Reference no: EM132824757
Case Overview - Macro Enterprises Inc - Becoming a Strategic PartnerMacro Enterprise Inc - Background Information
The Macro Enterprises, Inc. case study takes students into the real world of human resource (HR) consulting. Students assume the role of an HR consultant to help a company improve its performance.
Macro Enterprises, Inc. is the maker of carburetors for the outboard powerboat industry. Their annual gross revenue is approximately $10 million. They are a small, regional company located in Rockford, Illinois. Macro Enterprises' main clients are a local manufacturing division of a Fortune 500 outboard motor manufacturer and a privately-owned company in the next county that uses Macro Enterprises carburetors in their lawnmowers.
The outboard motor plant comprises about 30 percent of their sales and the lawnmower company 20 percent. Most of the other 50 percent are small lot orders for a variety of industries. In all, Macro Enterprises makes five different carburetor models. Last year, the outboard motor manufacturer moved two of its manufacturing facilities from Florida to the Rockford area. At that time, Macro Enterprises received word that orders for outboard motor carburetors would triple.
In response to this news, Macro Enterprises added another 125 people to its existing 300-person manufacturing staff. In addition, the company created a new human resource (HR) director position which was recently filled. The company now employs 500 people. Approximately 425 employees work on the manufacturing floor and the remaining 75 in various support functions including marketing and sales; finance; inventory control and distribution; plant management; and HR.
Everything seemed to go smoothly for the first six months of the transition. Two months ago, though, Macro Enterprises started hearing about problems with the carburetors in several of the newer-model outboard motors. After a thorough quality control investigation, the problem was found in the manufacturing of the carburetors. Random checks of carburetors for the past six months found that the housing screws were tightened to only half the tightness described in the Macro Enterprises carburetor production specifications. Further studies revealed that the problems stemmed from several issues:
- Performance:
a. The hydraulic bolt drivers used to tighten the carburetor bolts were not accurately calibrated.
b. Employees were not following the standard operating procedures (SOPs) of checking the bolt drivers' torque prior to using them.
- Employees did not know how to calibrate the bolt drivers.
- Employees were using bolt tightening specifications for carburetors manufactured in 2001; they were supposed to be using specifications updated for each client last year.
- Culture and work environment:
- There were communication problems between shifts and between functions.
- There was inconsistent application of SOPs due to different interpretations of the SOPs.
- Continually integrating new employees into the organization presented challenges.
- The company needed to become a learning organization
Scenario Details
As described in the case study overview, Macro Enterprises experienced numerous changes in multiple levels (organization, individual, and market) in a short period of time. Before moving the Florida operations to Rockford, the CEO and his executive team relied on HR to execute typical HR duties; HR was considered a strong contributor to the organization's operations. However, during the transition to one location, the CEO and executive team recognized the need for an HR director to assume responsibility for strategic leadership to ensure long-term sustainability. The CEO realized that the integration of the Florida operations into the Rockford location was not working as anticipated. The CEO and executive team made several strategic decisions during the integration without HR at the table, and in retrospect, they realized that their human resources needed more attention. In addition, the CEO discovered that other manufacturing companies in the same industry had included a senior-level HR director on their executive teams. Consequently, the CEO decided to hire a senior-level HR director as soon as the integration was complete.
The new HR director, Pat, was indeed hired after the Florida operations were moved to the Rockford location and, unfortunately, after the additional employees were hired. Pat has an MBA and an EdD from the University of Illinois at Urbana- Champaign (UIUC). She oversees a staff of three: an HR coordinator; an HR assistant coordinator; and an HR administrative support person.
During the interview process, Pat noticed that her position reported to the finance director and not directly to the CEO, as do the other director positions. After lengthy discussions with the finance director and the CEO, Pat accepted the position as designed. Both the CEO and the finance director agreed that the position could be elevated to the same level as the other directors if a convincing case could be made.
Pat was faced with several important challenges when she began working for Macro Enterprises. For this case, the goal is to help Pat become an effective and respected internal consultant with the intent to demonstrate the need for Pat's position to be at the strategic leadership level along with the other directors. In other words, Pat wants to add (and be seen as adding) as much value to the organization as the other members of the executive team. However, she also needs to change some mindsets about HR's potential strategic value and whether HR should be involved in strategic decision making.
One of the first things Pat did was to hire you and your consulting company to help her sort through the various issues that affect HR. She has asked you to help her move her department from an operational partner to a strategic partner. Ultimately, Pat wants to successfully demonstrate that Macro Enterprises needs HR at the table when strategic decisions are made.
After an initial meeting with Pat where she presented an analysis of Macro Enterprises's changes over the past few months, you all agree that there are four issues that urgently need strategic HR services:
- Growth: Significant growth in the number of employees over a short period of time, with projections for the growth to continue. Skilled labor supply is not anticipated to meet demand.
- Culture: Consolidating three locations into one. Cultural issues have prevented development of a cohesive, positive environment.
- Technology: Changing SOPs in response to technology developments. Customer complaints have illuminated a flaw in manufacturing. The flaw is more than a training issue.
- Leadership: Leadership and management development needs. Executive team members from all locations need to be role models for successful integration; currently, they are not yet a team.
These issues are a result of both internal and external factors.
The consulting team was tasked to collect and analyze data that will lead the organization toward substantial improvement. Pat intends to use the proposed solutions as evidence for how HR can add strategic value to the organization. Pat believes that these types of solutions will generate support for changing the HR department from an operations service provider to a strategic business partner.
For each issue, you work with Pat to develop a set of guiding questions to focus your research. You are given two weeks to put together a presentation for Pat that will show the evidence and compelling arguments to convince the CEO and the executive team that HR needs to become a strategic partner.
Please read the case study " Macro Entreprises Inc - Becoming a Strategic Partner" and help Pat the new HR Director identify and solve the issues listed below.
- How do employees perceive their (new) work environment?
- What steps toward integration have been taken to introduce and familiarize the Rockford and Florida employee groups with each other, as well as with newly hired employees?
- Are there recognized processes to identify and address employee concerns, including concerns regarding performance reviews?
- Do employees trust management? Do employees know how decisions which affect them and their work environment are made?