hall, 2009)

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Honda Cars Philippines, Inc. – Blue Skies for Our Children : An Advocacy Plan

In Partial Fulfillment Of the Course Requirements In Strategic Human Resource Management (HRM603M)

Blue Skies for Our Children

Background

Honda Cars Philippines, Inc. (HCPI) is registered under Securities and Exchange Commission (SEC) as an automotive manufacturer that assembles and imports cars since October 1990. HCPI’s assembly plant & Spare Parts Warehouse is located in Laguna Technopark, Sta.Rosa, Laguna. In addition, the main office of operations is also located in the vicinity of Sta Rosa, Laguna residing with the assembly plant. (Our Company: INVESTOR INFORMATION, 2012).

Currently, HCPI employees are called “Associates”, and around 700 Associates (Our Company: INVESTOR INFORMATION, 2012) are employed as regular employees all throughout the company. The branding of employees to Associates ensures that HCPI employees adhere to the Company principle of producing and giving quality products and services for good quality customer satisfaction.

Corporate Vision & Mission

The vision and mission of HCPI are encompassed thru the Fundamental Beliefs and the Company Principle, in which are called the Honda Philosophy. (Honda Philosophy, 2012) as shown in Figure 1: Honda Philosophy. The Fundamental Beliefs focuses on; (1) Respect for the Individual, and; (2) The Three Joys: Joy of Buying, Joy of Selling, and Joy of Creating. In addition to the Fundamental Beliefs, HCPI also follows the Company Principle; “Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality yet at a reasonable price for worldwide customer satisfaction”, as shown in Figure 2: Details of Honda Philosophy.

Environmental Vision

On the 20th year of operation in the Philippines in October 2012, HCPI strengthens its commitment to it environmental vision of realizing “the joy of freedom and mobility” and “a sustainable society where people can enjoy life”. The mission is to minimize the use of fossil fuels and environmental impacts like greenhouse gases through the products made by Honda (Honda Environment, 2012).

HCPI advocates that through its international research and development (R&D), HCPI offers automobiles with engines that are inspired by the environmental vision which consumes less fuel and produces minimal greenhouse emissions. These engines are called i-VTEC engines which are also classified as Euro 4 level. Whereas currently, the Philippines are only regulating a minimum of Euro 2 level engines to be sold in the local market (Honda Environment, 2012).

In the Philippines, HCPI launches its advocacy campaign that is in line with the Environmental Vision. The campaign is called, “Blue Skies for Our Children” (Honda Environment, 2012). Through this campaign, HCPI is promoting that by buying a Honda, each car owner is already contributing to the benefit of our future generations to have clean air to breathe.

This campaign, HCPI as a corporation, is being ethical in taking care of the wellness not only of its employees and customers but also of its stakeholders, as mentioned in Business Code of Ethics (Aquino, October 23, 1979). In addition, HCPI is aligned with the Catholic Social Teachings (Abela, 2001), that the purpose of the firm is not only for its shareholders but also for its stakeholders that are directly and indirectly being affected by HCPI as a corporation, which is clearly shown in Figure 3: Honda’s Direction.

The “Blue Skies for Our Children” is the main campaign of HCPI in the Philippines as its local corporation. Simultaneously, HCPI created a supporting campaign along with tie-ups and incorporation with other corporation and local offices, the “1’M Blue”. The “1’M Blue” campaign have an initial goal of committing one million eco-safe drivers in achieving the mission of Blue Skies for Our Children (Honda Environment, 2012).

The 1’M Blue campaign promotes that purchasing is Honda is only the first step in making sure that the future generations have clean air to breathe. HCPI proposes that the car owners themselves must further contribute by consciously using and driving the cars properly through the recommended driving and maintenance habits.

However, as Figure 4: Facebook page of 1’M Blue, there are only up to date 943 likes for the local campaign which was only launched last October 2012. This number signifies that the campaign is not fully being shared to Honda owners and other drivers despite the continuous updates in the said social network webpage.

Mission & Goals

Given that the campaign is not effectively being communicated well enough to the people or let alone to the Honda owners that owns and drives a Honda car, HCPI will have to plan and implement a more aggressive approach in informing and convincing people to join HCPI ‘s advocacy. In addition, The social network page is not enough as a medium in informing people. HCPI must use other sources of marketing medium in order to reach the people.

Implementation Plan
Supporting Advocacy Campaign

In support to the Blue Skies campaign of HCPI, a new parallel campaign will be implemented along with 1’M Blue campaign. HCPI will implement a charity tie-up campaign, the same concept used by Innocent drink company in Europe that promotes for every Innocent drink bottle with a knitted cap sold, the company will allot an amount to be donated to the charity that made the small knotted caps (Brown & Grayson, 2008).

The campaign that HCPI to implement will be that for every individual Honda Car sold, HCPI will dedicate an amount to buy a seedling tree to be donated and planted in La Mesa watershed. In addition, the tree will be named after the owner and the owner will have a certificate along with the car warranty booklet when the car is received by the new Honda owner. This campaign will be the first to the automotive market and being the first car maker in the Philippines to directly set aside a part of profits for the environment.

The seedling trees will be planted by HCPI associates every quarter of the year at La Mesa Watershed. A picture of the tree being planted will be sent to the owners as a reminder and thank you card for supporting HCPI’s advocacy campaigns. The customers will have a sense of achievements for choosing and buying a Honda car. This campaign will be a direct approach to Honda customers. In addition, the thank you card and the picture can be a tangible tool for an effective word of mouth promotion.

Supporting Promotional Activities

Supporting promotional activities will be executed in order to ensure sustainability of the campaign.

An annual campaign ad will be executed as a thank you to Honda owners within the year, to show the appreciation in supporting HCPI’s campaign and for purchasing the Honda products. These advertisement material will be distributed along above the line media; TV, Newspaper, Radio, Magazines, Billboards and others. This promotion activity will reach other Honda car owners and other brand car owners in informing them of the proactive campaign of HCPI.

For existing Honda car owners, a supporting campaign will be introduced. For every two succeeding preventive maintenance check-up or change-oil within the same year, HCPI and the servicing Dealer will allocate an amount for a seedling tree to be donated and planted in La Mesa watershed. Since, a Honda owner is recommended to service their car for maintenance check-up every six months or 10,000km traveled, whichever comes first.

Bibliography

Abela, A. V. (2001). Profit and More: Catholic Social Teaching and the Purpose of the Firm. Journal of Business Ethics , 31: 107-116.

Aquino. (October 23, 1979). A Code of Ethis for Business. In B.-B. C. Development.

Honda Environment. (2012). Retrieved December 5, 2012, from Honda Cars Philippines: http://www.hondaphil.com/ver2/blueskies.php?id=0

Honda Philosophy. (2012). Retrieved July 17, 2012, from Honda Worldwide: http://world.honda.com/profile/philosophy/

Our Company: INVESTOR INFORMATION. (2012). Retrieved July 17, 2012, from Honda Cars Philippines: http://www.hondaphil.com/ver2/ourcompany.php

The Definitive Guide to Recruiting in Good Times and Bad : An Article Critique and Review

In Partial Fulfillment Of the Course Requirements In Strategic Human Resource Management (HRM603M)

Summary, Critique and Opinion

The article (Fernandez-Araoz, Groysberg, & Nohria, May 2009) realizes the importance of an effective and structured hiring process of a company which can be advantageous to times of great opportunity like a recession. As observed that upon the turn of recession, there is a huge amount of potential and talented workforce that are looking for jobs. It is to the advantage of a company to filter and get the right employee that will be effective and can contribute to the realization of the goals of the company. In addition, the Article realizes the potential of recession in providing a large pool of manpower. As per Business Code of Ethics (Aquino, October 23, 1979), a company must provide an equal opportunity to applicants.

It is consistent that the recommendations of the Article highly focuses only on hiring top-executive or high ranking positions in a company because of the results of their research. The research focuses solely on 50 global companies by interviewing their CEOs and their respective HR managers. In addition, the research has surveyed executive-search consultants. From this, a majority of these CEOs does not follow a form of standard in terms of hiring a top executive position. But rather, these CEOs rely solely on their personal feel and preferences. These results can signify that HR is not effective in creating a hiring process and guidelines for the company, which could lead to a waste of time, resources and opportunity of the company. However, these can also signify that the CEO is also at fault for not realizing the needed improvement in the hiring process and for the deficiency of leading HR properly in creating a standard hiring process.

The Article, in turn has recommended a structured seven steps in hiring and keeping a top-executive position for the company.

The first step is by anticipating the need of manpower which should also be forecasted along with the projection and goal setting of the company. This step, gives HR management a huge responsibility in supporting and accomplishing the goal of the company, as in the concept of Value Chain (Robbins & Judge, 2009). In addition, HR can create strategies and properly schedule the career and skill development of the current and soon to be employees in the future. Given that the company will have an insight of the needed resources in hiring and keeping employees, HR must ensure that the future employees will perform effectively and efficiently. Hence, the first step is justifying the need for a proper hiring process of a company.

The second step is by specifying the job not only to specific job descriptions and specific skills, the job specification must also consider the management style needed in handling the current teams. In addition, the second step is considering the effect of the company culture to the job specification. By considering other factors in specifying the job, HR will hire an adaptive and job fit employees in the future. This step helps HR management in saving the company and not waste additional resources and time in training just in order for the new employees to be fit in the job and company.

The third step is by developing a pool of recommended candidates hence the company must have a diverse sources of manpower for recommendation. This step helps HR to save time in terms of looking for a set of candidates. The diverse source may come from recommendations of peers and/or employees that are a highly reliable source of nominations. Since the behavior and skill of a candidate can be confirmed easily by peers. In addition, HR can have a faster hiring process since HR can skip the background check of a candidate, saving time and resources of the company. This practice is currently being done by HR of Honda Cars Philippines, Inc.

The fourth step is by assessing the candidates properly in terms of a standard probing and questioning practices. It is highly recommended in the Article that in an interview, the best result can be gathered by asking behavioral event scenarios which will give the true personality of the candidates. Another method is by keeping a special set of interviewers that will ensure and recommend a quality set of candidates. Lastly, the involvement of stakeholders in the assessment process can eliminate the bias in every interview session. This fourth step also contributes to the company by savings in terms of additional meeting time for deliberations and recommendations. However, the company must invest in resources and especially in time in order to have the necessary capable interviewers. Hence, the full implementation of the entire Article recommendations and steps will only be ready for deployment or implementation once there are available and trained interviewers. In addition, this entire article will not be readily effective and implementable unless this fourth step is already being practiced by a Company.

The fifth step is by closing the deal to candidates while the hiring manager is present in the actual transaction and negotiation. The presence of the hiring manager gives an opportunity to further know the candidate while the step also helps the HR in terms of saving time for transition and adapting period of the new employee with the immediate superior. In addition, describing not only the opportunities of the job position but also the challenges that awaits in the company will give the candidate a set of expectations, directions and an insight of the culture of the Company. This step also makes a final screening process for the job fit of the candidate to the Company. Lastly, the Article is practicing the recommended Catholic Social Teachings (Zigarelli, 1993) by recommending the compensations being offered to the candidate be fair to other employees or the same set of compensations to the same position employees.

The sixth step is by integrating the newcomer in terms of assigning a mentor to the newcomer in order to ensure the tenure and effectively contribute to the company’s goals. The mentor will help speed up the transition process of the newcomer to the job position but also to the culture of the Company.

However, an observation to the Article is that the recommended hiring process is only applicable or biased toward large corporations and are not applicable to small or growing successful company. These bias can be clearly seen on Step4, 5 and 6 which describes that a set of top ranking officials be involved in the hiring process and transition process. These requirements can only be achieved by having a large pool of tenure employees which is likely the case in small and growing successful company. It is a fact that tenure officers have experience and knowledge of the processes in the Company. However, these tenure officers can back fire the hiring process by being threatened of their position and acquired power (Robbins & Judge, 2009). Hence, these challenges must be recognized by the HR management and make the necessary programs in order to prevent these possible scenarios.

Lastly, the seventh step is by auditing and reviewing the performance of the new hired employees. These performances can be measured and monitored by HR management by creating a control system and strategy against the job descriptions and targeted goals of the newcomer. It is recommended that a bad performing newcomer must be relieved within the first year and the recruiting process be reviewed and updated regularly in order to save the company from wasting time, resources and opportunities in the future.

The Article, however, fails to realize and mention the importance of Leadership as one of the traits needed in hiring a top-executive. As mentioned in an Organizational Behavior (Robbins & Judge, 2009), a leadership skill can be natural to an individual or can be learned through experiences. If a Company fails to measure the leadership skill of a candidate, the whole recommended hiring process can be compromised due to the required additional skills that need to be taught to the newcomer.

Aside to the equal opportunity that the Company must provide to applicants (Aquino, October 23, 1979), the Article recommends that it is better to hire top-executives than hire potential applicants which can be trained to be leaders and top-executives (Robbins & Judge, 2009). The Company can hire more employees rather than one top-executive compared to the opportunity of hiring two or more applicants of the same salary amount combined which in turn could deliver or contribute twice or more. This way, the Company can be an ethical Company that gives more individuals the opportunity to perform their right to work as mentioned in Catholic Social Teachings (Abela, 2001).

The recommended seven steps in hiring, guides the HR management of the Company to realize the importance of having a structured and standard hiring process in order to achieve the goals of the Company and support the company in terms of saving time, resources and opportunities in the future. These factors could and should have been realized by CEOs in order to help HR in structuring a standard hiring process.

Bibliography

Abela, A. V. (2001). Profit and More: Catholic Social Teaching and the Purpose of the Firm. Journal of Business Ethics , 31: 107-116.

Aquino. (October 23, 1979). A Code of Ethis for Business. In B.-B. C. Development.

Fernandez-Araoz, C., Groysberg, B., & Nohria, N. (May 2009). The Definitive Guide to
Recruiting in Good Times and bad. Harvard Business Review , 74-84.

Render, B., Stair, R. J., & Hanna, M. E. (2009). Quantitative Analysis for Management (Tenth ed.). New Jersey: Pearson Education Inc.

Robbins, & Judge. (2009). Essentials of Organizational Behaviour (13th ed.). Prentice-Hall.

Zigarelli, M. A. (1993). Catholic Social Teaching and the Employment Relationship: A Model for Managing Human Resources in Accordance with Vatican Doctrine. Journal of Business Ethics , 12: 75-82.

Hiring K-12 Graduates in 2018 in the Philippines

An original written work of Engr. Marvin T. Martinez
A DLSU – MBA student
In Partial Fulfillment Of the Course Requirements In Strategic Human Resource Management (HRM603M)

Back then in 2005 after I graduated from College and soon after I passed the board exam of PRC (Professional Regulation Commission), I was already 24 years old. I was no longer a student and I was then part of the new batch of working class, eager to practice what I have learned for the past rigorous six years of college. However, reality retaliates hard enough to shake every new graduate off their feet and give each and everyone a culture shock, as if it was an initiation in entering real life. That reality is the scarce availability of work that is available to everyone and every job interview is a battle field in which one must always have the best foot forward. Using everything relevant and irrelevant such as seminars attended, research projects, thesis reports, extracurricular activities, affiliated organizations and down to the college or university alma mater.

By the start of school year this June 2012, K-12 was implemented in the entire Philippines as the new education system. The K-12 program is different to the past education system by the additional of two more years before graduating. The main purpose of the K-12 program is to prepare the graduates for “tertiary education, middle-level skills development, employment, and entrepreneurship”; as mentioned in the webpage of the Official Gazette. In addition, the first batch of K-12 graduates are expected to join the working class by the year 2018. Simultaneously, the graduates and professionals of vocational schools, colleges and universities that will be part of the working class. All of these graduates will be ambitious in looking for work and jobs that will fit their knowledge and capabilities.

In 2018, whatever the state of economy of the country, companies and corporations will be needing fresh manpower for replacement or expansion of their operations. These companies and corporations will interview a set of applicants that are new graduates but of different age group, a wide gap of four years; 18 years old and around 22 years old for K-12 graduates and college graduates, respectively. As stated in the book, A Code of Ethics for Business by Aquino in 1979, a company must give an equal opportunity to all applicants of a specific work or job classification. By this guideline, the challenge that HR of companies and corporations of today must face in the coming of 2018 is how to create a hiring system for new applicants that will include the new batch of K-12 graduates.

Currently, companies handles new entries to the working class as applicants that all have undergone a tertiary training or education from a different school, college or universities. This need for a tertiary education is due to the current education system that have a gap of two years before reaching the working age of 18 years old. However, with the new K-12 program, 18 years old graduates are already allowed by the Philippine constitution to have a job and requires the companies to accept and give jobs to these new graduates that does not have any tertiary training or education. In addition, as stated in the Journal Article: Profit and More by Andrew Abela in 2001, the Catholic Social Teachings requires that the company must provide jobs in order for an individual to fulfill its right to work, for work is a right and a requirement in life fulfillment and achievement. Hence, it is the responsibility of a company to hire the K-12 graduates even not as required by the law but as a tool in achieving the right of an individual to work.

This new dilemma of hiring graduates with or without tertiary program must be recognized now by the HR management of companies and corporations. They have ample time to prepare and plan a new hiring system and guidelines for the new batch of K-12 graduates. The HR management must then make projections of the necessary or required manpower for the upcoming 2018 along with the necessary specialized trainings needed for hiring of K-12 graduates. The teams or group the new hires will be joining must also be considered and projected in order to assume the probable organization behavior and countermeasures in the company, as mentioned in the book by Judge Robbins about the Essentials of Organizational Behavior in 2009.

Upon reviewing the probable case scenarios of K-12 graduates and given the new dilemma and challenges that companies may face, a good HR management is needed in order to prevent any problems that may arise in the hiring process and organizational behavior of the company in 2018.

The link below is the published material in Business World Nespaper last December 27, 2012.
Business World – Dec 27, 2012

It’s More FUN in the Philippines : Philippines’ Tourism Campaign

an interesting tourism campaign of the Philippines

Case Analysis: RALEIGH & ROSSE: Measures to Motivate Exceptional Service

A Case analysis on Raleigh & Roose case with a good friend Jewel Kristian Taino of De La Salle University taking MBA.

Background and facts:

Raleigh and Rosse (R&R) is a luxury goods brand that started in New York since 1903. R&R have a total of 38 retailers internationally as of 2007. R&R is also known for its good customer service and customer relations; this is mainly due to its corporate “ownership culture” which started in R&R in 1992-1994. In relation, R&R employees are well of compared to the industry standards.
However, economic downturn has hit R&R hard compared to other brands by 2008. One major cause is the lawsuits lost by R&R to past employees and also the investigations and settlement done by state labor department due to its practices.

Also in 2007, Linda Watkins was hired as CEO and as one of the first officer in R&R that is not family related. R&R currently have a lawsuit due to its performance management system, the Sales per Hour (SPH).

Case Problem:
What can Watkins do to the current performance management system as part of the corporate culture, in order to prevent another lawsuit and recover from the current economic downturn?

Facts & Considerations:
• R&R Ownership Culture
The Ownership Culture is the core culture and success of R&R to its famed customer service where the employees especially the sales person are given accountability to its customers.

• The Sales per Hour (SPH) Program
The SPH is the main driving force of the Ownership Culture where incentive programs are part of its reward system.

Alternative Courses of Actions:

Alternative 1: Status Quo or Continue with the Current HRM Process
Watkins will continue with its current process, culture and performance management system.
Pros:
 R&R will maintain its harmonious operations and will recover once the recession is over.

Cons:
 The current system may once again produce lawsuits towards the company
 Elicited behavior might impact the company negatively amongst its employees

Alternative 2: Improve the SPH program as per state laws
Watkins will improve the current SPH program as per minimum requirement of the state law.
Pros:
 Watkins will prevent future lawsuits related to the SPH program
 The overall behavior will shift to a healthy competition rather than “sharking”

Cons:
 The company will still be affected by the current economic downturn and loose more profit.

Alternative 3: Change the current performance management system
Watkins will change the SPH and create a new performance management system like the balanced scorecard and other evaluation programs.
Pros:
 Watkins will prevent future lawsuits related to the SPH program.
 Watkins will help the company from further losses and cope with the current economic downturn.

Cons:
 Watkins will encounter huge resistance within the company since the SPH is a time tested program.

Recommendations:
Based on the presented data, Alternative 2: Improve the SPH program as per state laws is being recommended. The way it creates impact to the company’s revenue and corporate image is significant and has the potential to be improved. HR and management should focus on how to execute or implement it in such a way it will not create averse or wrong behavior. Like for instance, the SPH is a metrics-driven program which drives the employees to focus on the job by providing a good customer service which leads to sales. However, this just needs to be designed in such a way that certain behaviors are anchored such as passion, accountability and discipline. The program can include “peer evaluation” which apart from hitting the numbers, there will be a peer evaluation or recommendation (which of course must be supported by documentation) that will be included.

Learning:
The group realizes the importance of an effective performance management system in maintaining a corporate culture. The SPH is a form of controlling concept in term s of Management Principles. The controlling concept ensures that the company is in line with the company’s goals and target. In addition, controlling concepts acts as sensor is the company s deviating from its original goals.