HANOVER PUBLIC SYSTEMHortense Papot

Cécile Bouffier

Summary

1. Overview

2. Existing situation

3. Statement of problem

4. Solutions

Overview• Hanover began to lose money in 1998. • Several plants.• Here, the Taiwan plant headed by James Fukuda.

Overview : the exhibits

1. The background : chronicle of the company since the establishment in 1960s to 1998 with the Taipei report which the arrival of Fukuda, the new president.

2. A dialogue between Howard Wolff, the president oh HPS and Fukuda, the president of HPS Taiwan for talk about the current problem.

3. 3 exhibits : - Letter from Mr. Lo to Wolf- The present and the proposed organization- Balance sheet of the company- Number of sales

Overview : present situation

President

James Fukuda

Vice president of operations

T. Hu

Superintendant of manufacturing

H. Lee

Executive director (Marketing)

H. Tsao

Executive director ( Finance)

C. Lo

Overview : proposed situation

President

James FukudaVice-president of

operations

Superintendant of manufacturing

Executive director

(purchasing)

Executive director

(marketing)

Excutive director (personel)

Executive director

(finance)

Existing situation : Fukuda

Fukuda’s profile:

  38 years old Japanese- American, youngest president of

Hanover. Considered as a brilliant engineer Formerly vice-president of the Oakland plant:

reorganized the management, result : phenomenal growth.

Existing situation : Fukuda

Fukuda’s actions:

  Before arriving in Taiwan : cessation of some assets and

inventory to offset the liabilities.

One week after arriving : shut down the heating and cooling equipment manufacturing

After one month : Set up a new management organization

Existing situation : reorganization plan

Strengths Weaknesses

Consolidation of sales in one division

Immediately cost-effective Does not take into account specialized knowledge of sales force impact on the reputation and sales

No designation of anyone for any position

Will know people better to be able to put in this or that position

Anxiety among the staff.

No consultation of the middle-managers

One of the main problems of this plant is its organisation. Could be logical not to ask their opinions to the managers who worked under this wrong organisation.

Considered as a lack of regard for them, who have a better knowledge than him on how to do business in China and so could have been very useful.

Existing situation : financial situation Strengths Weaknesses

Good financial performance of the other eight foreign subsidiaries and four large domestic plants.

Possibility of financing the investments of the Taiwan one

Heating and cooling systems not profitable.

Competition: artificial low prices from the competitors.

Annual growth negative but at least increasing.

Taiwan plant losing money since 1996.

Existing situtation : management

Strengths Weaknesses

James Fukuda was formerly vice president at the Oakland plant, his managerial reorganization resulted in a phenomenal growth.

James Fukuda shut down the heating and cooling equipment manufacturing even if the all-Taiwanese staff was against it. (lake of communication, does not really listen to opinions form the staff)

Management reorganization considered as too fast, too radical and unwise by the managers of the plant.

Existing situation : intercultural

Strengths Weaknesses

James Fukuda seen by the middle management as an outsider and in addition he’s American-Japanese and the relationship between Japanese people and Taiwanese people is complicated.

Existing situation : personnel

Strengths Weaknesses

James Fukuda considered as a brilliant engineer by the HPS head office.

Tensed relationship between the staff and James Fukuda after the layoff of 18 workers and the resignation of 12 others.

Loss of the vice-president for operations and the plant superintendent, able and expert managers (resigned).

Statement of problem

HPS need sweeping changes to restore the financial soundness but the president

is faced to a crisis of the staff’s trust. Indeed, Fukuda took 3 main decisions that

are not really accepted.

Solutions

1 - Not to change anything

Keep the changes already done by James Fukuda.

Strengths Weaknesses

As James Fukuda said to Mr Wolff, employee’s attitudes could change

once benefits increase.

Possible very bad reaction of employees in the long-term: rebellion

(resignations), demotivation.

Less money spent immediately so better liability.

Degradation of the reputation of the company because of less skilled

employees for every different product.

Solutions

2 - Go even further in Fukuda’s actions : cessation more inventories to offset the liabilities

Strengths Weaknesses

Less assets but also liabilities : more cash

Risky just in time method in the long-term

Solutions

3 - Decrease our profit margin

for the heating and cooling

equipment systems.

Strengths Weaknesses

Be competitive compared to our competitors and be back on the

market.

Very expensive because to be competitive maybe no profit margin

possible.

Solutions

4 - No change in the organization :

keep only 2 executives

Strengths Weaknesses

Less costs and no radical changes for the employees.

Executives may have to much work and can’t do it alone : tasks

being done poorly.

Solutions

5 - Fire Lo and replace him by an American executiveStrengths Weaknesses

Fukuda will be understood by the American executive : more trust, less conflicts, same management.

Employees won’t trust him, as Fukuda.

Solutions

6 - Fire or put in another position James Fukuda.

Strengths Weaknesses

Possible better relationship and listening between the employees

and the new president, which could lead to benefits.

Time and money consuming to replace him.

 

Thank you for you attention !