Case study: ‘No Name' Aircraft

CEO Adam O'Meara of ‘No Name' Aircraft has become increasingly concerned about organisational profits. He's worried that a company takeover is imminent. O'Meara realises he needs to maximise shareholders' return on investment and obtain a high share price or this international company may be at risk and, of course, this means his job could well be on the line. ‘No Name' operates out of Australia and has subsidiaries in three countries - China, Singapore and Vietnam. ‘No Name' build and sell aircraft to 50 countries around the world. Numerous parts of the aircraft are produced in China and Vietnam and most of the design engineers operate out of Singapore. Aircraft are assembled in Singapore and also Australia.

Culture
‘No Name' home country (Australian) teams are not working well and there is a communication breakdown between integrated teams and across teams and management. The culture at ‘No Name' has developed into one that is very negative and workers have adopted the mantra ‘near enough is good enough'. Staff give the impression they would resist any attempt to make change. This kind of culture extends to communications between Headquarters and the subsidiaries.

One of the home country management teams has identified quality as one of the major problems at ‘No Name' and this is directly related to parts from China and Vietnam. Aircraft require small to large modifications even after they have been delivered to customers. Customers, both government and non-government, are complaining about the lack of quality, once very important to ‘No Name'. A number of stakeholders have sent O'Meara letters warning that unless quality is improved within six months, they will withhold partial payments and some are quoting percentages - certain customers say they will withhold 100 per cent and others are quoting 50 per cent.

One supervisor at ‘No Name' is responsible for a sub-design team of 9 people, another is responsible for 11 people who are the wire harness assembly team, and another team of 6 sets the harnesses in place in the aircraft. These are just three of over 50 teams that make up the assembly of an aircraft. There is no integration across the teams. Ben Brown, a member of the wire harness assembly team, notes ‘.....the other teams make it really difficult for us to complete our job. We all get in each other's way. There's a lot of resentment'.

The teams work to specifications for their area only, and working relationships within and across teams are suffering. The communications both laterally and horizontally are compromised and staff members are complaining about not receiving adequate instructions. Adam O'Meara is worried so he has called upon an internal group of executives to advise him.
Line managers in Australia are responsible for communications between Headquarters and the subsidiaries. However, O'Meara is constantly receiving emails from China, Singapore and Vietnam seeking clarification on numerous points.

Diversity management
Diversity management at ‘No Name' is confined to a simple policy that says everyone in the organisation needs to be respectful of race, age, ethnicity, gender, sexual orientation, physical abilities, religious beliefs and other philosophies.

There are issues at ‘No Name' related to embracing the rich value of working with diverse people. Firstly, at headquarters there is an intolerance towards working with employees from different generations. Senior staff are intolerant of working with apprentices and working relationships are strained. Secondly, there is a lack of recruitment of people with disabilities in China. Managers are actively ignoring job applications of people with disabilities, even when their skills are above and beyond other candidates. O'Meara fears repercussions of this recruitment discrimination in the form of legal action from rejected candidates with a disability.

Human Resources (HR) does not have a clear set of practices to help employees understand each other. Clearly, the interactions amongst staff are influenced by the perceptions of each other but HR does not appear to have considered the importance of how people perceive each other. At ‘No Name', employees need to better understand each other, to have effective communication and to value the diversity that exists throughout the company.

Diversity needs to provide practices that involve an appreciation of other cultures and ways of knowing more about people within headquarters, each subsidiary and across the subsidiaries. Practices have to ensure there is no organisational discrimination so that people can work together in harmony. ‘No Name' needs to realise that managing diversity can create a competitive advantage and be of benefit to a number of different areas of the organisation.

International performance management
There are numerous performance management issues across ‘No Name'. International performance is closely connected to international performance appraisals but these are lacking at ‘No Name'. Performance reviews are conducted by HR in Australia but there are no performance reviews conducted at any of the subsidiaries. There is no formal performance appraisal process for expatriates.

Headquarters takes a very ad hoc approach and does not take into consideration the economic factors that impact on business targets. One manager, Frank Collins was heard to say ‘we are under so much pressure in Australia because of high costs and even higher expectations'.

At headquarters decisions are made that affect each of the subsidiaries. For instance, headquarters will issue a decision and make an order for Singapore to produce a certain quota of parts only to find out there is a surplus of the same parts in Australia. Clearly, the implementation of decisions for the subsidiaries result in conflicting performance outcomes.

Fundamentally, there is no policy that underpins performance management at ‘No Name'. There are no clear measures. O'Meara told the HR Manager ‘It's time we had better performance measures.....we need to measure to manage. Someone will need to travel to China, Singapore and Vietnam and make sure we have consistency.....of course, we need to take into consideration culture and local practices'.

Training and development
As a function of HR, training and development should be concerned with every aspect of the organisation's activities. Expatriate training for those leaving Australia to work in China, Singapore or Vietnam is limited to half a day. HR refers staff to their online resources and assumes that every person has the same needs when they agree to work in another country.

There are no feedback avenues for employees to comment on the effectiveness of the expatriate training.

One employee, a mechanical engineer Alice Morgan, previously commented about her move to Singapore ‘there is no training available to help you integrate into your new surroundings once you arrive. People do things differently here and it took me a long time to get used to with no training'

The level of performance at ‘No Name' indicates there's a very strong rationale for focusing more on training and development across the organisation.

There is no systematic workforce planning and management development programs at ‘No Name'. Management development programs within an organisation work to internally identify and recruit potential managers, and develop their knowledge and skills through career development plans to meet organisational needs. This ensures a clear and effective succession plan for all key management roles. Employees are unaware of their career prospects with the company as career development plans are not utilised. Senior management do not develop junior employees to take over their role for fear of being sidelined for promotion. This lack of professional development has meant that a number of key employees earmarked for promotion have been poached by other companies.

Instructions for Assessment

Carefully read the case study for No Name aircraft.

Using the information provided in the case study as an example, summarise the critical theories and concepts of Organisational HRM. You need to analysis and critically evaluate the literature on all four of the areas covered:
- Diversity management;
- Culture;
- International Performance Management; and
- Training and Development.
Set out your essay using the following structure, using sub-headings as required:

1. Introduction

2. Organisational HRM, Diversity Management and Culture

3. International Performance Management, Training and Development

4. Conclusion and Recommendation(s) or Solution(s)

5. Research and Referencing
Make sure you write your essay using third-person language, and support your essay with a minimum of 25 contemporary (ie. beyond 2007) refereed journal articles - do not cite web pages.
All sections will be included in calculating the final mark.

Read through the marking criteria (assessment rubric) carefully before starting your essay.