Reference no: EM132901459

Question

Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors as well as the hardware and fittings required for them. Focusing mostly on the United States and Canada, the company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic coast, then through the Midwest and west, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution centre, hire a regional sales manager, and then let that regional sales manager help staff the distribution centre and hire local sales reps.

Unfortunately, the company's traditional success in finding sales help for its North American locations has not extended to its overseas operations. With the introduction of the new European currency in 2002, Mel Fisher, president of Central Steel Door, decided to expand his company abroad into Europe. However, the expansion has not gone smoothly at all. He tried for three weeks to find a sales manager by advertising in the International Herald Tribune, which is read by business people in Europe and by American expatriates living and working in Europe. Although the ads placed in the Tribune also run for about a month on the Tribune's website, Fisher has so far received only five applications. One came from a possibly viable candidate, whereas four came from candidates whom Fisher refers to as "lost souls"-people who seem to have spent most of their time travelling aimlessly from country to country sipping espresso in sidewalk cafés. When asked what he had done for the last three years, one told Fisher he'd been on a "walkabout."

Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his US sales managers by sending them to Europe to temporarily run the European operations but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The managers had hired about 10 local people to staff each of the two distribution centres. However, without full-time local European sales managers, the level of sales was disappointing, so Fisher decided to fire about half of the distribution centre employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that we can't fire anyone without at least one year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."