ASMUNTI LTD’S DILEMMA

THE FINNISH CASE STUDY BY KTUAS AND NKUAS

Luciana Ribeiro, Delphine Sabatier, Loïc Santini, Rafaela Leguíssimo, Samira Taybi, Kalle Heikkinen, Kim Satokangas, Ferran Martí, Linda Krievane, Marja Pajari.

CONTENTSIntroduction to the case study

I. Region point of view

II. Family point of view

III. Firm point of viewa) Human resources aspectb) Work health and securityc) BSCd) Lean management

Conclusion

INTRODUCTION• ASMUNTI LTD’S, LOCATED IN TORNIO (FINLAND)

• OWNED BY A FAMILY (FAMILY BUSINESS)

• 200 EMPLOYEES.

• LOSS OF COMPETITIVENESS (2 YEARS OF LOSSES)• CHINESE PRODUCTS COMPETENCE• DOWNFALL OF PRODUCTIVITY (5% IN 2 YEARS)

EMPLOYEES SITUATION• AVERAGE AGE: 41

• 25% BETWEEN 48 AND 62

• ON AVERAGE, 25 SICK DAYS A YEAR

• DEMOTIVATION (30%)

• ALCOHOLISM AND SMOKING PROBLEMS:• HIGH BLOOD PRESSURE• HEART PROBLEMS

OPTIONS FOR THE COMPANY

• SELLING THE COMPANY TO A CHINESE FIRM FOR 3 MILLION €

• CHANGE THE PRODUCTION TOTALLY: COOPERATION WITH A LATVIAN INVENTOR

• KEEP THE COMPANY AND DEVELOP IT

DIFFERENT POINTS OF VIEW• REGION

• FAMILY OWNER OF THE COMPANY

• FIRM

REGION POINT OF VIEW

SEA LAPLAND REGION

• The total population is 65176

• The total area is 6426,13 km2

• Population density is 10,14 people/km2.

DEVELOPING THE COMPANY IN TORNIO

• Potential new workplaces and investments for the area:• Chance of attracting more people to live in the area

• Increase in tax income

• More activities

SELLING OR CLOSING DOWN• Dramatic increase in unemployment• Total loss of around 800 workplaces

• Fall in the prices of property

• Huge loss of tax income

• Losing potential investments in the area

FAMILY POINT OF VIEW

POINT OF VIEW OF THE OWNER FAMILY

Selling to a Chinese firm:• 3 million €• Maybe they can live by this income for the rest of their life• If the company has debts after selling, they will receive less than 3 million • The end of family business

Cooperate with the Latvian inventor:• They lose 10% of the ownership of the company• Company changes their product portfolio totally• Owners should spend a lot of money for changing equipment and

retraining workers• Company can win a lot of money but the risk of failure is big because of

the new products which they would start to produce

POINT OF VIEW OF THE OWNER FAMILY

Keep the company and develop it:

• They continue the family business• Company has to do lots of developments and changes into

their production• They have the possibility to increase profits but they have also

the risk that company keeps on going down and making bigger losses

• Family companies have different values than other type of companies and they want to keep their ownership of the company more often

FIRM POINT OF VIEW

HUMAN RESOURCES ASPECTSSelling the company solution

- +Mass redundancy Cheaper labour force

Severance pay Training programImportant lost

Cooperation with Latvia solution- +

Readjust working conditions / time New equipments and machines Financial help

Has to recruit new workers / plan staff

New shareholder / strategic changesDevelop a new and efficient internal

communication

Keeping and developing the company solution- +

Cost of the reinforcing of the corporate culture Keep the company's identity

A need of money SubsidiesRecruitment cost Create employment

Promote training Readjust working conditions / time

WORK HEALTH AND SECURITY

The interventions are:

• Promote medical consultancy;• Help the employees about alcohol and smoking problems;• Promote physical exercises;• Give information about healthier food;• Control employees blood pressure, blood glucose, cholesterol and

weight;• Support and help the employees to solve their problems:• Teach ergonomic positions in working.

The human health is a very important issue in everybody´s lives. If we have many diseases and we’re not fit, we can not enjoy life fully.

BALANCED SCORECARD

Lean thinking, a management philosophy

• Lean thinking focuses eliminating 7 wastes

• Unprofitable functions, for ex. inventories

Customer satisfaction, better quality, lower costs, better production flow

• JIT, Just In Time

• Right amount, right time, right place, good quality

Tool for quality management

Enterprice Resource Planning (ERP)

• Information system

• Integrates different functions: production, warehouse management, billing• designed to improve business efficiency both functionally

and economically

• All data in the same database when the real-time data sharing between the different functions is easy.

• Enables the entire enterprise to improve its operations instead of optimizing only departmental activities

CONCLUSIONS• OUR ADVICE: KEEPING THE COMPANY• KEEPING MEANS MAINTAINING THE FAMILY BUSINESS

• ACTIONS NEED TO BE TAKEN IN THE COMPANY:• NEW MANAGERIAL SYSTEM: MOTIVATION, CORPORATE CULTURE• IMPROVE THE EMPLOYEES HEALTH• ROTATION OF THE WORK

• TAKING INTO ACCOUNT THE OLDER EMPLOYEES

• HUGE BENEFITS FOR THE REGION• EMPLOYMENT CREATED• INCREASE IN INCOME TAXES

• = CORPORATE SOCIAL RESPONSIBILITY

-THE END-