Ten years ago Albert Phillips opened his own retail store and sold unpainted furniture. His store was located in Lakeside, a small city in the southeastern part of the United States. Although his business was somewhat slow first, it grew steadily.

Many more sales, stock, and clerical personnel were hired. However, it soon became evident that Mr. Phillips was not able to effectively service all potential customers. Warehouse space was also badly needed.

Phillips Furniture Store was situated in a central location, and Mr. Phillips was hesitant about relocating. As an alternative to relocating, Mr. Phillips opened a satellite store in an outlying district to attract a new source of customers, as well as to provide better service to his current customers. Mr. Phillip eventually expanded his business into several neighboring towns until he had a total of six stores. When Martin Furniture, a small manufacturing firm that supplied some of the furniture for Phillips, became financially unstable, Mr. Phillips was able to gain control of the manufacturing plant.

At the end of last week, you were called into Mr. Phillips' office, and Mr. Phillips said, to you, "I have been pleased with your progress with us as a management trainee since you graduated six months ago." He explained that he felt that the company had gotten large enough to need a personnel manager. Previously, all managers handled most of their own personnel activities, usually on a "casual" basis. Mr. Phillips told you that with the acquisition of the manufacturing firm, "It's time for us to get our personnel activities organized, and you're the person to do it."

When asked why, he said, "I reviewed your personal file and noticed you had some courses in human resource management listed on your transcript." Also you have good people skills. Faced with both the challenge and the promotion, you accepted. Now you are trying to decide, "What am I to do now that I'm the HR manager.

1. On what activities would you tell Mr. Phillips you intended to focus?

2. What would be your first action, and why?