Hanover

Hanover Public Systems

Louise Liaume, Elise Manger

Overview

• HPS (1960’s): US manufacturer of industrial electrical equipment• elevators, • lighting systems, • heating and cooling equipment,• industrial fans

• 4 plants, among them Tapei (Taiwan):• Yang Hsiao-shih former president (fired 1998)• James Fukuda new president

Stakeholders

• Howard Wolff, President, HPS

• James Fukuda new president (Japanese-American), former vice-president of operations at the Oakland, California, plant

• C. Lo, Executive Director, Finance Division

Documents

• Dialogue between Howard Wolff and James Fukuda Talk about the decisions Fukuda has taken maybe too fast

• Exhibit 1: Letter from Lo to Wolff Complaints from the middle-level and upper-level managers about Fukuda

• Exhibit 2: Present and Proposed Organizational Charts for HPS Taiwan

New Executive Directors positions for Purchasing and Personnel

• Exhibit 3: HPS Taiwan Balance Sheet in 1998

• Exhibit 4: HPS Taiwan Sales by Product Line, 1993-1998 Losses since 1996

Situation

• Losses

• Measures instituted by President Fukuda : • partial liquidation, • cessation of manufacturing heating and cooling systems, • managerial reorganization : layoffs

• Conflict between Chinese (employees/managers) and Fukuda (Japanese)

• Lack of communcation between the employees and the new president of the company

Situation : Communication

Strengths Weaknesses- Good communication with Wolff

- Lack of communication between Fukuda and employees

- Employees don’t understand Fukuda’s actions and way of thinking

Situation: Intercultural differences

Strengths Weaknesses

- Japanese/American managerial way of Fukuda new launch to the plant

- Historically Japanese and Chinese don’t like each other

- Fukuda doesn’t take into account Chinese way of work

- Fukuda is more for an american culture than an asian one.

Situation: Management & Ethics

Strengths Weaknesses• Can be successfull in terms

of results (like in California)• Shows that Fukuda is

involved in this project• Hard decisions for better

responses (long-term)

• Bad first image for Fukuda• Fukuda doesn’t take into

account the Chinese way of doing

• Doesn’t match with the competitor’s actions

• Depressed morale for the employees, loss of their motivation

• Layoff of 18 employees just 1 week after arriving (+ costly)

Statement of problem

• Cultural and communication issues between Chinese and Japanese people

• Radical changes in a foreign company which shares a different culture from the board of directors have strong impacts on the company’s operating and the misunderstandings between the two cultures may damage the working relationships.

Option 1 : Stay like that

• Don’t change anything and wait for the results

• Let Fukuda proove his workStrenghts Weaknesses

• Way to see if this management can be adopted in this subsidiary

• Not costly

• Relationships can get worse

• Not resolving the communication problem

Option 2 : Trainings

• Organize trainings and team buildings for the employees and for Fukuda.

Fukuda : to understand the way of work of taiwanese people

Employees : be informed about the new management.Strenghts Weaknesses

• Employees and Fukuda will better understand each other

• Costly and time consuming

• Not resolving the financial problems

Option 3 : Keep the old organization

Option 3 : Keep the old organization

• Keep the old organization and replacing the people who have resigned

Sternghts Weaknesses

• Alternative for both Fukuda and employees

• Employees could be more confident

• Could not improve the company’s results

• Find another Vice-President and Superintendent of Manufacturing (former ones resigned) Time consuming and risky + problem of saving the face

Option 4 : Keep the heating and cooling manufacturing

• It permits to keep the employees of this department and try to compete the competitors.

Strenghts Weaknesses

• Do not fire the manufactures of those departments

• Try to compete the competitors

• Need to find a plan to fight against competitors

• Costly• Back to the decision :

lack of credibility of Fukuda

Option 5 : Dismiss Fukuda

• Dismiss Fukuda and upgrade C. Lo as president

Strenghts Weaknesses

• Communication/Financial problems resolved

• Employees will have a better morale and motivation

• C.Lo knows perfectly the financial situation of the company

• Loss of a good employee (Fukuda)

• Time consuming

Recommendation

Formation programs

• Better social cohesion

• Better understanding between the employees and the President

• Meet someone halfway

Thank you for your attention