Reference no: EM133135194

In 1970 Bob Horvath started Horvath Foods Limited. This Canadian company manufactures and distributes food products for the Canadian market from a plant and head office located in Brandon, Manitoba. Bob was 33 years old at the time. The sales volume for Horvath Foods Limited in the first year of operations was $300,000. By 2000 Horvath had 11 plants in Canada. As well they had expanded to the western US market and had a number of operations in Europe, Japan and China. The total sales volume of the company in 2000 was over $6 billion dollars. The company was a Canadian business success story, both at home and abroad. In addition to the spectacular volume increases the company was very well managed financially. It had no reason to go public to raise capital as it financed all of its expansion through earnings.

There were a number of reasons for the company's exponential growth. First and foremost, Bob valued hard work. He worked ten to twelve hours per day even in the latter stages of his career. Consequently, his senior and middle management group worked similar hours. In addition, he was a skilled salesman in the traditional sense. His handshake was his bond. Thirdly, he had a tremendous 'cultural sensitivity'. Whenever the company expanded to foreign markets he recruited a local executive to be CEO at that location so that local culture was respected. He then assigned a Canadian to be VP Finance so that financial reporting was consistent across all company operations. Bob was proud of the exponential growth of the company and was particularly proud of the Canadian roots. This pride and work ethic permeated through the organization from top management to the labourers in the plants.The success of this Canadian organization attracted executive and management talent from across Canada.

Another reason for success was the speed with which strategic decisions were made and the flexibility by which these decisions could be implemented. Strategic decisions were made only by Bob. From the Vice Presidential level down, decisions were made to implement and support the strategies developed by the owner. All employees were extremely proud that the company could go from conception of a new product idea to launch of the product in the marketplace in a matter of weeks. Similar decisions made by their competitors could take months or even years.

Finally, Bob was adamantly 'non-union.' His view was that union representation would severely hamper the company's flexibility of operations. He had developed a number of strategies to maintain non-union status and had shut plants down when the unions threatened to organize.

The Current Situation

You are brought in to the organization as Director of Human Resources for the Canadian operations. The company had manager level HR representation in each plant in Canada but no one coordinates the overall effort. Your job as described is to develop and implement HR policies so that the company can apply them consistently throughout the Canadian organization and to insure that the company maintains its non-union status across Canada. In that capacity, you report to Ron Abrams, Vice President of Operations in Canada. You work from the corporate offices in Brandon.

Early in your tenure you have become aware of the tremendous pride that the employees at all levels have in the company's success. You appreciate the importance of the quick decision making and flexibility of operations. This is a Canadian company for which you are proud to work. Employees at all levels of the organization wear jackets with the Horvath Foods logo on them.

You also discover a number of HR issues that need to be addressed. Executives and managers are hired at starting salaries that were set primarily by their ability to negotiate salary rather than on any specific salary range criteria. No policies regarding Employment Equity or Pay Equity exist. The company has no job descriptions in place and any notion of job evaluation processes hasn't been contemplated. Performance appraisals are non-existent below senior management and even at that level appraisals are informal and totally based on an MBO style of management. Bottom line results are paramount regardless of the behaviours exhibited by the executives and managers to get those results.

You are aware that there is one significant change in compensation in which you can make a difference right away. The benefits plan is archaic so you could implement a flexible benefits plan with same-sex benefits to bring the company up to current standards in that area.

Bonuses are non-existent in the organization except for the sales and marketing staff and they are paid solely on sales target achievement and market share improvement. Succession management is also non-existent. If Bob determined there is a vacancy and he viewed an employee in the hierarchy positively based on the employee's ability to implement, then that employee got the job. Even Bob himself had no plan with respect to who would replace him when he retires.

Along with the pride of working for the company there is also a pervasive fear. Employees are afraid to organize a union because they have heard that the company had no problem in ceasing operations if an organizing drive was established. At the head office and plants in Brandon, employees are also very afraid of losing their jobs as theirs is the one major employer in the area. Since there is no Collective Agreement, there are no consistent guidelines regarding termination and certainly no grievance procedures. Any employee at any level could be terminated at any time if he/she fell out of favour with the owner.

Bob Horvath regularly attends two significant team meetings. The team that includes the CEOs from all of the European and Asian subsidiaries meets once every three months at the corporate office in Brandon. The purpose of this team meeting is to discuss and improve results. In addition, Bob meets once a month with the senior executive team in Canada including the VP Sales-Retail, the VP Sales-Food Service, the Executive VP Marketing and the VP Operations. No other formal team meetings are held in the company. There are groups that meet on an ad-hoc basis to manage a new product implementation and these employees come from Sales, Marketing, Finance, and Operations.

The Sale

In December, Bob made a shocking announcement. At 75 it was time to retire and there was no one in the company to replace him. He had sold the company to Texas Foods, a US based food company with plants across the United State. It is owned by sole proprietor Bill Hayward, with its head office in Houston, Texas. Bill's initial plan, apparently, was to leave the Canadian operations alone in the immediate term based on its current success, and then to introduce American conservative business culture and southern values to the company in the near term. His top down traditional management style has worked well for him in the past in his US operations and he sees no reason to change now.

As the newly appointed Director of Human Resources for Horvath in Canada you recognize that there is significant work ahead. You know that changes are required but you are very aware that the company has been a huge success. How will you help move the company forward?

With reference to the case study on Horvath Foods and referencing the General Instructions for Written Assignments (in Assignments at the left), answer the questions below. Make sure that you provide direct references to relevant Organizational Behaviour theories and practices from the readings.

Introduction and Instructions

You have recently been hired as the Director of Human Resources for Horvath Foods. and have HR responsibility for all of the company's Canadian operations. As the newly appointed Director of Human Resources for Horvath in Canada you recognize that there is significant work ahead. You know that changes are required but you are very aware that the company has been a huge success. How will you help move the company forward?

Review the Horvath Foods Case Scenario in depth and address only the required five (5) topics listed below in your analysis report. Marks are allocated for thoroughness of coverage of the five required topics and their analysis-linkages to appropriate OB theories and practices from the course and external sources. It is not enough to just describe the happenings at Horvath Foods. Analysis should include the effectiveness of the current approach for each of the five topics as well as recommendations for improvement in each. Use each topic as a heading in your analysis report. While there are no page requirements for the analysis report, include all relevant analysis and be concise. Remember this is an Executive Summary.

For Written Assignment 2, the five (5) topics to be covered, and subjected to analysis are:

1. Organizational Design and Structure (Advantages/Disadvantages).

2. Conflict (Evidence and effect of conflict in the organization and how it is handled).

3. Leadership Style (Leadership style of the key leaders).

4. Organizational Culture (Culture(s) within the organization and the effect of the culture(s) on organization performance).

5. Organizational Change (Analyze any significant change - current changes being implemented; a recent change already implemented; changes being contemplated for the future).

Each topic is worth 8 marks with the mark allocation as follows:

1. Describe the current situation for each topic at Horvath Foods.

2. Analyze the effectiveness of their approach i.e. how it helps or hinders.

3. Make recommendations on how Horvath Foods can improve.

4. Link your recommendations to specific OB theories/concepts.