The New West Company Case Study (Total Mark= 100 marks)

Step 1 Read the following description of the New West Company

New West, Inc., located in a large city in western Canada, is a medium sized manufacturer of clothing and equipment relating to outdoor activities. The Singer family incorporated the company approximately 40 years ago; ten years ago, the company offered shares to the public through the over-the-counter market. New West experienced significant growth approximately 10 years ago. Recently they have been considering expanding their facilities and product lines again to take advantage of the rapidly growing outdoor activities industry.

While the company has grown slowly and has many loyal employees, the technical and marketing expertise of their current employees is questionable. New West has traditionally promoted from within and occasionally recruits from outside the organization. The production techniques, product lines, and processes have recently been converted sophisticated technologies and continue to do so. But some of the production equipment is still out of date. There is concern if the company is ready to face the changes in next decade if they want to remain competitive.

Currently New West employs 700 individuals in the following departments: 30 in accounting, 10 in information systems, 20 in finance, 10 in human resources management, 500 in manufacturing, 100 in marketing and sales, and 10 in research & development.

New West is planning to increase their productivity within the next few months. Top management projects an increase of 10% within the next year, 20% within the next two years, and 30% in the following three years. Sales within the last 3 years have increased consistently, from $10 million to $12 million to $15 million. But the profit percentage has been decreasing slightly over the past five years, from 10 percent to 7 percent.

The accounting group consists of CPAs and bookkeepers. As a group, they lack the knowledge of recent computerization of accounting practices. In addition, several have failed to remain current about recent changes in corporate tax laws and other federal securities commission regulations.

The finance department has traditionally managed the capital structure of the firm. Currently the firm has a relatively small debt. Increasingly, however, the organization has been experiencing cash flow problems.

The human resources department was titled the personnel department until recently and its major function has been record keeping. The top position in the department is held by a former sales representative that was moved laterally into a staff position in the department and then inherited the top position when the former job holder retired. Recruitment, selection and training of employees have been left to managers and individual departments. The company has also been involved in affirmative action and union negotiations. Recently, threats of slowdowns have been heard from the manufacturing workers.

The manufacturing department is the largest in the company. It has lacked cohesion and has experienced significant inefficiencies due to some out-of-date equipment and production techniques. The department has a rigid hierarchy; all managers have been promoted within the department. Managers are salaried, and the rest of the department all union workers is paid on an hourly basis. During the past two years they have accrued significant amounts of overtime.

The marketing department has primarily included sales representatives and their managers. One manager has also had the responsibility for the advertising program in the company, which has been contracted to outside organizations.

The research and development group is small. Although increasing funds have been allocated to research and development, most managers in the company feel that it has little impact. R & D has spent a lot of effort on developing new fabrics for outdoor clothing but has done little product development or equipment innovation beyond that.

The information systems department includes primarily computer operators and a few programmers who are responsible for automating the accounting practices in the company. There is no management information system. The computer is primarily used for customer billings, payroll, and purchasing.

Step 2 Answer the questions in Part I and Part II

Part 1 Question The Strategic Plan

What kind of business should New West be in the future to remain competitive and sustainable? Given the current situation, how much change do you feel is required and what specifically are those changes? Why? Consider market factors such as globalization, and technology in your response.

Part I Corporate Strategy - your answer should indicate the broad direction and philosophical changes you recommend for long term business success. (35 marks)

Part 2 Question The Human Resources Plan

What are the strengths and weaknesses of the existing workforce? What type of workforce should the company have to hold a competitive advantage and meet strategic goals? What human resources programs, practices and policies would you recommend? What are the barriers for success and how will you address them?

Part II Strategic HR Plan - your answer should be specific on what actions HR needs to take regarding the companys human capital and how those actions will contribute to the future success of the corporate strategy. (50 marks)

Note: Do not include any calculations, only your recommendation and final decisions for each question.

Details:

• Your submissions must be maximum 7 pages in Word format, double spaced and include a title page, references and in-text citations.

• Total mark= 85 (Part I & II) + 15 marks for referencing, mechanics & format of the paper (Please refer to rubrics)