Hanover Public Systems

HANOVER PUBLIC SYSTEMS

Bérénice ANDRECharles DAYGROUP 308

SUMMARY

I. OVERVIEW

II. BUSINESS FACTORS

III. STATEMENT

IV. DIFFERENT SOLUTIONS PROPOSED

V. CLASS DISCUSSION

OVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.

I. OVERVIEW1. Company’s Presentation

Hanover Public System (HPS)

• American Manufacturer of Industrial Electrical Equipment (elevators, lighting system, heating and cooling equipment and industrial fans)

• Important Dates : 1960 : Beginning of foreign manufacturing 1996 : Decline and money loss in Taiwan


Hanover Public System (HPS)

• 8 wholly owned subsidiaries around the world+

• 4 large domestic Plants

The company have good financial results except… in Taiwan.


I. OVERVIEW1. Company’s Presentation

Context : • Based in the city Taipei

(Taiwan)• Infusion of 3 million US $ from

the parent company

Still Bad Performance, loss of money

Consequences :• Yang Hsiao-Shih, President of

Taipei Plant was fired• James Fukuda became President

of Taipei Plant


I. OVERVIEW2. Taiwan’s Case

• Howard Wolff: HPS President

• Yang Hsiao-shih: Previous Taiwan Plant President (Terminated)

• James Fukuda: New Taiwan Plant President (Second generation Japanese-American)

• M. Lo: Finance Director (Taiwan)

• T. Hu: Vice-President of Operations (Taiwan)

• H. Lee: Superintendent of Manufacturing (Taiwan)


I. OVERVIEW2. Main Participants

a. Different Participants


b. James Fukuda

• Nationality : Japanese-American

• Age : 38 years old

• Experience : Ex Vice-President of the Operations at the Oakland California

• Characteristic : Seen as a Brillant Manager



b. James Fukuda

Actions :

Before Arriving : Throw out useless stocks in order to offset liabilities

+1 Week : Shut down the heating and cooling manufacturing equipmentLay-off 18 workers and 12 reassignment

+1 Month :Reorganization of the management



b. James Fukuda

Consequences of M. Fukuda’s actions :

• Vice-President, M. Hu resignation

• Middle and Upper Level Managers sent a letter to the President M. Wolff

• M. Wolff starts wondering and doubting about Mr Fukuda


I. OVERVIEW4. Exhibits

a. Dialogue



b. Exhibit 1 : Letter from M. Lo (Finance Director) to M. Wolff (President) complaining about M. Fukuda

1. Shut down the manufacturing of heat and cooling equipment due to very low prices set by competitors which are mainly Japanese

2. Unwise Reorganization Plan :- Sales were by equipment, M. Fukuda

wants them in one division.- Pressure exerced on employees who

aren’t sure about there future in the company

- Creation of a plan without consulting

3. Lack of Communication



b. Exhibit 2 : Present and Proposed Organizational Charts for HPS

RESIGNED

RESIGNED

Specialized Sales ForceOVERVIEW BIZ FACTORS STATEMENT SOLUTIONS CLASS RECO.


b. Exhibit 2 : Present and Proposed Organizational Charts for HPS

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b. Exhibit 3 : HPS—Taiwan Balance Sheet (in thousands of US$)



b. Exhibit 4 : HPS—Taiwan Sales by Product Line, 1993-1998 (in thousands of US$)


II. BUSINESS FACTORS1. Communication Problem

• Fukuda doesn’t have any experience in Taiwan and ignore the culture

• He took decisions before arriving on the field

Lack of consideration for his collaborators

• Once in Taiwan, he put in place measures without consulting the Taiwanese Managers

NO DIALOG WITH THE EMPLOYEES


II. BUSINESS FACTORS2. Intercultural Differences

FUKUDA• Fukuda has an individualistic vision and culture• He is only focused on the success of the subsidiary and forget

the workers• He wants to solve problems too fastly

CHINESE• The Chinese are attached to the group and solidarity• They want more cooperation• They see M. Fukuda as an impostor (Chinese don’t like Japanese)


II. BUSINESS FACTORS3. Asian Vs Western Management

Ba sic Va lue s

M a na g e m e nt StyleO rg a niza tio n

Asian

Asian

AsianAsian

W esterns

W esterns

W esternsW esterns

Ind ivid ua lLe g a lC o nfro nta tio nAna lytic

Sho rt Te rmC o ntro lC o nflic tO ne Pro d uc t/Se rvic e fo c use d

Ra tio na lityStruc ture dDire c tiveDo in t

Fo rm a lFra g m e nte dHie ra rc h ia lC o m p e titive

G ro upTrustC o m p ro m iseFlu id

Lo ng te rmHum a n Re so urc eC o lla b o ra tiveC usto m e rfo c use d

Re la tio nsh ip sFle xib leAd a p tiveUnd e rsta nd ing

In fo rm a lG e ne ra listIn te g ra te dC o -o p e ra tive


II. BUSINESS FACTORS4. SWOT

STRENGHTS WEAKNESSES- Important international

company (with subsidiaries)- Important annual sales- Specialized employees- Ability of the company to invest- M. Lo’s influence and

knowledge on the field (Taiwan)

- Loss of money in Taiwan- Resignation of M. Hu and Lee- Bad work atmosphere- Fukuda is narrow-minded- Some positions are still empty- Western culture VS Asian

culture

OPPORTUNITIES THREATS- Bankruptcy of the competitors- Good Sales = Diminution of

inventory- Arrival of a new Management- Elevator’s Market

- Fukuda’s lack of knowledge and experience in China

- Employees’ discontent- Sales still decrease- Harder price competition- Closing of HPS Taiwan


III. STATEMENT

• Critical financial situation due to a decrease of sales

• Bad Morale of the workers who are discontent about the situation

• Intercultural Problem about the Management Style


IV. DIFFERENT SOLUTIONS PROPOSED1. Status-Quo

Meaning : Continue with Fukuda’s ideas (close the heating and cooling equipment, follow the reoganization plan)

- Limit the loss- Well structured organization- Increase of assets

- Sales not specialized- Workers still angry- Takes time


IV. DIFFERENT SOLUTIONS PROPOSED2. Re-open heating and cooling equipment

Meaning : Go against Fukuda’s policy and give a chance to the heating and cooling equipment department


- Employees are not fired- Employees’ morale good- Competition possible against Japanese

- Loss of money - Margin will have to be ridiculous- Fukuda will be angry

IV. DIFFERENT SOLUTIONS PROPOSED3. Slow down Fukuda’s actions

Meaning : Slow down Fukuda’s policy, take the time to communicate with the employees about the gravity of the company’s situation, and help them with a re-insertion job plan


- Employees will have more time to find another job- Employees’ morale won’t be too bad- Fukuda will have what he expected- Managers will be able to advice

- Loss of money - Some workers will still complain

IV. DIFFERENT SOLUTIONS PROPOSED4. Dismiss Fukuda

Meaning : Dismiss Fukuda and replace him by a confirmed Chinese/Taiwanese Manager


- Employees will be more respectful- Employees will listen more easily- Manager will know how to react with the workers - More efficiency

- Fukuda will be annoyed- Might go against the Headquarters point of view- Might cause a loss of control- Loss of a brillant manager

IV. DIFFERENT SOLUTIONS PROPOSED5. Close HPS Taiwan

Meaning : Close the Taiwan Subsidiary Firm


- Restart from zero- No more loss of money- No more debts

- Cost a lot of money- Unemployment- No more possibility to create a new subsidiary in Taiwan in the future

IV. CLASS DISCUSSION

Please share with us your point of view and recommendations


Hanover Public Systems

Education

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